LABOR Law

LAW REVIEWER

ATTY. VOLTAIRE T. DUANO, LL.M.

LL.M. (Bene meritus), San Sebastian College-Recoletos, Graduate School of Law (2014);
LL.B. (with distinction as Valedictorian), San Sebastian College-Resoletos,
College of Law (1993); A.B. Political Science, Lyceum of the Philippines (1989);
Accredited Voluntary Arbitrator (DOLE-NCMB, Region IV);
Former Labor Law Counsel, Philippine Pizza Inc. (Pizza Hut),
now PPI Holdings, Inc.

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Litigation Lawyer; Mandatory Continuing Legal Education (MCLE) Lecturer
Professor, University of Sto. Tomas, Graduate School of Law, San Sebastian College

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Recoletos, College of Law Polytechnic University of the Philippines, College of Law

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yceum of the Philippines University, College of Law Manila Adventist College of Law

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and New Era University, College of Law

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Lifetime Member, Integrated Bar of the Philippines;
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National Bar Reviewer in Labor Law
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Authored the following law books:

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Principles and Cases, Labor Standards and Social Legislation, 2018 2nd Edition
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Principles and Cases, Labor Relations, 2018 2nd Edition

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Tell Me About Labor Law, 2020 1st Edition

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2016 Revised POEA Rules and Regulations, 2019 1st Edition

Special Issuances of the Supreme Court, Volume, I 2019 1st Edition
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Provisional Remedies & Special Civil Actions, Principles and Cases, 2020 2nd Edition
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Rules on Modes of Discovery Principles and Cases, 2021 2nd Edition

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FIRST EDITION
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2022

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(D CD CD
 Philippine Copyright 2022

by aj 900A

VOLTAIRE T. DUANO

ISBN 978-621-04-3429-3

No portion of this book may be copied or

reproduced in books, pamphlets, outlines or notes,
whether printed, mimeographed, typewritten, copied
in different electronic devices or in any other form, for

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distribution or sale, without the written permission of

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the author except brief passages in books, articles,

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reviews, legal papers, and judicial or other official

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proceedings with proper citation.

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Any copy ofthis book without the corresponding
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number and the signature of the author on this page
either proceeds from an illegitimate source or is in
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possession of one who has no authority to dispose of

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the same.
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ALL RIGHTS RESERVED

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BY THE AUTHOR
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No. 1763
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ISBN 978-621-04-3429-3

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 INSCRIPTION

This humble work is dedicated to our

ALMIGHTY GOD.

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MASCHILLIOM

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...
 FOREWORD Thurs

My Child,

You may not know me, but I know everything about you.
Psalm 139:1

I know when you sit down and when you rise up.

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Psalm 139:2

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I am familiar with all your ways.

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Psalm 139:3

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Even the very hairs on your head are numbered.
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Matthew 10:29-31
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For you were made in my image.

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Genesis 1:27
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In me you live and move and have your being.

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Acts 17:28
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For you are my offspring.

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Acts 17:28
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I knew you even before you were conceived.

Jeremiah 1:4-5

I chose you when I planned creation.

Ephesians 1:11-12

You were not a mistake, for all your days are written in my book.
Psalm 139:15-16

I determined the exact time of your birth and where you would live.
Acts 17:26
 You are fearfully and wonderfully made.
Psalm 139:14

I knit you together in your mother's womb.

Psalm 139:13

And brought you forth on the day you were born.

Psalm 71:6

I have been misrepresented by those who don't know me.

John 8:41-44

I am .
not distant and angry, but1
amJohn
the 4:16
completelove
expression of

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And it is my desire to lavish my love on you.

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1 John 3:1

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Simply because you are my child and I am your Father.

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1 John 3:1

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I offer you more than your earthly father ever could.
Matthew 7:11
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For I am the perfect father.

Matthew 5:48
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Every good gift that you receive comes from my hand.

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James 1:17
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For I am your provider and I meet all your needs.

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Matthew 6:31-33
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My plan for your future has always been filled with hope.
Jeremiah 29:11

Because I love you with an everlasting love.

Jeremiah 31:3

My thoughts toward you are countless as the sand on the seashore.

Psalm 139:17-18

And I rejoice over you with singing.

Zephaniah 3:17

vi
 I will never stop doing good to you.
Jeremiah 32:40

For you are my treasured possession.

Exodus 19:5

I desire to establish you with all my heart and all my soul.

Jeremiah 32:41

And I want to show you great and marvelous things.

Jeremiah 33:3

If you seek me with all your heart, you will find me.
Deuteronomy 4:29

Delight in me and I will give you the desires of your heart.

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Psalm 37:4

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For it is I who gave you those desires.

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Philippians 2:13

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I am able to do more for you than you could possibly imagine.
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Ephesians 3:20
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For I am your greatest encourager.

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Thessalonians 2:16-17
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I am also the Father who comforts you in all your troubles.

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2 Corinthians 1:3-4
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When you are brokenhearted, I am close to you.

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Psalm 34:18
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As a shepherd carries a lamb, I have carried you close to my heart.

Isaiah 40:11

One day I will wipe away every tear from your eyes.
Revelation 21:3-4

And I'll take away all the pain you have suffered on this earth.
Revelation 21:3-4

I am your Father, and I love you even as I love my son, Jesus.

John 17:23

vii
 For in Jesus, my love for you is revealed.
John 17:26

He is the exact representation of my being.

Hebrews 1:3

He came to demonstrate that I am for you, not against you.

Romans 8:31

And to tell you that I am not counting your sins.

2 Corinthians 5:18-19

Jesus died so that you and I could be reconciled.

2 Corinthians 5:18-19

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His death was the ultimate expression of my love for you.

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1 John 4:10

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I gave up everything I loved that I might gain your love.

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Romans 8:31-32
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If you receive the gift of my son Jesus, you receive me.
1 John 2:23
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And nothing will ever separate you from my love again.

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Romans 8:38-39
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Come home and I'll throw the biggest party heaven has ever seen.
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Luke 15:7
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I have always been Father, and will always be Father.

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Ephesians 3:14-15
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My question is... Will you be my child?

John 1:12-13

I am waiting for you.

Luke 15:11-32

Love, Your Dad.

Almighty God
([Link] - date of access
last November 13, 2021)

viii
 PREFACE

The best way to approach the bar examination essay

questions is the examinees' knowledge of dissecting the bar
questions. This involves spotting the issues, identifying relevant
rules on the fact pattern, and applying the law. This humble
work was designed to lighten the burden of the bar reviewees
in preparing for the bar examinations in Labor Law. The author
included concise questions on the codal provisions, rules to
implement the Labor Code, and the canonical doctrines on labor

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laws. Moreover, the comprehensive and concise topics given

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during the bar examinations in Labor Law from 1990 to 2019 were

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incorporated. This is to assist the bar reviewees in identifying

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the highly tested, frequently tested, and less frequently tested

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topics in Labor Law. The answers were based on the current labor
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laws, rules and regulations, and jurisprudential doctrines. The
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frequency of the bar questions is a diagnostic assessment of the

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reviewees' familiarity and knowledge of the basic principles and

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cases on labor laws. Thus, the bar questions as practical exercises

91

can sharpen their analytical skills to identify the material facts in

the issue, the points of law, and properly apply the law on the
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given bar problems.

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The above described distinctive features were designed to

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heighten the bar examinees' chance of obtaining a high score in

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Labor Law and eventually pass the bar examinations.

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Never doubt what you can achieve. The key to your

preparation is to study the smart way and not the hard way.
This will unleash your full potential. Becoming a lawyer is your
destiny. Mahatma Gandhi once said, "A man is but a product of
his thoughts. What he thinks, he becomes."

THE AUTHOR

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45

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 CONTENTS

FUNDAMENTAL PRINCIPLES AND POLICIES

Effectivity of the Labor Code.

2. 1
Labor standards provisions of the Labor Code
3. 1
Labor relations provisions of the Labor Code..
4. Concept of Labor Law.. 2

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5. Distinguish labor legislation from social legislation.
6.
Purpose of labor legislation..........

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7. 2

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Distinguish social security from union security
8. Interrelation of labor relations with labor standards.

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9. Differentiate labor standards from labor relations..

10.
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General classifications of labor statutes...
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11. Constitutional provisions on labor........ 5
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12. Distinguish constitutional due process from statutory

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due process.........
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13. Violation of notice requirement is not a denial of

101212121213
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Constitutional due process.

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14. 2012 Bar Q. No. 45.

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15. 2011 Bar Q. No. 40.......

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16. Rights of employer and employee

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17. Civil Code provisions related to labor.….......

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18. Declared basic policy under Article 3 of the Labor Code....

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19. Article XIII, Section 3 of the Constitution versus

Article 3 of the Labor Code. 14

20. Social justice as guiding principle in labor law 44

14

21. Salient features of protection to labor clause 15

22. Principle of co-determination under the Constitution......... 16

23. Principle of co-determination under the Labor Code............ 16

24. Legitimate workplace mechanism of co-determination ....... 16

25. Article XIII, Section 3 is not self-actuating... 17

26. Definitions of terms related to employer-employee

18
relationship.......
27. Employment status is defined and prescribed by law 19

xi
 20
28. 2019 Part I Bar Q. No. A.3
22
29. 2010 Bar Q. No. I(2).
22
30. 2000 Bar Q. No. III
23
31. 2017 Bar Q. No. IA.
32
32. 2017 Bar Q. No. VII.
25
33. 2016 Bar Q. No. II(a).
27
34. 2016 Bar Q. No. XIII..
28
35. 2014 Bar Q. No. XIII(A).
29
36. 1991 Bar Q. No. IV(a)..
30
37. 2012 Bar Q. No. 46
30
38. 2012 Bar Q. No. VII(a).
31
39. 2002 Bar Q. No. IV
40. 1996 Bar Q. No. I............ 32

33
41.
41 Crucial test of employer-employee relationship.

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33
42. Guidelines indicative of labor law "control".

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43. Rules as guidelines to achieve result and those

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34
that control methodology.

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34
44. 2019 Part I Bar Q. No. A.3(a).............

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45. 2015 Bar Q. No. VI(a).. m 35

36
46. 2015 Bar Q. No. VIII...
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37
47. 2011 Bar Q. No. 21..
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38
48. 2003 Bar Q. No. II...
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1999 Bar Q. No. XIV(1).. 39

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49.

50. Kind of relationship under a "boundary system"

91

41 41 41 42 43 43
arrangement...
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51. 2017 Bar Q. No. IB.

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52. Working scholars.

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1997 Bar Q. No. IV.

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53.

54. Resident physician in training and the hospital..

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55. Employment arrangement on lawyers...

56. Employer-employee relationship in job contracting
43 44 45 45 46 47 47

and labor-only contracting..

57. Independent contractor.
58. 2006 Bar Q. No. 2
59. Rule when evidence is in equipoise.
60. 2017 Bar Q. No. II....
61. 2009 Bar Q. No. II(b)..
62. Article 1702 of the Civil Code.........
Distinguish Article 4 of the Labor Code from
48

63.
Article 1702 of the Civil Code...
 48
64. Concept of management prerogatives........
49
65. Criterion in the exercise of management prerogatives.
49
66. Aspects of management prerogatives...........
50
67. Management prerogative on employee selection
50
68. Management prerogative on discipline...
69. Management prerogative on right to prescribe rules
51
and regulation.......
51
70. Management prerogative on security of tenure..................
71. Management prerogative on right to dismiss
52
an employee..

72. Management prerogative on right to characterize

52
employment as no longer necessary and to hire.
73. Management prerogative on transfer/promotion
employees.... 53

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54
74. Management prerogative on outsourcing of business.

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54
75. Management prerogative on productivity standards

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55
76. Management prerogative on right to demote

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77. 2001 Bar Q. No. II(a).. 56

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78. 1994 Bar Q. No. XVIII. m 56

79. Concept of bonus 57

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80. Rule on bonus amidst depressed financial condition....... 58

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81. When bonus is demandable and enforceable

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59
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obligation.
82. 2003 Bar Q. No. X.......... 59
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83. 2002 Bar Q. No. XVI(B) 60

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84. 1995 Bar Q. No. III(1). 61

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85. Management prerogative on change of

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working hours 62
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86. 2009 Bar Q. No. I(a). 63

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87. 2019 Part I Bar Q. No. A.1 63

88. Tests to determine validity of company policy

on employment..... 63

89. Laws similar to BFOQ.. 65

90. Validity of policy against marital discrimination. 66

91. Validity of two types of employment policies

6

on spouses 67
69 70 70

92. 2000 Bar Q. No. X(a).......

93. Rule on applicability of the Labor Code..........
94. Exceptions on applicability of the Labor Code..

xiii
 BOOK ONE

CHAPTER I

RECRUITMENT AND PLACEMENT OF WORKERS

71
1. Definition of recruitment and placement...
2. Interpretation of the proviso in Article 13(b)
of the Labor Code 71

3. Distinguish license from authority under the

Labor Code.. 72

4. Distinguish license from authority under the Migrant

Workers and Overseas Filipinos Act of 1995,

72
as amended by RA 10022...
5. Distinguish private employment agency from private

73
recruitment entity under the Labor Code..

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6. Private recruitment/employment agency under

73
RA 8042, as amended.....

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7. Those who can engage in recruitment and placement

74
of workers.

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8. POEA's participation in recruitment and placement. 74
Jurisdiction of the Philippine Overseas
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9.
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75
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Employment Agency.
10. Award of money claims arising from recruitment
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75 75 76 76 76
violation....
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Prescription of pre-employment/recruitment violation........

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11.
12. Appeal of POEA's decision....
91

13. 2010 Bar Q. No. I(3).

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14. 2017 Bar Q. No. III.

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77
15. Jurisdiction on claims of OFW under Section 10,
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RA 8042, as amended...
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16. Nature of liability of principal/employer and

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78
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recruitment/placement agency...
17. 2019 Part II Bar Q. No. B.13(b). 79

18. Agency's liability despite termination of its agency

79
agreement.
80
19. 2017 Bar Q. No. III(A)..
20. Reliefs granted in case of termination of overseas
employment without just, valid or authorized cause........ 81

21. Theory of imputed knowledge. 82

22. Joint and solidary liability of corporate officers,

directors, and partners under second paragraph
of Section 10, RA 8042. 82

23. 2009 Part I Bar Q. No. III(c).. 83

xiv
24. 2012 Bar Q. No. 55 .. 84

25. Mandatory remittance of foreign exchange earnings

and its percentage. 86

26. 2006 Bar Q. No. III 87

27. Private sector's participation in recruitment and

placement of workers. 87

28. Disqualification to engage in recruitment

and placement........... 87

29. Derogatory records 89

30. 2006 Bar Q. No. II.... 90

31. Qualifications as to citizenship and capitalization................ 90

32. Non-transferability of license or authority 91

33. 1998 Bar Q. No. II....... 91

34. Prohibited practices under Article 34 of the

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Labor Code....... 92

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35. Commission of prohibited practices under

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Article 34 as illegal recruitment... 93

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36. Jurisdiction of DOLE to suspend or cancel license

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or authority m 93

37. 2012 Bar Q. No. 19. 94

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38. Regulatory power of the Secretary of Labor and

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Employment... 94
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39. Visitorial power 94

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40. 2011 Bar Q. No. 60.. 95

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41. Illegal recruitment under the Labor Code 95

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42. 2015 Bar Q. No. IB... 95

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43. 2011 Bar Q. No. 63.... 96

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44. 2007 Bar Q. No. III(a)... 97

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45. 2005 Bar Q. No. II-(1a). 98

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46. 2002 Bar Q. No. IXV-A...

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99

47. Meaning of "committed against three or more persons

individually or as a group". 99

48. Distinguish illegal recruitment under RA 8042, as

amended, from illegal recruitment under the
Labor Code........ 100

49. 2019 Part II Bar Q. No. B.13(a) and (b)........... 102

50. Illegal recruitment and unlawful acts under RA 8042,

as amended by RA 10022...... 103

51. Other prohibited acts under RA 8042, as amended

by RA 10022.. 105
52.
Persons responsible for illegal recruitment........... 107

XV
53. Penalties of illegal recruitment under RA 8042,
107
as amended
108
54. Administrative sanctions on illegal recruitment....................
55. Prescriptive period of illegal recruitment under
108
RA 8042, as amended........
56. Venue of illegal recruitment under RA 8042,
109
as amended

57. Rule on filing of independent action under RA 8042,

as amended 109

2010 Bar Q. No. XXI.. 110

58.
2005 Bar Q. No. VIII(2)... 111
59.
112
60. Coverage of alien employment permit....
61. When to issue alien employment permit to
112
non-resident or applicant employer...

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62. 2007 Bar Q. No. XX. ............
113

113

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63. 1995 Bar Q. No. II(2).

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BOOK TWO

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Chapter I m
APPRENTICES, LEARNERS, AND PERSONS
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WITH DISABILITY
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1. Definitions of apprenticeship, apprenticeable

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occupation, and highly technical industries... 115

91

115
2. Qualifications of an apprentice
116
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3. 2012 Bar Q. No. 44

116
Employers who may employ apprentices..
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4.

116
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5. Effect of failure to register apprenticeship program.

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117
6. Jurisdiction on violation of apprenticeship agreement...........
Effect of PAC's failure to settle the issue 117
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8. Appeal of decision of authorized agency for violation of

117
apprenticeship agreement..
117
9. Compulsory apprenticeship.
118
10. Wage of apprentices.
118
11. Apprentices with minimum wages.
118
12. Apprentices without compensation
118
13. Learner.
118
14. When learners may be employed..............
119
15. 2012 Bar Q. No. 43.
119
16. Distinguish leaner from apprentice.............
122
17. 2011 Bar Q. No. 6.....

xvi
18. 2011 Bar Q. No. 8.... 122

19. 2011 Bar Q. No. 69...... 123

20. Wage or salary rates of learners... 123

21. 123
Minimum wage of learners.
22. 2012 Bar Q. No. 39 124

23. 2012 Bar Q. No. 75. 124

24. Definitions of disabled persons, impairment, disability,

handicap, and qualified individual with disability. 124

25. 2000 Bar Q. No. VII....... 126

26. 1998 Bar Q. No. III 126

27. Rights and privileges of persons with disability. 127

28. Wage of persons with disability 127

29. Incentives for employers employing persons

with disability. 127

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30. Eligibility of persons with disability as apprentices

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or learners...... 128

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31. 2011 Bar Q. No. 47.. 128

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32. 2006 Bar Q. No. IV. 129

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33. 2013 Bar Q. No. VII. m 129

34. 2013 Bar Q. No. VIII.. 130

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BOOK THREE
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Chapter I
91

HOURS OF WORK
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Coverage of Book III, Title I of the Labor Code on

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1.
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Working Conditions and Rest Periods 132

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2. Statutory benefits under Book III, Title I of the Labor

Code on Working Conditions and Rest Periods.....
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132
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Those excluded from the coverage of Title I, Book III on

Working Conditions and Rest Periods 132

4. Government employees excluded from the coverage

of Title I, Book III on Working Conditions and
Rest Periods. 133

5. Employees of government-owned and controlled

corporation (GOCC) covered by the civil service.. 133

6. Definition of managerial employee........... 133

7. Conditions to be a managerial employee........ 133

8. Conditions to be considered as officers and members of

managerial staff. 134

xvii
9. Classifications of supervisors under Title I, Book III
134
on Working Conditions and Rest Periods..
10. Requirement for exclusion of domestic servants and
persons in the personal service from the coverage
of Title I, Book III on Working Conditions and
Rest Periods. 135

135
11. Workers paid by results
12. 2012 Bar Q. No. 2. 136
137
13. 2012 Bar Q. No. 17
137
14. 2002 Bar Q. No. III.
15. Circumstance to exclude those who are paid on
piece-work, "takay," "pakiao" or task basis, and other
137
non-time work from overtime and premium pay.
16. Categories of employees paid by results... 138

138
2011 Bar Q. No. 34....

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17.
139
18. Field personnel.

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19. Rule to conclude that an employee is a field personnel 139

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20. 1992 Bar Q. No. I(A). 140

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21. Interpretation of the phrase "those who are engaged on
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141
task or contract basis, purely commission basis"
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Normal hours of work under Article 83 of the
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22.
Labor Code... 141
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Maximum hours of work under Article 83 of the

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23.
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Labor Code............. 142

Exceptions to normal hours of work. 142

91

24.

25.
ส Concept of flexible work arrangements. 142
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143
26. Kinds of flexible work arrangements
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143
2005 Bar Q. No. V(c).…...
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27.

Effects of Compressed Work Week (CWW). 144

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28.
145
29. Compensable hours worked
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30. 2011 Bar Q. No. 2.….......... 145

31. Principles in determining hours worked 146

147
32. Rules on waiting time..…........
147
33. Rule on working while "on call"..
147
34. Rule when not working while on call.
35. 2004 Bar Q. No. VII. 147
148
36. 1997 Bar Q. No. XVIII.
149
37. 1993 Bar Q. No. XI.
38. Rule on attendance at lectures, meetings, training programs....... 150

39. Rule on rest periods or coffee breaks..... 150

40. Rule on travel time....... 150

xviii
41. 2012 Bar Q. No. 49 151

42. 151
2011 Bar Q. No. 17.....
151
43. Rule on meal and rest period.
44. Rule on shorter meal period.. 152

152
45. Night shift differential...
152
46. Those excluded from night shift differential.
47. 2011 Bar Q. No. 57.. 153

48. 2002 Bar Q. No. XIII-A... 154

49. Distinguish overtime work from overtime pay. 154

50. Additional compensation for overtime work.. 154

51. 2017 Bar Q. No. V(A).. 155

52. 2012 Bar Q. No. 3 155

53. 1992 Bar Q. No. XIV.. 156

54. Those excluded from overtime pay 156

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55. Overtime for ordinary working days. 157

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56. Overtime on scheduled rest day or special day 158

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57. Overtime on special day which falls on a
scheduled rest day. 158

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58. Overtime on regular holiday. 159

59.
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Overtime on regular holiday which falls on a
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scheduled rest day. 159
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60. 2002 Bar Q. No. XIV(B). 160

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61. Rule on stipulated overtime. 160

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62. 2012 Bar Q. No. 4 161

91

63. Rule on offsetting of undertime.. 161

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64. 2010 Bar Q. No. XI(B). 162

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65. 2003 Bar Q. No. VI... 162

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66. Cases when an employee may be required to render

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overtime work.. 162

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67. 1997 Bar Q. No. II....... 163

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68. 2012 Bar Q. No. 5 165

69. 2011 Bar Q. No. 67... 166

70. 2010 Bar Q. No. XIV(A). 166
71. 2008 Bar Q. No. XII. 167

CHAPTER II

WEEKLY REST PERIODS

1. Coverage of the weekly rest periods 169

2. 1998 Bar Q. No. IV ....... 169

3. Rule on preference of employee to his weekly

day of rest.... 169

xix
 170
4. Work on scheduled rest day..
170
5. Instances of work on scheduled rest day.
6. 2011 Bar Q. No. 35... 171

171
7. Premium pay....
8. Those excluded from premium pay.. 171

9. Premium pay for work on a rest day or on

172
special days.
10. Premium pay for work on a rest day which is also
172
a special day..
11. Premium pay for work on a regular holiday which
is also a rest day. 173

12. 2011 Bar Q. No. 25... 173

13. 2002 Bar Q. No. XIV(A). 174

ph
CHAPTER III

HOLIDAYS, SERVICE INCENTIVE LEAVES,

u.
ed
AND SERVICE CHARGE

n.
175
Holiday pay.

ai
12 Regular Holidays and 4 Nationwide Special Days.......... 175
2. m
3. 2012 Bar Q. No. 40 176
su

4. Those covered by holidays with pay. 176

m

5. Those excluded from the coverage of holidays with pay .... 176
s.

177
@

6. 2019 Part I Bar Q. No. A.5

177
91

7. 2012 Bar Q. No. 6

8. Compensation for holiday work.. 178
cx

9. Computation of holiday for work performed on that day.. 178

o.

179
2002 Bar Q. No. XIII(B)..
er

10.

11. Computation of holiday for work performed on a

sp

regular holiday which is also the employee's rest day 179

o
pr

12. Rules on absences during holidays. 179

13. Rules on regular holidays during temporary or periodic

shutdown and temporary cessation of work. 180

180
14. Holiday pay of certain employees
181
15. 2002 Bar Q. No. V.….......
16. Rule on regular holiday falling on rest days or Sundays..... 181
182
17. Rule on successive regular holidays....
18. 2018 Bar Q. No. V(b).. 182

19. 2010 Bar Q. No. IV. 183

20. Rule on two regular holidays on the same day. 183

185
21. 2005 Bar Q. No. V(a).......

XX
22. Service incentive leave. 185

185
23. Meaning of the term "at least one-year service"
24. Those excluded from entitlement to Service
Incentive Leave........... 185

25. 2013 Bar Q. No. XI 186

26. 2012 Bar Q. No. 31 187

27. 2011 Bar Q. No. 50... 188

28. Domestic worker's/kasambahay's service

incentive leave............ 188

29. 2010 Bar Q. No. XX.. 188

30. Treatment of service incentive leave.. 189

31. 2011 Bar Q. No. 27. 189

32. Rule on commutation of SIL 189

33. Prescriptive period of service incentive leave (SIL). 190

ph
34. Paternity leave under RA 8187. 190

u.
35. Coverage of paternity leave under RA 8187.. 191

ed
36. Conditions for entitlement to paternity leave benefits

n.
under RA 8187 191

ai
37. Period to avail paternity leave under RA 8187.
m 191

38. Treatment of paternity if not availed 192

su

39. 2018 Bar Q. No. XVIII(b). 192

m

40. 2013 Bar Q. No. VI(B). 193

s.
@

41. 2012 Bar Q. No. 38 194

91

42. 2011 Bar Q. No. 41.. 195

43. 2005 Bar Q. No. III(2)(A). 195

cx

44. 2002 Bar Q. No. XVI.... 196

o.
er

45. Coverage of RA 11210, the Expanded Maternity

sp

Leave Law 197

Benefits granted by RA 11210, the Expanded

o

46.
pr

Maternity Leave Law....... 197

47. Rule on the grant of maternity leave under RA 11210,

the Expanded Maternity Leave Law.…...... 198

48. Rule on manner of enjoyment of the benefit

under RA 11210, the Expanded Maternity Leave Law......... 199

49. Rule on extended maternity leave under RA 11210,

the Expanded Maternity Leave Law........ 199

50. Frequency of the grant of maternity leave under

RA 11210, the Expanded Maternity Leave Law. 200
51. Grant of maternity leave benefits after termination
of employment......... 200

xxi
52. Maternity leave of a female worker with pending
administrative case............ 200

53. Eligibility for the grant of maternity leave benefit

in the private sector. 201

54. Notice requirement for grant of maternity leave

benefit in the private sector.. 201

55. The amount of maternity leave benefits in the

private sector........ 202

56. Effect of payment of daily SSS maternity benefits

to sickness benefits under SSS Law 202

57. Consecutive pregnancies and multiple childbirths

202
in the private sector.
58. Instances that the employer is liable for damages
to SSS.. 202

59. Maternity leave benefits for women in the informal

ph
economy and voluntary contributors to the SSS... 203

u.
60. Allocation of maternity leave credits to the child's

ed
father or alternative caregiver.. 203

n.
61. Effects of availing the option to allocate. 204

62.
ai
Effect of death or permanent incapacity of the
m
beneficiary female worker. 204
su

63. 2018 Bar Q. No. XVIII(a). 205

m

64. 2015 Bar Q. No. XIII... 206

s.

65. 2012 Bar Q. No. 37 206

@

66. 2010 Bar Q. No. III 207

91

67. 2005 Bar Q. No. III(2)(b). 208

cx

209
68. 2000 Bar Q. No. I.....
o.

69. Solo parent under RA 8972, the Parental Leave for

er

Solo Parents ...... 209

sp

70. Meaning of children under RA 8972. 210

o

Parental leave under RA 8972.. 211

71.
pr

72. Conditions for entitlement of parental leave

under RA 8972..... 211

73. Effect in case parental leave under RA 8972 is not

availed.. 211

212
74. 2011 Bar Q. No. 45.
75. Leave for victims of VAWC under RA 9262. 212

76. Requirement for the employer to comply with

212
VAWC leave .........
213
77. 2011 Bar Q. No. 38..
78. Special leave benefit for women under RA 9710,
213
the Magna Carta of Women ...........

xxii
79. Definitions 214

80. Conditions for entitlement of special leave

under RA 9710....... 215

81. Distinguish special leave benefit under RA 9710

from SSS sickness benefit........ 215

82. Effect of availing special leave benefit under RA 9710

during maternity leave benefit 215

83. Treatment of special leave benefit under RA 9710. 216

84. 2013 Bar Q. No. VI(A). 216

85. Service charge. .…......

217

86. Coverage of service charge under Article 96,

as amended by RA 11360. 217

87. Employees and establishments under Article 96

of the Labor Code, as amended by RA 11360 217

ph
88. Distribution of service charges under Article 96
of the Labor Code, as amended by RA 11360 217

u.
ed
89. Frequency of distribution of service charges under
Article 96 of the Labor Code, as amended

n.
by RA 11360...... 218

ai
90. 2011 Bar Q. No. 73...
m 218
su

CHAPTER IV
m

THIRTEENTH MONTH PAY

s.
@

1. 13th month pay. 219

91

2. Those required to pay the 13th month pay... 219

cx

3. Those entitled to receive the 13th month pay... 219

o.

4.
Components of "basic salary" under the
er

13th Month Pay Law. 219

sp

5. 2011 Bar Q. No. 52... 220

o

6. Distinction of the term "basic salary" from

pr

"fringe benefits" 220

7. Determination of whether or not a commission forms

part of the basic salary. 221

8. Employers exempted from paying 13th month 222

9. 2012 Bar Q. No. IX. 223

10. 2012 Bar Q. No. 30. 224

11. 13th month pay for certain types of employees.. 224

xxiii
 CHAPTER V

WAGES

226
1. Meaning of wage...
226
2. Basic factor in determining employees' wages.
227
3. Rule on wage and salary........
4. Distinguish wage from salary for the purpose of
Article 1708 of the Civil Code...... 227

5. Rule on execution or attachment of wage under

Article 1708 of the Civil Code.. 228

6. 2017 Bar Q. No. VI(B).... 228

7. Distinguish "salary" from "wages; rule on its

attachment and execution. 229

8. Distinguish supplements from facilities.. 230

9. Rules on facilities 230

ph
231
10. Purpose test..

u.
231
11. Requirements for the deductibility of a facility.

ed
12. 2018 Bar Q. No. V(a)..... 232

n.
13. 2013 Bar Q. No. II..... 233

ai
234
14. 2010 Bar Q. No. XXIII. m
235
Bonus considered part of the wage, salary, or compensation....
su
15.

16. Rule if a commission is included in the computation

m

of actual wages/salary. 236

s.

Rule if a commission is part of basic salary and included

@

17.

in the computation of 13th month pay..... 236

91

18. Allowances that can be considered as components of

cx

237
separation pay..
o.

19. 2018 Bar Q. No. VII... 237

er

20. 2014 Bar Q. No. XXV 238

sp

21. 1997 Bar Q. No. 3 238

o
pr

22. 1992 Bar Q. No. VII(a). 239

23. Non-elimination or diminution rule. 240

24. Basis of benefit to apply the Non-Diminution Rule.. 240

25. Requisites for the application of the

non-diminution rule.... 241

26. Benefit to be considered as a regular company practice. 241

27. Instances when non-diminution rule will not apply. 242

28. Meaning of the term "benefits" mentioned in the

non-diminution rule............. 242

29. Overtime is not within the term benefits under

Article 100.. 243

xxiv
30. 2019 Part I Bar Q. No. A.6 243

31. 2015 Bar Q. No. IV. 244

32. 2014 Bar Q. No. XX. 246

33. 2013 Bar Q. No. XIII.. 247

248
34. 2013 Bar Q. No. XVI(2).
249
35. 2005 Bar Q. No. I(2).
36. 2015 Bar Q. No. II.. 251

37. 2013 Bar Q. No. III 252

38. Other provisions on non-diminution rule.... 253

253
39. Wages paid by an employer.
40. 254
Time of payment of wages; exceptions......
41. Wages paid on a task which cannot be completed
254
in two (2) weeks.
42. To whom wages should be paid.. 254

ph
43. Exceptions to direct payment of wages...... 254

u.
44. When employer pays the wages of a worker to

ed
255
another person.

n.
45. 2015 Bar Q. No. III. 256

ai
46. 2013 Bar Q. No. XV. m 256

47. 1998 Bar Q. No. V(1) and (2).…...... 257

su
m

Chapter VI
s.

JOB-CONTRACTING AND LABOR-ONLY

@

CONTRACTING
91

260
cx

1. Definitions

Trilateral relationship in job-contracting. 262

o.

2.
er

3. Rule on validity of outsourcing of specific jobs,

sp

works or services..... 262

4.

Test of independent contractorship.. 262

o

4567
pr
5.

Different kinds of independent contractors.. 263

6.

Independent contractors recognized by jurisprudence 264

7.

Rule if employees under fixed-term contracts can

be an independent contractors...... 265

8. The arrangements which are excluded from the

coverage of D.O. 174, Series of 2017. 266

9. Elements of labor-only contracting 267

10. Burden to prove substantial capital, investment, etc............. 268

11. Effect of failing to discharge the burden of proof

on substantial capital...... 268
12. Other illicit forms of employment arrangements... 268

XXV
13. When principal is deemed to be the direct employer
269
of the contractor's or subcontractor's employees...........
14.
Elements of permissible contracting or subcontracting
arrangements (job contracting) under Article 106. 270

15. The required "substantial capital" 270

16. 2012 Bar Q. No. 42 270

17. 2011 Bar Q. No. 9.... 271

18. 2011 Bar Q. No. 55... 272

19. Rights of contractor's/subcontractor's employees

under D.O. No. 174-17....….... 272

20. Mandatory stipulations in employment contract

and service agreement under D.O. No. 174-17 273

21. Effects of violation of the rights of the contractor's

employees and the required stipulations under

ph
D.O. No. 174-17 274

22. 2009 Bar Q. No. XI(a)................ 274

u.
ed
23. Mandatory registration and registry of legitimate
contractors 276

n.
Effect of registration of independent contractorship 277

ai
24.

25.
m
Distinguish job contracting/subcontracting from
su
"labor-only" contracting 277
m

26. 2019 Part I Bar Q. No. A.7(a). 279

s.

27. 2017 Bar Q. No. X(A)... 280

@

28. 2016 Bar Q. No. XVIII(a). 281

91

29. 2012 Bar Q. No. 29 284

cx

30. 2012 Bar Q. No.41... 284

o.

31. 2012 Bar Q. No. 47 285

er

32. 1997 Bar Q. No. XVI.. 286

sp

33. 2012 Bar Q. No. X(a). 289

o

34. 2012 Bar Q. No. X(b).. 290

pr

35. 2002 Bar Q. No. VIII(A) and (B) 290

36. 1994 Bar Q. No. I(1). 291

37. 1994 Bar Q. No. I(2). 292

38. Distinction of solidary liability in labor-only contracting

from solidary liability in job-contracting. 293

39. 2016 Bar Q. No. XX(B).. 295

40. 2012 Bar Q. No. 10 297

41. 2000 Bar Q. No. XIII(A) and (B).. 298

42. 2009 Bar Q. No. XIV(B)... 299

43. 1992 Bar Q. No. III 302

xxvi
44. Government agency within the scope of the
Labor Code. 303

45. 2014 Bar Q. No. IV 304

46. 2004 Bar Q. No. VIII(A). 304

47. Distinction of Article 107 of the Labor Code from

Article 106 of the Labor Code.. 305

48. Remedy of principal on its being made liable

to indirect employees. 306

49. Extent of the solidary liability for any violation

of the Labor Code under Articles 106 and 109
of the same Code....... 307

50. Circumstance when an indirect employer is liable as a

consequence of such unlawful termination.... 308

51. Interpretation of the phrase "any violation of any

provision of this Code" under Article 109 of the

ph
Labor Code............ 309

u.
310

ed
52. 2013 Bar Q. No. XVII.
53. 2005 Bar Q. No. III(1)(a)(1)(b) 312

n.
54. 2001 Bar Q. No. XIII(a)........ 313

ai
55.
m
Cases when principal is considered a direct employer
su
under D.O. No. 174-17.. 314
m
s.

Chapter VII
@

PAYMENT OF WAGES
91

1. Rule to enforce the workers preference under

cx

Article 110 of the Labor Code.. 316

o.

2. Order of preference between a mortgage credit

er

and worker. 316

sp

3. 2003 Bar Q. No. XII. 317

o

1999 Bar Q. No. XVIII.. 318

pr

4.

5. 1995 Bar Q. No X(1). 319

6. 1995 Bar Q. No X(2). 319

7. 1992 Bar Q. No. VI. 320

8. Basis of the deduction of attorney's fees under

Article 111 of the Labor Code 321

9. Concept of attorney's fees under Article 111 of the

Labor Code... 321

10. 2016 Bar Q. No. XV(a) 322

11. 2001 Bar Q. No. XVII(a).. 322
12. 1993 Bar Q. No. XII. 323

xxvii
 13. Distinction of attorney's fees under Article 111 and
Article 228(b) of the Labor Code. 323

14. Rule on the award of interest in money claims. 324

15. 2016 Bar Q. No. XVI(b).......... 326

Chapter VIII
PROHIBITION REGARDING WAGES

1. Rule on wage deduction and exceptions. 327

2. 2012 Bar Q. No. 11.... 328

3. 2012 Bar Q. No. 28 329

4. 1998 Bar Q. No. V(2). 330

5. Legal compensation of the Civil Code allowed under

Article 113 of the Labor Code 331

6. Deductions allowed by law. 331

ph
7. Conditions for deduction of loss or damage under

u.
Article 114 in relation to 115 of the Labor Code..... 332

ed
8. Exceptions to the rule against withholding of wages/
diminution of benefits under Article 116 of the

n.
333

ai
Labor Code...
m
su
Chapter IX
NATIONAL WAGES AND PRODUCTIVITY
m

COMMISSION AND REGIONAL TRIPARTITE

s.

WAGES AND PRODUCTIVITY BOARDS

@
91

1. National Wages and Productivity Commission (NWPC))..... 335

cx

2. Powers and functions of National Wages and

o.

Productivity Commission (NWPC)... 335

er

3. Regional Tripartite Wages and Productivity Boards

sp

(RTWPBS)... 336
o

4. Powers of Regional Tripartite Wages and Productivity

pr

Boards (RTWPBS)...... 337

5. Effectivity of a wage order. 338

6. Remedy of aggrieved party on the wage order

issued by RTWPB... 338

7. Grounds for appeal of wage order... 338

339
8. 2017 Bar Q. No. IV(a)..
9. 2017 Bar Q. No. IV(b) 339

10. 2012 Bar Q. No. 32. 340

11. Nature of the RTWPB's power to issue a wage order. 340

12. Whether certiorari/prohibition will lie to assail the

341
wage order issued by RTWPB'

xxviii
 Chapter X
WAGE DISTORTION

1. Procedural remedies to correct of wage distortion. 342

2. 2012 Bar Q. No. 53 343

3. 2012 Bar Q. No. 21 343

344
4. 2009 Bar Q. No. IX(b).
2008 Bar Q. No. II(a). 344
344
2006 Bar Q. No. VI(2)..
2002 Bar Q. No. XVII(A) 344

5. Effect of the pending dispute arising from

345
wage distortion.........
345
6. Meaning of wage distortion
7. Effects of increase in prescribed wage rates. 346

8. Elements of wage distortion.......... 346

ph
346
9. Cases when no wage distortion exists.....

u.
10. 2019 Part II Bar Q. No. B.14(a) and B.14(b). 347

ed
11. 2009 Bar Q. No. IX(a).... 348

n.
348
2006 Bar Q. No. VI(1).. PÅ, vat

ai
1997 Bar Q. No. VIII(A). m 348

Whether or not wage distortion is a ground for 26

su
12.

strike/lockout... 348
m

13. 2009 Bar Q. No. IX(a).. 349

s.

349
@

2006 Bar Q. No. VI(3)............

1997 Bar Q. No. VIII[B] ...............….... 349
91
cx

Chapter XI
o.

ADMINISTRATION AND ENFORCEMENT

er
sp

1. Powers of Secretary of Labor and Employment/duly

authorized representative under Article 128 of the
o
pr

Labor Code............. 350

2. Those included in the visitorial power under

Article 128 of the Labor Code.. 350

3. 2011 Bar Q. No. 48.... 351

4. Enforcement power under Article 128 of the

Labor Code.......... 351

5. Enforcement power on health and safety of workers

under Article 128 of the Labor Code. 352

6. The power of appellate review of the Secretary

of Labor and Employment under Article 128 of
the Labor Code. 352

xxix
 7. Rule in case of contest on the findings of Labor
Standards and Welfare Officers under Article 128

of
the Labor Code 353

(
c
)
Q.

..
Bar

No.

III
2008
8. 353

9. 1993 Bar Q. No. IV 354

10. Significance of the phrase "in cases of employer

employee relationship still exists" stated in
Article 128(b) of the Labor Code. 356

11. The "exception clause," in the last sentence of

Article 128(b) of the Labor Code. 356

12. 2012 Bar Q. No. 52.. 357

13. Article 128(b) of the Labor Code and limitations of

jurisdictional amount under Articles 129 and 224
of the Labor Code 357

14. 2012 Bar Q. No. 48. 358

ph
15. 2009 Bar Q. No. I(e)... 359

u.
16. 1991 Bar Q. No. VIII... 360

ed
17. DOLE's power to determine existence of an employer

n.
employee relationship under Article 128 of the

ai
Labor Code. m 361

18. 2016 Bar Q. No. X(a) and (b)............... 362

su

19. Nature of visitorial and enforcement power under

m

Article 128 of the Labor Code..... 364

s.

Adjudicatory powers of the Regional Director under

@

20.
Article 129 of the Labor Code. 364
91

21. Requisites for the exercise of adjudicatory powers of the

cx

Regional Director under Article 129 of the Labor Code...... 364

o.

22. 2012 Bar Q. No. 24 365

er

23. 1996 Bar Q. Nos. XV(1) and (2)............. 365

sp

24. Rule on appeal under Article 129 of the Labor Code........ 367
o

25. Grounds for appeal under Article 129 of the

pr

Labor Code....... 367

Chapter XII
EMPLOYMENT OF WOMEN

1. Corrective labor and social laws on gender inequality

under the Labor Code. 368

2. 1998 Bar Q. No. VIII.... 368

3. Prohibited discrimination against any women employee.... 369

4. Effect of willful commission of any unlawful acts under
Article 133.... 369

XXX
5. Sexual harassment under RA 7877. 370

6. Kinds of environments to commit sexual harassment

under RA 7877 ...... 370

7. Sexual harassment committed in a work-related

environment under RA 7877 370

8. Sexual harassment committed in an education or

training related environment under RA 7877. 371

9. Those liable for sexual harassment under RA 7877 371

10. The duty of the employer/head of office in a

work-related, education or training environment
under RA 7877 372

11. Liability for damages of the employer, head of office,

educational or training institution under RA 7877. 373
12. Rule on the filing of an independent action for
damages under RA 7877..... 373

ph
13. Penalties and prescriptive period under RA 7877. 373

u.
14. Gravamen of the offense in sexual harassment.. 374

ed
15. Effect of the employer's insensibility to the

n.
employee's sexual harassment case 374

16.
ai
No categorical oral or written statement for demand,
m
request or requirement of a sexual favor under
su

RA 7877...... 375
m

17. 2018 Bar Q. No. XII. 376

s.
@

18. 2011 Bar Q. No. 29.... 377

2009 Bar Q. Nos. XIII(a) and (b). 378

91

19.

20. 2006 Bar Q. No. XV. 379

cx

21. 2005 Bar Q. No. VII(2). 380

o.

22. 2004 Bar Q. No. IV(B). 382

er

2003 Bar Q. No. XV. 383

sp

23.

24. 2000 Bar Q. No. XI(a) and (b). 383

o
pr

25. RA 11313, the Safe Spaces Act.. 386

26. Gender-based sexual harassment in the workplace

under RA 11313, the Safe Spaces Act... 386

27. Duties of employers under RA 11313, the

Safe Spaces Act. 387

28. Duties of employees and co-workers under

RA 11313, the Safe Spaces Act.. 388

29. Liabilities of the employers under RA 11313,

the Safe Spaces Act.…............. 389

30. Stipulations against marriage under the Labor Code.............. 389

31. Condition to contract marriage before reinstatement. 390

32.
A) ..... 391

xxxi
 2012 Bar Q. No. VI(b). 391
33.
392
34. 1995 Bar Q. No. XV.
393
35. 2010 Bar Q. No. IX
36. Prohibited acts under Article 135 of the Labor Code............ 394

37. 2000 Bar Q. No. X(b).. 395

38. Status of women in certain work places under

Article 136 of the Labor Code. 395

39. 2008 Bar Q. No. XI 395

40. 2012 Bar Q. No. IV. 396

41. 1999 Bar Q. No. III 397

42. 1997 Bar Q. No. XIX. 398

43. Distinguished RA 11313 and RA 7877. 400

Chapter XIII

ph
EMPLOYMENT OF MINORS

u.
1. Define the following: (a) "Child," (b) "Child labor,"

ed
and (c) "Working Child". 405

n.
2. Prohibitions on employment of a child. 405

Minimum employable age..

ai
3. m 406

Worst forms of child Labor..... 406

su
4.

5. Hours of work of a working child 407

m

The prohibition on the employment of children in

s.

6.
certain advertisements and in mine labor
@

408

Exceptions and conditions on employment of

91

7.

a child below 15 years of age. 408

cx

409
8. 2015 Bar Q. No. V...
o.

2012 Bar Q. No. 14. 410

er

9.

2007 Bar Q. No. II[2a].

sp

10. 411

413
2012 Bar Q. No. 22
o

11.
pr

12. 2012 Bar Q. No. IV[B]. 414

13. 2006 Bar Q. No. XIV [1-5] 415

14. 2004 Bar Q. No. I[B].. 416

15. 2002 Bar Q. No. XVII[B]. 417

16. Prohibition against child discrimination. 418

17. RA 10911, the Anti-Age Discrimination in

418
Employment Act.….......
18. Exceptions under RA 10911, the Anti-Age
Discrimination in Employment Act.. 419

19. Reportorial requirement for employer under RA 10911,

420
Anti-Age Discrimination in Employment Act........

xxxii
 420
20. Penalty for violation of RA 10911.
421
21. 1998 Bar Q. No. VII.

Chapter XIV
EMPLOYMENT OF DOMESTIC
WORKERS/KASAMBAHAY

1. Define the following: 1. Domestic work, 2. Domestic

422
worker or "Kasambahay" and 3. Household..
2. Definition of Domestic worker or "Kasambahay"
under RA 10361 422

3. 2009 Bar Q. No. VI[a].. 423

4. 2000 Bar Q. No. IX[a]........... 423

424
5. Specific acts declared "unlawful" under RA 10361.
425
6. Those not covered by RA 10361......

ph
7. Rights and privileges of domestic worker or

u.
425
kasambahay under RA 10361..

ed
8. Standard of treatment of domestic worker or

n.
426
kasambahay under RA 10361....

ai
9. Board, lodging, and medical attendance of domestic
m
worker or kasambahay included under RA 10361...... 426
su

10. Guarantee of privacy of domestic worker or

m

427
kasambahay under RA 10361...
s.

11. Right to access to outside communication of domestic

@

427
worker or kasambahay under RA 10361.
91

12. Right to education and training of domestic worker or

cx

kasambahay under RA 10361. 427

o.

13. Rule on prohibition against privileged information

er

428
and exceptions.
sp

428
14. Rights and privileges of employer under RA 10361 .........
o

15. Daily rest period of domestic worker or kasambahay

pr

428
under RA 10361

16. Weekly rest period of domestic worker or kasambahay

under RA 10361 429

17. Stipulations that a domestic worker and employer

are allowed to agree under RA 10361.. 429

18. Rule on assignment to non-household work of

domestic worker or kasambahay under RA 10361.. 429

19. Conditions for temporary task of domestic worker

or kasambahay under RA 10361. 429

20. Mode of payment of wages of domestic worker

or kasambahay under RA 10361. 430

xxxiii
 21. Frequency of payment of wages of domestic worker
or kasambahay under RA 10361. 430

22. Domestic worker or kasambahay entitled to leave

benefits under RA 10361 431

23. Social and other benefits of domestic worker or

kasambahay under RA 10361. 431

24. Domestic worker or kasambahay entitlement to

thirteenth-month pay under RA 10361. 431

25. Rule on termination of service of domestic worker

or kasambahay under RA 10361...... 432

26. Rule on pre-termination of service of domestic

worker or kasambahay under RA 10361..... 432

27. Grounds for termination initiated by the domestic

worker under RA 10361 433
28. Effects if a domestic worker or kasambahay leaves

ph
without cause under RA 10361 433

u.
29. Grounds for termination initiated by the employer

ed
under RA 10361 ....... 434

n.
30. Effect if the employer dismissed the domestic worker

ai
or kasambahay without cause. m 434

31. Invalid ground for termination under RA 10361

su

32. Jurisdiction on settlement of disputes involving

m

domestic worker or kasambahay under RA 10361....... 435

s.

33. Mechanism for settlement of disputes involving

@

domestic worker or kasambahay under RA 10361... 435

91

34. 2018 Bar Q. No. XI(c).…...... 436

cx

35. 2012 Bar Q. Nos. V(a) and (b) 437

o.

36. 1998 Bar Q. No. IX. 437

er

37. 2018 Bar Q. No. XI(b). 438

sp

38. 2011 Bar Q. No. 11... 439

o
pr

39. 2007 Bar Q. No. II(b). 439

40. 2019 Bar Q. Nos. A.4(a) and (B).. 440

41. 2012 Bar Q. No. 64. 441

42. 2011 Bar Q. No. 20.... 441

43. 2011 Bar Q. No. 23.. 442

Chapter XV
EMPLOYMENT OF HOMEWORKERS

1. Definitions: (a) "Industrial Homework," (b) "Industrial

Homeworker," and (c) "Home". 443
2.
Rules on deductions involving homeworkers....... 443

xxxiv
 444
3. Enforcement power involving homeworkers......
4. Employment of minor as homeworkers
5. Prohibitions for homework........... 445

6. 2017 Bar Q. No. V(C).. 445

7. 2000 Bar Q. No. IX(b)....... 446

8. RA 11165, the "Telecommuting Act". 446

9. Definitions of terms 447

........

10. Telecommuting program under RA 11165 447

11. Stipulations that should be included in the

telecommuting program under RA 11165. 448

12. Fair treatment under RA 11165. 449

3. Data protection is applicable in RA 11165.... 450

Administration of telecommuting work arrangement

under RA 11165........ 450

ph
Chapter XVI

u.
ed
EMPLOYMENT OF NIGHT WORKERS

n.
1. Night worker............ 452

Those not covered on nightwork under the Labor Code.....

ai 452
2. m
3. Alternative measures to night work for pregnant
su

and nursing employees......... 452

m

4. Protection against dismissal and loss of benefits of night

s.

workers 453
@
91

BOOK FOUR
cx

Chapter I
o.
er

HEALTH, SAFETY, AND SOCIAL WELFARE BENEFITS

sp

Employees' Compensation Program.…....... 455

o
2.

pr

Dependents under Employees' Compensation Program..... 455

. Meaning of dependent child/children under Employees'
.
Program
Compensation

455

4.
Meaning of dependent spouse under Employees'
Compensation Program . 455
5. Beneficiaries under Employees' Compensation Program.... 456
6. Meaning of injury under Employees' Compensation
Program 456
7. Meaning of sickness under Employees' Compensation
Program 456

8. COVID-19 as compensable illness under Employees'

Compensation Program 456

XXXV
 1

9. 2018 Bar Q. Nos. IX(a), (b), and (c) 457

10. 2005 Bar Q. No. VIII(1b)... 460

460
11. 1999 Bar Q. No. XX(1).
12. 1997 Bar Q. No. XX(c).. 461

13. Effective date of coverage under Employees'

Compensation Program 461

14. Jurisdictional foundation for compensation under

462
Employees' Compensation Program.....
15

Grounds for compensability under Employees'

462
Compensation Program
16 17

2012 Bar Q. No. 16. 462

Test of proof in compensation proceedings covered by

Employees' Compensation Program....... 463

18. Increased risk theory 464

2017 Bar Q. No. XII(C)..

ph
19. 464

2012 Bar Q. No. 15. 465

u.
20.

21. Interpretation of the phrase "arising out of and in

ed
the course of employment" 465

n.
Injury or accident said to arise "in the course of
ai
22.
employment"
m 466
su
23. 1999 Bar Q. No. XX(2). 466
m

24. 1996 Bar Q. No. XIV.. 468

s.

25. 24-hour duty doctrine.. 469

@

26. 2005 Bar Q. No. VIII(1)(a). 469

91

27. Going to and from work rule.. 470

cx

28. 2008 Bar Q. No. VIII.. 470

o.

29. Limitation of liability. 471

er

30. Notorious negligence. 471

sp

31. 1993 Bar Q. No. XX. 471

o

32. Disability. 473

pr

33. Three kinds of disability benefits under the Labor Code. 473

34. Meaning of permanent disability. 474

35. Total disability. 474

36. Nature of injury in total disability 474

37. Compensation and benefits under POEA

Standard Employment Contract. 475

38. Post-employment medical examination under

POEA-Standard Employment Contract.…........ 477

39. Reason for strict compliance with three-day

period for post-employment examination. 478

xxxvi
40. The third-doctor conflict resolution procedure
under the 2010 POEA-SEC. 479

480
41. 2019 Part II Bar Q. Nos. B.16(a) and (b)...
42. Basis to pursue action for total and permanent
disability benefits. 483

43. Guidelines on company-designated physician

to assess the seafarers... 484

44. POEA-SEC (MC No. 10-2010). 485

45. Section 32-A under POEA-SEC (MC No. 10-2010) ............... 486

16. Meaning of work-related injury.. 486

47. 2018 Bar Q. No. X(b)......…..... 486

48. 2015 Bar Q. Nos. XV(a) and (b) 488

49. 2013 Bar Q. No. X...... 490

ph
Chapter II
SOCIAL SECURITY ACT OF 2018

u.
ed
1. Employer under SSS Law (RA 11199). 493

n.
2. 2012 Bar Q. No. 36 493

ai
3. Employee under SSS Law. m 494

4. 2009 Bar Q. No. X(b)... 494

su

5. 1999 Bar Q. No. VII... 495

m

6. Dependents under SSS Law 496

s.

2017 Bar Q. No. XII(a). 496

@

7.

Employment covered under SSS Law; Exceptions........ 497

91

8.

9. 2015 Bar Q. No. VI(b). 498

cx

¹0. 2014 Bar Q. No. XIII(B).. 499

o.

1. 2002 Bar Q. No. XII. 499

er

12. Primary and secondary beneficiaries under SSS Law 500

sp

13. 2019 Part I Bar Q. Nos. A.2(a) and (b).. 501

o
pr

14. 2017 Bar Q. No. XII(b). 502

15. 2016 Bar Q. No. XVII(a).... 503

16. 1997 Bar Q. No. XX(a) 503

17. 2000 Bar Q. No. II...... 505

18. Effective date of coverage of employee, employer,

self-employed and OFW 506

507
19. 1995 Bar Q. No. XVI...
20. Jurisdiction of SSC. 508

21. Appeal on decision of SSC. 508

22. Reportorial duty of employer under SSS Law. 508

23. Benefits under RA 11199.. 509

xxxvii
 509
24. Monthly pension benefit.
25. Included in monthly pension benefits. 509

26. Retirement benefit.. 510

27. Types of retirement benefits. 510

28. Death benefit.......... 512

29. Types of death benefits.. 512

30. Permanent disability benefit... 513

31. Types of permanent disability benefits........ 513

32. Funeral benefit........ 514

33. Amount of funeral benefit 515

34. Sickness benefit........ 515

35. Requirements to qualify for grant of sickness benefit. 515

36. Rules on sickness notification requirement

by the employee...... 516

ph
37. Sickness notification requirement by the employer. 517

u.
38. Amount of sickness benefit. 517

ed
39. Maternity benefit. 517

n.
40. Unemployment insurance or involuntary

ai
separation benefit... m 518

41. Conditions for eligibility of unemployment insurance

su

or involuntary separation benefit.. 518

m

42. Limitation of unemployment insurance or involuntary

s.

separation benefit.... 519

@

43. Rule on overlapping of benefits.. 519

91

44. Prescriptive period for filing unemployment

cx

insurance or involuntary separation benefit claims. 519

o.

45. Employer's liability for failure to report

er

employee/s on time.......... 519

sp

46. Measure of damages as a result of failure to

o

report employee........ 520

pr

47. Employer's liability for misrepresenting true date of

employment or remitting contributions... 520
48. Measure of damages as a result of employer's
misrepresenting true date of employment or remitting
contributions 521

49. Guidelines for determination of employer's

liability for damages. 521

50. Effect of failure or refusal of employer to pay or remit

the contributions on the benefits of employee..... 522

51. Prescriptive period of necessary action against

the employer. 522

xxxviii
52. Offenses punishable under SSS Law 522

53. Party to institute a criminal action... 524

54. Prescriptive period of criminal action with

imprisonment for six years.. 524

55. 2001 Bar Q. No. XIII(b).... 525

56. 2016 Bar Q. No. XVII(b). 526

Chapter III
GOVERNMENT SERVICE INSURANCE ACT

1. Compulsory coverage of the Government Service

Insurance Act. 527

2. Classifications of membership in the GSIS Law. 528

3. Those excluded from compulsory coverage of

the GSIS Law........... 529

ph
4. Effective date of GSIS membership........... 529

u.
5. Definition of Employer, Employee Member, Active

ed
Member, Dependents, Primary beneficiaries and

n.
Secondary beneficiaries... 529

ai
6. Benefits under GSIS Law m 530

7. Compulsory Life Insurance Benefits under the Life

su

Endowment Policy (LEP)... 531

m

8. Compulsory Life Insurance Benefits under the

s.

Enhanced Life Policy (ELP))...... 532

@

9. Retirement Benefits ..... 532

91

10. Rule on eligibility for retirement. 533

cx

11. Retirement benefit options........... 533

o.

12. Rule on change of Retirement Benefit Option........... 534

er

535
13. Separation Benefits..
sp

535
14. Unemployment Benefits.
o
pr

536
15. Disability Benefits....
16. Three kinds of disability 536

536
17. Survivorship Benefits..
18. Survivorship benefits of members in active service..... 537

19. Survivorship benefits of inactive members 537

20. Payment of survivorship benefits............ 538

21. Conditions for entitlement to survivorship benefits. 539

22. Funeral Benefit....... 539

23. Amount of funeral benefit. 540

24.

Conditions for entitlement to funeral benefit. 540

25.

2009 Bar Q. No. X(a); 1997 Bar Q. No. XX(b). 541

26.

2004 Bar Q. No. VIII(B). 541

xxxix
 542
27. Prescriptive period for claim under the GSIS Law
542
28. Jurisdiction of the GSIS...
29. Rules governing appeals from the decision of the GSIS...... 542
30. 1995 Bar Q. No. XI(2).. 543

Chapter IV
PORTABILITY LAW

544
1. Definitions of Contributions, Portability, Totalization........
2. Creditable services in the public sector under
544
Portability Law
3. Period of contribution in the private sector
under Portability Law 545
545
4. Overlapping under Portability Law.
5. Benefits under the Portability Law 545

ph
6. Instances where totalization under Portability

u.
Law will apply. 546

ed
7. Effect if after totalization the worker-members does
not qualify in either system (SSS/GSIS)... 546

n.
ai
8. Instance when totalization will not apply 546

9.
m
Times to credit the overlapping periods of creditable
su
services or contributions under the Portability Law.. 546

547
m

10. 2014 Bar Q. No. XIV..

s.

11. 2011 Bar Q. No. 54.... 547

@

12. 2005 Bar Q. No. II(c). 547

91

BOOK FIVE
cx
o.

Chapter I
er

POLICY AND DEFINITIONS

sp

1. Meaning of Labor Relations 549

o
pr

2. Principle of co-determination.. 549

3. Principle of co-determination in the Labor Code... 549

4. Legitimate workplace mechanisms to exercise

codetermination..... 550
‫ܩ‬5. ‫ܩ‬

1994 Bar Q. Nos. X(1) and (2).. 550

6. ‫ܘ‬

1995 Bar Q. No. XVII.. 552

552
7. Meaning of employee.
‫ܣ‬8. ‫ܘ‬

1990 Bar Q. No. IX-2.. 553

9. Distinguish a labor organization from a legitimate

554
labor organization.
554
10. 1996 Bar Q. No. II(1).....

xl
 554
11. 2012 Bar Q. No. 50.
2011 Bar Q. No. 58..... 554
12.
555
13. 2004 Bar Q. No. II(A)(2)
555
14. 2000 Bar Q. No. XV[a].

15. 2004 Bar Q. No. II[3]. 556

16. 1991 Bar Q. No. XIII[c]. 556

17. 2003 Bar Q. No. V...... 557

2002 Bar Q. No. XVIII[A]. 557

1996 Bar Q. No. III[1]. 557

18. 2017 Bar Q. No. XI[a]. 558

Chapter II
LABOR ARBITERS
AND NATIONAL LABOR RELATIONS COMMISSION

ph
1. Original and exclusive jurisdiction of the

u.
Labor Arbiters...... 559

ed
1995 Bar Q. No. IX(1)........... 560

n.
3. 2015 Bar Q. No. XXI(c)..... 560

4.
ai
Matrix on the exercise of jurisdiction of Labor
m
Arbiters under Article 224 of the Labor Code.......... 563
su

5. "Reasonable causal connection" rule.. 563

m

6. Actions, between the employees and employers, which

s.

are not within the jurisdiction of the labor tribunals............. 564

@

7. Money claims which are within the jurisdiction of the

91

Labor Arbiters under the Labor Code. 565

cx

8.
Jurisdiction over an employee's claim for the release
o.

of the amount (outstanding loan) withheld from his

er

565
separation package...
sp

9. 2016 Bar Q. No. XV(a) 566

o

568
2015 Bar Q. No. XIX(a).
pr

10.
11. Other cases that do not fall within the jurisdiction
of labor tribunals.. 569

12. Coverage of the civil service 569

569
13. Meaning of intra-corporate controversy
14. Tests to determine whether or not a case involves
an intra-corporate dispute. 570

15. Jurisdiction over intra-corporate dispute.. 570

16. Original and exclusive jurisdiction when the person

terminated is a corporate officer.......... 571

17. Rule to determine a corporate officer. 571

18. Distinction between an officer and an employee. 572

xli
 19. 2019 Part II Bar Q. No. B.12(a)... 572

20. 2017 Bar Q. No. XI(B). 573

21. 2015 Bar Q. No. XXII(A). 574

22. 2014 Bar Q. No. XIX... 577

23. 2011 Bar Q. No. 15........ 578

24. 1996 Bar Q. No. XI 579

25. Employers with immunity from suit. 580

26. 2014 Bar Q. No. X......... 581

27. 1994 Bar Q. Nos. XV(1) and (2).. 582

28. 2001 Bar Q. No. X..... 582

29. Unfair labor practice.. 583

30. Aspects of unfair labor practices which are within the

jurisdiction of labor arbiter…... 583

31. Other quasi-judicial body that can exercise jurisdiction

ph
over unfair labor practices.. 583

Meaning of termination disputes.......... 584

u.
32.

ed
33. Exceptions on labor arbiters' jurisdiction over
termination disputes.. 585

n.
ai
34. 2012 Bar Q. No. 54 585

35. 1991 Bar Q. No. V(a).

m 586
su
36. 1990 Bar Q. No. I(1). 587
m

37. Money claims which are within the jurisdiction

s.

of labor arbiters 588

@

38. 2011 Bar Q. No. 39.. 589

91

39. 2011 Bar Q. No. 66... 589

cx

40. 2012 Bar Q. No. 27 590

o.

41. 2004 Bar Q. No. IV(A) 591

er

42. Jurisdiction of labor arbiters under Section 10 of

sp

RA 8042 is not limited to employer-employee

o

592
relationship...............
pr

43. 2009 Part I Bar Q. Nos. III(a) and (b)........ 592

44. Rule on claim for damages under paragraph 4 of

Article 224(a)(4) of the Labor Code...... 594

45. Jurisdiction over actions for damages where employer

employee relationship is merely incidental.. 595

595
46. 1999 Bar Q. No. V(2)...
47. 1995 Bar Q. No. V........ 596

48. Labor arbiters' jurisdiction to award damages governed

by the Civil Code 598

49. 2018 Bar Q. No. III(c). 598

50. 2001 Bar Q. No. XI(a). 599

xlii
51. Those cases arising from strikes and lockouts which
600
fall within the jurisdiction of the Labor Arbiters.....
52. Jurisdiction on wage distortion disputes in unorganized
establishments........ 600
600
53. 2012 Bar Q. No. 53.
54. Circumstance that Labor Arbiters will exercise

jurisdiction over enforcement of compromise

agreements.......... 601

55. 2001 Bar Q. No. XI(a). 601

56. 2012 Bar Q. No. 53.. 601

57. 1995 Bar Q. No. IX(3). 602

58. 2014 Bar Q. No. XXVII.. 603

604
59. Matters may be taken by the NLRC En Ban............
60. Interpretation of Article 225 9(c) of the Labor Code............. 604

ph
61. 2013 Bar Q. No. V.............. 605

u.
606
62. Procedure for contempt powers

ed
63. Kinds of injunction that the NLRC can issue under

n.
the Labor Code........ 607

64. Grounds, penalties and rule on appeal for

ai
m
607
direct contempt........
su
608
65. Grounds for indirect contempt.
m

608
66. Where to file the charge for indirect contempt.
s.

608
@

67. Initiating indirect contempt proceedings.

609
91

68. Punishment for direct contempt..............

610
69. 1999 Bar Q. No. IX(1)....
cx

70. Kinds of injunction under the Labor Code....... 611

o.

71. Requisites for issuance of a temporary/permanent

er

injunction by the NLRC under the Labor Code 611

sp

72. 612
1993 Bar Q. No. V..
o
pr

613
2015 Bar Q. No. XIX(b).
74. 615
Certified labor disputes..
75. Effects of certified labor disputes under 2011 NLRC
Rules of Procedure..... 615

76. Effects of defiance of certification order under the

2011 NLRC Rules of Procedure......... 616

77. Procedure of the NLRC's jurisdiction on

616
extraordinary remedies
78. Technical rules are not binding in any proceeding
before the NLRC and the Labor Arbiters... 618

79. 2007 Bar Q. No. XIII..... 619

xliii
80. Labor Arbiters to resolve cases based solely on the
position papers, affidavits or documentary evidence
619
submitted by the parties.
81. 2001 Bar Q. No. XIV.. 620

82. 1990 Bar Q. No. VI(2)(b).. 621

622
83. 2014 Bar Q. No. VII.
84. 2007 Bar Q. No. V... 624

85. Rule on charging attorney's fees, negotiation fees

626
or similar charges arising from CBA..
86. Effect of any contract charging attorney's fees
626
arising from CBA....
11

87. Exactions which are within the category of '

similar charge".. 626

88. Explain the object and import of Article 228 (b)

of the Labor Code. 627

ph
89. Distinguish attorney's fees under Article 228 (b)

u.
from the attorney's fees under Article 111 of the

ed
Labor Code... 627

n.
90. 1997 Bar Q. Nos. XI(a) and (b).. 628

1993 Bar Q. Nos. I(1) and (2)........

ai
91.
m 629
su

Chapter III
m

APPEAL
s.
@

1. Period to appeal the decisions, awards or orders

91

of the Labor Arbiter... 631

Grounds to appeal the decisions, awards or orders

cx

2.

of the Labor Arbiter. 631

o.

Where to file the appeal on the decisions, awards

er

3.
sp

or orders of the Labor Arbiter.... 632

Requisites for perfection of appeal on the decisions,

o

4.
pr

awards or orders of the Labor Arbiter. 632

5. Posting of bond required in filing of an appeal on

the decisions, awards or orders of the Labor Arbiter. 633

6.
Purpose of appeal bond 633

7. Nature of the perfection of appeal on the decisions,

awards or orders of the Labor Arbiter 633

8. 2001 Bar Q. No. VIII... 634

9. 2012 Bar Q. No. 73. 634

10. 2007 Bar Q. No. VI. 635

11. 2001 Bar Q. No. VIII.. 636

12. 1993 Bar Q. No. VI. 637

xliv
13. Effect of filing an irregular or a bond that
637
is not genuine.......
14. Requirements in filing a motion to reduce bond. 637

15. Effect of filing a mere motion to reduce bond 638

16. Effect of filing of mere notice of appeal 638

17. Effect when appeal is perfected.. 638

18. The "meritorious cases" as grounds for reduction

of bond.. 638
19.
Guidelines on the filing and acceptance of motions
to reduce appeal bond.. 639

20. 2016 Bar Q. No. XIX... 640

21. Effect of the reinstatement aspect of the Labor

Arbiter's decision. 641
22. Effect of posting a bond on reinstatement aspect

ph
of the decision of the Labor Arbiter

u.
23. 2012 Bar Q. No. 65.. 642

ed
24. 2011 Bar Q. No. 18... 642

1995 Bar Q. No. VI(3)...........

n.
25. 644

ai
26. 2013 Bar Q. Nos. IV(A) and (B). 645

27. 2005 Bar Q. No. V(B).

m 646
su
28. 1999 Bar Q. No. IX(2).. 647
m

29. 2009 Part I Bar Q. No. VIII(a), (b), and (c).. 648
s.

30. Accrued wages/salaries (reinstatement

@

wages/salaries)........ 649
91

31. Two-fold test to bar accrued wages 650

cx

32. 2018 Bar Q. No. XIII(B).. 650

o.

33. Refund doctrine. 652

er

34. Reason for reversing the refund doctrine. 652

sp

35. 2019 Part I Bar Q. No. B.12(b).. 652

o

36. 2017 Bar Q. No. XII(A). 654

pr

37. Mode of review of the NLRC's decision......... 655

38. Effect of filing of petition for certiorari on execution. 656

39. Effect of reversal of executed judgment. 656

40. 2019 Part I Bar Q. No. A.9(b).. 656

41. 1999 Bar Q. No. XV(1). 657

42. 2007 Bar Q. No. XII(12)(a). 658

43. The instances when an order of execution can

be appealed 658

44. 2007 Bar Q. No. XII(b). 659

45. Contempt powers of the Secretary of Labor 659

xlv
 Chapter IV
BUREAU OF LABOR RELATIONS

1. Bureau 660

2. Cases within the original and exclusive jurisdiction

of the Bureau of Labor Relations and Labor
Relations Divisions............ 660

Labor Relations Divisions. 660

3456
Med-Arbiter under the Labor Code. 661

Jurisdiction of the Med-Arbiter under the Labor Code......... 661

Jurisdiction of Regional Directors on inter/intra

union and registration related cases..... 665

7. Jurisdiction of the Bureau of Labor Relations on

inter/intra union and registration related cases. 667

8. Quasi-judicial agencies exercising jurisdiction on cases

ph
enumerated under Article 232 of the Labor Code.... 667

u.
9. Distinguish inter-union disputes from intra-union

ed
disputes....... 667

n.
10. Rule on appeal involving decisions of the Med-Arbiter

ai
and Regional Director... m 667

11. Rule on appeal involving the decision of the

su
Bureau of Labor Relations.. 668
m

12. Distinction on the mode of review of the

s.

Bureau of Labor Relations' decision. 668

@

13. 2019 Part I Bar Q. No. B.11(b). 668

91

14. 2012 Bar Q. No. 66. 669

cx

15. 1996 Bar Q. No. XII. 669

o.
er

Chapter V
sp

COMPROMISE AGREEMENTS
o

1. Effect of compromise agreements under the

pr

Labor Code. 671

2. When Labor Arbiters assume jurisdiction on

compromise agreements....... 671

3. 2007 Bar Q. No. VII(7)(a)...... 671

4. Discuss the rule on the validity of quitclaims........... 672

5. Rule on "dire necessity" as acceptable ground to

annul quitclaims...... 672

6. Reason why quitclaims are commonly frowned

upon as contrary to public policy 673
7. Effect of absence of evidence of any vices of consent in
executing a quitclaim............. 673

xlvi
8. Cases where the position and education were
considered in affirming the validity of quitclaims .. 674

9. Validity of compromise agreement how determined.... 676

10. 2010 Part I Bar Q. No. I[1] 676

11. 2010 Bar Q. No. XI 677

12. 1999 Bar Q. No. XI.. 678

13. 1994 Bar Q. No. XVII. 679

Chapter VI
MANDATORY CONCILIATION-MEDIATION

1. Rule on mandatory conciliation-mediation

under the Labor Code. 681

2. Definitions of terms 681

3. Cases not covered by the mandatory conciliation

mediation under the Labor Code.

ph
682

Who may file a request for assistance (RFA)? 683

u.
4.

Party to appear during SEnA......

ed
5. 683

6. Requirements for lawyers, agents or representatives

n.
to appear during the SEnA.... 684

ai
7.
m
Instances when the 30-day mandatory conciliation
su
mediation can be pre-terminated 684

8. Instances when the 30-day mandatory conciliation

m

mediation can be terminated

s.
@

9. Cases that can be taken cognizance by the Labor

Arbiter, or the appropriate DOLE office or
91

attached agency 685

cx

10. Nature of the conciliation-mediation proceedings ....... 685

o.

11. Effect of settlement entered by the parties

er

during SEnA............. 686

sp

12.
Effect of non-compliance with the settlement
o

agreement entered by the parties during SEnA............... 686

pr

13. Nature of information and statements made

at conciliation proceedings. 687

14.
Effects of privileged communication under the
Labor Code.. 687
15. 2007 Bar Q. No. VII(b). 687

16. 2018 Bar Q. No. XIV(b)............... 687

Chapter VII
BAR RULES

1. Contract bar rule 689

2. Exception to the contract bar rule. 689

xlvii
3. Cases that the contract bar rule will apply. 689

4. Bar rules on the filing of the petition for

certification election.. 690

5. Counting of the one (1)-year period and duration

of the following Bar Rules. 691

6. Distinguish Statutory Bar Rule from Certification

Year Bar Rule......... 692

7. 199 Bar Q. No. IV(1)... 693

8. 1999 Bar Q. No. II(1).. 693

Chapter VIII
REGISTRATION AND CANCELLATION

1. What is registration.. 695

2. Definitions of terms 695

ph
3. Requirements for registration of an independent union...... 697

u.
4. Additional requirements for federations or

ed
national unions. 697

n.
5. Effects of registration of a labor organization,

ai
association or group of unions or workers. 697
m
6. When a labor organization acquires the legal
su
personality or the status of legitimate labor
m

698
organization............
s.

7. 2012 Bar Q. No. 69. 698

@

8. 2003 Bar Q. No. IX. 698

91

9. Rule to question the legal personality of a labor

cx

699
organization...
o.

10. 2018 Bar Q. No. II(a)... 699

er

11. 2010 Part II Bar Q. No. XXIV 700

sp

12. Affiliate....... 701

o

13. Requirements for affiliation…... 701

pr

14. Purpose of affiliation 702

15. Rule on the right to disaffiliate of a local union. 702

16. 1994 Bar Q. Nos. XIX(1) and (2).. 703

17. Creation of local chapter...... 704

18. Effect of chartering and creation of a local chapter. 704

19. When a chapter is entitled to all other rights and

privileges of a legitimate labor organization........... 704

20. Cancellation proceedings.. 705

21. Petition for cancellation proceedings... 705

22. Effect of petition for cancellation of registration 705

23. Grounds for cancellation of registration. 705

xlviii
24. Voluntary cancellation of registration effected... 706

25. Equity of the incumbent...... 706

26. 2018 Bar Q. No. II(b).. 706

27. 2015 Bar Q. No. XIX.. 707

Chapter IX
RIGHTS AND CONDITIONS OF MEMBERSHIP

1. Rights and conditions of membership in a labor

organization............ 708

2. As to fees, dues, assessments, and other contributions

of union members 708

3. As to union funds and financial transactions... 709

4. As to union officers/members. 711

5. As to question of major union policy.

ph
712

6. As to workers education. 713

u.
7. Effect of any violation of the rights and conditions

ed
of membership........... 713

n.
8. Requirements on levy under Article 250 [n] and

ai
check-off under Article 250(0) of the Labor Code. 713
m
su
2002 Bar Q. No. VII...... 714

10. 2001 Bar Q. No. XII(b).

m

715
s.

2002 Bar Q. No. XIX(A). 716

@

2012 Bar Q. No. 57. 716

91

Chapter X
cx

RIGHTS OF LEGITIMATE LABOR

o.

ORGANIZATIONS
er
sp

1.
Rights of legitimate labor organizations 717
o

2.
2013 Bar Q. No. X.…........ 717
pr

Chapter XI
COVERAGE OF RIGHT TO SELF-ORGANIZATION

1.
Right to self-organization........ 719

2.
Coverage of the right to self-organization... 719
3. Those excluded from the coverage of employees'
right to self-organization.......... 721
4. Those who may join employees' organizations
in the public sector...... 722

5.
Eligibility for membership in employees'
organization commence 722

xlix
6. Those not eligible to join employees' organizations
722
in the public sector...........
7. Terms and conditions of employment in the public
723
sector which are subject of negotiation
8. Negotiable matters between the management and
the accredited employees' organization in the
. 723

9. Compensation matters in the public sector which

724
are not negotiable..
10. Workers in the public sector do not enjoy the
right to strike.... 724

11. Rule on collective bargaining agreements and

collective negotiation agreements in government
owned or controlled corporations. 725

ph
12. Remedy of the employees in the government

u.
owned or controlled corporations. 726

ed
2011 Bar Q. No. 64... 727
13.

n.
14. 2002 Bar Q. No. VI(B).. 728

ai
15. 2000 Bar Q. No. IV(b)(i).. 728
m
16. 2000 Bar Q. No. IV(b)(ii). 729
su
17. 2012 Bar Q. No. 58 729
m

18. 2010 Bar Q. No. X..... 730

s.

19. 2002 Bar Q. No. XVIII(B). 730

@

20. 2014 Bar Q. No. XVII(A) 731

91

21. 2009 Part II Bar Q. No. XI(c).. 732

cx

22. 1996 Bar Q. No. II(2). 733

o.

23. 2011 Bar Q. No. 22.... 734

er

24. 2014 Bar Q. No. XVII(B). 734

sp

25. 2004 Bar Q. No. X(B)... 736

o
pr

26. Definitions of terms 737

27. Rule on managerial employees' right to join

737
any labor organization
28. Rule on the right of supervisory employees' to
737
self-organization........
29. Confidential employees covered by the prohibition
on the right to self-organization. 738

30. Justification on exclusion of confidential employees

under Article 255 of the Labor Code 738

31. 2017 Bar Q. No. IX(A)... 738

32. 2010 Part II Bar Q. No. XV(A)... 740

33. 2004 Bar Q. No. IX(B)... 741

1
34. 1995 Bar Q. Nos. VII(1) and (2).. 741

35. 2018 Bar Q. Nos. XV(a) and (b) 743

36. 1994 Bar Q. No. III..... 743

37. 2017 Bar Q. No. IX(B). 745

38. 2014 Bar Q. No. XII. 746

39. 2011 Bar Q. No. 14..... 746

40. 2009 Part I Bar Q. No. I.. 748

41. 2002 Bar Q. No. VI... 748

42. 1994 Bar Q. No. IV(1)............. 749

43. Effect of inclusion as union members of employees

outside the bargaining unit. 750
44. Effect of affiliation of rank-and-file and

supervisory unions...... 750

45. When co-mingling can be a ground for

ph
cancellation of union registration........ 750

u.
46. Effect of co-mingling on union's legal personality.. 751

ed
47. 2013 Bar Q. No. XVIII... 751

n.
48. 2010 Bar Q. No. V... 753

49.
ai
2010 Part II Bar Q. No. XV(b)...................
m 753

50. 2014 Bar Q. No. XV.. 754

su

51. 1999 Bar Q. No. I......... 755

m
s.

Chapter XII
@

UNFAIR LABOR PRACTICES

91
cx

1.
Concept of unfair labor practices 757
o.

2.
Effect of recovery of civil liability in administrative
er

proceedings involving ULP. 757

sp

3.
Unfair labor practices are criminal offenses under
the Labor Code..
o

757
pr

4.
Requirement for the prosecution of ULP. 758
5.
Prescriptive period of the criminal aspect of ULP 758

6. Effect of pendency of administrative case for ULP. 758

7.
Effect of final judgment in administrative proceedings
involving ULP... 758
8. Essence of ULP 758
9.
Unfair labor practices committed by the employers
and labor organizations.......... 759
10. Test of interference and coercion. 762

11. Application of "totality of conduct doctrine" in

unfair labor practices. 762

li
 763
12. 2012 Bar Q. No. 59
1996 Bar Q. No. IV(1).. 763
13.

14. 1996 Bar Q. No. IV(2). 764

765
15. 2007 Bar Q. No. VIII...
2005 Bar Q. No. II(b).. 766
16.
766
17. 2009 Part I Bar Q. No. VII..
767
18. 2019 Part II Bar Q. No. 18.
2012 Bar Q. No. 74 768
19.
768
20. 2018 Bar Q. No. X(a).
769
21. 2004 Bar Q. No. IX(A).
770
22. 2001 Bar Q. No. II(a).
771
23. Runaway shop.
771
24. Union security.......
772
25. Kinds of union security clause...

ph
26. Agency shop agreement under Article 258(e)

u.
772
of the Labor Code

ed
773
27. Legal basis of union's right to agency fees..

n.
28. Employees exempted from the coverage of

ai
773
union shop clause..... m
774
29. 2009 Part I Bar Q. No. I(c)................
su
774
30. 2015 Bar Q. Nos. XVII(b) and (c)..
m

776
31. 1999 Bar Q. No. XVI(1)..
s.

777
2010 Bar Q. No. XIII..
@

32.
778
2009 Part II Bar Q. No. XI..
91

33.
778
34. 1997 Bar Q. Nos. V(a) and (b).
cx

779
35. 2009 Bar Q. No. XVIII(b)...
o.

780
36. 2005 Bar Q. Nos. VI(a) and (b).
er

781
37. 1995 Bar Q. No. XVII.
sp

782
38. 2018 Bar Q. Nos. XVI(a) and (b)
o

785
pr

39. 2011 Bar Q. No. 70.....

40. Collective bargaining and effect of violating the
786
duty to bargain collectively.
41. Unfair labor practices in Collective Bargaining
786
under Article 259(g) [248(g)] of the Labor.
42. Bargaining in bad faith and refusal to bargain. 787

43. Effect of bargaining in bad faith or refusal to bargain. 788

44. Bargaining in bad faith is a question of fact 789

and evidentiary...
45. Circumstances indicating bargaining in bad faith................ 790

791
46. Individual bargaining.
792
47. Blue-sky bargaining.
...............

lii
48. Surface bargaining 792

792
49. Shifting bargaining positions
50. Boulwarism 792

793
51. Substitutionary doctrine........
52. Effect of labor contracts on transferee of business. 793

53. Effect on labor contracts in case of merger..... 794

54. Violation of the CBA constitute ULP. 794

55. Who are liable for ULP.. 795

56. 2011 Bar Q. No. 68...... 795

57. 1997 Bar Q. No. VI(b). 796

58. 1999 Bar Q. No. VI(2).. 797

59. 2011 Bar Q. No. 59...... 798

60. 2009 Part I Bar Q. No. I. 799

2000 Bar Q. No. XVI(a). 800

ph
61.

52. 2000 Bar Q. No. XVI(b). 801

u.
3. 2011 Bar Q. No. 51...... 802

ed
1998 Bar Q. No. XV.. 803

n.
Chapter XIII
ai
m
COLLECTIVE BARGAINING
su

AND ADMINISTRATION OF AGREEMENTS

m
s.

Procedure in collective bargaining.. 804

@

Jurisdictional preconditions of collective bargaining.. 805

91

1996 Bar Q. No. V(2)........... 805

cx

4.
Effect of filing of a petition for certification election
o.

will suspend the pending CBA negotiation.…............ 806

er

5. Effect of the pendency of a petition for cancellation

sp

of union registration on collective bargaining 807

o

6. Concept of collective bargaining.... 807

pr

7. Meaning of duty to bargain collectively in the

absence of collective bargaining agreements..... 808

8. Meaning of the duty to bargain collectively when

there exists a collective bargaining agreement... 808
9. Automatic Renewal Clause/Evergreen
Clause/Hold-over...... 808

10. 1999 Bar Q. No. VI(1).. 809

11. 1996 Bar Q. No. V(1)... 811
12. 2009 Bar Q. No. XVI(c). 811
13. 2008 Bar Q. No. I(A) and 1999 Bar Q. No. (2). 813
14. 2001 Bar Q. No. VII.. 813

liii
 814
15. 2005 Bar Q. No. V(b).....

16. Terms of CBA and the representation aspect

17. Rule when to question the majority status of the
incumbent bargaining agent and to conduct a
certification election. 815

18. Effect of subsequent CBA executed by the

bargaining agent and the employer on the 5-year
815
representation status......
19. Period to renegotiate "all other provisions" of the
815
Collective Bargaining Agreement...
20. Rule on retroactivity of the renegotiated "all
816
other provisions" of the CBA..
816
21. Rights of parties in case of bargaining deadlock.
816
22. Collective bargaining deadlock.....

ph
23. Meaning of the representation aspect and "all
816
other provisions"..

u.
ed
24. Effect of amended or extended term of CBA
817
on exclusive representation status...........

n.
Period of renegotiated terms of "all other
ai
25.
817
provisions" of the CBA....
m
su
26. Retroactivity of the effectivity of an arbitral
818
m

award (CBA).
s.

819
27. 2019 Part II Bar Q. No. B.15(b).
@

28. 2011 Bar Q. No. 19... 819

91

29. 2009 Bar Q. Nos. XVI(a) and (b). 820

822
cx

30. 2019 Part II Bar Q. No. B.15(a)..

823
o.

31. 2001 Bar Q. No. I....

er

823
32. 1994 Bar Q. Nos. IX(1) and (2)..
sp

Chapter XIV
o
pr

INJUNCTION

826
1. No injunction rule.
826
2. Exceptions to no injunction rule....
3. Other provisions of the Labor Code prohibiting
826
injunction...........
827
4. 2014 Bar Q. No. XXIII.
828
5. 2001 Bar Q. No. X....
828
6. 1997 Bar Q. No. VII.
829
7. 1995 Bar Q. No. II(2).
830
8. 1992 Bar Q. No. V..
831
9. 1991 Bar Q. No. XV.

liv
 Chapter XV
DETERMINATION OF REPRESENTATION STATUS

1. Concept of exclusive bargaining representative. 833

2. Concept of bargaining representative... 833

3. Concept of bargaining unit... 833

4.
Factors in determining the appropriate collective
bargaining unit ....... 834

5. Modes to determine the exclusive bargaining

representative/agent.............. 834

6. Requirements for request of SEBA Certification. 835

7. Actions of the Regional Director on Request for

SEBA Certification.... 835
8. Rule on request for certification in unorganized
establishment with only one (1) legitimate labor

ph
organization........ 836

u.
9. Actions of Regional Director on submission of

ed
requirements for Request for SEBA Certification 837

n.
10. Effect of SEBA certification.... 837

11.
ai
Rule on request for certification in unorganized
m
establishment with more than one (1) legitimate
su

labor organization..... 838

m

12. Rule on the request for certification in organized

s.

establishment.
@

838

13. Certification/Consent election and their distinctions........ 838

91

14.
Who may file a petition certification election... 838
cx

15. Effect when national union/federation files the

o.

petition for its local/chapter. 839

er

16. When can an employer file a petition for

sp

certification election.. 839

o
pr

17. Effect of filing a petition for certification election

by the employer.......... 839
18. Grounds for the dismissal of a petition for
certification election.. 840

19. Prohibited grounds for the denial/suspension of

the petition for certification election. 841

20. Med-Arbiter can resolve issues pertaining to

employer-employee relationship. 842

21. Proceedings to hear and resolve validity of certificate

of registration, legal personality as a labor organization,
validity of registration and execution of collective
bargaining agreements. 842

lv
22. Rule on appeal in a certification election in
842
unorganized establishment...........
23. Rule on appeal in a certification election in organized
establishment 843

24. When decision of the Secretary becomes final

843
and executory.........
25. Effects of consent election. 843

26. Effects of early agreements on pending

844
representation case......
27. Employer as by-stander on the conduct of
844
certification election.
28. Qualification of voters; inclusion-exclusion... 844

845
29. Procedure on the challenge of votes.
845
30. Rule on filing of protest and its perfection...
Rule on the declaration of failure of election.

ph
31. 846

Re-run election....... 846

u.
32.

ed
When to conduct a re-run election. 846
33.

Vote required to win the re-run election. 847

n.
34.

Effect of failure of election....... 847

ai
35.
m
36. Rule on proclamation and certification of
su
election results 847
m

37. To whom the decision of the Med-Arbiter is

s.

848
appealable.........
@

38 When decision of the Secretary becomes final

91

848
and executory...
849
cx

39. Run-off election

40. Conduct of run-off election proper 849
o.

41. Right to present grievances to employer and the

er

right to submit to voluntary arbitration.......

sp

849

Existence of employer-employee relationship is

o

42.
pr

required in the conduct of certification election. 850

43. Effect of amended or extended term of CBA on

851
exclusive representation status
44. Probationary employees can vote in a
certification election. 851
852
45. 2011 Bar Q. No. 75....
853
46. 2007 Bar Q. No. IV[4].
853
47. 1998 Bar Q. No. XVI....
854
48. 2017 Bar Q. No. XI(A).
854
2012 Bar Q. No. VII(b).
854
2006 Bar Q. No. VIII..

lvi

MES
 2004 Bar Q. No. II[A.4]. 854

2000 Bar Q. No. XIV. 854

49. 1998 Bar Q. No. XVIII. 856

50. 2012 Bar Q. No. 34 857

51. 2018 Bar Q. Nos. VI[a] and [b]. 857

859
52. 2006 Bar Q. No. XIII[1].
53. 2006 Bar Q. No. XIII[2] 859

54. 2011 Bar Q. No. 26.... 859

55. 1998 Bar Q. No. XVII 860

56. 2014 Bar Q. No. V[A]. 860

57. 1999 Bar Q. No. IV[2].. 862

58. Organized establishment. 862

59. Who may file a petition for certification election

in organized establishments. 863

ph
60. Period to file a petition for certification election 863

u.
61. Requirements for a valid election and to be

ed
certified as bargaining agent... 863

n.
62. 2012 Bar Q. No. 33. 863

ai
63. 2001 Bar Q. No. XX....... m 864

2014 Bar Q. Nos. V(B), (C), (D), and (E). 865

su
4.

5. 2009 Bar Q. Nos. XV(A), (B), and (C). 867

m

66. Effect of expiration of freedom period where no

s.

petition for certification election is filed......

@

869

Effect of any amendment, extension or renewal of

91

67.
CBA on the freedom period under the rules... 869
cx

68. Interpretation of last paragraph of Article 268 in

o.

relation to the last paragraph of Article 264 of

er

the Labor Code 870

sp

871
69. Double majority rule...
o
pr

70. Unorganized establishment.. 871

71. Effect of filing a petition for certification election

in unorganized establishments. 871

72. Who may file a petition for certification election

in unorganized establishments. 871

73. Effect if a national union/federation filed the

petition for certification election......... 871

74. When may an employer file a petition for

certification election...... 872
75. Rule on employer as bystander. 872
76. Limitations of employer's participation in
certification election. 872

lvii
77. Distinguish Bystander Rule from Innocent
872
Bystander Rule............
78. Mode of review of the DOLE Secretary's decision
in certification election 873

2016 Bar Q. No. X............ 874

79.
2003 Bar Q. No. VII. 875
80.

2011 Bar Q. No. 53.. 875

81.
82. 2005 Bar Q. No. I... 876

83. 2014 Bar Q. No. XVI.. 877

84. 1996 Bar Q. Nos. XVIII(1), (2), and (3)............. 878

Chapter XVI
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION

ph
1. Grievance machinery. 880

u.
2. Disputes that can be referred to the grievance

ed
machinery or voluntary arbitrators......... 880

n.
3. Rule on grievance without a union or CBA. 880

ai
4. Distinguish commercial arbitration from voluntary
m
arbitration 881
su
882
5. Effect of unresolved grievances.
m

6. Cases within the original and exclusive jurisdiction

s.

of Voluntary Arbitrators or panel of Voluntary

@

Arbitrators 883
91

7. Gross violations of CBA...... 883

cx

8. Jurisdiction of voluntary arbitrator involving

o.

claims of OFW...... 884

er

9. Distinguish the jurisdiction on money claims of

sp

labor arbiters from the jurisdiction on money

o

claims of the voluntary arbitrators........ 885

pr

10. Binding effect of the voluntary arbitrator's decision. 885

11. Jurisdiction of voluntary arbitrators on other

886
labor disputes..........
12. Jurisdiction on termination cases arising in or
resulting from interpretation, implementation of
CBA and enforcement company personnel policies.............. 886
13. Termination cases referred by Policy No. 56 that
is within the jurisdiction of voluntary arbitration.................. 887
14. Jurisdictions of the labor arbiters and voluntary
arbitrators in termination cases arising from the
CBA/company personnel policies...... ...........….. 888

lviii
15. Dismissal pursuant to the union security clause
is within the phrase "grievances arising from the
interpretation or implementation of CBA". 889

16. The illegal termination and unfair labor practice

included in the "catch-all" definition of grievance. 890

17. Mode of appeal and period to appeal the

VA's decision....... 891

18.
4 Motion for Reconsideration of the VA's decision

required before resorting to Rule 43.. 892

8

19. Nature of the order of reinstatement of

voluntary arbitrator 893

8

20. Process of appeal involving the decision of

Voluntary Arbitrators.... 894
สี

21. 2019 Part I Bar Q. No. A.1(e).. 894

ph
22. 2018 Bar Q. No. IV(a)............... 894

2019 Part I Bar Q. No. B.11(c)...

u.
23. 895

ed
2017 Bar Q. No. XI(C).. 895

1997 Bar Q. No. XIII..

n.
895

ai
24. 2010 Bar Q. No. XXV. 896
m
25. 2008 Bar Q. Nos. II(a), (b), and (c).......... 898
su
26. 2001 Bar Q. No. I....... 900
m

1995 Bar Q. No. IX(2).. 901

27.
s.

28. 2015 Bar Q. No. XVII(a).. 901

@

902
29. 2013 Bar Q. No. IX(A).
91

903
30. 2003 Bar Q. No. VIII...
cx

904
31. 2015 Bar Q. No. XX(A).
o.

32. 2015 Bar Q. No. XX(B). 904

er

905
33. 2013 Bar Q. No. I......
sp

34. 2011 Bar Q. No. 36... 906

o

35. 2008 Bar Q. No. II(b)... 906

pr

Chapter XVII
STRIKES AND LOCKOUTS

1. Concept of strike 908

2. Those that encompass the term strike. 908

3. Different forms of strike... 909

4. Peaceful picketing. 911

5. Concept of lockout... 911

6. Those that encompass the term lockout.......... 911

7. Grounds for staging a strike or lockout. 911

lix
8. Instances when no strike or lockout can be declared 912

9. Who may declare a strike or lockout in case of

912
bargaining deadlock.....
10. When can any legitimate labor organization
declare a strike...... 913

913
11. Procedural requirements of a valid strike/lockout.
12. Effects on non-compliance with the requirements
for a valid strike or lockout... 914

13. Mandatory notices under Article 278 of the Labor Code..... 915
14. Period to file a notice of strike or lockout...... 916

15. Forms and contents of a notice of strike or lockout.. 916

16. Effect of a notice that does not conform with

917
the requirements........
17. Notice of strike or lockout to be treated as

ph
917
preventive mediation case..........

u.
18. Prohibition on parties during mediation and

ed
conciliation by the NCMB 918

Cooling-off period and 7-day strike ban.

n.
918
19.

ai
20. When 15-day cooling-off period is not applicable
m 918

21. Requirement on decision to declare a strike or lockout....... 919

su
22. Duration of the validity of a decision to stage
m

a strike or lockout. 919

s.

23. DOLE through NCMB can supervise the conduct

@

of secret balloting. 919

91

24. Period to furnish notice on the conduct of strike

cx

or lockout vote meeting. 920

Purpose of giving notice on conduct of strike vote

o.

920
25.
er

26. Period to furnish strike/lockout vote results. 920

sp

27. 2019 Part I Bar Q. No. A.1(c).. 921

o

28. 2013 Bar Q. No. II... 921

pr

29. 2012 Bar Q. No. 13 922

30. 2019 Part II Bar Q. No. B.11(a)....... 922

31. Assumption of jurisdiction or certification for

compulsory arbitration.…........ 923

32. Operational guidelines or conditions for the

assumption of jurisdiction or certification for
compulsory arbitration........... 923

33. Effects of assumption of jurisdiction or certification

under Article 278(g) of the Labor Code 924

34. Requirement on criminal prosecution of prohibited

acts under Article 279 of the Labor Code 924

lx
35. Strikes/lockouts in hospitals, clinics, similar
medical institutions......... 925
36.
Power of the President of the Philippines to
intervene and assume jurisdiction in labor disputes. 926
37.
Industries indispensable to the national interest
according to jurisprudence....... 926

38. Academic institutions as industry indispensable

to national interest .......... 927
39. Industries indispensable to the national interest
under the Rules to Implement the Labor Code. 927
40. Submission for voluntary arbitration of disputes
subject of compulsory arbitration............ 927

41. Finality of decisions of DOLE Secretary, NLRC

and Voluntary Arbitrator. 928

ph
42. Scope of the "assume jurisdiction" 928

43. Certified labor disputes...........

u.
928

ed
4. Effects of certification order under the 2011

NLRC Rules of Procedure on pending cases..

n.
929

ai
45. Character of the assumption order. m 929

46. Interpretation of the phrase "under the same

su
terms and conditions" 930
m

47. Purpose of return-to-work order. 931

s.

48. Effect of defiance of assumption order/return-to

@

work order issued by the Secretary of Labor under

91

Article 278(g) of the Labor Code. 931

cx

49. Requisites of union busting. 931

o.

50. Distinguish the cause of action of declaration of

er

illegal strike from the cause of action for illegal

sp

dismissal 932
o

51. Distinguish strike from picketing... 932

pr

52. Requirements of a valid strike/lockout 933

53. When to consider picketing as a strike.... 933

54. Rule on entitlement to the payment of wages

during the period of strike 934

55. "No strike, No lockout" clause.. 935

56. Prohibited activities in relation to strike or

lockout under the Labor Code...... 935
57. Effect of termination due to unlawful lockout.. 936

58. Effects of participation in illegal strike and

commission of illegal acts during a strike. 937
59. Effect of participation in a lawful strike.... 937

Ixi
60. Due process in termination on the ground of
commission of prohibited acts under Article 279
of the Labor Code 937

61. Distinguish the liability between union members

and union officers as a consequence of illegal strikes 938

62. Strike to be declared valid may still be declared

as invalid............. 938

Categories of an illegal strike.. 939

63.
64. Acts considered illegal under Article 279(a)
of the Labor Code 939

65. Jurisdiction to determine legality of strike or lockout. 940

66. Voluntary arbitrators’ jurisdiction on legality of

strike or lockout.... 940

67. Concept of deadlock. 941

68. Statutory due process is applicable to termination

ph
for commission of prohibited acts under Article 279

u.
of the Labor Code 941

ed
69. Nature of responsibility for commission of illegal acts.......... 941

n.
70. Petition to declare a strike illegal is not necessary 942

2017 Bar Q. Nos. XIV(a) and (b)...

ai
71.
m 942

2015 Bar Q. No. XVI(c)... 943

su
72.

73. 2010 PART II Bar Q. No. XVI(a). 944

m

2010 Part II Bar Q. No. XIX(a). 946

s.

74.
@

75. 2008 Bar Q. No. III(b).... 946

91

76. 2003 Bar Q. No. III 948

948
1997 Bar Q. No. XIV(b)..
cx

77.

1995 Bar Q. No. XIV.... 949

o.

78.

2012 Set B Bar Q. No. I(b)(2).

er

79. 949
sp

951
80. 2004 Bar Q. No. III
952
o

81. 2004 Bar Q. No. X....

pr

82. 2013 Q. No. VII. 953

83. 1999 Bar Q. No. VI(2). 954

955
84. 1998 Bar Q. No. XX.
85. 2018 Bar Q. Nos. XVIII (a) and (b). 956

86. 2012 Bar Q. No. 35 958

959
87. 2010 Part II Bar Q. No. XVI(b)
88. 2008 Bar Q. Nos. VI(a) and (b).... 960

962
89. 2002 Bar Q. No. X..........
90. 2000 Bar Q. No. XVII(a). 963

91. 1998 Bar Q. No. XIX.. 964

92. 2015 Bar Q. No. XVI(a).. .........

965

lxii
93. 2014 Bar Q. No. XVIII. 966

967
94. 2010 Bar Q. No. VI(a)..
95. 2009 Part I Bar Q. Nos. VII(a) and (b) 968

96. 2007 Bar Q. No. IX.. 969

97. 2004 Bar Q. No. II(B)(1). 970

98. 2001 Bar Q. No. VI(a). 971

99. 1994 Bar Q. No. VIII(1). 972

100. 2004 Bar Q. No. II(1). 973

101. 2017 Bar Q. No. XIII(B).. 973

102. 2016 Bar Q. Nos. V(a) and (b). 974

103. 2000 Bar Q. No. XVIII(a). 977

104. 2008 Bar Q. No. XIII.. 978

105. 1995 Bar Q. No. XIV. 979

106. 2009 Part I Bar Q. No. IX(a))....... 979

ph
107. 1995 Bar Q. No. XIII.. 979

u.
108. 2017 Bar Q. No. XIII(A). 981

ed
109. 2015 Bar Q. No. XVI(c). 981

n.
110. 2014 Bar Q. No. VIII(B) 982

ai
111. 2006 Bar Q. No. XI(2).. m 983

112. 2014 Bar Q. No. XXVI(A). 984

su

113. 2012 Set B Bar Q. No. I(b)(3). 985

m

114. 2008 Bar Q. No. VI(c))......... 987

s.

15. 1997 Bar Q. No. XIV(a)... 988

@

116. 1994 Bar Q. No. VII(1) 989

91

117. 2010 Bar Q. No. VI(b). 990

cx

118. 2010 Part II Bar Q. No. XVI(c).. 991

o.

119. 2007 Bar Q. No. XV.. 992

er

120. 2003 Bar Q. No. IV. 993

sp

121. 2000 Bar Q. No. XVII(b) 994

o

122. 1995 Bar Q. No. XIV(2)

pr

995

123. 1994 Bar Q. Nos. VIII(2) and (3) 995

124. 2014 Bar Q. Nos. VIII(A) and (C) 997

125. 2006 Bar Q. Nos. XI(1) and (3) 998

126. 2014 Bar Q. No. XXVI(B). 999

127. 2012 Bar Q. No. 12. 1000

128. 1997 Bar Q. No. XV. 1000

129. 2011 Bar Q. No. 13X. 1001

130. 1994 Bar Q. No. VII(2). 1002

131. Improved offer balloting.. 1002

132. Concept of trade union activities 1003

133. Meaning of trade union activities 1003

lxiii
134. Jurisdiction on criminal prosecution of prohibited
activities under Article 279 of the Labor Code
and clearance requirement...... 1004

135. Distinction of Article 287 from Article 303

of the Labor Code 1005

136. Visitorial power of the Secretary of Labor and

Employment or his duly authorized representative
involving financial activities of a legitimate
labor organization 1006

137. Limitations on the inquiry or examination. 1007

138. Effect of filing complaint for inquiry or examination

with the period of 60/30 days. 1007

139. Those who can exercise visitorial power under

1007
Article 289 of the Labor Code.
140. Where to file the request for examination of

ph
books of accounts. 1008

u.
141. Jurisdiction of actions for violation of Article 250

ed
of the Labor Code 1008

142. Prescriptive period of the complaint or petition

n.
for audit examination of funds and book
ai
of accounts
m 1008
su
143. Rule on appeal from the decision of the Med
Arbiter denying the conduct of audit and
m

from results of the audit. 1009

s.
@

144. 2015 Bar Q. No. XVIII.. 1009

91

145. 2001 Bar Q. No. XVIII(a) 1009

1010
146. 1999 Bar Q. No. VIII(1)..
cx

147. 2001 Bar Q. No. XVIII(b)...... 1011

o.
er

Chapter XVIII
sp

STATUTORY DUE PROCESS IN TERMINATION

o
pr

1. Constitutional right of workers to security of tenure.......... 1012

2. Burden of proving validity of employment

1012
termination.

3. Rule on suspension of the effects of termination

by the Secretary of the Department of Labor
1013
and Employment.......
4. Right of an employee for purposes of union
1013
membership...........
5. Distinguish constitutional due process from
1013
statutory due process..........
1013
6. The due process in employment termination

lxiv

Y
 1014
7. Two aspects of statutory due process
8. Statutory procedural due process in termination
1014
of employment
1017
9. Hearing in termination when mandatory.
10. Effect of violation of company procedure
1018
on termination
11. Effect of failure to comply with procedural due
1018
process by the employer.
12. Effects of the possible situations in termination
1019
disputes........
Effect when there was no dismissal of employment 1020
13.

14. Effect of non-existent cause for termination..... 1021

15. Requirement before effecting the termination

1021
of employment due to authorized cause....
16. Effect of procedural and substantive defects

ph
1022
on dismissal....

u.
1022
2012 Bar Q. No. 61

ed
17.
1023
18. 1999 Bar Q. No. XIII(1).

n.
1998 Bar Q. No. XII. 1024

ai
19.
1025
20. 1998 Bar Q. No. XIV.
m
su
21. 1994 Bar Q. No. VI(2)..... 1026
m

1027
22. 1994 Bar Q. No. II(1).
s.

1027
23. 2017 Bar Q. No. X(C)
@

1028
24. 2016 Bar Q. Nos. VI(a) and (b).
91

25. 1030
2012 Bar Q. No. 8
cx

1031
26. 2009 Part I Bar Q. No. XVII(a)
o.

1032
27. 2006 Bar Q. No. VII....
er

28. 2004 Bar Q. No. VI(B). 1033

sp

29. 1999 Bar Q. No. XVII(1).. 1035

o

30. 1998 Bar Q. No. XII. 1036

pr

31. 2009 Part I Bar Q. No. IV 1037

1038
32. 2019 Part II Bar Q. No. B.17(b)..
33. 2012 Bar Q. No. 62. 1039

1039
34. 2011 Bar Q. No. 71..

BOOK SIX

Chapter I
TERMINATION OF EMPLOYMENT

1. Coverage of the title on post-employment of

the Labor Code ...... 1041

lxv
 2. Right of workers to security of tenure.. 1041

3. Employees entitled to the right of security of tenure. 1042

4. OFWS' right to security of tenure 1042

1043
5. Reliefs for illegal dismissal..
6. Concept of reinstatement. 1044

7. Scope of reinstatement "without loss of seniority

rights and other privileges" 1044

8. Reasons for denying reinstatement in illegal

termination. ......
1044

9. Effect of failure to claim reinstatement in the

complaint form. 1045

10. Cases of payroll reinstatement under the law 1046

11. Distinguish reinstatement from a return-to-work order. 1046

12. Concept of backwages...... 1047

13. Effect of failure to claim backwages in the

ph
complaint form 1048

u.
14. Imputed or putative service. 1048

ed
15. Computation of separation pay awarded in lieu of

n.
reinstatement.... 1049

ai
16. Computation of backwages. m 1049

17. Distinguish backwages from reinstatement... 1051

su

18. Distinguish backwages from unpaid wages.. 1051

m

19. Those included in the computation of the award

s.

of separation pay and backwages 1051

@

20. Instances where separation pay can be awarded 1052

91

21. Instances where separation pay is awarded in lieu

cx

of reinstatement........ 1052
o.

22. Rule on separation pay of employees' termination

er

by reason of just causes 1053

sp

23.
Rule on separation pay as an act "social justice"
o

or based on "equity". 1053

pr

24. Instance when courts may opt to grant separation

pay anchored on social justice..... 1054

25. Amount of separation pay in authorized causes....... 1054

26. The amount of separation pay in case reinstatement

is no longer viable.... 1055

27. Basis for computing backwages and separation....... 1056

28. When allowances are components of separation pay. 1056

29. Basis of solidary liability of corporate agents on
illegal dismissal 1056
30. Doctrine of piercing the veil of corporate fiction................ 1058

lxvi
 1059
31. Doctrine of strained relations.
1060
32. Concept of constructive dismissal..
Test of constructive dismissal..... 1060
33.
Various situations of constructive dismissal... 1061
34.

35. Distinguish resignation from constructive dismissal..…............ 1061

1062
36. Rule on option to resign or graceful exit
1063
37. Rules on preventive suspension.
1064
38. Basis of preventive suspension.
2009 Bar Q. No. XVII(b). 1064
39.
1065
40. 2009 Part I Bar Q. No. V(a).
1066
41. 2012 Bar Q. No. 60
1067
42. 2014 Bar Q. No. I.........
2019 Bar Q. No. A.9(a). 1067
43.
44. 2002 Bar Q. No. IX 1069

ph
1070
45. 2007 Bar Q. No. X.......
2009 Bar Q. No. XVIII(a); 1995 Bar Q. No. III(2).....

u.
1070
46.

ed
47. 1994 Bar Q. No. II(2). 1071

1071
1994 Bar Q. No. I(3)..

n.
48.

ai
2001 Bar Q. No. V.. 1071
49. m 1072
50. 2011 Bar Q. No. 16....
su
1073
51. 2002 Bar Q. No. XX(A)
m

1074
52. 2001 Bar Q. No. IV.....
s.

1074
53. 2001 Bar Q. No. XV(a).
@

1075
54. 2012 Bar Q. No. 9 ..
91

1996 Bar Q. No. VI(1)... 1076

55.
cx

1077
56. 2011 Bar Q. No. (28).
o.

57. 2014 Bar Q. No. XXV. 1078

er

1079
58. 1997 Bar Q. No. 3.
sp

1080
59. 1992 Bar Q. No. VII(a).
o

1081
60. 2002 Bar Q. No. XIX(B).
pr

1082
61. 1997 Bar Q. No. X......
62. 1991 Bar Q. No. V(b).. 1082

1084
63. 2012 Bar Q. No. III(b).
1085
64. 1999 Bar Q. No. X....
1086
65. 1996 Bar Q. No. VIII..
66. 2019 Part I Bar Q. No. A.8(a).. 1087

67. 2019 Part I Bar Q. No. A.8(b).. 1089

68. 2015 Bar Q. No. X.... 1090

lxvii
 Chapter II
KINDS OF EMPLOYEES

1.
Article 295 of the Labor Code is not a yard stick to
determine employment relationship... 1092
2. Four categories of employees under Article 295
of the Labor Code........ 1092

3. Classifications of regular employees.. 1092

4. Test to determine regular employment. 1093

5. When regular employment attaches.. 1093

6. Qualified disabled persons are covered by

Article 295 [280] of the Labor Code..... 1094

7. Interpretation of the restrictive clause under

Article 295 of the Labor Code......... 1094

8. Exceptions to regular employment.. 1095

ph
9. Project employment. 1096

10. Principal test to determine a project employee.........

u.
1096

ed
11. Effect of absence of a written contract in a project
employment 1097

n.
12. Effect of extension of the employment of a
ai
project employee.
m 1097
su
13. Effect of length of time of employee's engagement
in a project employment.........
m

1098

14. Interpretation of the proviso in second paragraph

s.
@

of Article 295 (280) of the Labor Code.............. 1098

91

15. Effect of membership in a work pool. 1099

When project employee become a regular employee.

cx

16. 1099

17. Types of activities involved in a project employment.

o.

1100

Rule to safeguard the rights of workers against the

er

18.

arbitrary use of the word "project".......

sp

1101

Nature of the employment of regular employees,

o

19.
pr

casual employees, and probationary employees. 1101

20. Distinguish project employment from fixed-term

employment. 1101

21. Effect of failure to file a termination report after

completion of every project. 1102

22. Rule on construction industry regarding repeated

and successive rehiring of project employees. 1103
23. Concept of seasonal employment...... 1103

24. Rule on regular seasonal employees........... 1104

25. Effect of continuous and repeated hiring of

seasonal employees....... 1106

lxviii
26. Farm workers in Mercado Sr. case were not considered
1107
as regular employees.........
27. Seasonal workers need not work continuously for one
whole year to be considered regular employees.. 1107

28. Farm workers in Hacienda Bino v. Cuenca case

were considered regular employees... 1108

29. Employment deemed to be casual 1110

30. Effect if a casual employee has rendered at least

one year of service.. 1111

31. When does casual employment arrangement

becomes regular 1111

32. When is regular employment attached 1111

33. Fixed period employment.......... 1112

34. Fixed-term employment under the Civil Code

ph
and the Labor Code. 1112

Criteria of a valid fixed-term employment........ 1113

u.
35.

ed
36. Rule on termination of fixed period based on the
clause that "either party may terminate the same at

n.
any time by giving four (4) weeks written notice" 1113

ai
37.
m
Rule on contract provisions providing for two
su
periods - fixed period and probationary period. 1114
m

38. Employment status of seafarers.... 1115

s.

39. Distinctions among fixed-term employees,

@

independent contractors, and regular employees. 1116

91

40. Rule on whether or not employees with fixed term

contracts can be an independent contractor........... 1117
cx

1118
Regular employee with a fixed term contract.
o.

41.
er

42. 2018 Bar Q. No. VIII... 1118

sp

1120
43. 2013 Bar Q. No. VIII(A).
o

44. 2013 Bar Q. No. IX 1121

pr

1122
45. 2006 Bar Q. No. IV
46. 2019 Part I Bar Q. No. A.1(b).. 1123

1124
47. 2005 Bar Q. No. II(2)(b).
1124
48. 2005 Bar Q. No. II(2)..
49. 1998 Bar Q. No. XI 1125

50. 1996 Bar Q. No. 3 1127

51. 2002 Bar Q. No. II.. 1127

52. 1994 Bar Q. No. XI 1128

53. 2010 Part II Bar Q. No. XVII. 1129

54. 2008 Bar Q. No. IV 1130

55. 2007 Bar Q. No. XVI.. 1132

lxix
K
 56. 2012 Bar Q. No. 72 1133

57. 2015 Bar Q. No. VII.. 1133

58. 2014 Bar Q. No. II... 1135

59. 2008 Bar Q. No. III 1136

60. 2005 Bar Q. No. IX. 1138

61. 2017 Bar Q. No. VIII.. 1140

62. 2014 Bar Q. No. VI. 1140

63. 2009 Part II Bar Q. No. XI. 1141

64. 2002 Bar Q. No. XI 1142

65. Probationary employment. 1142

66. Rules governing probationary employment........... 1143

67. Period of probationary employment........ 1143

68. Grounds to terminate probationary employment ... 1143

69. Standard of due process in termination of probationary

ph
employee.......... 1144

70. When probationary employee becomes a

u.
regular employee............. 1144

ed
71. Purpose of probationary employment... 1144
EN
n.
72. Exceptions to the six-month period under
the Labor Code.
ai 1145
m
R
su
73. When probationary employment can be validly
extended beyond the six-month period....... 1145
m

Effect of failure to notify the probationary employee

s.

74.
@

of the reasonable standards..... 1146

91

75. Exception to the requirement of notifying the

probationary employee of the reasonable standards............ 1147
cx

76. Instance when effect of failure to inform the

o.

reasonable standard is not applicable.…........ 1147

er

77. Meaning of probationary period shall not exceed

sp

six months 1148

o
pr

78. Limitations of employer's power to terminate

a probationary employee..…..... 1148
79. Cases of substantial or deemed compliance with
the rule on notification of standards.. 1150

80. Computation of six months in a probationary

employment. 1150

81. 1998 Bar Q. No. X.... 1151

82. 2016 Bar Q. No XII. 1151
83. 2001 Bar Q. No. XII. 1153
84. 2019 Part II Bar Q. No. 17(a). 1153

85. 2013 Bar Q. No. XIV.. 1155

Ixx
 Chapter III
JUST CAUSES FOR TERMINATION

1. Meaning of dismissal from employment........... 1157

1157
2. Just causes for termination by the employer.
3. Distinguish dismissal due to just causes from
authorized causes. 1158

4. Concept of misconduct.......... 1158

5. Nature of the employee's misconduct as a just

cause for termination........ 1159

6. Character of the transgression based on serious

misconduct, lawful disobedience to a lawful
order and fraud 1159

7. Elements of serious misconduct. 1160

8. Two-step process to determine whether or not a

ph
conduct is disgraceful or immoral 1160

u.
9. Whether or not dismissal of a classroom teacher

ed
by reason of her marriage to her student is justified

n.
as immoral conduct 1160

10. Dismissal of a school teacher due to extra-marital

ai
m
relationship is justified as a form of immoral conduct.......... 1162
su

11. Pre-marital sexual relations resulting to pregnancy

m

1162
out of wedlock is disgraceful or immoral..
s.
@

12. Procedure in case an employee is positive for

1164
91

dangerous drugs.........
13. Effect of drug use inside company premises
cx

1164
and during working hours.
o.

14. Procedure for validity of drug tests. 1164

er

Effect of refusal to submit to drug test.. 1166

sp

15.

16. Elements of willful disobedience to the lawful orders......... 1166

o
pr

17. Character of the willful disobedience to the

lawful orders.. 1166

1167
18. Distinguish transfer from promotion.........
19. Jurisprudential guidelines on transfer of employees............. 1167
20. Rule on refusal to be promoted 1168

21. Nature of neglect of duty as a just cause for

termination. 1168
22.

Gross negligence and habitual neglect. 1169

of

of

...
duty
neglect
Instances
23.

1169

24. Dismissal for gross negligence even if not habitual. 1169

25. Abandonment. ............

1170

lxxi
 Elements of abandonment. 1171
26.

27. Abandonment of work not inconsistent with filing

1171
of a complaint.
28. Rule on abandonment incompatible with
1172
constructive dismissal......

29. Rule on prohibiting the removal or demotion from

,

work
" onWitness
account ofProtection
,absences
6981 Security
under
and RABenefitAct". 1172

30. Requisites for a valid dismissal on the ground

1173
of loss of trust and confidence.........
31. Guidelines for a valid dismissal based on loss
1174
of trust and confidence............
32. Rule if failure to reach sales quota can be
1174
considered a willful breach of trust.
Gross negligence as basis for loss of trust

ph
33.
1175
and confidence.

u.
34. Nature of a position of an employee with access

ed
1175
to employer's property.….....

n.
35. Rules for termination based on loss of trust and
confidence between managerial employees and
ai
m
1175
fiduciary rank-and-file employees...........
su

36. Conviction in a criminal case is not determinative

m

of just or authorized cause for termination.…....…....... 1177

s.

Rule on commission of a crime or offense as a

@

37.

just cause for termination. 1179

91

38. Analogous cause as a just cause for termination............. 1179

cx

1180
39. Cases of analogous causes.
o.

40. Requisites for valid termination due to

er

inefficiency in work 1182

sp

41. Rule when unsatisfactory rating can be a just

o

cause for dismissal.. 1182

pr

42. 2017 Bar Q. No. X(B).. 1182

43. 2019 Part I Bar Q. No. A.1 1183

44. 2000 Bar Q. No. VI.. 1184

45. 2016 Bar Q. No. XI. 1185

46. 2013 Bar Q. Nos. I(A) and (B) 1186

47. 2012 Bar Q. No. 7 1188

48. 2010 Bar Q. Nos. VII(a) and (b) 1188

49. 1996 Bar Q. No. IX. 1191

50. 1995 Bar Q. No. IV. 1192

51. 1996 Bar Q. No. VII... 1193

lxxii
 1195
52. 2018 Bar Q. No. XIII(a).
1196
53. 2008 Bar Q. No. XII.
54. 2003 Bar Q. No. XIV. 1197

1198
55. 1995 Bar Q. No. VIII..
1200
56. 2018 Bar Q. Nos. XIX(a) and (b).
1201
57. 1999 Bar Q. No. V(1).
1202
58. 2011 Bar Q. No. 44...
59. 2014 Bar Q. Nos. XI (A),(B), and (C)....... 1203

2015 Bar Q. No. IX. 1205

60.
2014 Bar Q. No. IX 1206
61.
62. 2006 Bar Q. No. XII. 1207

63. 2011 Bar Q. No. 4..... 1207

64. 2009 Bar Part I Q. No. V(b) 1208

1209
65. 2001 Bar Q. No. III

ph
1210
66. 2011 Bar Q. No. 65...

u.
67. 1999 Bar Q. No. XII(2) 1211

ed
68. 2015 Bar Q. No. XI.. 1212

n.
69. 2016 Bar Q. No. XV(b).. 1212

ai
1213
70. 2014 Bar Q. No. XXIV.. m
1214
2004 Bar Q. No. VI(B)
su
71.

1215
72. 2010 Bar Part II Q. No. XVIII
m

1216
s.

73. 2008 Bar Q. No. X....

@

Chapter IV
91

AUTHORIZED CAUSES FOR TERMINATION

cx
o.

1. Authorized causes for termination.......... 1218

er

Installation of labor-saving device as an authorized

2. cause for termination..........
sp

1218
o

3. Installation of labor-saving device can be considered

pr

as an implement of retrenchment.... 1218

1219
4. Nature of redundancy
5. Requisites for validity of the implementation of
1219
redundancy program.
6. Evidence to substantiate redundancy. 1220

7. Factors to establish superfluity of position........ 1220

8. Fair and reasonable criteria in ascertaining redundant

positions and selection of employees 1220

9. Cases of dismissal on the basis of redundancy due to

contracting out of labor to an independent contractor........... 1220
10. Distinguish redundancy from retrenchment.. 1222

lxxiii
11. Retrenchment.. 1222

12. Rule on retrenchment as a measure of last resort. 1222

13. Requirements for a valid retrenchment..... 1223

14. "First -In, Last-Out Rule" of Last-In and

First-Out Rule 1225

15. Effect of failure to comply with the requisite of using

fair and reasonable criteria in retrenchment........ 1226

16. Proof required involving condition of business losses...... 1227

17. Employer need not to wait for substantial losses to

materialize in effecting retrenchment... 1228

18. Purpose of one-month notice on authorized causes for

termination 1228

19. Notice of a valid cause for termination to DOLE is

necessary under Article 298 of the Labor Code. 1228

20. Notice of closure under Article 298 of the Labor

ph
Code should be served individually........ 1229

u.
สี

21. Distinguish temporary retrenchment from permanent

ed
retrenchment. 1229

n.
22. Limitation of closure of business or undertaking....... 1230

23. Closure or cessation of business.

ai 1230
m
Kinds of closure or cessation of operations of
su
24.

establishment or undertaking. 1231

m

สี Requirements for a valid cessation of business

s.

25.
@

operations. 1231

Rule on payment of separation pay in case of

91

26.
ส

closure due to serious losses 1232

cx

27. Summary of the rules on closure of business......... 1232

o.

28. Distinguish closure of business from retrenchment. 1233

er

29. Effect of proving business losses in closure of the

sp

establishment.. 1234
o
pr

30. Rule on payment of separation pay for authorized

causes 1234

31. Closure of business operations contemplated under

Article 298 [283] of the Labor Code 1235

32. Circumstances of termination under the Labor Code .......... 1236

33. Requisites for termination due to union

security clause.......... 1237

34. Due process required in termination pursuant to a

union security clause. 1237

35. Effect of change of business ownership done

in bad faith 1238

lxxiv
 1238
36. Legal consequences of voluntary mergers..
37. Two types of corporate acquisitions and their effects ......... 1238

1239
38. Successor employer doctrine......
1239
39. Principle of totality of infractions.....
40. Substantive requirements for termination
due to disease 1240

41. Effect if disease/ailment can be cured within six

month period ....... 1240

42. Requirement of certification from a competent

1241
public authority.......
43. Interpretation of the phrase "prejudicial to his
health as well as to the health of his co-employees". 1241

44. Twin-notice requirement is applicable to terminations

due to disease under Article 299 of the Labor Code............. 1242

ph
45. Effect of violation of statutory procedural due process
for termination due to disease under Article 299

u.
ed
of the Labor Code. 1243

46. Policy of the law on discrimination and termination

n.
1244
in the workplace based on HIV status
ai
47. 2004 Bar Q. No. II(B).…..........
m 1244
su
1245
48. 2002 Bar Q. No. XX(B).
m

1245
49. 1999 Bar Q. No. XIX.
s.

50. 2000 Bar Q. Nos. XII(a) and (b)... 1246

@

1246
51. 2001 Bar Q. No. XV(b)....
91

1248
52. 2019 Part II Bar Q. No. B.19(a)..
cx

53. 2017 Bar Q. No. XIII(C). 1249

o.

1250
54. 2016 Bar Q. No. IV
er

55. 2012 Set B Bar Q. Nos. VIII(a), (b), (c), and (d). 1251
sp

56. 1253
2011 Bar Q. No. 10....
o

1253
57. 2003 Bar Q. No. XIII.
pr

58. 2001 Bar Q. No. XVI(b).. 1255

1255
59. 2001 Bar Q. No. XVI(c)
1256
60. 2011 Bar Q. No. 33...
61. 1257
1998 Bar Q. No. XIII.
62. 2013 Bar Q. No. V... 1258

1258
63. 2012 Bar Q. No. 18
1259
64. 2001 Bar Q. No. VI
65. 2016 Bar Q. Nos. VII(a) and (b) 1260

66. 2012 Bar Q. Nos. II(a) and (b) 1261

67. 2004 Bar Q. No. V (A)........... 1263

1264
68. 2016 Bar Q. No. IX

lxxv
 2015 Bar Q. Nos. XII(a) and (b).. 1265

901.2 3
1266
1994 Bar Q. No. XIV...
2004 Bar Q. No. VI(A) 1267
1268
When is an employment not deemed terminated.
73. Exception when an employment is not deemed
1268
suspended...
74

Rule on payment of wages during period

1269
of suspension.
75

75. Grounds that the suspension of employment

1269
can be extended..
76
76. Requirement for extension of the suspension
1269
of employment
77. Period for extension of the suspension of employment....... 1269
78 Effect in case the employees find alternative employment
during extended suspension of employment..... 1269

ph
29
79. Effect in case retrenchment is necessary before or

u.
after the expiration of the extended suspension of

ed
employment 1270

n.
80. Rule on recall and retrenchment before the expiration

ai
of the extended suspension of employment...........
m 1270

81. Effect of extension of suspension of employment

su

on employees' right to separation pay; period

m

included in the computation of the separation pay. 1270

s.

82. Effects of bona fide suspension of business operation......... 1271

@

83. Floating status may be considered as constructive

91

dismissal 1271
cx

84. 2019 Part II Bar Q. No. B.19(b)........... 1272

o.

85. 2014 Bar Q. No. XXI.. 1273

er

86. 2004 Bar Q. No. I......... 1274

o sp

Chapter V LAH
pr

RETIREMENT OF SERVICE

1. Rule on retirement of an employee under

the Labor Code. 1276
2. Retirement benefits of an employee under
the Labor Code. 1276
3. Amount of retirement benefits under the
Labor Code.. 1276

4. Applicability of retirement law under the Labor Code

and amount of retirement pay. 1276
5. Those included in one-half (1/2) month salary......….….... 1277

lxxvi
 Those excluded in retirement law 1277
6.
‫ܩ‬
1277
7. Effect of violation of retirement law
8. Coverage of retirement benefits under the Labor Code....... 1277
9. Excluded from coverage of retirement benefits under
the Labor Code. 1278

10. 2001 Bar Q. No. XIX(b) 1278

11. Rule if retirement is under CBA/contract. 1278

12. Retirement age under the Labor Code. .......... 1279

13. Minimum length of service. 1280

14. Amount of retirement pay. 1280

15. Components of one-half (12) month salary. 1281

16. Those included in the fifteen (15) days salary

of the employees........ 1281

17. Basis of one month's salary of those paid by results............. 1281

ph
18. Three types of retirement plans.. 1282

u.
19. Rule on employer's prerogative to retire an employee

ed
earlier than the legally permissible ages under the

n.
Labor Code......... 1283

20.
ai
Effect of employee's acceptance of the letter of
m
1284
appointment on retirement plan
su

21.
H Part-time employees entitled to retirement benefits 1284
m

22. Distinguish retirement pay from separation pay..... 1285

s.

23. When to recover both separation pay and retirement

@

benefits .... 1286

91

24. Rule on employer's discretion to extend service

cx

1286
of retired employee or official...
o.

25. Distinguish retirement from dismissal for just

er

and authorized... 1286

sp

1287
26. Distinguish retirement from redundancy
o
pr

27. 2013 Bar Q. No. VI... 1288

1288
28. 2019 Part II Bar Q. No. B.20.
2012 Bar Q. No. 70... 1289
29.
1289
30. 2007 Bar Q. No. XI(11)(a).
1290
31. 2007 Bar Q. No. XI(11)(b).
1290
32. 2018 Bar Q. No. I(b)..
1291
33. 2011 Bar Q. No. 3......
1292
34. 2001 Bar Q. No. XIX(a).
1292
35. 2018 Bar Q. No. I(a)
36. 2018 Bar Q. No. IV(b). 1293

lxxvii
 BOOK SEVEN

Chapter I
PRESCRIPTION OF OFFENSES AND CLAIMS

1. Prescriptive period of offenses penalized under

the Labor Code 1295

1295
2. Prescription of unfair labor practice.
1295
3. Prescription of money claims.
4. Accrual of cause of action for the three year
prescriptive period under Article 306 of the
Labor Code..... 1296

5. Money claims covered by the prescriptive period

under Article 306 of the Labor Code. 1297

6. Distinguish prescriptive period of money claims

under Article 306 of the Labor Code from

ph
backwages/damages as a consequence of illegal

u.
termination under Article 1146 of the Civil Code. 1297

ed
7. Prescriptive period for money claims involving

n.
retirement and separation benefits...... 1298

8.
ai
Prescriptive period under Article 306 of the Labor
m
Code prevails over the prescriptive period set under
su

POEA-SEC. 1299
m

9. Prescriptive period of Service Incentive Leave (SIL) 1299

s.

Prescription of workmen's compensation claims .... 1300

@

10.
Prescription of action on union funds. 1300
91

11.
12. Prescriptive period for illegal dismissal. 1300
cx

13. 2019 Part I Bar Q. No. A.10(d). 1301

o.

14. 2012 Bar Q. No. 71 1301

er

2013 Bar Q. No. IV(2).. 1301

sp

15.

16. 2018 Bar Q. No. III(b).... 1302

o
pr

17. 2019 PART I Bar Q. No. A.10(a). 1303

18. 2010 PART II Bar Q. No. XX.. 1303

19. 2019 Bar Q. No. A.10(b).. 1304

20. 2013 Bar Q. No. IV.. 1305

21. 2002 Bar Q. Nos. I(A) and (B) 1305

22. 1997 Bar Q. No. XII(a).. 1306

23. 1997 Bar Q. No. XII(b). 1307

24. 1994 Bar Q. No. XII. 1308

lxxviii
 LABOR LAW REVIEWER

FUNDAMENTAL PRINCIPLES

AND POLICIES

ph
1. When did the Labor Code take effect?

u.
ed
The Labor Code took effect six months after its

promulgation or on November 1, 1974. (Article 2, Labor Code)

n.
ai
2.
m
What are the provisions of the Labor Code on Labor
su
Standards?
m

The following are the provisions covered by Labor

s.

Standards:
@
91

1. Book One Pre-Employment

cx

2. Book Two Human Resources Development Program

o.
er

3. Book Three Conditions of Employment

sp

4. Book Four Health, Safety, and Social Welfare Benefits

o
pr

3. What are the provisions of the Labor Code on Labor

Relations?

The following are the provisions covered by Labor

Relations:

1. Book Five Labor Relations

2. Book Six Post-Employment

3. Book Seven Transitory and Final Provisions

1
2 LABOR LAW REVIEWER

4. What is labor law?

Labor law is the body of laws, rules, and regulations

enacted or issued by the State to promote the welfare of
employees and regulate their relations with their employers.
It also includes all judicial decisions interpreting said laws,
rules, and regulations.

5. Is there any distinction between labor legislation and

social legislation? Explain. (1995 BAR Q. No. I[2])

Labor legislation consists of statutes, regulations, and

ph
jurisprudence governing the relations between capital and

u.
labor by providing for employment standards and a legal

ed
framework for negotiating, adjusting, and administering

n.
those standards and other incidents of employment. A labor

ai
legislation is a social legislation. m
su
Social legislation includes laws that provide particular
m

kinds of protection or benefits to society or segments thereof

s.

in furtherance of social justice. A social legislation is not

@

always a labor legislation. This law is broader compared to

91

labor legislation.
cx
o.

6. What is the purpose of labor legislation? (2006 BAR Q.

er

No. I[2])
sp

The purpose of labor legislation is to implement the

o
pr

state policies in the Labor Code and the Constitution,

such as those provided in Article 3 of the Labor Code, and
Article II, Section 18 and Article XIII, Section 3 of the 1987
Constitution.

7. Distinguish clearly but briefly between social security

and union security. (2004 BAR Q. No. II)

Social Security Law are those laws that provide for

income security and/or medical care for contingencies, such
as: a. sickness; b. maternity; c. invalidity; d. old age; e. death
of a bread winner; unemployment; f. emergency expenses;
and g. employment injuries x x x. (ILO Recommendation
 LABOR STANDARDS 3

Fundamental Principles and Policies

No. 67 cited in page 159, Labor and Social Legislation: An

Updated Systematic Presentation, Froilan M. Bacungan, 2011)

Union security is a generic term, which is applied to and

comprehends "closed shop," "union shop," "maintenance
of membership," or any other form of agreement which
imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment.
(Inguillo v. First Philippine Scales, G.R. No. 165407, June 5,
2009)

How do the provisions of the law on labor relations

ph
8.

interrelate, if at all, with the provisions pertaining to labor

u.
standards? (2003 BAR Q. No. XI)

ed
n.
The interrelations are exemplified as follows:

ai
1.
m
In the exercise of jurisdiction of quasi-judicial
su
agencies under labor relations law, the subject matter of
m

which can be the statutory benefits under labor standards

s.

law; and
@

2. In collective bargaining or negotiations under

91

labor relations law, the subject matter refers to wages, hours

cx

of work, and other terms and conditions of employment

o.

mandated by labor standards law.

er
sp

9. Differentiate labor standards law from labor relations law.

o
pr

Are the two mutually exclusive? (1997 BAR Q. No. I)

Labor Standards Law shall refer to the minimum

requirements prescribed by existing laws, rules and

regulations, and other issuances relating to wages, hours
of work, and cost of living allowances and other monetary
and welfare benefits, including those set by occupational
safety and health standards. (Section 7, Rule I, Rules on the
Disposition of Labor Standards Cases in the Regional Office,
dated September 16, 1987, cited in Maternity Children's Hospital
v. Secretary of Labor, G.R. No. 78909, June 30, 1989)

Labor Relations Law defines the status, rights and

duties, and the institutional mechanisms, that govern
4 LABOR LAW REVIEWER

the individual and collective interactions of employers,

employees or their representatives. Labor is understood as
physical toil although it does not necessarily exclude the
application of skill; thus there is skilled and unskilled labor.
The two are not mutually exclusive. The interrelations
of labor relations with labor standards are exemplified as
follows:

1. In the exercise of jurisdiction of quasi-judicial

agencies under labor relations law, the subject matter of
which can be the statutory benefits under labor standards

ph
law; and

u.
2. In collective bargaining or negotiations under

ed
labor relations law, the subject matter refers to wages, hours

n.
of work, and other terms and conditions of employment
mandated by labor standards law.
ai
m
su

10. What are the three (3) general classifications of labor

m
s.

statutes? Describe and give an example of each

@

classification. (1995 BAR Q. No. I[1])

91

The three (3) general classifications of labor statutes are

cx

as follows:
o.
er

1. Labor Standards Law shall refer to the minimum

sp

requirements prescribed by existing laws, rules and

o

regulations and other issuances relating to wages, hours

pr

of work, cost of living allowances, and other monetary

and welfare benefits, including those set by occupational
safety and health standards. (Section 7, Rule I, Rules on the
Disposition of Labor Standards Cases in the Regional Office,
dated September 16, 1987, cited in Maternity Children's Hospital
v. Secretary of Labor, G.R. No. 78909, June 30, 1989) Example:
The worker's minimum statutory benefits under Book III
such as overtime, premium night shift differential, holiday
pay, rest day, service incentive leave, and service charge
2. Labor Relations Law defines the status, rights
and duties, and the institutional mechanisms that govern
the individual and collective interactions of employers,
 LABOR STANDARDS 5

Fundamental Principles and Policies

employees or their representatives. Labor is understood as

physical toil although it does not necessarily exclude the
application of skill; thus there is skilled and unskilled labor.
Example: Law of strike, lockout, and picketing
3. Social Security Law are those laws that provide for
income security and/or medical care for contingencies such
as: a. sickness; b. maternity; c. invalidity; d. old age; e. death
of a bread winner, unemployment; f. emergency expenses;
and g. employment injuries x x x. (ILO Recommendation
No. 67 cited in page 159 of the Labor and Social Legislation: An

ph
Updated Systematic Presentation, Froilan M. Bacungan 2011).
Examples: SSS Law, GSIS Law, and Portability Law

u.
ed
1. What are the fundamental labor standards and labor

n.
relations rights of workers provided in the Constitution?

ai
m
Among the relevant constitutional provisions on labor
su

are as follows:
m
s.

1. The State shall promote a just and dynamic social

@

order that will ensure the prosperity and independence

91

of the nation and free the people from poverty through

cx

policies that provide adequate social services, promote full

o.

employment, a rising standard of living, and an improved

er

quality of life for all. (1987 Constitution, Declaration of

sp

Principles and State Policies, Article II, Section 9)

o
pr

2. The State shall promote social justice in all phases

of national development. (1987 Constitution, Declaration of
Principles and State Policies, Article II, Section 10)

3. The State values the dignity of every human

person and guarantees full respect for human rights. (1987
Constitution, Declaration of Principles and State Policies, Article
II, Section 11)

4. The State recognizes the vital role of the youth

in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being.
It shall inculcate in the youth patriotism and nationalism,
and encourage their involvement in public and civic affairs.
6 LABOR LAW REVIEWER

(1987 Constitution, Declaration of Principles and State Policies,

Article II, Section 13)

5. The State recognizes the role of women in nation

building, and shall ensure the fundamental equality before
the law of women and men. (1987 Constitution, Declaration of
Principles and State Policies, Article II, Section 14)

6. The State affirms labor as a primary social

economic force. It shall protect the rights of workers and
promote their welfare. (1987 Constitution, Declaration of
Principles and State Policies, Article II, Section 18)

ph
7. The State recognizes the indispensable role of the

u.
private sector, encourages private enterprise, and provides

ed
incentives to needed investments. (1987 Constitution,

n.
Declaration of Principles and State Policies, Article II, Section
ai
20)
m
su

8. No person shall be deprived of life, liberty, or

m

property without due process of law, nor shall any person be

s.

denied the equal protection of the laws. (1987 Constitution,

@
91

Bill of Rights, Article III, Section 1)

cx

9. No law shall be passed abridging the freedom

o.

of speech, of expression, or of the press, or the right of the

er

people peaceably to assemble and petition the government

sp

for redress of grievances. (1987 Constitution, Bill of Rights,

o

Article III, Section 4)

pr

10. 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. (1987 Constitution, Bill of Rights, Article III, Section
8)

11. The civil service embraces all branches,

subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled
corporations with original charters. (1987 Constitution, Civil
Service, Article IX-B, Section 2[1])
 LABOR STANDARDS 7

Fundamental Principles and Policies

12. No officer or employee of the civil service shall be

removed or suspended except for cause provided by law.
(1987 Constitution, Civil Service, Article IX-B, Section 2[3])

13. The right to self-organization shall not be denied

to government employees. (1987 Constitution, Civil Service,
Article IX-B, Section 2[5])

14. Temporary employees of the Government shall

be given such protection as may be provided by law. (1987
Constitution, Civil Service, Article IX-B, Section 2[6])

15. The Congress shall provide for the standardization

ph
of compensation of government officials and employees,

u.
including those in government-owned or controlled

ed
corporations with original charters, taking into account

n.
the nature of the responsibilities pertaining to, and the
ai
m
qualifications required for, their positions. (1987 Constitution,
su
Civil Service, Article IX-B, Section 5)
m

16. The use of property bears a social function, and

s.
@

all economic agents shall contribute to the common good.

Individuals and private groups, including corporations,
91

cooperatives, and similar collective organizations, shall

cx

have the right to own establish, and operate economic

o.
er

enterprises, subject to the duty of the State to promote

sp

distributive justice and to intervene when the common

o

good so demands. (1987 Constitution, National Economy and

pr

Patrimony, Article XII, Section 6)

17. The State shall promote the preferential use of
Filipino labor, domestic materials, and locally produced
goods, and adopt measures that help make them competitive.
(1987 Constitution, National Economy and Patrimony, Article
XII, Section 12)

18. The sustained development of a reservoir

of national talents consisting of Filipino scientists,
entrepreneurs, professionals, managers, high-level technical
manpower and skilled workers and craftsmen in all fields

shall be promoted by the State. The State shall encourage

8 LABOR LAW REVIEWER

appropriate technology and regulate its transfer for the

national benefit.

The practice of all professions in the Philippines shall

be limited to Filipino citizens, save in cases prescribed by
law. (1987 Constitution, National Economy and Patrimony,
Article XII, Section 14)

19. The Congress shall not, except by general law,

provide for the formation, organization, or regulation of
private corporations. Government-owned or controlled
corporations may be created or established by special

ph
charters in the interest of the common good and subject to

u.
the test of economic viability. (1987 Constitution, National

ed
Economy and Patrimony, Article XII, Section 16)

n.
20. The Congress shall give highest priority to the

ai
enactment of measures that protect and enhance the right
m
su
of all the people to human dignity, reduce social, economic,
and political inequalities, and remove cultural inequities
m
s.

by equitably diffusing wealth and political power for the

@

common good.
91

To this end, the State shall regulate the acquisition,

cx

ownership, use, and disposition of property and its

o.

increments. (1987 Constitution, Social Justice and Human

er

Rights, Article XIII, Section 1)

sp

21. The promotion of social justice shall include the

o
pr

commitment to create economic opportunities based on

freedom of initiative and self-reliance. (1987 Constitution,
Social Justice and Human Rights, Article XIII, Section 2)
22. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for
all.

It shall guarantee the rights of all workers to self

organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security
of tenure, humane conditions of work, and a living wage.
 LABOR STANDARDS

Fundamental Principles and Policies

They shall also participate in policy and decision-making

processes affecting their rights and benefits as may be
provided by law.

The State shall promote the principle of shared

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

The State shall regulate the relations between workers

and employers, recognizing the right of labor to its just

ph
share in the fruits of production and the right of enterprises

u.
to reasonable returns on investments, and to expansion and

ed
growth. (1987 Constitution, Labor, Article XIII, Section 3)

n.
ai
23. The State shall protect working women by
m
providing safe and healthful working conditions, taking
su
into account their maternal functions, and such facilities
m

and opportunities that will enhance their welfare and

s.

enable them to realize their full potential in the service of

@

the nation. (1987 Constitution, Women, Article XIII, Section

91

14)
cx
o.

12. Distinguish the due process clause under the 1987

er

Constitution from the statutory due process under the

sp

Labor Code.
o
pr

The relevant provision on due process can be found in

Article III, Section 1 of the 1987 Constitution. The distinction
between the due process clause under the 1987 Constitution
and the labor law was discussed by the Supreme Court
in the landmark case of Agabon v. NLRC, G.R. No. 1586,
November 17, 2004 in this manner:

To be sure, the Due Process Clause in Article

III, Section 1 of the Constitution embodies a
system of rights based on moral principles so
deeply imbedded in the traditions and feelings
of our people as to be deemed fundamental to
a civilized society as conceived by our entire
10 LABOR LAW REVIEWER

history. Due process is that which comports with

the deepest notions of what is fair and right and
just. (Solesbee v. Balkcom, 339 U.S. 9, 16 (1950)
(Frankfurter, J., dissenting)) Due process is violated
if a practice or rule "offends some principle of
justice so rooted in the traditions and conscience
of our people as to be ranked as fundamental."
(Snyder v. Massachusetts, 291 U.S. 97, 105 [1934])
It is a constitutional restraint on the legislative as
well as on the executive and judicial powers of
the government provided by the Bill of Rights.

ph
u.
Constitutional due process protects the

ed
individual from the government and assures him
of his rights in criminal, civil, or administrative

n.
ai
proceedings while statutory due process found in
m
the Labor Code and Implementing Rules protects
su

employees from being unjustly terminated

m

without just cause after notice and hearing.

s.
@

13. Why is it that a violation of notice requirement in

91

termination dispute is not a denial of Constitutional due

cx

process?
o.

The Honorable Supreme Court ruled that violation by

er
sp

employer of the notice requirement cannot be considered

a denial of due process clause under the Constitution. The
o
pr

reasons given are as follows:

There are three reasons why, on the other

hand, violation by the employer of the notice
requirement cannot be considered a denial of due
process resulting in the nullity of the employee's
J

dismissal or layoff.
The first is that the Due Process Clause of

the Constitution is a limitation on governmental

powers. It does not apply to the exercise of private
power, such as the termination of employment
under the Labor Code. This is plain from the text
of Art. III, §1 of the Constitution, viz.: "No person
1
 LABOR STANDARDS 11

Fundamental Principles and Policies

shall be deprived of life, liberty, or property

without due process of law. . . ." The reason is
simple: Only the State has authority to take the
life, liberty, or property of the individual. The
purpose of the Due Process Clause is to ensure
that the exercise of this power is consistent with
what are considered civilized methods.

The second reason is that notice and hearing

are required under the Due Process Clause before
the power of organized society are brought to bear
upon the individual. This is obviously not the case

ph
of termination of employment under Article 283.

u.
Here the employee is not faced with an aspect of

ed
the adversary system. The purpose for requiring
a 30-day written notice before an employee is laid

n.
ai
off is not to afford him an opportunity to be heard
m
on any charge against him, for there is none. The
su
purpose rather is to give him time to prepare
m

for the eventual loss of his job and the DOLE

s.

an opportunity to determine whether economic

@

causes do exist justifying the termination of his

91

employment.
cx

Even in cases of dismissal under Article 282,

o.

the purpose for the requirement of notice and

er

hearing is not to comply with Due Process Clause

sp

of the Constitution. The time for notice and

o
pr

hearing is at the trial stage. Then that is the time

we speak of notice and hearing as the essence
of procedural due process. Thus, compliance by
the employer with the notice requirement before
he dismisses an employee does not foreclose
the right of the latter to question the legality of
his dismissal. As Article 277(b) provides, "Any
decision taken by the employer shall be without
prejudice to the right of the worker to contest
the validity or legality of his dismissal by filing
a complaint with the regional branch of the
National Labor Relations Commission." (Serrano
v. NLRC, G.R. No. 117040, January 27, 2000)
12 LABOR LAW REVIEWER

14. Which is not a constitutional right of the worker? a. The

right to engage in peaceful concerted activities; b. The
right to enjoy security of tenure; c. The right to return on
investment; d. The right to receive a living wage? (2012
BAR Q. No. 45)

C. The right to return on investment

This right pertains to the right of the enterprise or the

employer. (Article XIII, Section 3, 1987 Constitution)

5. For labor, the Constitutionally adopted policy of promoting

ph
social justice in all phases of national development means

u.
(A) the nationalization of the tools of production. (B) the

ed
periodic examination of laws for the common good. (C)

n.
the humanization of laws and equalization of economic

ai
forces. (D) the revision of laws to generate greater
m
employment. (2011 BAR Q. No. 40)
su
m

C) the humanization of laws and equalization of

s.

economic forces
@

See Article II, Section 10, 1987 Constitution.

91
cx

16. What are the rights of an employer and an employee?

o.

(1996 BAR Q. No. I[2])

er
sp

Right of labor to its just share in the fruits of production

o

and the right of enterprises to reasonable returns on

pr

investments, and to expansion and growth (Article XIII,

Section 3, 1987 Constitution)

17. What are the provisions of the Civil Code that are related
to labor?

Among the Civil Code provisions related to labor are

as follows:

1. The relations between capital and labor are not

merely contractual. They are so impressed with public
interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on
 LABOR STANDARDS 13

Fundamental Principles and Policies

labor unions, collective bargaining, strikes and lockouts,

closed shop, wages, working conditions, hours of labor and
similar subjects. (Article 1700, Civil Code)

2. Neither capital nor labor shall act oppressively

against the other, or impair the interest or convenience of
the public. (Article 1701, Civil Code)
3. In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent
living for the laborer. (Article 1702, Civil Code)

ph
4. No contract which practically amounts to

u.
involuntary servitude, under any guise whatsoever, shall

ed
be valid. (Article 1703, Civil Code)

n.
5. In collective bargaining, the labor union or

ai
members of the board or committee signing the contract
m
su
shall be liable for non-fulfillment thereof. (Article 1704, Civil
m

Code)
s.

6. The laborer's wages shall be paid in legal currency.

@

(Article 1705, Civil Code)

91
cx

7. Withholding of the wages, except for a debt due,

o.

shall not be made by the employer. (Article 1706, Civil Code)

er

8. The laborer's wages shall be a lien on the goods

sp

manufactured or the work done. (Article 1707, Civil Code)

o
pr

9. The laborer's wages shall not be subject to

execution or attachment, except for debts incurred for food,
shelter, clothing, and medical attendance. (Article 1708, Civil
Code)

18. What are the declared basic policies under Article 3 of the
Labor Code?

The declared policies of the Labor Code, which the

State guarantees, are the following:
1. Afford protection to labor;

2. Promote full employment;

14 LABOR LAW REVIEWER

3. Ensure equal work opportunities regardless of

sex, race, or creed;

4. Regulate the relations between workers and

employers; and
5. Assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work. (Article 3, Labor Code)

Enumerate at least four (4) policies enshrined in Section

3, Article XIII of the Constitution that are not covered by

ph
Article 3 of the Labor Code on declaration of basic policy.

u.
(2009 BAR Q. No. II[a])

ed
The following are the policies that are not covered by

n.
Article 3 of the Labor Code:

ai
m
1. Codetermination Participation in policy and
1
su

decision-making processes affecting the workers' rights and

m

benefits as may be provided by law.

s.
@

2. Shared responsibility - Promote the principle of

91

shared responsibility between workers and employers.

cx

3. Policy on dispute resolution - Preferential use of

o.

voluntary modes in settling disputes, including conciliation,

er

and shall enforce their mutual compliance therewith to

sp

foster industrial peace

o
pr

4. Right of labor and of enterprise - Right of labor

to its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and to
expansion and growth
20. May social justice as a guiding principle in labor law
be so used by the courts in sympathy with the working
man if it collides with the equal protection clause of the
Constitution? Explain. (2003 BAR Q. No. I)
Yes, the State is bound under the Constitution to
afford full protection to labor and when conflicting interests
of labor and capital are to be weighed on the scales of
social justice the heavier influence of the latter should be
 LABOR STANDARDS 15

Fundamental Principles and Policies

counterbalanced with the sympathy and compassion the

law accords the less privileged workingman. This is only
fair if the worker is to be given the opportunity and the
right to assert and defend his cause not as a subordinate but
as part of management with which he can negotiate on even
plane. Thus, labor is not a mere employee of capital but its
active and equal partner. (Fuentes v. NLRC, G.R. No. 110017,
January 2, 1997 citing Firestone Tire and Rubber Company v.
Firestone Tire and Rubber Company Employees Union, G.R. No.
75363, August 4, 1992)

ph
21. What are the salient features of the protection to labor

u.
provision of the Constitution? (1998 BAR Q. No. I)

ed
The salient features of protection to labor clause

n.
provided under Article XIII, Section 3 of the 1987 are as
ai
follows:
m
su

1. Extent and coverage ofprotection - Full protection

m

to labor, local and overseas, organized and unorganized

s.
@

2. Policy on employment-Promote full employment

91

and equality of employment opportunities for all.

cx

3. Unionism and methods of determination,

o.

conditions of employment - The rights of all workers to

er

self-organization, collective bargaining, and negotiations

sp

4. Concerted Activities Peaceful concerted

o
pr

activities, including the right to strike in accordance with

1W

5. Working conditions - Security of tenure, humane

conditions of work, and a living wage

6. Codetermination Participation in policy and

-

decision-making processes affecting workers' rights and

benefits as may be provided by law

7. Shared responsibility - Promote the principle of

shared responsibility between workers and employers.

8. Policy on dispute resolution - Preferential use of

voluntary modes in settling disputes, including conciliation,
16 LABOR LAW REVIEWER

and shall enforce their mutual compliance therewith to

foster industrial peace.
9. Right of labor and of enterprise - Right of labor
to its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and to
expansion and growth.

22. What is the principle of co-determination?

The principle of co-determination is the workers'

participation in policy and decision-making processes

ph
affecting their rights and benefits as may be provided by

u.
law. (Article XIII, Section 3, 1987 Constitution)

ed
n.
23. Is the principle of co-determination provided in the Labor

ai
Code?
m
su
Yes. The principle of co-determination was included in
the Labor Code by RA 6715 approved on March 21, 1989.
m

The provisions relative to this principle are as follows:

s.
@

1. To ensure the participation of workers in decision

91

and policy-making processes affecting their rights, duties,

cx

and welfare. (Article 218[f], Labor Code)

o.
er

2. Any provision of law to the contrary notwith

sp

standing, workers shall have the right, subject to such rules

o

and regulations as the Secretary of Labor and Employment

pr

may promulgate, to participate in policy and decision

making processes of the establishment where they are
employed insofar as said processes will directly affect their
rights, benefits, and welfare. (Second paragraph, Article 267,
Labor Code)

24. What is the legitimate workplace mechanism where this

principle of co-determination can be exercised?
The Labor Management Council (LMC). The Labor
Code provides, "Any provision of law to the contrary
notwithstanding, workers shall have the right, subject to
such rules and regulations as the Secretary of Labor and
 17
LABOR STANDARDS

Fundamental Principles and Policies

Employment may promulgate, to participate in policy and

decision-making processes of the establishment where they
are employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose, workers
and employers may form labor-management councils:
Provided, That the representatives of the workers in such
labor-management councils shall be elected by at least the
majority of all employees in said establishment." (Article
267, Labor Code, as amended by Section 22, RA 6715, March 21,
1989)

25. What is the nature of the clause on protection to labor

ph
under Article XIII, Section 3 of the 1987 Constitution?

u.
ed
While all the provisions of the 1987 Constitution are
presumed self-executing, (Manila Prince Hotel v. Government

n.
ai
Service Insurance System, G.R. No. 122156, February 3, 1997,
m
267 SCRA 408) there are some which the Supreme Court
su
has declared not judicially enforceable, Article XIII being one,
m

(Basco v. Philippine Amusement and Gaming Corporation, G.R.

s.

No. 91649, May 14, 1991, 197 SCRA 52) particularly Section 3
@

thereof, the nature of which, the Supreme Court, in Agabon

91

v. National Labor Relations Commission, G.R. No. 158693,

cx

November 17, 2004, 442 SCRA 573, has described to be not

o.

self-actuating:
er
sp

Ultimately, therefore, Section 3 of Article

o

XIII cannot, on its own, be a source of a positive

pr

enforceable right stave off the dismissal of an

employee for just cause owing to the failure to

serve proper notice or hearing. As manifested
by several framers of the 1987 Constitution, the
provisions on social justice require legislative
enactments for their enforceability. (Agabon v.
National Labor Relations Commission, supra)
(Emphasis added)
Thus, Section 3, Article XIII cannot be treated
as a principal source of direct enforceable rights, for
the violation of which the questioned clause may
be declared unconstitutional. It may unwittingly
18 LABOR LAW REVIEWER

risk opening the floodgates of litigation to every

worker or union over every conceivable violation
of so broad a concept as social justice for labor.
It must be stressed that Section 3, Article XIII
does not directly bestow on the working class any
actual enforceable right, but merely clothes it with
the status of a sector for whom the Constitution

urges protection through executive or legislative

action and judicial recognition.

6. What are the definitions of terms under the Labor Code

ph
which are related to employer-employee relationship?

u.
ed
The following definitions of terms are related to the
issue of employer-employee relationship:

n.
ai
1. Article 13(a) of the Labor Code,
m under Book I,
defined a worker as any member of the labor force, whether
su

employed or unemployed.
m
s.

2. Article 97(b), (c), and (e) of the Labor Code, under

@

Book III, defined employer and employee and related terms as

91

follows:
cx

"Employer" includes any person acting

o.

directly or indirectly in the interest of an employer

er

in relation to an employee and shall include the

sp

government and all its branches, subdivisions

o
pr

and instrumentalities, all government-owned or

controlled corporations and institutions, as well as
non-profit private institutions, or organizations.

"Employee" includes any individual

employed by an employer.

"Employ" includes to suffer or permit to

work.

3. On the other hand, Article 219(e) and (f) of the

Labor Code, under Book V, and Section 1(s) Book V of the
Rules to Implement the Labor Code, defined the employer
and employee as follows:
 19
LABOR STANDARDS
Fundamental Principles and Policies

"Employer" includes any person acting in

the interest of an employer, directly or indirectly.
The term shall not include any labor organization
or any of its officers or agents except when acting
as employer.

"Employee" includes any person in the

employ of an employer. The term shall not be
limited to the employees of a particular employer,
unless the Code so explicitly states. It shall include
any individual whose work has ceased as a result

ph
of or in connection with any current labor dispute

u.
or because of any unfair labor practice if he has

ed
not obtained any other substantially equivalent

n.
and regular employment.

ai
"Employee" refers to any person working
m
for an employer. It shall include one whose work
su

has ceased in connection with any current labor

m
s.

dispute or because of any unfair labor practice

@

and one who has been dismissed from work but

91

the legality of the dismissal is being contested in

cx

a forum of appropriate jurisdiction.

o.

How is employment status defined and prescribed?

er
sp

In the case of Insular Life Assurance Co., Ltd. v. NLRC,

o

350 Phil. 918 (1998), it was ruled that one's employment

pr

status is defined and prescribed by law, and not by what

the parties say it should be, viz.: It is axiomatic that the
existence of an employer-employee relationship cannot be
negated by expressly repudiating it in the management
contract and providing therein that the "employee" is an
independent contractor when the terms of the agreement
clearly show otherwise. For, the employment status of a
person is defined and prescribed by law, and not by what
the parties say it should be. In determining the status of the
management contract, the "four-fold test" on employment
earlier mentioned has to be applied. (Id. at 926) (Emphasis
and underscoring supplied)
 20 LABOR LAW REVIEWER

In finding the existence of employer-employee

relationship not on the basis of an agreement, the
Honorable Supreme Court in Diamond Farms Inc. v. Southern
Philippines Federation of Labor (SPFL)-Workers Solidarity of
DARBMUPCO/Diamond-SPFL, citing Tabas v. California
Manufacturing Co., Inc., G.R. No. L-80680, January 26, 1989,
ruled in this wise: The existence of an employer-employees
relation is a question of law and being such, it cannot be
made the subject of agreement. Hence, the fact that the
manpower supply agreement between Livi and California
had specifically designated the former as the petitioners'

ph
employer and had absolved the latter from any liability

u.
as an employer, will not erase either party's obligations as

ed
an employer, if an employer-employee relation otherwise
exists between the workers and either firm x x x. (Emphasis

n.
supplied) (Century Properties, Inc. v. Babiano, G.R. No. 220978,
ai
July 5, 2016)
m
su

28. A, B, and C were hired as resident-doctors by MM Medical

m

Center, Inc. In the course of their engagement, A, B, and C

s.
@

maintained specific work schedules as determined by the

91

Medical Director. The hospital also monitored their work

through supervisors who gave them specific instructions
cx

on how they should perform their respective tasks,

o.

including diagnosis, treatment, and management of their

er
sp

patients. One day A, B, and C approached the Medical

Director and inquired about the non-payment of their
o
pr

employment benefits. In response, the Medical Director

told them that they are not entitled to any because they are
mere "independent contractors" as expressly stipulated in
the contracts which they admittedly signed. As such, no
employer-employee relationship exists between them and
the hospital. x x x (b) Is the Medical Director's reliance on
the contracts signed by A, B, and C to refute the existence
of an employer-employee relationship correct? If not,
are A, B, and C employees of MM Medical Center, Inc.?
Explain. (2019 Part I BAR Q. No. A.3)

No, the reliance of the Medical Director on the contracts

is not correct.
 21
LABOR STANDARDS
Fundamental Principles and Policies

By established jurisprudence, one's employment

status is defined and prescribed by law, and not by what
the parties say it should be, viz.: It is axiomatic that the
existence of an employer-employee relationship cannot be
negated by expressly repudiating it in the management
contract and providing therein that the "employee" is an
independent contractor when the terms of the agreement
clearly show otherwise. For, the employment status of a
person is defined and prescribed by law, and not by what
the parties say it should be. In determining the status of the
management contract, the "four-fold test" on employment

ph
earlier mentioned has to be applied. The existence of an

u.
employer-employees relation is a question of law and being

ed
such, it cannot be made the subject of agreement. (Century

n.
Properties, Inc. v. Babiano, G.R. No. 220978, July 5, 2016)

ai
Yes, A, B, and C are employees of MM Medical Center,
m
su
Inc.
m

In determining the existence of an employer-employee

s.

relationship, the "four-fold test," should be applied, which

@

has the following elements, to wit: (1) the selection and

91

engagement of the employee; (2) the payment of wages; (3)

cx

the power to discipline and dismiss; and (4) the employer's

o.

power to control the employee with respect to the means

er

and method by which the work is to be accomplished.

sp

(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

o
pr

Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

In this case, the first and fourth elements are present.
he facts clearly stated that A, B, and C were hired as
resident-doctors by MM Medical Center, Inc. and they
maintained specific work schedules as determined by the
Medical Director. The hospital also monitored their work
through supervisors who gave them specific instructions on
how they should perform their respective tasks, including
diagnosis, treatment, and management of their patients.
Thus, A, B, and C are subject to the control of the hospital.

Applying the test, A, B, and C are, therefore, employees

of MM Medical Center, Inc.
22 LABOR LAW REVIEWER

29. True or false. Explain your answer briefly. The relations

between employer and employee are purely contractual in
nature. (2010 BAR Q. No. I[2])

False. The relations between capital and labor are

not merely contractual. They are so impressed with public
interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor, and
similar subjects. (Article 1700, Civil Code)

ph
30. Banco de Manila and the Ang Husay Janitorial and Pest

u.
Control Agency entered into an Independent Contractor

ed
Agreement with the usual stipulations: specifically, the

n.
absence of employer-employee relationship, and the relief
ai
m
from liability clauses. Can the Bank, as a client, and the
su
Agency, as an independent contractor, stipulate that no
m

employer-employee relationship exists between the Bank

s.

and the employees of the Agency who may be assigned to

@

work in the Bank? Reason. (2000 BAR Q. No. III)

91

No, the Bank and the Agency cannot stipulate the

cx

absence of employer-employee relationship.

o.
er

By established jurisprudence, one's employment

sp

status is defined and prescribed by law, and not by what

o

the parties say it should be, viz.: It is axiomatic that the

pr

existence of an employer-employee relationship cannot be

negated by expressly repudiating it in the management
contract and providing therein that the "employee" is an
independent contractor when the terms of the agreement
clearly show otherwise. For, the employment status of a
person is defined and prescribed by law, and not by what
the parties say it should be. In determining the status of the
management contract, the "four-fold test" on employment
earlier mentioned has to be applied. The existence of an
employer-employees relation is a question of law and being
such, it cannot be made the subject of agreement. (Century
Properties, Inc. v. Babiano, G.R. No. 220978, July 5, 2016)
 23
LABOR STANDARDS

Fundamental Principles and Policies

31. What are the accepted tests to determine the existence of

an employer-employee relationship? (2017 BAR Q. No.
IA)

The accepted tests are the following:

1. The traditional four-fold test of employer
employee relationship:

The "four-fold test," which has the following elements,

to wit:

(1) the selection and engagement of the

ph
employee;

u.
(2) the payment of wages;

ed
n.
(3) the power to discipline and dismiss; and

ai
m
(4) the employer's power to control the em
su

ployee with respect to the means and method by which

m

the work is to be accomplished. (David v. Macasio, 738

s.

Phil. 293, 307 [2014] cited in Parayday v. Shogun Shipping

@

Company, Inc. G.R. No. 204555, July 6, 2020)

91
cx

2. The economic dependence test

o.

The Supreme Court observed the need to consider

er

the existing economic conditions prevailing between the

sp

parties, in addition to the standard of right-of-control like

o
pr

the inclusion of the employee in the payrolls, to give a

clearer picture in determining the existence of an employer
employee relationship based on an analysis of the totality
of economic circumstances of the worker. Thus, the
determination of the relationship between employer and
employee depends upon the circumstances of the whole
economic activity, such as:
(1) the extent to which the services performed
are an integral part of the employer's business;

(2) the extent of the worker's investment in

equipment and facilities;
24 LABOR LAW REVIEWER

(3) the nature and degree of control exercised by

the employer;

(4) the worker's opportunity for profit and loss;

(5) the amount of initiative, skill, judgment
or foresight required for the success of the claimed
independent enterprise;

(6) the permanency and duration of the

relationship between the worker and the employer;
and

ph
(7) the degree of dependency of the worker

u.
upon the employer for his continued employment in

ed
that line of business. (Sevilla v. Court of Appeals, G.R.

n.
Nos. L-41182-3, April 15, 1988, 160 SCRA 171, 179-180,

ai
citing Visayan Stevedore Transportation Company v. Court
m
of Industrial Relations, 125 Phil. 817, 820 [1967])
su
m

The proper standard of economic dependence is

s.

whether the worker is dependent on the alleged employer

@

for his continued employment in that line of business.

91

(Francisco v. NLRC, G.R. No. 170087, August 31, 2006 citing

cx

the foreign authority of Halferty v. Pulse Drug Company, 821

o.

F.2d 261 [5th Cir. 1987])

er
sp

3. The two-tiered test (combination of control test

o

and economic dependency test) (Francisco v. NLRC, G.R. No.

pr

170087, August 31, 2006)

32. Dr. Crisostomo entered into a retainer agreement with

AB Hotel and Resort whereby he would provide medical
services to the guests and employees of AB Hotel and
Resort, which, in turn, would provide the clinic premises
and medical supplies. He received a monthly retainer
fee of P60,000.00, plus a 70% share in the service charges
from AB Hotel and Resort's guests availing themselves
of the clinic's services. The clinic employed nurses and
allied staff, whose salaries, SSS contributions and other
benefits he undertook to pay. AB Hotel and Resort issued
 25
LABOR STANDARDS

Fundamental Principles and Policies

directives giving instructions to him on the replenishment

of emergency kits and forbidding the clinic staff from
receiving cash payments from guests. In time, the nurses
and the clinic staff claimed entitlement to rights as regular
employees of AB Hotel and Resort, but the latter refused on
the ground that Dr. Crisostomo, who was their employer,
was an independent contractor. Rule, with reasons. (2017
BAR Q. No. VII)

I will rule for AB Hotel and Resort.

In determining the existence of an employer-employee

ph
relationship, the "four-fold test," should be applied, which

u.
has the following elements, to wit: (1) the selection and

ed
engagement of the employee; (2) the payment of wages; (3)

n.
the power to discipline and dismiss; and (4) the employer's

ai
power to control the employee with respect to the means
m
and method by which the work is to be accomplished.
su

(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

m

Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

s.
@

In this case, the first and second elements are present.

91

The facts clearly stated that Dr. Crisostomo employed in

cx

his clinic the nurses and allied staff, whose salaries, SSS
o.

contributions, and other benefits he undertook to pay. Thus,

er

the nurses and allied staff are not the employees of AB Hotel
sp

and Resort.
o
pr

Applying the test, the nurses and allied staff cannot,

therefore, claim entitlement to the rights of regular
employees of the hotel.

33. Gregorio was hired as an insurance underwriter by

the Guaranteed Insurance Corporation (Guaranteed).
He does not receive any salary but solely relies on
commissions earned for every insurance policy approved
by the company. He hires and pays his own secretary but
is provided free office space in the office of the company.
He is, however, required to meet a monthly quota of
twenty (20) insurance policies, otherwise, he may be
26 LABOR LAW REVIEWER

terminated. He was made to agree to a Code of Conduct

for underwriters and is supervised by a Unit Manager.

Is Gregorio an employee of Guaranteed? (2016 BAR

Q. No. II[a])

Yes, Gregorio is an employee.

In determining the existence of an employer-employee

relationship, the "four-fold test," should be applied, which
has the following elements, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3)
the power to discipline and dismiss; and (4) the employer's

ph
power to control the employee with respect to the means

u.
and method by which the work is to be accomplished.

ed
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

n.
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

ai
m
In this case, the following facts illustrate the presence
su
of the above elements:
m

1. He was hired as an insurance underwriter by

s.
@

Guaranteed and paid on commission basis; 2. He is required

to meet a monthly quota of twenty (20) insurance policies,
91

otherwise, he may be terminated; 3. He was made to agree to

cx

a Code of Conduct for underwriters; and 4. He is supervised

o.

by a Unit Manager.
er
sp

Applying the test, Gregorio is, therefore, an employee

o

of Guaranteed.
pr

Suppose Gregorio is appointed as Unit Manager

and assigned to supervise several underwriters. He holds
office in the company premises, receives an overriding
commission on the commissions of his underwriters, as
well as a monthly allowance from the company, and is
supervised by a branch manager. He is governed by the
Code of Conduct for Unit Managers. Is he an employee of
Guaranteed? Explain. (2016 BAR Q. No. II[b])
Yes, Gregorio is an employee of Guaranteed.
In determining the existence of an employer-employee
relationship, the "four-fold test," should be applied, which
 27
LABOR STANDARDS

Fundamental Principles and Policies

has the following elements, to wit: (1) the selection and

engagement of the employee; (2) the payment of wages; (3)
the power to discipline and dismiss; and (4) the employer's
power to control the employee with respect to the means
and method by which the work is to be accomplished.
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

The above elements are present in this case as shown

by the fact that Gregorio was appointed as Unit Manager
and assigned to supervise several underwriters; he holds
office in the company premises, receives an overriding

ph
commission on the commissions of his underwriters, as

u.
well as a monthly allowance from the company, and is

ed
upervised by a branch manager.

n.
ai
Applying the test, Gregorio is, therefore, an employee
m
of Guaranteed.
su
m

34. Matibay Shoe and Repair Store, as added service to its

s.

customers, devoted a portion of its store to a shoe shine

@

stand. The shoe shine boys were tested for their skill
91

before being allowed to work and given ID cards. They

cx

were told to be present from the opening of the store up

o.

to closing time and were required to follow the company

er

ules on cleanliness and decorum. They bought their own

sp

hoe shine boxes, polish, and rags. The boys were paid
o
pr

y their customers for their services but the payment is

coursed through the store's cashier, who pays them before
closing time. They were not supervised in their work
by any managerial employee of the store but for a valid
complaint by a customer or for violation of any company
rule, they can be refused admission to the store. Were the
boys employees of the store? Explain. (2016 BAR Q. No.
XIII)

Yes, the boys are employees of the store.

In determining the existence of an employer-employee

relationship, the "four-fold test," should be applied, which
has the following elements, to wit: (1) the selection and
28 LABOR LAW REVIEWER

engagement of the employee; (2) the payment of wages; (3)

the power to discipline and dismiss; and (4) the employer's
power to control the employee with respect to the means
and method by which the work is to be accomplished.
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

In this case, the following facts illustrate the presence

of the above elements:

1. They were tested for their skill before being

allowed to work and given ID cards; 2. They were

ph
told to be present from the opening of the store up

u.
to closing time; 3. They were required to follow the

ed
company rules on cleanliness and decorum; 4. The boys

n.
were paid by their customers for their services but the

ai
payment is coursed through the store's cashier, who
m
pays them before closing time; and 5. That for violation
su

of any company rule, they can be refused admission to

m
s.

the store.
@

Applying the test, the boys are, therefore, employees of

91

the store.
cx
o.

35. Don Luis, a widower, lived alone in a house with a large

er

garden. One day, he noticed that the plants in his garden

sp

needed trimming. He remembered that Lando, a 17-year

o

old out-of-school youth, had contacted him in church the

pr

other day looking for work. He contacted Lando who

immediately attended to Don Luis's garden and finished
the job in three days. (A) Is there an employer-employee
relationship between Don Luis and Lando? (2014 BAR Q.
No. XIII[A])

Yes, there is an employer-employee relationship

between Don Luis and Lando.

In determining the existence of an employer-employee

relationship, the "four-fold test," should be applied, which
has the following elements, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3)
 29
LABOR STANDARDS

Fundamental Principles and Policies

the power to discipline and dismiss; and (4) the employer's

power to control the employee with respect to the means
and method by which the work is to be accomplished.
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)
The facts illustrate the presence of the first element.
Further, the term employ means to suffer or permit to work.
(Article 97[e], Labor Code) Thus, the fact that Don Luis had
made Lando suffer or was permitted to work shows that the
latter is in the employ of the former.

ph
Hence, there is an existence of employer-employee

u.
relationship between Don Luis and Lando.

ed
n.
6. Don Jose, a widower, owns a big house with a large

ai
garden. One day, his house helper and gardener left after
m
they were scolded. For day, Don Jose, who lives alone in
su

a compound to look for someone who could water the

m
s.

plants in the garden and clean the house. He chanced upon

@

Mang Kiko on the street and asked him to water the plants
91

and clean the house. Without asking any question, Mang

cx

Kiko attended to the plants in the garden and cleaned the

house. He finished the work in two days.
o.
er

Is there an employer-employee relationship between Don

sp

Jose and Mang Kiko? (1991 BAR Q. No. IV[a])

o
pr

there is an employer-employee relationship

between Don Jose and Mang Kiko.

In determining the existence of an employer-employee

relationship, the "four-fold test," should be applied, which
has the following elements, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3)
the power to discipline and dismiss; and (4) the employer's
power to control the employee with respect to the means
and method by which the work is to be accomplished.
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)
 30 LABOR LAW REVIEWER

The facts illustrate that the first element was present in

this case. Further, the term employ means to suffer or permit
to work. (Article 97[e], Labor Code) Thus, when Don Jose had
made Mang Kiko suffer or was permitted to work shows
that the latter is in the employ of the former.
Hence, there is an existence of employer-employee
relationship between Don Jose and Mang Kiko.

7. Employee-employer relationship exists under the

following, except: a. Jean, a guest relations officer in a
nightclub and Joe, the nightclub owner; b. Atty. Sin' Cruz,

ph
who works part-time as the resident in house lawyer of

u.
X Corporation; c. Paul, who works as registered agent on

ed
commission basis in an insurance company; d. Jack and

n.
Jill, who work in X Company, an unregistered Association.

ai
(2012 BAR Q. No. 46)
m
su

C. Paul, who works as registered agent on

m

commission basis in an insurance company

s.
@

Jurisprudence is settled that insurance agents are

91

independent contractors. The relationship between the

cx

insurance company and the agents was tested in the

o.

traditional "four-fold test," which has the following

er

elements, to wit: (1) the selection and engagement of the

sp

employee; (2) the payment of wages; (3) the power to

o

discipline and dismiss; and (4) the employer's power to

pr

control the employee with respect to the means and method

by which the work is to be accomplished. (David v. Macasio,
738 Phil. 293, 307 [2014] cited in Parayday v. Shogun Shipping
Company, Inc. G.R. No. 204555, July 6, 2020)

38. Inggu, an electronics technician, worked within the

premises of Pit Stop, an auto accessory shop. He filed a
Complaint for illegal dismissal, overtime pay and other
benefits against Pit Stop. Pit Stop refused to pay his claims
on the ground that Inggu was not its employee but was an
independent contractor. It was common practice for shops
like Pit Stop to collect the service fees from customers and
 LABOR STANDARDS 31

Fundamental Principles and Policies

pay the same to the independent contractors at the end of

each week. The auto shop explained that Inggu was like
a partner who worked within its premises, using parts
provided by the shop, but otherwise Inggu was free to
render service in the other auto shops. On the other hand,
Inggu insisted that he still was entitled to the benefits
because he was loyal to Pit Stop, it being a fact that he
did not perform work for anyone else. Is Inggu correct?
Explain briefly. (2012 BAR Q. No. VII[a])

Inggu is not correct.

ph
In determining the existence of an employer-employee

u.
relationship, the "four-fold test" should be applied, which

ed
has the following elements, to wit: (1) the selection and

n.
engagement of the employee; (2) the payment of wages; (3)

ai
the power to discipline and dismiss; and (4) the employer's
m
power to control the employee with respect to the means
su

and method by which the work is to be accomplished.

m

(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

s.

Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

@
91

The facts of the above problem do not indicate the

cx

existence of any of the foregoing elements. Thus, Inggu is

o.

not an employee of Pit Stop but an independent contractor.

er
sp

39. Pandoy, an electronics technician, worked within the

o

premises of Perfect Triangle, an auto accessory shop. He

pr

filed a complaint for illegal dismissal, overtime pay, and

other benefits against Perfect Triangle, which refused
to pay his claims on the ground that Pandoy was not
its employee but was an independent contractor. It was
common practice for shops like Perfect Triangle to collect
the service fees from customers and pay the same to the
independent contractors at the end of each week. The
auto shop explained that Pandoy was like a partner who
worked within its premises using parts provided by the
shop, but otherwise Pandoy was free to render service in
the other auto shops. On the other hand, Pandoy insisted
that he still was entitled to the benefits because he was
32 LABOR LAW REVIEWER

loyal to perfect Triangle, it being a fact that he did not

perform work for anyone else. Is Pandoy correct? Explain
briefly. (2002 BAR Q. No. IV)

Pandoy is not correct.

In determining the existence of an employer-employee

relationship, the "four-fold test" should be applied, which
has the following elements, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3)
the power to discipline and dismiss; and (4) the employer's
power to control the employee with respect to the means

ph
and method by which the work is to be accomplished.

u.
(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

ed
Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

n.
The facts of the above problem do not indicate the
ai
m
existence of any of the foregoing elements. Thus, Pandoy
su
is not an employee of Perfect Triangle but an independent
m

contractor.
s.
@

40. When does an employer-employee relationship exist?

91

(1996 BAR Q. No. I)

cx

The existence of employer-employee relationship can

o.

be established by applying the following tests:

er
sp

1. In determining the existence of an employer

o

employee relationship, the "four-fold test" should be

pr

applied, which has the following elements, to wit:

(1) the selection and engagement of the

employee;

(2) the payment of wages;

(3) the power to discipline and dismiss; and

(4) the employer's power to control the employee

with respect to the means and method by which the
work is to be accomplished. (David v. Macasio, 738 Phil.
293, 307 [2014] cited in Parayday v. Shogun Shipping
Company, Inc. G.R. No. 204555, July 6, 2020)
 33
LABOR STANDARDS

Fundamental Principles and Policies

2. The proper standard of economic dependence

is whether or not the worker is dependent on the alleged
employer for his continued employment in that line of
business. (Francisco v. NLRC, G.R. No. 170087, August 31,
2006 citing the foreign authority of Halferty v. Pulse Drug
Company, 821 F.2d 261 [5th Cir. 1987])
3. The two-tiered test (combination of control test

and economic dependency test) (Francisco v. NLRC, G.R. No.

170087, August 31, 2006)

ph
What is the most crucial and determinative factor to
determine an employment relationship?

u.
ed
Among the four, the most determinative factor

n.
in ascertaining the existence of employer-employee

ai
relationship is the "right of control test." "It is deemed to
m
be such an important factor that the other requisites may
su

even be disregarded.” (Sandigan Savings and Loan Bank,

m

Inc. v. National Labor Relations Commission, 324 Phil. 348,

s.
@

358 [1996]) This holds true where the issues to be resolved

91

is whether a person who performs work for another is

cx

the latter's employee or is an independent contractor,

(Cosmopolitan Funeral Homes, Inc. v. Maalat, G.R. No. 86693,
o.
er

July 2, 1990, 187 SCRA 108, 112) as in this case. For where the
sp

person for whom the services are performed reserves the

o

right to control not only the end to be achieved but also the
pr

means by which such end is reached, employer-employee

relationship is deemed to exist. (Royale Homes Marketing
Corporation v. Alcantara, G.R. No. 195190, July 28, 2014)

42. What are the guidelines indicative of labor law "control"?

Guidelines indicative of labor law "control," as the

first Insular Life case tells us, should not merely relate to
the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the
means or methods to be employed in attaining the result,
or of fixing the methodology and of binding or restricting
the party hired to the use of these means. (Tongko v. The
34 LABOR LAW REVIEWER

Manufacturer's Life Insurance Company, Inc., G.R. No. 167622,

June 29, 2010)

A. Labor Law Control = Employment Relationship

Control over the performance of the task of one

providing service both with respect to the means and
manner, and the results of the service-is the primary element
in determining whether an employment relationship exists.
(Tongko v. The Manufacturer's Life Insurance Company, Inc.,
G.R. No. 167622, January 25, 2011)

ph
43. What is the difference between the rules that merely

u.
serve as guidelines to achieve the mutually desired result

ed
without dictating the means or methods in attaining it,

n.
and those that control or fix the methodology?

ai
Logically, the line should be drawn between rules that
m
su
merely serve as guidelines toward the achievement of the
m

mutually desired result without dictating the means or

s.

methods to be employed in attaining it, and those that control

@

or fix the methodology and bind or restrict the party hired to

91

the use of such means. The first, which aim only to promote
cx

the result, create no employer-employee relationship unlike

o.

the second, which address both the result and the means
er

used to achieve it. (Insular Life Assurance Co., Ltd. v. NLRC,

sp

G.R. No. 84484, November 15, 1989)

o
pr

44. A, B, and C were hired as resident-doctors by MM Medical

Center, Inc. In the course of their engagement, A, B, and C
maintained specific work schedules as determined by the
Medical Director. The hospital also monitored their work
through supervisors who gave them specific instructions
on how they should perform their respective tasks,
including diagnosis, treatment, and management of their
patients. One day A, B, and C approached the Medical
Director and inquired about the non-payment of their
employment benefits. In response, the Medical Director
told them that they are not entitled to any because they are
mere "independent contractors" as expressly stipulated in
 LABOR STANDARDS 35

Fundamental Principles and Policies

the contracts which they admittedly signed. As such, no

employer-employee relationship exists between them and
the hospital.

What is the control test in determining the existence of an

employer-employee? (2019 Part I BAR Q. No. A.3[a])

Guidelines indicative of labor law "control" should not

merely relate to the mutually desirable result intended by
the contractual relationship; they must have the nature of
dictating the means or methods to be employed in attaining
the result, or of fixing the methodology and of binding or

ph
restricting the party hired to the use of these means. (Tongko

u.
v. The Manufacturer's Life Insurance Company, Inc., G.R. No.

ed
167622, June 29, 2010)

n.
ai
45. Ador is a student working on his master's degree in
m
horticulture. To make ends meet, he takes on jobs to come
su

up with flower arrangements for friends. His neighbor,

m

Nico, is about to get married to Lucia and needs a floral

s.

arranger. Ador offers his services and Nico agrees. They

@

shake hands on it, agreeing that Nico will pay Ador

91

P20,000.00 for his services but that Ador will take care of
cx

everything. As Ador sets about to decorate the venue, Nico

o.

changes all of Ador's plans and ends up designing the

er

arrangements himself with Ador simply executing Nico's

sp

instructions. Is there an employer-employee relationship

o

between Nico and Ador? (2015 BAR Q. No. VI[a])

pr

Yes, there is an employer-employee relationship

between Nico and Ador.

Control over the performance of the task of one

providing service both with respect to the means and
-

manner, and the results of the service- is the primary element

in determining whether an employment relationship exists.
(Tongko v. The Manufacturer's Life Insurance Company, Inc.,
G.R. No. 167622, January 25, 2011)

In this case, the element of control is present. This is

because Ador had simply executed Nico's instructions as to
the manner and method of the performance of work.
36 LABOR LAW REVIEWER

Hence, there is an existence of employer-employee

relationship between Nico and Ador.

46. Star Crafts is a lantern maker based in Pampanga. It

supplies Christmas lanterns to stores in Luzon, Metro
Manila, and parts of Visayas, with the months of August to
November being the busiest months. Its factory employs
a workforce of 2,000 workers who make different lanterns

daily for the whole year. Because of increased demand, Star

Crafts entered into a contractual arrangement with People
Plus, a service contractor, to supply the former with 100

ph
workers for only 4 months, August to November, at a rate

u.
different from what they pay their regular employees. The

ed
contract with People Plus stipulates that all equipment

n.
and raw materials will be supplied by Star Crafts with the

ai
m
express condition that the workers cannot take any of the
su
designs home and must complete their tasks within the
premises of Star Crafts. Is there an employer-employee
m
s.

relationship between Star Crafts and the 100 workers

@

from People Plus? Explain. (2015 BAR Q. No. VIII)

91

Yes, there is an employer-employee relationship

cx

between Star Crafts and the workers supplied by People

o.

Plus.
er
sp

Control over the performance of the task of one

o

providing service - both with respect to the means and

pr

manner, and the results of the service - is the primary element

in determining whether an employment relationship exists.
(Tongko v. The Manufacturer's Life Insurance Company, Inc.,
G.R. No. 167622, January 25, 2011)

In this case, the element of control is present. This

was indicated in the express condition of the contract
stating that the workers must complete their tasks within
the premises of Star Crafts. Thus, the fact that the said 100
workers were performing their tasks within the premises of
Star Crafts shows the control or supervision of the latter on
the performance of work by the former.
 37
LABOR STANDARDS

Fundamental Principles and Policies

Hence, there is an existence of employer-employee

relationship between Star Crafts and the workers supplied
by People Plus.

47. Reach-All, a marketing firm with operating capital of

P100,000, supplied sales persons to pharmaceutical
companies to promote their products in hospitals and
doctors' offices. Reach-All trained these sales persons in
the art of selling but it is the client companies that taught
them the pharmacological qualities of their products.
Reach-All's roving supervisors monitored, assessed, and

ph
supervised their work performance. Reach-All directly

u.
paid their salaries out of contractor's fees it received.

ed
Under the circumstances, can the sales persons demand

n.
that they be absorbed as employees of the pharmaceutical

ai
firms? m
su
(A) No, they are Reach-All's employees since it has
m

control over their work performance.

s.
@

(B) Yes, since they receive training from the

pharmaceutical companies regarding the
91

products they will promote.

cx
o.

(C) No, since they are bound by the agency agreement

er

between Reach-All and the pharmaceutical

sp

companies.
o
pr

(D) Yes, since Reach-All does not qualify as

independent contractor employer, its clients
being the source of the employees' salaries.
(2011 BAR Q. No. 21)

(A) No, they are Reach-All's employees since it has

control over their work performance.

Control over the performance of the task of one

providing service - both with respect to the means and
manner, and the results of the service-is the primary element
in determining whether an employment relationship exists.
(Tongko v. The Manufacturer's Life Insurance Company, Inc.,
G.R. No. 167622, January 25, 2011)
38 LABOR LAW REVIEWER

In this case, the element of control as to the manner and

method of performance of work is present. This is because
the facts state that Reach-All's roving supervisors monitored,
assessed, and supervised their work performance.

48. Pablo was a farm-hand in a plantation owned by ABC

& Co., working approximately 6 days a week for a good
15 years. Upon Pablo's death, his widow filed a claim for
burial grant and pension benefits with the Social Security
System (SSS). The claim was denied on the ground that
Pablo had not been a registered member-employee.

ph
Pablo's widow filed a petition before the SSS asking that

u.
ABC & Co. be directed to pay the premium contributions

ed
of Pablo and that his name be reported for SSS coverage.

n.
ABC & Co. countered that Pablo was hired to plow, harrow

ai
and burrow, using his own carabao and other implements
m
and following his own schedule of work hours, without
su

any supervision from the company. If proven, would this

m

factual setting advanced by ABC & Co. be a valid defense

s.

against the petition? (2003 BAR Q. No. II)

@
91

Yes, the factual setting advanced by ABC & Co. is a

cx

valid defense.
o.

Control over the performance of the task of one

er

providing service both with respect to the means and

sp

manner, and the results of the service - is the primary element

o
pr

in determining whether an employment relationship exists.

(Tongko v. The Manufacturer's Life Insurance Company, Inc.,
G.R. No. 167622, January 25, 2011)

The element of control as to the manner and method

of performance of work is not present in this case. This

is because Pablo was hired to plow, harrow, and burrow,
using his own carabao and other implements and following
his own schedule of work hours, without any supervision
from the company. Thus, Pablo is not an employee of ABC
& Co. Therefore, ABC & Co. cannot be directed to pay the
premium contribution of Pablo and report him for SSS
coverage.
 39
LABOR STANDARDS

Fundamental Principles and Policies

Alternative answer:

No, the factual setting advanced by ABC & Co. is

not a valid defense.

In determining the existence of an employer

employee relationship, the "four-fold test" should
be applied, which has the following elements, to wit:
(1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power to discipline
and dismiss; and (4) the employer's power to control
the employee with respect to the means and method

ph
by which the work is to be accomplished. (David v.

u.
Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

ed
Shogun Shipping Company, Inc. G.R. No. 204555, July 6,

n.
2020)

ai
m
In this case, the first element is present. This was
su
because Pablo had worked on the farm for the last
m

fifteen (15) years.

s.
@

49. FACTS: Asia Security & Investigation Agency (ASIA)

91

executed a one-year contract with the Baron Hotel

cx

(BARON) for the former to provide the latter with

o.

twenty (20) security guards to safeguard the persons and

er

belongings of hotel guests, among others. The security

sp

guards filled up Baron application form and submitted

o

the executed forms directly to the Security Department of

pr

Baron. The pay slips of the security guards bore Baron's

logo and showed that Baron deducted therefrom the
amounts for SSS premiums, medicare contributions, and
withholding taxes. Assignments of security guards, who
should be on duty or on call, promotions, suspensions,
dismissals, and award citations for meritorious services
were all done upon approval by Baron's chief Security
officer. After the expiration of the contract with Asia, Baron
did not renew the same and instead executed another
contract for security services with another agency. Asia
placed the affected security guards on "floating status"
on "no work no pay" basis. Having been displaced from
40 LABOR LAW REVIEWER

work, the Asia security guards filed a case against Baron

Hotel for illegal dismissal, overtime pay, minimum wage
differentials, vacation leave and sick leave benefits, and

13th month pay. Baron Hotel denied liability alleging that

Asia is the employer of the security guards and therefore,
the complaint for illegal dismissal and payment of money
claims should be directed against Asia. Nevertheless,
Baron filed a Third Party Complaint against Asia. Is there
an employer-employee relationship between the Baron
Hotel, on one hand, and the Asia security guards, on the
other hand? Explain briefly. (1999 BAR Q. No. XIV[1])

ph
Yes, there is an employer-employee relationship

u.
between Baron Hotel, on one hand, and the security guards.

ed
n.
In determining the existence of an employer-employee

ai
relationship, the "four-fold test" should be applied, which
m
has the following elements, to wit: (1) the selection and
su

engagement of the employee; (2) the payment of wages; (3)

m

the power to discipline and dismiss; and (4) the employer's

s.
@

power to control the employee with respect to the means

and method by which the work is to be accomplished.
91

(David v. Macasio, 738 Phil. 293, 307 [2014] cited in Parayday v.

cx

Shogun Shipping Company, Inc. G.R. No. 204555, July 6, 2020)

o.
er

In this case, the following facts illustrate the presence

sp

of the above elements:

o
pr

1. The security guards filled up Baron application

form and submitted the executed forms directly to the
Security Department of Baron; 2. The pay slips of the security
guards bore Baron's logo and showed that Baron deducted
therefrom the amounts for SSS premiums, medicare
contributions, and withholding taxes; 3. Assignments
of security guards, who should be on duty or on call,
promotions, suspensions, dismissals, and award citations
for meritorious services were all done upon approval by
Baron's chief Security officer.

Hence, there is an existence of employer-employee

relationship between Baron Hotel and the security guards.
 41
LABOR STANDARDS

Fundamental Principles and Policies

50. What is the kind of relationship existing under a

"boundary system" arrangement?
In a number of cases decided by the Supreme Court,
(National Labor Union v. Dinglasan, 98 Phil. 649, 652 [1996];
Magboo v. Bernardo, 7 SCRA 952, 954 [1963]; Lantaco, Sr. v.
Llamas, 108 SCRA 502, 514 [1981]), it was ruled that the
relationship between jeepney owners/operators on one
hand and jeepney drivers on the other under the boundary
system is that of employer-employee and not of lessor-lessee.
It was explained that in the lease of chattels, the lessor loses

ph
complete control over the chattel leased although the lessee

u.
cannot be reckless in the use thereof, otherwise he would be

ed
responsible for the damages to the lessor.

n.
In the case of jeepney owners/operators and jeepney
drivers, the former exercise
ai
supervision and control
m
su
over the latter. The management of the business is in the
owner's hands. The owner as holder of the certificate of
m
s.

public convenience must see to it that the driver follows the

@

route prescribed by the franchising authority and the rules

91

promulgated as regards its operation. Now, the fact that the

cx

drivers do not receive fixed wages but get only that in excess
o.

of the so-called "boundary" they pay to the owner/operator

er

is not sufficient to withdraw the relationship between them

sp

from that of employer and employee.

o
pr

51. Applying the tests to determine the existence of an

employer-employee relationship, is a jeepney driver
operating under the boundary system an employee of his
jeepney operator or a mere lessee of the jeepney? Explain
your answer. (2017 BAR Q. No. IB)
See answer in Question No. 50.

52. Is a working scholar an employee of the school?

There is no employer-employee relationship between
students on one hand, and schools, colleges, or universities
on the other, where there is written agreement between
them under which the former agree to work for the latter in
42 LABOR LAW REVIEWER

exchange for the privilege to study free of charge, provided

the students are given real opportunities, including such
facilities as may be reasonable and necessary to finish their
chosen courses under such agreement. (Section 14 Rule X
Book III, Rules to Implement the Labor Code)

53. Ruben Padilla entered into a written agreement with

Gomburza College to work for the latter in exchange for
the privilege of studying in said institution. Ruben's work
was confined to keeping clean the lavatory facilities of the
school. One school day, Ruben got into a fist fight with

ph
a classmate, Victor Monteverde, as a result of which the
latter sustained a fractured arm. Victor Monteverde filed a

u.
ed
civil case for damages against Ruben Padilla, impleading
Gomburza College due to the latter's alleged liability as

n.
ai
an employer of Ruben Padilla. Under the circumstances,
m
could Gomburza College be held liable by Victor
su
Monteverde as an employer of Ruben Padilla? (1997 BAR
m

Q. No. IV)
s.

No, Gomburza College could not be held liable for

@

damages.
91
cx

There is no employer-employee relationship between

o.

students on one hand, and schools, colleges, or universities

er

on the other, where there is written agreement between

sp

them under which the former agree to work for the latter in
o

exchange for the privilege to study free of charge, provided

pr

he students are given real opportunities, including such

facilities as may be reasonable and necessary to finish their
chosen courses under such agreement. (Section 14, Rule X,
Book III, Rules to Implement the Labor Code)

In this case, the facts clearly stated that Ruben Padilla

entered into a written agreement with Gomburza College to
work for the latter in exchange for the privilege of studying
in said institution. Thus, he is a working scholar and not an
employee of the college.

Applying the rule, Gomburza College could not be

held liable by Victor Monteverde for the acts and omissions
of Ruben Padilla.
 LABOR STANDARDS 43

Fundamental Principles and Policies

54. What is the relationship of a resident physician in training

and the hospital?

There is employer-employee relationship between

resident physicians and training hospital unless: (1) There
is training agreement between them; and (2) The training
program is duly accredited or approved by the appropriate
government agency. (Section 14 Rule X Book III, Rules to
Implement the Labor Code)

55. What is the employment arrangement on lawyers?

ph
A lawyer, like any other professional, may very well

u.
be an employee of a private corporation or even of the

ed
government. It is not unusual for a big corporation to hire

n.
a staff of lawyers as its in-house counsel, pay them regular

ai
salaries, rank them in its table of organization, and otherwise
m
treat them like its other officers and employees. At the same
su

time, it may also contract with a law firm to act as outside

m
s.

counsel on a retainer basis. The two classes of lawyers

@

often work closely together but one group is made up of

91

employees while the other is not. A similar arrangement

cx

may exist as to doctors, nurses, dentists, public relations

o.

practitioners, and other professionals. (Hydro Resources

er

Contractors Corp. v. Pagalilauan, G.R. No. L-62909, April 18,

sp

1989)
o
pr

56. Explain if the law itself establishes an employer-employee

relationship in job contracting and labor-only contracting.
Under the general rule set out in the first and second
paragraphs of Article 106, an employer who enters into a
contract with a contractor for the performance of work for the
employer, does not thereby create an employer-employees
relationship between himself and the employees of the
contractor. Thus, the employees of the contractor remain
the contractor's employees and his alone. Nonetheless,
when a contractor fails to pay the wages of his employees
in accordance with the Labor Code, the employer who
contracted out the job to the contractor becomes jointly
 44 LABOR LAW REVIEWER

and severally liable with his contractor to the employees

of the latter "to the extent of the work performed under
the contract" as such employer were the employer of the
contractor's employees. The law itself, in other words,
establishes an employer-employee relationship between the
employer and the job contractor's employees for a limited
purpose, i.e., in order to ensure that the latter get paid the
wages due to them.

A similar situation obtains where there is "labor only"

contracting. The "labor-only" contractor - i.e., "the person
or intermediary" is considered "merely as an agent

ph
-

of the employer." The employer is made by the statute

u.
responsible to the employees of the "labor only" contractor

ed
as if such employees had been directly employed by the

n.
employer. Thus, where "labor-only" contracting exists
ai
m
in a given case, the statute itself implies or establishes an
su
employer-employee relationship between the employer
m

(the owner of the project) and the employees of the "labor

s.

only" contractor, this time for a comprehensive purpose:

@

"employer for purposes of this Code, to prevent any

91

violation or circumvention of any provision of this Code."

cx

The law in effect holds both the employer and the "labor
o.

only" contractor responsible to the latter's employees for the

er

more effective safeguarding of the employees' rights under

sp

the Labor Code. (Id. at 439-440) (Emphasis supplied) (Vigilla

o

v. Philippine College of Criminology, Inc., G.R. No. 200094, June

pr

10, 2013, citing Philippine Bank of Communications v. NLRC,

230 Phil. 430 [1986])

57. Who is an independent contractor? Is there an employer

employee relationship between an independent contractor
and his principals?
An independent contractor is defined as one who carries
on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and
under one's own responsibility according to one's own
manner and method, free from the control and direction of
the principal in all matters connected with the performance
 45
LABOR STANDARDS

Fundamental Principles and Policies

of the work except as to the results thereof. (Fuji Television

Network Inc. v. Espiritu, G.R. No. 204944-45, December 3, 2014)

In view of the "distinct and independent business"

of independent contractors, no employer-employee
relationship exists between independent contractors and
their principals. (Fuji Television Network Inc. v. Espiritu, G.R.
No. 204944-45, December 3, 2014)

58. What is the concept of liberal approach in interpreting the

Labor Code and its Implementing Rules and Regulations?
(2006 BAR Q. No. 2)

ph
u.
It is a basic and irrefragable rule that in carrying out

ed
and in interpreting the provisions of the Labor Code and

n.
its implementing regulations, the workingman's welfare

ai
should be the primordial and paramount consideration.
m
The interpretation herein made gives meaning and
su

substance to the liberal and compassionate spirit of the law

m

enunciated in Article 4 of the Labor Code that "all doubts

s.

in the implementation and interpretation of the provisions

@

of the Labor Code including its implementing rules and

91

regulations shall be resolved in favor of labor." (Manaya v.

cx

Alabang Country Club Incorporated, G.R. No. 168988, June 19,

o.

2007 citing Salinas, Jr. v. National Labor Relations Commission,

er

377 Phil. 55, 65-66 [1999]; See also Philippine Long Distance
sp

Telecommunications v. National Labor Relations Commission,

o
pr

341 Phil. 809, 816 [1997])

59. What is the rule when the evidence of the employer and
the employee are in equipoise?

Where both parties in a labor case have not presented

substantial evidence to prove their allegations, the evidence
is considered to be in equipoise. In such a case, the scales
of justice are tilted in favor of labor. Thus, petitioners are
hereby considered to have been illegally dismissed. When
the evidence of the employer and the employee are in
equipoise, doubts are resolved in favor of labor. (Hubilla v.
HSY Marketing Ltd., Co., G.R. No. 207354, January 10, 2018
citing Mobile Protective & Detective Agency v. Ompad, 494 Phil.
46 LABOR LAW REVIEWER

621, 635 (2005) [Per J. Puno, Second Division] citing Asuncion

v. NLRC, 414 Phil. 329 (2001) [Per J. Kapunan, First Division])
This is in line with the policy of the State to afford greater
protection to labor. (See LABOR CODE, Section 4 and CONST.,
Article II, Section 18)

60. Procopio was dismissed from employment for stealing his

co-employee Raul's watch. Procopio filed a complaint for
illegal dismissal. The Labor Arbiter ruled in Procopio's
favor on the ground that Raul's testimony was doubtful,
and, therefore, the doubt should be resolved in favor of

ph
Procopio. On appeal, the NLRC reversed the ruling because

u.
Article 4 of the Labor Code - which states that all doubts in

ed
the interpretation and implementation of the provisions

n.
of the Labor Code, including the implementing rules and

ai
regulations, shall be resolved in favor of labor - applied
m
only when the doubt involved the "implementation and
su

interpretation" of the Labor Code; hence, the doubt, which

m
s.

involved the application of the rules on evidence, not the

@

Labor Code, could not necessarily be resolved in favor of

91

Procopio. Was the reversal correct? Explain your answer.

cx

(2017 BAR Q. No. II)

o.

No, the reversal was not correct.

er
sp

In Peñaflor v. Outdoor Clothing Manufacturing, G.R.

o

No. 177114, January 21, 2010, the Supreme Court explained

pr

the application of Article 4 of the Labor Code regarding

doubts on respondent's evidence on the voluntariness of
petitioner's resignation. Thus, the High Court said: Another
basic principle is that expressed in Article 4 of the Labor
Code - that all doubts in the interpretation and implementation
ofthe Labor Code should be interpreted in favor of the workingman.
This principle has been extended by jurisprudence to cover
doubts in the evidence presented by the employer and
the employee. (Fujitsu Computer Products Corporation of the
Philippines v. Court of Appeals, 494 Phil. 697 [2005])
Applying the doctrinal rule, the reversal is therefore
not correct.
 LABOR STANDARDS 47

Fundamental Principles and Policies

61. Clarito, an employee of Juan, was dismissed for allegedly

stealing Juan's wristwatch. In the illegal dismissal case
instituted by Clarito, the Labor Arbiter, citing Article 4
of the Labor Code, ruled in favor of Clarito upon finding
Juan's testimony doubtful. On appeal, the NLRC reversed
the Labor Arbiter holding that Article 4 applies only when
the doubt involves "implementation and interpretation"
of the Labor Code provisions. The NLRC explained that
the doubt may not necessarily be resolved in favor of
labor since this case involves the application of the Rules

ph
on Evidence, not the Labor Code. Is the NLRC correct?
Reasons. (2009 BAR Q. No. II[b])

u.
ed
No, the NLRC is not correct.

n.
ai
In Peñaflor v. Outdoor Clothing Manufacturing, G.R.
m
No. 177114, January 21, 2010, the Supreme Court explained
su
the application of Article 4 of the Labor Code regarding
m

doubts on respondent's evidence on the voluntariness of

s.

petitioner's resignation. Thus, the High Court said: Another

@

basic principle is that expressed in Article 4 of the Labor

91

Code that all doubts in the interpretation and implementation

cx

ofthe Labor Code should be interpreted in favor ofthe workingman.

o.

This principle has been extended by jurisprudence to cover

er

doubts in the evidence presented by the employer and

sp

the employee. (Fujitsu Computer Products Corporation of the

o
pr

Philippines v. Court of Appeals, 494 Phil. 697 [2005])

Applying the doctrinal rule, the NLRC is therefore not
correct.

62. What is the similar principle and complementary

provision of Article 4 of the Labor Code embodied in the
Civil Code?

The similar principle and complementary provision

of Article 4 of the Labor Code is embodied in Article 1702

which says: "In case of doubt, all labor legislation and all
abor contracts shall be construed in favor of the safety and
decent living for the laborer." The rationale in explaining
48 LABOR LAW REVIEWER

the incorporation of Article 1702 of the Civil Code, the Code

Commission stated -

"The Public good requires that this

presumption be established whenever there is
some doubt in any labor law or labor contract. The
safety and the decent living of the toiling classes
do not affect them alone but are matters of deep
76
and immediate concern to the entire nation. When
in any nation, a large section of the inhabitants, are
not afforded a safe and decent life, the economic

ph
progress of the country is impeded, and the level

u.
of general well-being is pulled down."

ed
n.
63. Distinguish Article 4 of the Labor Code from Article 1702

ai
of the Civil Code. m
su
The distinctions are as follows: Aqus
m

1. Article 4 refers to the doubts on the Labor Code

s.

and its implementing rules and regulations while Article

@

1702 refers to the doubts on labor legislation and labor

91

contracts. Thus, Article 1702 is broader compared to Article

cx

4;
o.
er

2. The application of Article 4 is extended by

sp

jurisprudence to cover doubts in the evidence presented by

o

the employer and the employee. (Fujitsu Computer Products

pr

Corporation of the Philippines v. Court of Appeals, 494 Phil.

697 [2005]) On the other hand, there is no jurisprudence
extending the application of Article 1702 to cover doubts on
evidence.

64. What is the concept of management prerogatives?

Management prerogatives refer "to the right of an

employer to regulate all aspects of employment, such as the
freedom to prescribe work assignments, working methods,
processes to be followed, regulation regarding transfer of
employees, supervision of their work, lay-off and discipline,
 LABOR STANDARDS 49

Fundamental Principles and Policies

and dismissal and recall of work." (SHS Perforated Materials,

Inc. v. Diaz, G.R. No. 185814, October 13, 2010 citing Baybay
Water District v. Commission on Audit, G.R. Nos. 147248-49,
January 23, 2002)

65. What is the criterion to guide in the exercise of manage

ment prerogatives?

The employer's right to conduct the affairs of its

business, according to its own discretion and judgment,
is well-recognized. An employer has a free reign and

ph
enjoys wide latitude of discretion to regulate all aspects of

u.
employment and the only criterion to guide the exercise of

ed
its management prerogative is that the policies, rules, and

n.
regulations on work-related activities of the employees

ai
must always be fair and reasonable. (The Coca-Cola Export
m
Corporation v. Gacayan, G.R. No. 149433, December 15, 2010,
su
638 SCRA 377, 398-399)
m
s.

This Court upholds these management prerogatives so

@

long as they are exercised in good faith for the advancement

91

of the employer's interest and not for the purpose of

cx

defeating or circumventing the rights of the employees

o.

under special laws and valid agreements. (Gemina, Jr. v.

er

Bankwise, Inc. (Thrift Bank) G.R. No. 175365, October 23, 2013)
o sp

66. What are the aspects of management prerogatives?

pr

The exercise of management prerogatives involves the

following aspects:
1. Employee selection; 2. To discipline; 3. To prescribe
rules and regulations; 4. Security of Tenure; 5. To dismiss
an employee; 6. To characterize employment as no longer
necessary and hire; 7. To transfer/promote employees; 8.
Outsourcing of business; 9. Productivity standards; 10.
Right to demote; 11. Grant of bonus; 12. Change of working
hours; 13. Post-employment ban; 14. Policy on marital
discrimination.
 LABOR STANDARDS 49

Fundamental Principles and Policies

and dismissal and recall of work." (SHS Perforated Materials,

Inc. v. Diaz, G.R. No. 185814, October 13, 2010 citing Baybay
Water District v. Commission on Audit, G.R. Nos. 147248-49,
January 23, 2002)

65. What is the criterion to guide in the exercise of manage

ment prerogatives?

The employer's right to conduct the affairs of its

business, according to its own discretion and judgment,
is well-recognized. An employer has a free reign and
enjoys wide latitude of discretion to regulate all aspects of

ph
employment and the only criterion to guide the exercise of

u.
its management prerogative is that the policies, rules, and

ed
regulations on work-related activities of the employees

n.
must always be fair and reasonable. (The Coca-Cola Export
ai
m
Corporation v. Gacayan, G.R. No. 149433, December 15, 2010,
su
638 SCRA 377, 398-399)
m

This Court upholds these management prerogatives so

s.

long as they are exercised in good faith for the advancement

@
91

of the employer's interest and not for the purpose of

defeating or circumventing the rights of the employees
cx

under special laws and valid agreements. (Gemina, Jr. v.

o.

Bankwise, Inc. (Thrift Bank) G.R. No. 175365, October 23, 2013)
er
sp

66. What are the aspects of management prerogatives?

o
pr

The exercise of management prerogatives involves the

following aspects:

1. Employee selection; 2. To discipline; 3. To prescribe

rules and regulations; 4. Security of Tenure; 5. To dismiss
an employee; 6. To characterize employment as no longer
necessary and hire; 7. To transfer/promote employees; 8.
Outsourcing of business; 9. Productivity standards; 10.
Right to demote; 11. Grant of bonus; 12. Change of working
hours; 13. Post-employment ban; 14. Policy on marital
discrimination.
 LABOR STANDARDS 51

Fundamental Principles and Policies

Labor Relations Commission, G.R. No. 121348, March 9, 2000,

327 SCRA 540, 547-548)

69. What is the rule on management prerogative on the right

to prescribe reasonable rules and regulations?

It is axiomatic that appropriate disciplinary sanction is

within the purview of management imposition. (San Miguel
Corporation v. National Labor Relations Commission, G.R. Nos.
146121-22, April 16, 2008, 551 SCRA410, 426) What should not
be overlooked is the prerogative of an employer company
to prescribe reasonable rules and regulations necessary for

ph
the proper conduct of its business and to provide certain

u.
disciplinary measures in order to implement said rules

ed
to assure that the same would be complied with. (Soco v.

n.
Mercantile Corporation of Davao, G.R. Nos. L-53364-65, March
16, 1987)
ai
m
su

What is the rule on management prerogative on security

m
s.

of tenure?
@

In United Laboratories, Inc. v. Domingo, G.R. No. 186209,

91

September 21, 2011, it was ruled:

cx

It should be remembered, however, that

o.
er

the entitlement of workers to security of tenure

sp

is correlative to the right of enterprises to

o

reasonable returns on investments. (Article XIII,

pr

Sec. 3, paragraph 4 of the Constitution) The rights

are measured each in relation to the other.

In one section under the same title of

Article XIII, the Constitution mandates that "all

workers shall be entitled to security of tenure"

and commands at the same time in the same
way, that the State shall recognize the right of
enterprises to reasonable returns on investments,
and to expansion and growth. Such that, in this
jurisdiction, we recognize that management
has a wide latitude to regulate, according to
his own discretion and judgment, all aspects
 52 LABOR LAW REVIEWER

of employment, including the freedom to

transfer and reassign employees according to
the requirements of its business. The right of
employees to security of tenure does not give
them vested rights to their positions to the extent
of depriving management of its prerogative to
change their assignments or to transfer them.
(Philippine Japan Active Carbon Corporation v.
National Labor Relations Commission, 253 Phil. 149,

153 [1989]) Managerial prerogatives, on the other

hand, are subject to limitations provided by law,

ph
collective bargaining agreements, and general

u.
principles of fair play and justice. (Norkis Trading

ed
Co., Inc. v. Gnilo, G.R. No. 159730, 11 February 2008,

n.
544 SCRA 279, 290)

ai
m
71. What is the rule on management prerogative on the right
su

to dismiss an employee.
m

In Sutherland Global Services (Philippines), Inc. v.

s.
@

Labrador, G.R. No. 193107, March 24, 2014, the Supreme

91

Court said: We have consistently ruled that the power to

cx

dismiss an employee is a recognized prerogative inherent

o.

in the employer's right to freely manage and regulate his

er

business. The law, however, in protecting the rights of the

sp

laborers, authorizes neither oppression nor self-destruction

o

of the employer. The worker's right to security of tenure is

pr

not an absolute right, for the law provides that he may be

dismissed for cause. (Molina v. Pacific Plans, Inc., 519 Phil.
475, 497 [2006]) The power of dismissal is a measure of self
protection.

72. State the rule on management prerogative on the right to

characterize employment as no longer necessary and to
hire.

In Arabit v. Jardine Pacific Finance, Inc. (formerly MB

Finance), G.R. No. 181719, April 21, 2014: We recognize
that management has the prerogative to characterize an
employee's services as no longer necessary or sustainable,
 LABOR STANDARDS 53

Fundamental Principles and Policies

and therefore properly terminable. (Golden Thread Knitting

Industries, Inc. v. NLRC, supra at 228)

73. What is the rule on management prerogative on transfer

and promotion of employees?

As to the extent of management prerogative to transfer /

promote employees, and the differences between transfer
on one hand, and promotion, on the other, Coca-Cola Bottlers
Philippines, Inc. v. Del Villar, 646 Phil. 587 (2010) is instructive,
viz.: [L]abor laws discourage interference in employers'

ph
judgment concerning the conduct of their business. In the
pursuit of its legitimate business interest, management

u.
ed
has the prerogative to transfer or assign employees from
one office or area of operation to another - provided there

n.
ai
is no demotion in rank or diminution of salary, benefits,
m
and other privileges; and the action is not motivated by
su
discrimination, made in bad faith, or effected as a form of
m

punishment or demotion without sufficient cause. x x x. In

s.

the case of Blue Dairy Corporation v. National Labor Relations

@

Commission, we described in more detail the limitations

91

on the right of management to transfer employees: x x x

cx

[I]t cannot be used as a subterfuge by the employer to rid

o.

himself of an undesirable worker. In particular, the employer

er

must be able to show that the transfer is not unreasonable,

sp

inconvenient or prejudicial to the employee; nor does it

o
pr

involve a demotion in rank or a diminution of his salaries,

privileges and other benefits, x x x. A transfer is a movement

from one position to another which is of equivalent rank,
level or salary, without break in service. Promotion, on
the other hand, is the advancement from one position to
another with an increase in duties and responsibilities as
authorized by law, and usually accompanied by an increase
in salary. Conversely, demotion involves a situation where
an employee is relegated to a subordinate or less important
position constituting a reduction to a lower grade or rank,
with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary. (Id. at 607
611) (Citations omitted and emphasis and underscoring
54 LABOR LAW REVIEWER

ours) (Echo 2000 Commercial Corporation v. Obrero Filipino

Echo 2000 Chapter-CLO, G.R. No. 214092, January 11, 2016)

74. What is the rule on outsourcing of business activities?

"In one case, the Court held that it is management
prerogative to farm out any of its activities, regardless of
whether such activity is peripheral or core in nature. (Alviado
v. Procter & Gamble Phils., Inc., G.R. No. 160506, March 9, 2010,
614 SCRA 563, 577) What is of primordial importance is that
the service agreement does not violate the employee's right

ph
to security of tenure and payment of benefits to which he
is entitled under the law. Furthermore, the outsourcing

u.
ed
must not squarely fall under labor-only contracting where

n.
the contractor or sub-contractor merely recruits, supplies,

ai
or places workers to perform a job, work, or service for a
m
principal x x x." (BPI-Employees Union-Davao City FUBU
su

(BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands,

m

G.R. No. 174912, July 24, 2013)

s.
@

What is the rule on management prerogative on

91

productivity standards?
cx

The right of the employer to set productivity standards

o.
er

was upheld by the Supreme Court in Leonardo v. NLRC, G.R.

sp

No. 125303 and Fuerte v. Aquino, G.R. No. 126937, June 16, 2000.
o

Thus, in sustaining the employer's claim that the employee

pr

was demoted for failure to meet the company policy on

sales quota the Supreme Court held: This arrangement
appears to us to be an allowable exercise of company rights.
An employer is entitled to impose productivity standards
for its workers, and in fact, non-compliance may be visited
with a penalty even more severe than demotion. Thus:

[t]he practice of a company in laying off workers

because they failed to make the work quota has
been recognized in this jurisdiction. (Philippine
American Embroideries v. Embroidery and Garment
Workers, 26 SCRA 634, 639) In the case at bar,
the petitioners' failure to meet the sales quota
 55
LABOR STANDARDS

Fundamental Principles and Policies

assigned to each of them constitute a just cause

of their dismissal, regardless of the permanent
or probationary status of their employment.
Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments
due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean
failure to attain work goals or work quotas, either
by failing to complete the same within the allotted
reasonable period, or by producing unsatisfactory
results. This management prerogative of requiring

ph
standards may be availed of so long as they are

u.
exercised in good faith for the advancement of

ed
the employer's interest. (Buiser v. Leogardo, Jr., 131

n.
SCRA 151, 158 [1984])

ai
m
su
76. What is the rule on management prerogative on right to
demote?
m
s.

There is no demotion where there is no reduction in

@

position, rank, or salary as a result of such transfer. (Juliana

91

Brillantes v. Guevarra, 27 SCRA 138; Fernando v. Patricia Sto.

cx

Tomas, 234 SCRA 546) Thus, demotion is said to exist when

o.

there is a reduction in position, rank, or salary. Generally,

er

demotion is allowed as a valid exercise of management

sp

prerogative, often as a consequence of an employee's failure

o
pr

to comply with company productivity standards. (Leonardo

v. NLRC and Fuerte v. Aquino, supra)

Even the employer's right to demote an employee

requires the observance of the twin-notice requirement.
(Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, G.R.
No. 118045, January 2, 1997, 266 SCRA 97, 109–110) In Gaco
v. National Labor Relations Commission, G.R. No. 104690,

February 23, 1994, 230 SCRA 260, it was noted that:

While due process required by law is

applied on dismissals, the same is also applicable
to demotions as demotions likewise affect

the employment of a worker whose right to

56 LABOR LAW REVIEWER

continued employment, under the same terms

and conditions, is also protected by law. Moreover,
considering that demotion is, like dismissal, also
a punitive action, the employee being demoted
should as in cases of dismissals, be given a chance
to contest the same.

77. Company "A" contracts out its clerical and janitorial

services. In the negotiations of its CBA, the union insisted
that, henceforth, the company may no longer engage in
contracting out these types of services, which services the

ph
union claims to be necessary in the company's business,

u.
without prior consultation. Is the union stand valid or

ed
not? For what reason(s)? (2001 BAR Q. No. II[a])

n.
ai
No, the union's stand is not valid.
m
In one case, the Supreme Court ruled that it is
su

management prerogative to farm out any of its activities,

m

regardless of whether such activity is peripheral or core in

s.
@

nature. (Alviado v. Procter & Gamble Phils., Inc., G.R. No. 160506,
March 9, 2010, 614 SCRA 563, 577) What is of primordial
91

importance is that the service agreement does not violate

cx

the employee's right to security of tenure and payment of

o.

benefits to which he is entitled under the law. Furthermore,

er

the outsourcing must not squarely fall under labor-only

sp

contracting where the contractor or sub-contractor merely

o
pr

recruits, supplies or places workers to perform a job, work

or service for a principal. (BPI-Employees Union-Davao City
FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine
Islands, G.R. No. 174912, July 24, 2013)

Applying the doctrinal rule, contracting out does not

require prior consultation with the union.

78. Harbor View Hotel has an existing Collective Bargaining

Agreement (CBA) with the union of rank-and-file
employees consisting, among others, of bartenders,
waiters, room boys, housemen, and stewards. During the
lifetime of the CBA, Harbor View Hotel, for reasons of
economy and efficiency, decided to abolish the position of
 LABOR STANDARDS 57

Fundamental Principles and Policies

housemen and stewards who do the cleaning of the hotel's

public areas. Over the protest of the Union, the Hotel
contracted out the aforementioned job to the City Service
Janitorial Company, a bona fide independent contractor
which has a substantial capital in the form of janitorial
tools, equipment, machineries and competent manpower.
Is the action of the Harbor View Hotel legal and valid?
(1994 BAR Q. No. XVIII)

Yes, the action of Harbor View Hotel is legal and valid.

In one case, the Supreme Court ruled that it is

ph
management prerogative to farm out any of its activities,

u.
regardless of whether such activity is peripheral or core

ed
in nature. (Alviado v. Procter & Gamble Phils., Inc., G.R.

n.
No. 160506, March 9, 2010, 614 SCRA 563, 577) What is of

ai
primordial importance is that the service agreement does
m
not violate the employee's right to security of tenure and
su

payment of benefits to which he is entitled under the

m

law. Furthermore, the outsourcing must not squarely fall

s.

under labor-only contracting where the contractor or sub

@

contractor merely recruits, supplies or places workers to

91

perform a job, work or service for a principal. (BPI-Employees

cx

Union-Davao City FUBU (BPIEU-Davao City-FUBU) v. Bank

o.

of the Philippine Islands, G.R. No. 174912, July 24, 2013)

er
sp

In this case, the contracting out was made to a bona

o

fide independent contractor which has a substantial capital

pr

in the form of janitorial tools, equipment, machineries, and

competent manpower. Therefore, contracting out to a bona
fide independent contractor is legal.

79. What is a bonus?

By definition, a “bonus” is a gratuity or act of liberality

of the giver which the recipient has no right to demand as
a matter of right. It is something given in addition to what
is ordinarily received by or strictly due the recipient. The
granting of a bonus is basically a management prerogative
which cannot be forced upon the employer who may not be
obliged to assume the onerous burden of granting bonuses
or other benefits aside from the employee's basic salaries or
58 LABOR LAW REVIEWER

wages, especially so if it is incapable of doing so. (Manila

Banking Corporation v. NLRC, 279 SCRA 602 [1997])

80. Can an employer, who is in a depressed financial condition,

be compelled to pay the bonus?

A bonus is an amount granted and paid to an employee

for his industry and loyalty which contributed to the
success of the employer's business and made possible the
realization of profits. It is an act of generosity granted by
an enlightened employer to spur the employee to greater

ph
efforts for the success of the business and realization of

u.
bigger profits. (Luzon Stevedoring Corp. v. Court of Industrial

ed
Relations, 15 SCRA 660 [1965]) The granting of a bonus is
a management prerogative, something given in addition to

n.
ai
what is ordinarily received by or strictly due the recipient.
m
(Traders Royal Bank v. NLRC, 189 SCRA 274 [1990]) Thus,
su
a bonus is not a demandable and enforceable obligation,
m

(Luzon Stevedoring Corp. v. Court of Industrial Relations,

s.

supra), except when it is made part of the wage, salary

@

or compensation of the employee. (Philippine National

91

Construction Corporation v. NLRC, 307 SCRA 218 [1999]; Atok

cx

Big Wedge Mutual Benefit Association v. Atok-Big Wedge Mining

o.

Co., 92 Phil. 754 [1953]) However, an employer cannot be

er

forced to distribute bonuses which it can no longer afford to

sp

pay. To hold otherwise would be to penalize the employer

o

for his past generosity. Thus, in Traders Royal Bank v. NLRC

pr

(supra), we held that:

It is clear x x x that the petitioner may not

be obliged to pay bonuses to its employees. The
matter of giving them bonuses over and above
their lawful salaries and allowances is entirely
dependent on the profits, if any, realized by the
Bank from its operations during the past year.

Moreover, bonuses are not part of labor standards in

the same class as salaries, cost of living allowances, holiday
pay, and leave benefits, which are provided by the Labor
Code. (Producers Bank of the Philippines v. NLRC, G.R. No.
100701, March 28, 2001)
 59
LABOR STANDARDS

Fundamental Principles and Policies

81. When does a bonus become a demandable or enforceable

obligation?

A bonus, however, becomes a demandable or

enforceable obligation when it is made part of the wage or
salary or compensation of the employee. (Philippine National
Construction Corp. v. National Labor Relations Commission,
366 Phil. 678 [1999]; Philippine Duplicators, Inc. v. National
Labor Relations Commission, 311 Phil. 407, 419 [1995]) Particu
larly instructive is the ruling of the Court in Metro Transit
Organization, Inc. v. National Labor Relations Commission, 315
Phil. 860, 871 (1995), where it was written:

ph
u.
Whether or not a bonus forms part of wages

ed
depends upon the circumstances and conditions

n.
for its payment. If it is additional compensation

ai
which the employer promised and agreed to give
m
without any conditions imposed for its payment,
su
such as success of business or greater production
m

or output, then it is part of the wage. But if it is paid

s.

only if profits are realized or if a certain level of

@

productivity is achieved, it cannot be considered

91

part of the wage. Where it is not payable to all

cx

but only to some employees and only when their

o.

labor becomes more efficient or more productive,

er

it is only an inducement for efficiency, a prize

sp

therefore, not a part of the wage.

o
pr

82. XYZ Employees Association filed a complaint against

ABC Bank for wrongful diminution of benefits. It alleged
that the bank had been providing for a mid-year bonus
equivalent to one-month basic pay and a Christmas bonus
equivalent to one-month basic pay since 1971. Upon the
effectivity of Presidential Decree (P.D.) No. 851 in 1975
which granted the 13th month pay, the bank started giving
its employees a one-month basic pay as mid-year bonus,
one-month basic pay as Christmas bonus, and one-month
basic pay as 13th month pay. In 1980, the bank was placed
under conservatorship and by virtue of a monetary
board resolution of the Central bank, the bank only gave
one month basic pay mandated by P.D. 851, and it no
60 LABOR LAW REVIEWER

longer gave its employees the traditional mid-year and

Christmas bonuses. Could ABC Bank be compelled, given
the circumstances, to continue paying its employees the
traditional mid-year and Christmas bonuses in addition
to the 13th month pay? (2003 BAR Q. No. X)

No, ABC Bank could not be compelled to continue

paying the traditional mid-year and Christmas bonuses.
The granting of a bonus is a management prerogative,
something given in addition to what is ordinarily received
by or strictly due the recipient. (Traders Royal Bank v. NLRC,

ph
189 SCRA 274 [1990]) Thus, a bonus is not a demandable

u.
and enforceable obligation, (Luzon Stevedoring Corp. v.

ed
Court of Industrial Relations, supra), except when it is made

n.
part of the wage, salary or compensation of the employee.

ai
(Philippine National Construction Corporation v. NLRC, 307
m
SCRA 218 [1999]; Atok-Big Wedge Mutual Benefit Association
su

v. Atok-Big Wedge Mining Co., 92 Phil. 754 [1953]) However,

m

an employer cannot be forced to distribute bonuses which it

s.
@

can no longer afford to pay. To hold otherwise would be to

91

penalize the employer for his past generosity.

cx

In this case ABC Bank was placed under conservatorship

o.

because it is facing financial difficulties. Thus, it can no

er

longer afford to pay the bonuses.

sp

ABC Bank, therefore, can no longer be compelled to

o
pr

pay the bonuses.

83. The projected bonus for the employees of Suerte Co. was
50% of their monthly compensation. Unfortunately, due
to the slump in the business, the president reduced the
bonus to 5% of their compensation. Can the company
unilaterally reduce the amount of bonus? Explain briefly.
(2002 BAR Q. No. XVI[B])

Yes, the company can unilaterally reduce the amount

of bonus.

The granting of a bonus is a management prerogative,

something given in addition to what is ordinarily received
 LABOR STANDARDS 61

Fundamental Principles and Policies

by or strictly due the recipient. (Traders Royal Bank v. NLRC,

189 SCRA 274 [1990]) Thus, a bonus is not a demandable
and enforceable obligation, (Luzon Stevedoring Corp. v.
Court of Industrial Relations, supra) except when it is made
part of the wage, salary or compensation of the employee.
(Philippine National Construction Corporation v. NLRC, 307
SCRA 218 [1999]; Atok-Big Wedge Mutual Benefit Association
v. Atok-Big Wedge Mining Co., 92 Phil. 754 [1953]) However,
an employer cannot be forced to distribute bonuses which it
can no longer afford to pay. To hold otherwise would be to
penalize the employer for his past generosity.

ph
u.
34. What is a bonus? When is it demandable as a matter of

ed
right? Explain. (1995 BAR Q. No. III[1])

n.
ai
By definition, a "bonus" is a gratuity or act of liberality
m
of the giver which the recipient has no right to demand as
su

a matter of right. It is something given in addition to what

m

is ordinarily received by or strictly due the recipient. The

s.

granting of a bonus is basically a management prerogative

@

which cannot be forced upon the employer who may not be

91

obliged to assume the onerous burden of granting bonuses

cx

or other benefits aside from the employee's basic salaries or

o.

wages, especially so if it is incapable of doing so. (Manila

er

Banking Corporation v. NLRC, 279 SCRA 602 [1997])

osp

A bonus, however, becomes a demandable or

pr

enforceable obligation when it is made part of the wage or

salary or compensation of the employee. (Philippine National
Construction Corp. v. National Labor Relations Commission, 366
Phil. 678 [1999]; Philippine Duplicators, Inc. v. National Labor
Relations Commission, 311 Phil. 407, 419 [1995]) Particularly
instructive is the ruling of the Court in Metro Transit
Organization, Inc. v. National Labor Relations Commission, 315
Phil. 860, 871 (1995), where it was written:

Whether or not a bonus forms part of wages

depends upon the circumstances and conditions
for its payment. If it is additional compensation
which the employer promised and agreed to give
62 LABOR LAW REVIEWER

without any conditions imposed for its payment,

such as success of business or greater production
or output, then it is part of the wage. But if it is paid
only if profits are realized or if a certain level of
productivity is achieved, it cannot be considered
part of the wage. Where it is not payable to all
but only to some employees and only when their
labor becomes more efficient or more productive,
it is only an inducement for efficiency, a prize
therefore, not a part of the wage.

ph
85. State the rule on management prerogative on change of

u.
working hours.

ed
Every business enterprise endeavors to increase its

n.
ai
profits. In the process, it may devise means to attain that
m
goal. Even as the law is solicitous of the welfare of the
su

employees, it must also protect the right of an employer to

m

exercise what are clearly management prerogatives. (San

s.

Miguel Brewery Sales Force v. Ople, G.R. No. 53515, February

@

8, 1989, 170 SCRA 25; Abbot Laboratories v. NLRC, 154 SCRA

91

713) Thus, management is free to regulate, according to its

cx

own discretion and judgment, all aspects of employment,

o.

including hiring, work assignments, working methods,

er

time, place and manner of work, processes to be followed,

sp

supervision of workers, working regulations, transfer

o
pr

of employees, work supervision, lay off of workers and

discipline, dismissal, and recall of workers. (NLU v. Insular
Yebana Co., L-15363, July 31, 1961, 2 SCRA 924) Further,
management retains the prerogative, whenever exigencies
of the service so require, to change the working hours of
its employees. So long as such prerogative is exercised in
good faith for the advancement of the employer's interest
and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid
agreements, this Court will uphold such exercise. (Union
Carbide Labor Union v. Union Carbide Phils., Inc., G.R. No.
41314, November 13, 1992, 215 SCRA 554)
 63
LABOR STANDARDS

Fundamental Principles and Policies

86. True or False. Answer True if the statement is true or

False if the statement is false. Explain your answer in not

more than two (2) sentences. a) An employment contract
prohibiting employment in a competing company within
one year from separation is valid. (2009 BAR Q. No. I[a])

A non-involvement clause is not necessarily void for

being in restraint of trade as long as there are reasonable
limitations as to time, trade, and place. (Tiu v. Platinum Plans
Phil, Inc., G.R. No. 163512, February 28, 2007)
In this case, the non-involvement clause has a time

ph
limit: one year from separation. It is also limited as to trade,

u.
since it only prohibits employment in a competing company.

ed
n.
87. Define, explain or distinguish the following terms: (d)

ai
Bona fide occupational qualifications (2019 Part I BAR Q.
m
No. A.1)
su

Employment in particular jobs may not be limited

m

to persons of a particular sex, religion, or national origin

s.
@

unless the employer can show that sex, religion, or national

91

origin is an actual qualification for performing the job. The

qualification is called a bona fide occupational qualification
cx

(BFOQ). (Black's Law Dictionary, 6th ed. cited in Yrasuegui v.

o.

Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008)

er
sp

To justify a bona fide occupational qualification, the

o

employer must prove two factors: (1) that the employment

pr

qualification is reasonably related to the essential operation

of the job involved; and (2) that there is a factual basis for
believing that all or substantially all persons meeting the
qualification would be unable to properly perform the
duties of the job. (Star Paper Corporation v. Simbol, G.R. No.
164774, April 12, 2006)

88. What are the tests to determine the validity of a company

policy on employment? Explain.
The following are the tests:

1. Bona fide occupational qualification (BFOQ)

- Employment in particular jobs may not be limited to
64 LABOR LAW REVIEWER

persons of a particular sex, religion, or national origin

unless the employer can show that sex, religion, or national
origin is an actual qualification for performing the job. The
qualification is called a bona fide occupational qualification
(BFOQ). (Black's Law Dictionary, 6th ed. cited in Yrasuegui v.
Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008)

To justify a bona fide occupational qualification, the

employer must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation
of the job involved; and (2) that there is a factual basis for

ph
believing that all or substantially all persons meeting the

u.
qualification would be unable to properly perform the

ed
duties of the job. (Star Paper Corporation v. Simbol, G.R. No.

n.
164774, April 12, 2006)

2.
ai
Meiorin Test "Meiorin Test" in determining
-
m
su
whether an employment policy is justified. Under this test,
m

(1) the employer must show that it adopted the standard for
s.

a purpose rationally connected to the performance of the

@

job (The focus is not on the validity of the particular standard

91

but rather on the validity of its more general purpose.); (2) the
cx

employer must establish that the standard is reasonably

o.

necessary (To show that the standard is reasonably necessary,

er

it must be demonstrated that it is impossible to accommodate

sp

individual employees sharing the characteristics of the claimant

o

without imposing undue hardship on the employer.) to the

pr

accomplishment of that work-related purpose; and (3) the

employer must establish that the standard is reasonably
necessary in order to accomplish the legitimate work
related purpose. (Yrasuegui v. Philippine Airlines, Inc., G.R.
No. 168081, October 17, 2008)

3. Test of Reasonableness - The test of reasonableness

of the company policy is used because it is parallel to

BFOQ. (Id. at 243) BFOQ is valid “provided it reflects an
inherent quality reasonably necessary for satisfactory job
performance." (Philippine Telegraph and Telephone Company
v. National Labor Relations Commission, G.R. No. 118978, May
 LABOR STANDARDS 65

Fundamental Principles and Policies

23, 1997, 272 SCRA 596, 613 cited in Yrasuegui v. Philippine

Airlines, Inc., G.R. No. 168081, October 17, 2008)

4. The disparate treatment and the disparate impact

Under the disparate treatment analysis, the plaintiff
must prove that an employment policy is discriminatory
on its face. No-spouse employment policies requiring
an employee of a particular sex to either quit, transfer,
or be fired are facially discriminatory. For example, an
employment policy prohibiting the employer from hiring
wives of male employees, but not husbands of female

ph
employees, is discriminatory on its face.

u.
On the other hand, to establish disparate impact, the

ed
complainants must prove that a facially neutral policy has

n.
a disproportionate effect on a particular class. For example,

ai
although most employment policies do not expressly
m
indicate which spouse will be required to transfer or leave
su

the company, the policy often disproportionately affects one

m
s.

sex.
@
91

89. What are the laws that contain provisions similar to

BFOQ?
cx
o.

1. The Constitution (Constitution (1987), Article

er

XIII, Section 3), the Labor Code (Article 3, Declaration of

sp

Basic Policy), and RA 7277 (Approved on March 24, 1992)

o

or the Magna Carta for Disabled Persons (Section 32,

pr

Discrimination of Employment) contain provisions similar to

BFOQ. (Yrasuegui v. Philippine Airlines, Inc., G.R. No. 168081,
October 17, 2008)

2. RA No. 1109, known as the Anti-Age Discrimi

nation in Employment Act, Section 6, which provides that
when age is a bona fide occupational qualification rea
sonably necessary in the normal operation of a particular
business or where the differentiation is based on reasonable
factors other than age.
66 LABOR LAW REVIEWER

90. What is the rule on the validity of a policy against personal

or marital relationships with employees of competitor
companies?

The prohibition against personal or marital relations

hips with employees of competitor companies upon Glaxo's
employees is reasonable under the circumstances because
relationships of that nature might compromise the interests
of the company. In laying down the assailed company
policy, Glaxo only aims to protect its interests against the
possibility that a competitor company will gain access to its

ph
secrets and procedures.

u.
That Glaxo possesses the right to protect its economic

ed
interests cannot be denied. No less than the Constitution

n.
recognizes the right of enterprises to adopt and enforce
ai
such a policy to protect its right to reasonable returns on
m
su
investments and to expansion and growth. (Section 3, Article
m

XIII of the Constitution)

s.

In any event, from the wordings of the contractual

@

provision and the policy in its employee handbook, it is

91

clear that Glaxo does not impose an absolute prohibition

cx

against relationships between its employees and those of

o.

competitor companies. Its employees are free to cultivate

er

relationships with and marry persons of their own choosing.

sp

What the company merely seeks to avoid is a conflict of

o
pr

interest between the employee and the company that may

arise out of such relationships. As succinctly explained by
the appellate court, thus:
The policy being questioned is not a policy
against marriage. An employee of the company
remains free to marry anyone of his or her
choosing. The policy is not aimed at restricting
a personal prerogative that belongs only to the
individual. However, an employee's personal
decision does not detract the employer from
exercising management prerogatives to ensure
maximum profit and business success... (Duncan
 LABOR STANDARDS 67

Fundamental Principles and Policies

Association ofDetailman-PTGWO v. Glaxo Wellcome

Philippines, Inc., G.R. No. 162994, September 17,
2004)

91. What is the rule on the validity of the two types of

employment policies involving spouses: policies banning
only spouses from working in the same company (no
spouse employment policies) and those banning all
immediate family members, including spouses, from
working in the same company (anti-nepotism employment
policies)?

ph
u.
We note that since the finding of a bona fide occupational

ed
qualification justifies an employer's no-spouse rule, the

n.
exception is interpreted strictly and narrowly by these state

ai
courts. There must be a compelling business necessity for
m
which no alternative exists other than the discriminatory
su

practice. (See note 117, A. Giattina, supra) To justify a bona fide

m

occupational qualification, the employer must prove two

s.

factors: (1) that the employment qualification is reasonably

@

related to the essential operation of the job involved; and,

91

(2) that there is a factual basis for believing that all or

cx

substantially all persons meeting the qualification would be

o.

unable to properly perform the duties of the job. (Richard G.

er
sp

Flood and Kelly A. Cahill, The River Bend Decision and How It
Affects Municipalities' Personnel Rule and Regulations, Illinois
o
pr

Municipal Review, June 1993, p. 7)

The concept of a bona fide occupational qualification

is not foreign in our jurisdiction. We employ the standard
of reasonableness of the company policy which is parallel
to the bona fide occupational qualification requirement. In
the recent case of Duncan Association of Detailman-PTGWO
and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., G.R.
No. 162994, September 17, 2004, we passed on the validity
of the policy of a pharmaceutical company prohibiting its
employees from marrying employees of any competitor
company. We held that Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing strategies
68 LABOR LAW REVIEWER

and other confidential programs and information from

competitors. We considered the prohibition against personal
or marital relationships with employees of competitor
companies upon Glaxo's employees reasonable under the
circumstances because relationships of that nature might
compromise the interests of Glaxo. In laying down the
assailed company policy, we recognized that Glaxo only
aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and
procedures. (Ibid.)

ph
The requirement that a company policy must be

u.
reasonable under the circumstances to qualify as a valid

ed
exercise of management prerogative was also at issue in

n.
the 1997 case of Philippine Telegraph and Telephone Company

ai
v. NLRC, G.R. No. 118978, May 23, 1997. In said case, the
m
employee was dismissed in violation of petitioner's policy of
su

disqualifying from work any woman worker who contracts

m
s.

marriage. We held that the company policy violates the right

@

against discrimination afforded all women workers under

91

Article 136 of the Labor Code, but established a permissible

cx

exception, viz.:
o.

[A] requirement that a woman employee

er

must remain unmarried could be justified as

sp

a "bona fide occupational qualification," or

o
pr

BFOQ, where the particular requirements of the

job would justify the same, but not on the ground
of a general principle, such as the desirability of
spreading work in the workplace. A requirement
of that nature would be valid provided it reflects
an inherent quality reasonably necessary for
satisfactory job performance.

We do not find a reasonable business necessity in the

case at bar.

The policy is premised on the mere fear that employees

married to each other will be less efficient. If we uphold the
questioned rule without valid justification, the employer
 LABOR STANDARDS 69

Fundamental Principles and Policies

can create policies based on an unproven presumption of a

perceived danger at the expense of an employee's right to
security of tenure.

Petitioners contend that their policy will apply only

when one employee marries a co-employee, but they
are free to marry persons other than co-employees. The
questioned policy may not facially violate Article 136 of
the Labor Code but it creates a disproportionate effect and
under the disparate impact theory, the only way it could
pass judicial scrutiny is a showing that it is reasonable

ph
despite the discriminatory, albeit disproportionate, effect.

u.
The failure of petitioners to prove a legitimate business

ed
concern in imposing the questioned policy cannot prejudice

n.
the employee's right to be free from arbitrary discrimination

ai
based upon stereotypes of married persons
m working
together in one company. (See A. Giattina, supra)
su

Thus, for failure of petitioners to present undisputed

m
s.

proof of a reasonable business necessity, we rule that the

@

questioned policy is an invalid exercise of management

91

prerogative. (Star Paper Corporation v. Simbol, G.R. No.

cx

164774, April 12, 2006)

o.
er

92. An exclusive school for girls, run by a religious order, has

sp

a policy of not employing unwed mothers, women with

o

live-in partners, and lesbians. Is the policy violative of any

pr

provision of the Labor Code on employment of women?

(2000 BAR Q. No. X[a])

Yes, the policy violated the provision of the Labor Code

on employment of women.

Employment in particular jobs may not be limited

to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national
origin is an actual qualification for performing the job. The
qualification is called a bona fide occupational qualification
(BFOQ). (Black's Law Dictionary, 6th ed. cited in Yrasuegui v.
Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008)
70 LABOR LAW REVIEWER

In this case, the discrimination as to those unwed

mothers, women with live-in partners, and lesbians cannot
be justified under BFOQ unless that of being unwed
mothers, women with live-in partners, and lesbians are the
actual occupational qualifications for the job. Moreover, the
said policy is not valid because it is violative of the Labor
Code which makes it unlawful to discharge a woman on
account of pregnancy. (Article 135 [2])

S.
What is the rule on applicability of the Labor Code?

ph
All rights and benefits granted to workers under this
Code shall, except as may otherwise be provided herein,

u.
ed
apply alike to all workers, whether agricultural or non
agricultural. (Article 3, Labor Code)

n.
ai
m
94. What are the exceptions on applicability of the Labor
su
Code?
m

The applicability of the Labor Code is subject to certain

s.

exceptions such as those employed in the civil service,

@

those employed in government-owned and controlled

91

corporations with special charter, involving intra-corporate

cx

controversy, employers with immunity from suit and those

o.

excluded under working conditions and rest periods of

er

Book III Title I under Article 82 of the Labor Code in relation

sp

to Rule I, Section 2, Rule II, Section 1, Rule IV, Section 1, and

o
pr

Rule V, Section 1, Book III of the Rules to Implement the

Labor Code.
 BOOK ONE

Chapter I

RECRUITMENT

AND

ph
PLACEMENT OF WORKERS

u.
ed
n.
What is recruitment and placement?

ai
Recruitment and placement refers to any act of
m
su
canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract
m
s.

services, promising or advertising for employment, locally

@

or abroad, whether for profit or not: Provided, That any

91

person or entity which, in any manner, offers or promises for

cx

a fee, employment to two or more persons shall be deemed

o.

engaged in recruitment and placement. (Article 13[b], Labor

er

Code)
o sp

What is the interpretation of the proviso in Article 13(b) of

pr

the Labor Code, which states, "Provided, That any person

or entity which, in any manner, offers or promises for a
fee, employment to two or more persons shall be deemed
engaged in recruitment and placement"?

The number of persons dealt with is not an essential

ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article
13(b) will constitute recruitment and placement even if only
one prospective worker is involved. The proviso merely
lays down a rule of evidence that where a fee is collected in

71
72 LABOR LAW REVIEWER

consideration of a promise or offer of employment to two or

more prospective workers, the individual or entity dealing
with them shall be deemed to be engaged in the act of
recruitment and placement. The words "shall be deemed"
create that presumption. (Underscoring supplied) (People v.
Panis, G.R. Nos. L-58674-77, July 11, 1990)

3. Distinguish license from authority under the Labor Code.

"License" means a document issued by the
Department of Labor authorizing a person or entity to
operate a private employment agency (Article 13[d], Labor

ph
Code) while "Authority" means a document issued by the

u.
ed
Department of Labor authorizing a person or association
to engage in recruitment and placement activities as a

n.
ai
private recruitment entity. (Article 13[f], Labor Code) From
m
the foregoing definitions, a "License" is an authority to
su
operate a private employment agency while "Authority"
m

is an authority to engage in recruitment and placement

s.

activities as a private recruitment entity.

@
91

4. Distinguish authority from license under Migrant

cx

Workers and Overseas Filipinos Act of 1995, as amended

o.

by RA 10022.
er

Authority refers to a document issued by the Secretary

sp

of Labor and Employment authorizing the officers, personnel,

o
pr

agents or representatives of a licensed recruitment/manning

agency to conduct recruitment and placement activities in
a place stated in the license or in a specified place (Section
1[b] Rule II, Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1995, as amended
by RA 10022) while License refers to the document issued
by the Secretary of Labor and Employment authorizing a
person, partnership or corporation to operate a private
recruitment/manning agency. (Section 1[w] Rule II, Omnibus
Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995, as amended by RA 10022) From
the foregoing definitions, a licensed recruitment/manning
agency is required to obtain an authority for its officers,
 LABOR STANDARDS 73

Recruitment and Placement of Workers

the personnel, agents or representatives to conduct recruitment

and placement activities in a place stated in the license
or in a specified place and a license to operate a private
recruitment/manning agency.
5. Distinguish private employment agency from private
recruitment entity under the Labor Code.

"Private fee-charging employment agency" means

any person or entity engaged in recruitment and placement
of workers for a fee which is charged, directly or indirectly,

ph
from the workers or employers or both (Article 13[c], Labor

u.
Code) while "Private recruitment entity" means any person

ed
or association engaged in the recruitment and placement of

n.
workers, locally or overseas, without charging, directly or

ai
indirectly, any fee from the workers or employers. (Article
m
13[e], Labor Code)
su
m

The authority of private fee-charging employment

s.

agency to recruit and place workers is derived from a

@

document known as a license (Article 13[d]) while the

91

authority of the latter to recruit and place workers is derived

cx

from a document known as authority. (Article 13[f]) "Private

o.

fee-charging employment agency" is engaged in overseas

er

recruitment while "Private recruitment entity" is engaged

sp

in the recruitment and placement of workers, locally or

o

overseas.
pr

6. How did RA 8042, as amended, define private recruitment/

employment agency?

Private Recruitment/Employment Agency refers

to any person, partnership or corporation duly licensed
by the Secretary of Labor and Employment to engage in
the recruitment and placement of workers for overseas
employment for a fee which is charged, directly or indirectly,
from the workers who renewed their employment contracts
with the same principal. (Section 1[pp] Rule II, Omnibus
Rules and Regulations Implementing the Migrant Workers
and Overseas Filipinos Act of 1995, as amended by RA 10022)
74 LABOR LAW REVIEWER

It seems that from the said definition the terms private

employment agency and private recruitment entity have no
more relevant distinctions to speak of.

7. Who may engage in the recruitment and placement of

workers?

No person or entity shall engage in the recruitment

and placement of workers either for local or overseas
employment except the following:
(a) Public employment offices;

ph
(b) (repealed);

u.
ed
(c) POEA (E.O. 797);

n.
(d) Private recruitment offices;

ai
m
(e) Private employment agencies;
su

(f) Shipping or manning agents or

m
s.

representatives; and
@

(g) Such other persons or entities as may be

91

authorized by the Secretary. (Rule III, Section 1, Book I,

cx

Rules to Implement the Labor Code)

o.
er

8. What is the POEA's participation in recruitment and

sp

placement of workers?
o
pr

The Administration shall recruit and place workers

primarily on government-to-government arrangements. In
the recruitment and placement to service the requirements
for trained and competent Filipino workers of foreign
governments and their instrumentalities, and such
other employers as public interests may require, the
Administration shall deploy only to countries where
the Philippines has concluded bilateral agreements
or arrangements: Provided, that such countries shall
guarantee to protect the rights of Filipino migrant workers;
and provided further that such countries shall observe and/
or comply with the international laws and standards for
migrant workers. (Section 4, Rule X, Omnibus Rules and
 LABOR STANDARDS 75

Recruitment and Placement of Workers

Regulations Implementing The Migrant Workers and Overseas

Filipinos Act of 1995 as amended by RA 10022)

9.
What are the cases within the original and exclusive
jurisdiction of the Philippine Overseas Employment
Administration (POEA)?

The POEA shall exercise original and exclusive

jurisdiction to hear and decide:

(a) All pre-employment/recruitment violation cases

which are administrative in character, involving or arising

ph
out of violations of Rules and Regulations relating to

u.
licensing and registration, including refund of fees collected

ed
from the workers or violation of the conditions for issuance

n.
of license or authority to recruit workers; and

(b)
ai
Disciplinary action cases and other special cases,
m
which are administrative in character, involving employers,
su

principals, contracting partners and OFWs processed by

m

the POEA. (Section 6, Rule X, Omnibus Rules and Regulations

s.
@

Implementing The Migrant Workers and Overseas Filipinos Act

91

of 1995, as amended by RA 10022)

cx

10. Can the POEA award money claims arising from

o.

recruitment violation?
er
sp

Yes. Money claims arising from recruitment violation

o

may be awarded in addition to the administrative penalties

pr

imposed. (Section 123, Rule III, Part V, 2016 Revised POEA

Rules and Regulations Governing the Recruitment and
Employment of Seafarers)

11. What is the prescriptive period of all pre-employment/

recruitment violation and disciplinary action cases?

All pre-employment/recruitment violation and

disciplinary action cases shall be barred if not commenced
or filed with the Administration within three (3) years after
such cause of action accrued. (Section 9, Rule X, Omnibus
Rules and Regulations Implementing The Migrant Workers and
Overseas Filipinos Act of 1995, as amended by RA 10022)
76 LABOR LAW REVIEWER

12. To whom is the decision of the POEA Administrator

appealable?
The decision of the Administrator may be appealed
to the Secretary of Labor and Employment within fifteen
(15) days from the receipt of the Decision. (Section 11, Rule
X, Omnibus Rules and Regulations Implementing The Migrant
Workers and Overseas Filipinos Act of 1995, as amended by RA
10022)

13. True or false. Explain your answer briefly. As a general

rule, direct hiring of Overseas Filipino Workers (OFWs) is

ph
not allowed. (2010 BAR Q. No. I[3])

u.
ed
True. There is a ban on direct hiring under Article 18

n.
of the Labor Code which says: No employer may hire a

ai
Filipino worker for overseas employment, except through
m
the Boards and entities authorized by the Secretary of Labor.
su
m

14. As a rule, direct hiring of migrant workers is not allowed.

s.

What are the exceptions? Explain your answer. (2017 BAR

@

Q. No. III)
91

The direct hires are exempted from the ban on

cx

direct hiring for overseas employment under RA 8042, as

o.

amended by RA 10022. They are the workers directly hired

er

by employers for overseas employment as authorized by

sp

the Secretary of Labor and Employment and processed by

o
pr

the POEA, including:

1. Those hired by international organizations
2.
Those hired members of the diplomatic corps
3. Name hires or workers who are able to secure
overseas employment opportunity with an employer
without the assistance or participation of any agency. [Labor
Code, POEA Rules] (Section 1[i], Rule II, Omnibus Rules and
Regulations Implementing The Migrant Workers and Overseas
Filipinos Act of 1995, as amended by RA 10022)
Further, under Rule I, Part IV, Revised POEA Rules and
Regulations Governing the Recruitment and Employment of
 LABOR STANDARDS 77

Recruitment and Placement of Workers

Landbased Overseas Filipino Workers of 2016 the following are

exempted from the ban on direct hiring:

a. Members of the diplomatic corps;

b.
International organizations;
C.
Heads of state and government officials with
the rank of at least deputy minister; or
d. Other employers as may be allowed by the
Secretary of Labor and Employment, such as:
1. Those provided in (a), (b), and (c) who

ph
bear a lesser rank, if endorsed by the POLO or

u.
Head of Mission in the absence of the POLO;

ed
2. Professionals and skilled workers with

n.
duly executed/authenticated contracts containing
ai
terms and conditions over and above the standards
m
su
set by the POEA. The number of professional and
skilled Overseas Filipino Workers hired for the
m
s.

first time by the employer shall not exceed five

@

(5). For the purpose of determining the number,

91

workers hired as a group shall be counted as one;

cx

or
o.

3. Workers hired by a relative/family

er

member who is a permanent resident of the host

sp

country.
o
pr

15. Who has jurisdiction over money claims of OFW?

Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims:

(1) arising out of an employer-employee relationship;

or

(2) by virtue of any law; or

(3) contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary
78 LABOR LAW REVIEWER

and other forms of damage. Consistent with this mandate,

the NLRC shall endeavor to update and keep abreast with
the developments in the global services industry. (First
paragraph, Section 10, RA 8042 as amended by RA 10022)
However, Section 7 Rule VII of the Omnibus Rules and
Regulations implementing RA 10022 states:
"Sec. 7. Voluntary Arbitration

For OFWs with collective bargaining

agreements, the case shall be submitted for
voluntary arbitration in accordance with Articles

ph
261 and 262 of the Labor Code."

u.
ed
16. What is the nature of liability of principal/employer and

n.
the recruitment/placement agency for any and all claims

ai
of the OFWs? m
su
The liability of the principal/employer and the
m

recruitment/placement agency for any and all claims under

s.

this section shall be joint and several. This provision shall

@

be incorporated in the contract for overseas employment

91

and shall be a condition precedent for its approval. The

cx

performance bond to be filed by the recruitment/placement

agency, as provided by law, shall be answerable for all
o.
er

money claims or damages that may be awarded to the

sp

workers. If the recruitment/placement agency is a juridical

o

being, the corporate officers and directors and partners as

pr

the case may be, shall themselves be jointly and solidarily

liable with the corporation or partnership for the aforesaid
claims and damages.
Such liabilities shall continue during the entire period
or duration of the employment contract and shall not be
affected by any substitution, amendment or modification
made locally or in a foreign country of the said contract.
(2nd and 3rd paragraphs, Section 10, RA 8042 as amended by RA
10022)

17. Mr. A signed a one (1)-year contract with XYZ Recruitment

Co. for deployment as welding supervisor for DEF, Inc.
located in Dubai. The employment contract, which the
 79
LABOR STANDARDS
Recruitment and Placement of Workers

Philippine Overseas Employment Administration (POEA)

approved, stipulated a salary of US$600.00 a month. Mr. A
had only been in his job in Dubai for six (6) months when
DEF, Inc. announced that it was suffering from severe
financial losses and thus intended to retrench some of its
workers, among them Mr. A. DEF, Inc. hinted, however,
that employees who would accept a lower salary could be
retained. Together with some other Filipino workers, Mr.
A agreed to a reduced salary of US$400.00 a month and
thus, continued with his employment.

ph
Assuming that the reduction was invalid, may Mr. A hold

u.
XYZ recruitment Co. liable for underpayment of wages?

ed
Explain. (2019 Part II BAR Q. No. B. 13[b])

n.
Yes, Mr. A can hold XYZ recruitment Co. liable.

ai
m
The liability of the principal/employer and the
su

recruitment/placement agency for any and all claims under

m

this section shall be joint and several. This provision shall

s.

be incorporated in the contract for overseas employment

@

and shall be a condition precedent for its approval. Such

91

liabilities shall continue during the entire period or duration

cx

of the employment contract and shall not be affected by any

o.

substitution, amendment or modification made locally or in

er

a foreign country of the said contract. (2nd and 3rd paragraphs,

sp

Section 10, RA 8042 as amended by RA 10022)

o
pr

In this case, the basis of the liability of XYZ recruitment

Co. is its solidary liability with its principal as provided by
law. Therefore, Mr. A can hold XYZ Recruitment Co. liable
for underpayment of his wages.

18. Can an agency be relieved of its liability despite

termination of its agency agreement with the principal?
No. Jurisprudence explained that joint and solidary
liability is meant to assure aggrieved workers of immediate
and sufficient payment of what is due them. The fact that
the agency and its principal have already terminated their
agency agreement does not relieve the former of its liability.
80 LABOR LAW REVIEWER

This must be so, because the obligations covenanted in

the [manning] agreement between the local agent and its
foreign principal are not coterminous with the term of such
agreement so that if either or both of the parties decide
to end the agreement, the responsibilities of such parties
towards the contracted employees under the agreement
do not at all end, but the same extends up to and until the
expiration of the, employment contracts of the employees
recruited and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very
purpose for which the law governing the employment of

ph
workers for foreign jobs abroad was enacted. (OSM Shipping

u.
Philippines, Inc. v. National Labor Relations Commission, G.R.

ed
No. 138193, March 5, 2003, 398 SCRA 606, 616-617 citing

n.
Pentagon International Shipping Services, Inc. v. The Court of
ai
m
Appeals, G.R. No. 169158, July 1, 2015)
su
m

19. Andrew Manning Agency (AMA) recruited Feliciano for

s.

employment by Invictus Shipping, its foreign principal.

@

Meantime, AMA and Invictus Shipping terminated their

91

agency agreement. Upon his repatriation following his

cx

premature termination, Feliciano claimed from AMA and

o.

Invictus Shipping the payment of his salaries and benefits

er

for the unserved portion of the contract. AMA denied

sp

liability on the ground that it no longer had any agency

o

agreement with Invictus Shipping. Is AMA correct?

pr

Explain your answer. (2017 BAR Q. No. III[A])

No, AMA is not correct.

The liability of the principal/employer and the

recruitment/placement agency for any and all claims of
Filipino overseas workers shall be joint and several. Such
liabilities shall continue during the entire period or duration
of the employment contract and shall not be affected by any
substitution, amendment or modification made locally or in
a foreign country of the said contract. (2nd and 3rd paragraphs,
ction 10, RA 8042 as amended by RA 10022)
 81
LABOR STANDARDS
Recruitment and Placement of Workers

The fact that the agency and its principal have already
terminated their agency agreement does not relieve the
former of its liability. This must be so, because the obligations
covenanted in the [manning] agreement between the local
agent and its foreign principal are not coterminous with
the term of such agre ment so that if either or both of the
parties decide to end the agreement, the responsibilities
of such parties towards the contracted employees under
the agreement do not at all end, but the same extends up
to and until the expiration of the, employment contracts
of the employees recruited and employed pursuant to the

ph
said recruitment agreement. (Pentagon International Shipping

u.
Services, Inc. v. The Court of Appeals, G.R. No. 169158, July 1,

ed
2015)

n.
ai
Applying the above provision of law and doctrinal
m
rule, the joint and solidary liability of AMA and Invictus
su

Shipping shall continue during the entire period or duration

m

of Feliciano's overseas employment contract and shall not

s.

be affected by the termination of the agency agreement.

@
91

20. What are the reliefs in case of termination of overseas

cx

employment without just, valid or authorized cause?

o.
er

The reliefs granted by law to the illegally dismissed

sp

OFWs are as follows:

o
pr

1. Salary for the unexpired portion of the

employment contract violated together with attorney's fees
and reimbursement of amounts withheld from her salary;
2. Full reimbursement of his placement fee with
interest of twelve (12%) per annum (Section 10 of RA 8042,
otherwise known as the Migrant Workers and Overseas Filipinos
Act of 1995);

3. That "repatriation of the worker and the transport

of his [or her] personal belongings shall be the primary
responsibility of the agency which recruited or deployed
the worker overseas." The exception is when "termination
82 LABOR LAW REVIEWER

of employment is due solely to the fault of the worker”; (RA

8042 [1995], Section 15) and

4. 10% of the amount of withheld wages as attorney's

fees when the withholding is unlawful. (Article 111, Labor
Code) (Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R.
No. 170139, August 5, 2014)

21. What is the theory of imputed knowledge?

The theory of imputed knowledge ascribes the

knowledge of the agent, Sunace, to the principal, employer
Xiong, not the other way around. (Rovels Enterprises, Inc. v.

ph
Ocampo, G.R. No. 136821, October 17, 2002, 391 SCRA 176;

u.
vide Air France v. Court of Appeals, et al., 211 Phil. 601 [1983])

ed
The knowledge of the principal-foreign employer cannot,

n.
therefore, be imputed to its agent Sunace. (Sunace Int'l
ai
m
Mgmt. Services Inc. v. NLRC, G.R. No. 161757, January 25,
su
2006, cited in the subsequent case of APQ Shipmanagement Co.,
m

LTD v. Caseñas, G.R. No. 197303, June 4, 2014)

s.
@

22. Explain the rule on the joint and solidary liability of

91

corporate officers, directors, and partners provided under

cx

the second paragraph of Section 10, RA 8042.

o.

The pertinent portion of Section 10 provides:

er
sp

SEC. 10. Money Claims.-xxx

o
pr

The liability of the principal/employer and

the recruitment/placement agency for any and
all claims under this section shall be joint and
several. This provision shall be incorporated in
the contract for overseas employment and shall
be a condition precedent for its approval. The
performance bond to be filed by the recruitment/
placement agency, as provided by law, shall be
answerable for all money claims or damages
that may be awarded to the workers. If the
recruitment/placement agency is a juridical
being, the corporate officers and directors and
 83
LABOR STANDARDS
Recruitment and Placement of Workers

partners as the case may be, shall themselves be

jointly and solidarily liable with the corporation
or partnership for the aforesaid claims and
damages. (Emphasis supplied)

But the Court has already held, pending adjudication

of this case, that the liability of corporate directors and
officers is not automatic. To make them jointly and solidarily
liable with their company, there must be a finding that they
were remiss in directing the affairs of that company, such as
sponsoring or tolerating the conduct of illegal activities. In

ph
the case of Becmen and White Falcon, while there is evidence
that these companies were at fault in not investigating the

u.
ed
cause of Jasmin's death, there is no mention of any evidence
in the case against them that intervenors Gumabay, et al.,

n.
ai
Becmen's corporate officers and directors, were personally
m
involved in their company's particular actions or omissions
su
in Jasmin's case. (Becmen Service Exporter and Promotion, Inc.
m

v. Spouses Simplicio and Mila Cuaresma, for and in behalf oftheir

s.

daughter Jasmin G. Cuaresma, et al., G.R. No. 167590, G.R. No.

@

182978-79, November 12, 2013, consolidated with other cases,

91

and Spouses Simplicio and Mila Cuaresma, for and in behalf of

cx

their deceased daughter Jasmin G. Cuaresma v. White Falcon

o.

Services, Inc. and Becmen Services Exporter and Promotion, Inc.,

er

G.R. No. 184298-99, November 12, 2013)

osp

23. Richie, a driver-mechanic, was recruited by Supreme

pr

Recruiters (SR) and its principal, Mideast Recruitment

Agency (MRA), to work in Qatar for a period of two (2)
years. However, soon after the contract was approved by
POEA, MRA advised SR to forego Richie's deployment
because it had already hired another Filipino driver
mechanic, who had just completed his contract in Qatar.
Aggrieved, Richie filed with the NLRC a complaint
against SR and MRA for damages corresponding to his
two years' salary under the POEA-approved contract.
SR and MRA traversed Richie's complaint, raising the
following arguments:
84 LABOR LAW REVIEWER

Even assuming that they are liable, their liability

would, at most, be equivalent to Richie's salary for only
six (6) months, not two years. Rule on the validity of the
foregoing arguments with reasons. (2009 BAR Part I Q.
No. III[c])

The argument that Richie is only entitled to his six (6)

months' salary is not valid. The reliefs granted by law to the
illegally dismissed OFWs are as follows:

1. Salary for the unexpired portion of the

employment contract violated together with attorney's fees

ph
and reimbursement of amounts withheld from her salary;

u.
2. Full reimbursement of his placement fee with

ed
interest of twelve (12%) per annum (Section 10 of RA 8042,

n.
otherwise known as the Migrant Workers and Overseas Filipinos
Act of 1995);
ai
m
su

3. That "repatriation of the worker and the transport

m

of his [or her] personal belongings shall be the primary

s.

responsibility of the agency which recruited or deployed

@

the worker overseas." The exception is when "termination

91

of employment is due solely to the fault of the worker," (RA

cx

8042 (1995), Section 15) and

o.

4. 10% of the amount of withheld wages as attorney's

er
sp

fees when the withholding is unlawful. (Article 111, Labor

o

Code) (Sameer Overseas Placement Agency, Inc. v. Cabiles,

pr

G.R. No. 170139, August 5, 2014)

24. Peter worked for a Norwegian cargo vessel. He worked

as a deckhand, whose primary duty was to assist in the
unloading and loading of cargo and sometimes, assist in
cleaning the ship. He signed a five-year contract starting
in 2009. In 2011, Peter's employers began treating him
differently. He was often maltreated and his salary was
not released on time. These were frequently protested
to by Peter. Apparently exasperated by his frequent
protestations, Peter's employer, a once top official in
China, suddenly told him that his services would be
 85
LABOR STANDARDS

Recruitment and Placement of Workers

terminated as soon as the vessel arrived at the next port,

in Indonesia. Peter had enough money to go back home,
and immediately upon arriving, he filed a money claim
with the NLRC against his former employer's local agent.
ng Will Peter's case prosper?

a. Yes, he is entitled to full reimbursement of his

placement fee, with interest at 12% per annum, plus salary
for the unexpired portion of his employment contract
or for three (3) months for every year of the unexpired
portion, whichever is higher;

ph
b. Yes, he is entitled to full reimbursement of

u.
his placement fee, with interest at 12% per annum, plus

ed
his salary for the unexpired portion of his employment

n.
contract or for three (3) months for every year of the
unexpired portion, whichever is less;
ai
m
su
C. Yes, he is entitled to his salaries for the
m

unexpired portion of his employment contract, plus full

s.

reimbursement of his placement fee with interest at 12%

@

per annum;
91

d. Yes, he is entitled to his salaries for three (3)

cx

months for every year of the unexpired portion of his

o.

employment contract, plus full reimbursement of his

er
sp

placement fee with interest at 12% per annum. (2012 BAR

o

Q. No. 55)
pr

C. Yes, he is entitled to his salaries for the unexpired

portion of his employment contract, plus full reimbursement
of his placement fee with interest at 12% per annum.

The reliefs granted by law to the illegally dismissed

OFWs are as follows:

1. Salary for the unexpired portion of the

employment contract violated together with attorney's fees
and reimbursement of amounts withheld from her salary;

2. Full reimbursement of his placement fee with

interest of twelve (12%) per annum (Section 10 of RA 8042,
86 LABOR LAW REVIEWER

otherwise known as the Migrant Workers and Overseas Filipinos

Act of 1995 cited in Sameer Overseas Placement Agency, Inc. v.
Cabiles, G.R. No. 170139, August 5, 2014);

25. What is required for Filipino workers on their foreign

exchange earnings? State the percentage of the earnings
to be remitted.

It shall be mandatory for all Filipino workers abroad to

remit a portion of their foreign exchange earnings to their
families, dependents, and/or beneficiaries in the country
in accordance with rules and regulations prescribed by the

ph
Secretary of Labor. (Article 22, Labor Code)

u.
ed
All contracts of employment and agency or service

n.
agreements shall contain a proviso that shall make it

ai
mandatory for workers to remit to the Philippines in foreign
m
exchange at least the following portions of their earnings:
su
m

a) Seamen or mariners: Eighty (80%) percent of basic

s.

salary (as amended by Section 1 EO 925 Series of 1983);

@

b) Workers of Filipino contractors and construction

91

companies: Seventy (70) percent of basic salary;

cx
o.

c) Doctors, engineers, teachers, nurses and other

er

professional workers whose contract provide for free board

sp

and lodging: Seventy (70) percent of basic salary;

o
pr

d) All other professional workers whose employment

contracts do not provide for free board and lodging facilities:
Fifty (50) percent of basic salary;

e) Domestic and other service workers: Fifty (50)

percent of basic salary;

f) All other workers not falling under the

aforementioned categories: Fifty (50) percent of basic salary.
(Section 2, EO 857)

g) Performing artists overseas: Fifty (50) percent of

basic salary. (Section B[7], D.O. No. 35 Series of 1994)
 LABOR STANDARDS 87

Recruitment and Placement of Workers

26. Can an overseas worker refuse to remit his earnings to his

dependents and deposit the same in the country where he
works to gain more interests? Explain. (2006 BAR Q. No.
III)

No, an overseas worker cannot refuse to remit his

earnings in the country.

The Labor Code provides that it shall be mandatory

for all Filipino workers abroad to remit a portion of their
foreign exchange earnings to their families, dependents,
and/or beneficiaries in the country in accordance with

ph
rules and regulations prescribed by the Secretary of Labor.

u.
(Article 22) The remittance is, therefore, mandatory.

ed
n.
Who may participate in the private sector in recruitment
and placement of workers?
ai
m
su
Only the following persons or entities in the private
m

sector may engage in the recruitment and placement of

s.

workers either for local or overseas employment:

@

(a) Private employment agencies;

91
cx

(b) Private recruitment entities;

o.

(c) Shipping or manning agents or representatives;

er

and
o sp

(d) Such other persons or entities as may be authorized

pr

by the Secretary. (Rule IV, Section 1, Book I, Rules to Implement

the Labor Code)

28. Who are disqualified to engage in recruitment and

placement of workers for overseas employment of
landbased and seafarers?

Under the Labor Code, travel agencies and sales

agencies of airline companies are prohibited from engaging
in the business of recruitment and placement of workers for
overseas employment whether for profit or not. (Article 26)
Under the POEA Rules, the following persons and
entities are disqualified to participate or engage in the
88 LABOR LAW REVIEWER

recruitment and placement of workers for overseas

employment:

1. Travel agencies and sales agencies of airline

companies (Section 3[a], Rule I, Part II, Revised POEA Rules
and Regulations Governing the Recruitment and Employment
of Landbased Overseas Filipino Worker of 2016 and Section
3[a], Rule I Part II, 2016 Revised POEA Rules and Regulations
Governing the Recruitment and Employment of Seafarers)

2. Officers or members of the Board of any

corporation or partners in a partnership engaged in the

ph
business of a travel agency (Section 3[b], Rule I, Part II, Revised

u.
POEA Rules and Regulations Governing the Recruitment and

ed
Employment of Landbased Overseas Filipino Worker of 2016

n.
and Section 3[b], Rule I Part II, 2016 Revised POEA Rules and

ai
Regulations Governing the Recruitment and Employment of
m
Seafarers)
su
m

3. Corporations and partnerships, where any of

s.

its officers, members of the board or partners is also an

@

officer, member of the board or partner of a corporation

91

or partnership engaged in the business of a travel agency

cx

(Section 3[c], Rule I, Part II, Revised POEA Rules and

o.

Regulations Governing the Recruitment and Employment of

er

Landbased Overseas Filipino Worker of 2016 and Section 3[d],

sp

Rule I, Part II, Revised POEA Rules and Regulations Governing

o

the Recruitment and Employment of Landbased Overseas Filipino

pr

Worker of2016);

4. The applicant is presently an incorporator,

director or key officer of at least five (5) licensed manning
agencies (Section 3[c], Rule I Part II, 2016 Revised POEA Rules
and Regulations Governing the Recruitment and Employment of
Seafarers);

5. Individuals, partners, officers or directors of

an insurance company who make, propose or provide
an insurance contract under the compulsory insurance
coverage for agency-hired Overseas Filipino Workers (for
seafarers) (Section 3[d], Rule I, Part II, Revised POEA Rules
 LABOR STANDARDS 89

Recruitment and Placement of Workers

and Regulations Governing the Recruitment and Employment

of Landbased Overseas Filipino Worker of 2016 and Section
3[e], Rule I Part II, 2016 Revised POEA Rules and Regulations
Governing the Recruitment and Employment of Seafarers);

6. Sole proprietors, partners or officers, and

members of the board with derogatory records (Section 3[e],
Rule I, Part II, Revised POEA Rules and Regulations Governing
the Recruitment and Employment of Landbased Overseas Filipino
Worker of 2016 and Section 3[f], Rule I Part II, 2016 Revised
POEA Rules and Regulations Governing the Recruitment and

ph
Employment of Seafarers);

u.
7. Any official or employee of the DOLE, POEA,

ed
OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI,

n.
PNP, Civil Aviation Authority of the Philippines (CAAP),

ai
international airport authorities, and other government
m
agencies directly involved in the implementation of RA
su

8042, as amended, and/or any of his/her relatives within the

m

fourth civil degree of consanguinity or affinity. (Section 3[f],

s.
@

Rule I, Part II, Revised POEA Rules and Regulations Governing

91

the Recruitment and Employment of Landbased Overseas Filipino

Worker of 2016 and Section 3[g], Rule I Part II, 2016 Revised
cx

POEA Rules and Regulations Governing the Recruitment and

o.

Employment of Seafarers)
er
sp

29. Who are those considered with derogatory records?

o
pr

The derogatory records, such as, but not limited to the

following:
1. Those convicted, or against whom probable cause
or prima facie finding of guilt is determined by a competent
authority, for illegal recruitment, or for other related
crimes or offenses committed in the course of, related to, or
resulting from, illegal recruitment, or for crimes involving
moral turpitude;
2. Those agencies whose licenses have been revoked
for violation of RA 8042 (Migrant Workers and Overseas
Filipinos Act of 1995), as amended, PD 442 (Labor Code of
90 LABOR LAW REVIEWER

the Philippines), as amended, and RA 9208 (Trafficking in

Persons Act of 2003), as amended, and their implementing
rules and regulations;
3. Those agencies whose licenses have been
cancelled, or those who, pursuant to the Order of the
Administrator, were included in the list of persons with
derogatory record for violation of recruitment laws and
regulations. (Section 3[e], Rule I, Part II, Revised POEA Rules
and Regulations Governing the Recruitment and Employment
of Landbased Overseas Filipino Worker of 2016 and Section 3[f],
Rule I Part II, 2016 Revised POEA Rules and Regulations Gover

ph
ning the Recruitment and Employment of Seafarers)

u.
ed
30. Wonder Travel and Tours Agency (WTTA) is a well

n.
known travel agency and an authorized sales agent of

ai
the Philippine Air Lines. Since majority of its passengers
m
su
are overseas workers, WTTA applied for a license for
recruitment and placement activities. It stated in its
m
s.

application that its purpose is not for profit but to help

@

Filipinos find employment abroad. Should the application

91

be approved? (2006 BAR Q. No. II)

cx

No, the application should be denied.

o.

Travel agencies and sales agencies of airline companies

er

are prohibited from engaging in the business of recruitment

sp

and placement of workers for overseas employment whether

o
pr

for profit or not. (Article 26, Labor Code) Thus, even if it is not
for profit as a travel agency and sales agent of Philippine
Air Lines, WTTA is disqualified to engage in recruitment
and placement activities.

31. What are the qualifications to engage in recruitment and

placement in terms of citizenship and capitalization?
As to citizenship

Only Filipino citizens or corporations, partnerships or

entities at least seventy-five percent (75%) of the authorized
and voting capital stock of which is owned and controlled
by Filipino citizens shall be permitted to participate in the
 LABOR STANDARDS 91

Recruitment and Placement of Workers

recruitment and placement of workers, locally or overseas.

(Article 27, Labor Code)

As to capitalization

At least seventy-five percent (75%) of the authorized

and voting capital stock of which is owned and controlled by
Filipino citizens may engage in the business of recruitment
and placement of Filipino workers.

The sole proprietor and partnership shall have

a minimum capitalization of Five Million Pesos

ph
(PhP5,000,000.00) and a minimum paid up capital of Five

u.
Million Pesos (PhP5,000,000.00) in case of a corporation.

ed
(Section 2 Rule I, Part II, Revised POEA Rules and Regulations

n.
Governing the Recruitment and Employment of Landbased

ai
Overseas Filipino Workers of 2016 and Section 2 Rule I, Part II,
m
Revised POEA Rules and Regulations Governing the Recruitment
su

and Employment of Landbased Overseas Filipino Worker of2016)

m
s.

32. What is the rule on non-transferability of license or

@

authority?
91

No license or authority shall be used directly or

cx

indirectly by any person other than the one in whose favor

o.

it was issued or at any place other than that stated in the

er
sp

license or authority be transferred, conveyed, or assigned to

any other person or entity. Any transfer of business address,
o
pr

appointment or designation of any agent or representative,

including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of
Labor. (Article 29, Labor Code)

33. A recruitment and Placement Agency declared voluntary

bankruptcy. Among its assets is its license to engage in
business. Is the license of the bankrupt agency an asset
which can be sold in public auction by the liquidator?
(1998 BAR Q. No. II)

No, the license cannot be sold in public auction by the

liquidator.
92 LABOR LAW REVIEWER

This is prohibited by the Labor Code which provides

that no license or authority shall be used directly or
indirectly by any person other than the one in whose favor
it was issued or at any place other than that stated in the
license or authority be transferred, conveyed, or assigned to
any other person or entity. Any transfer of business address,
appointment or designation of any agent or representative,
including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of
Labor. (Article 29)

ph
34. What are the prohibited practices under the Labor Code?

u.
ed
It shall be unlawful for any individual, entity, licensee,
or holder of authority:

n.
(a)
ai
To charge or accept, directly or indirectly, any
m
amount greater than that specified in the schedule of
su

allowable fees prescribed by the Secretary of Labor, or to

m
s.

make a worker pay any amount greater than that actually

@

received by him as a loan or advance;

91

(b) To furnish or publish any false notice or

cx

information or document in relation to recruitment or

o.

employment;
er
sp

(c) To give any false notice, testimony, information or

o

document or commit any act of misrepresentation for the

pr

purpose of securing a license or authority under this Code;

(d) To induce or attempt to induce a worker already

employed to quit his employment in order to offer him to
another unless the transfer is designed to liberate the worker
from oppressive terms and conditions of employment;
(e) To influence or to attempt to influence any person
or entity not to employ any worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or placement of
workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;
 LABOR STANDARDS 93

Recruitment and Placement of Workers

(g) To obstruct or attempt to obstruct inspection by the

Secretary of Labor or by his duly authorized representatives;

(h) To fail to file reports on the status of employment,

placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary
of Labor;

(i) To substitute or alter employment contracts

approved and verified by the Department of Labor from
the time of actual signing thereof by the parties up to and

ph
including the periods of expiration of the same without the
approval of the Secretary of Labor;

u.
ed
(j) To become an officer or member of the Board of

n.
any corporation engaged in travel agency or to be engaged

ai
directly or indirectly in the management of a travel agency;
m
and
su
m

(k) To withhold or deny travel documents from

s.

applicant workers before departure for monetary or

@

financial considerations other than those authorized under

91

this Code and its implementing rules and regulations.

cx

(Article 34, Labor Code)

o.

35. When does the commission of the prohibited practices

er
sp

under Article 34 of the Labor Code considered illegal

recruitment?
o
pr

When it is undertaken by non-licensees or holder of

authority. (Article 38[a], Labor Code)

36. What are the powers of the Department of Labor

and Employment (DOLE) and Philippine Overseas
Employment Administration (POEA) affecting license or
authority? State the nature of their jurisdiction.
The Minister of Labor shall have the power to suspend
or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations
issued by the Ministry of Labor, the Overseas Employment
Development Board, or for violation of the provisions of
94 LABOR LAW REVIEWER

this and other applicable laws, General Orders and Letters

of Instructions. (Article 35, Labor Code)

The jurisdiction of the Department of Labor and

Employment (DOLE) or Secretary of Labor and Employment
to suspend or cancel any license or authority is concurrent
with the Philippine Overseas Employment Administration
(POEA).

37. The power to suspend or cancel a license to recruit

employees is vested on: a. The Secretary of Labor and
Employment; b. The POEA Administrator; c. A and B

ph
concurrently; d. Neither of them. (2012 BAR Q. No. 19).

u.
A and B concurrently.

ed
C.

n.
Article 35 of the Labor Code provides for the

ai
concurrent jurisdiction of Department of Labor and
m
Employment (DOLE) and the Philippine Overseas
su

Employment Administration (POEA) on the suspension

m

and/or cancellation of license or authority. (Romero v. People,

s.

G.R. No. 171644, November 23, 2011 citing Eastern Assurance

@

and Surety Corp. v. Secretary of Labor and People v. Diaz)

91
cx

38. What is the regulatory power of the Secretary of Labor

o.

and Employment?
er
sp

The Secretary of Labor shall have the power to restrict

and regulate the recruitment and placement activities of
o
pr

all agencies within the coverage of this Title and is hereby

authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the
provisions of this Title. (Article 36, Labor Code)

39. What is the visitorial power of the Secretary of Labor and

Employment?

The visitorial power of the Secretary of Labor or his

duly authorized representatives constitute in the exercise,
at any time, of the following:

(a) inspect the premises, books of accounts and

records of any person or entity covered by this Title;
 LABOR STANDARDS 95

Recruitment and Placement of Workers

(b) require it to submit reports regularly on prescribed

forms; and

(c) act on violation of any provisions of this Title.

(Article 37, Labor Code)

40. Which of the following acts is NOT part of the regulatory

and visitorial power of the Secretary of Labor and
Employment over recruitment and placement agencies?
The power to (A) order arrest of an illegal recruiter. (B)
inspect premises, books and records. (C) cancel license
or authority to recruit. (D) garnish recruiter's bond. (2011

ph
BAR Q. No. 60)

u.
0

ed
(A) order arrest of an illegal recruiter.

n.
See Articles 36 and 37 of the Labor Code.

ai
m
su
41. How did the Labor Code define illegal recruitment?
m

Any recruitment activities, including the prohibited

s.

practices enumerated under Article 34 of this Code, to be

@

undertaken by non-licensees or non-holders of authority,

91

shall be deemed illegal and punishable under Article 39 of

cx

this Code. (Article 38[a], Labor Code)

o.
er

42. When does the recruitment of workers become an act of

sp

economic sabotage? (2015 BAR Q. No. IB)

o
pr

In overseas employment, the recruitment of workers

becomes an act of economic sabotage when committed as
follows:

1. By a syndicate - Illegal recruitment is deemed

committed by a syndicate if carried out by a group of three
(3) or more persons conspiring or confederating with one
another.

2. In a large scale It is deemed committed in

-

large scale if committed against three (3) or more persons

individually or as a group. (Section 6, RA 8042 as amended by
RA 10022; Section 2, Rule IV, Omnibus Rules and Regulations
96 LABOR LAW REVIEWER

Implementing the Migrant Workers and Overseas Filipinos Act

of1995)

While under the Labor Code, which applies for local

employment, when committed by a syndicate or in large
scale shall be considered an offense involving economic
sabotage and shall be penalized in accordance with Article
39 hereof. Illegal recruitment is deemed committed by
a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another
in carrying out any unlawful or illegal transaction, enterprise
or scheme defined under the first paragraph hereof. Illegal

ph
recruitment is deemed committed in large scale if committed

u.
against three (3) or more persons individually or as a group.

ed
(Article 38[b])

n.
ai
43. Which of the following is an essential element of illegal
m
recruitment? (A) The recruiter demands and gets money
su

from the recruit but issues no receipt. (B) The recruiter

m

gives the impression that he is able to send the recruit

s.

abroad. (C) The recruiter has insufficient capital and has

@

no fixed address. (D) The recruiter has no authority to

91

recruit. (2011 BAR Q. No. 63)

cx
o.

The answer could be either letter B or D.

er

(B) The recruiter gives the impression that he is able

sp

to send the recruit abroad.

o
pr

But to prove illegal recruitment, it must be shown that

the accused, without being duly authorized by law, gave
complainants the distinct impression that he had the power
or ability to send them abroad for work, such that the latter

were convinced to part with their money in order to be

employed. (People v. Laogo, G.R. No. 176264, January 19, 2011)
(D) The recruiter has no authority to recruit.
Under Article 38(a) of the Labor Code, the law
applicable for local employment, the essential element of
illegal recruitment is when the recruitment activities and
prohibited activities under Article 34 are undertaken by a
non-holder of authority.
 LABOR STANDARDS 97

Recruitment and Placement of Workers

44. Discuss the types of illegal recruitment under the Labor

Code. (2007 BAR Q. No. III[a])

Under the Labor Code, which applies for local

employment, the types of illegal recruitment are as follows:

a. Simple illegal recruitment -

Any recruitment
activities, including the prohibited practices enumerated
under Article 34 of this Code, to be undertaken by non
licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code.
The Department of Labor and Employment or any law

ph
enforcement officer may initiate complaints under this

u.
Article. (Article 38[a])

ed
b. Illegal recruitment when committed by a syndicate

n.
ai
or in large scale shall be considered an offense involving
m
economic sabotage and shall be penalized in accordance
su
with Article 39 hereof.
m
s.

Illegal recruitment is deemed committed by a syndicate

@

if carried out by a group of three (3) or more persons

91

conspiring and/or confederating with one another in

cx

carrying out any unlawful or illegal transaction, enterprise,

or scheme defined under the first paragraph hereof. Illegal
o.
er

recruitment is deemed committed in large scale if committed

sp

against three (3) or more persons individually or as a group.

o

(Article 38[b])
pr

For overseas recruitment, the following are the types

of illegal recruitment:

1. Simple illegal recruitment;

2. Offense involving economic sabotage when

committed as follows:

By a syndicate Illegal recruitment is deemed

committed by a syndicate if carried out by a group of three
(3) or more persons conspiring or confederating with one
another.
98 LABOR LAW REVIEWER

In a large scale - It is deemed committed in large scale

if committed against three (3) or more persons individually
or as a group. (Section 6, RA 8042 as amended by RA 10022;
Section 2, Rule IV, Omnibus Rules and Regulations Implementing
the Migrant Workers and Overseas Filipinos Act of 1995)

45. During the open forum following your lecture to a group

of managers and HRD personnel, you were asked the
following questions: (a) What qualifying circumstances
will convert "illegal recruitment" to "economic sabotage,"
thus subjecting its perpetrator or perpetrators to a penalty

ph
of life imprisonment and a fine of at least P500,000.00?
(2005 BAR Q. No. II-[1a])

u.
ed
The qualifying circumstances that will convert "illegal

n.
recruitment" to "economic sabotage" under RA 8042, as

ai
amended by RA 10022, are as follows:
m
su
1. By a syndicate - Illegal recruitment is deemed
committed by a syndicate if carried out by a group of three
m
s.

(3) or more persons conspiring or confederating with one

@

another.
91

2. In a large scale It is deemed committed in

-
cx

large scale if committed against three (3) or more persons

o.

individually or as a group. (Section 6, RA 8042, as amended by

er

RA 10022; Section 2, Rule IV, Omnibus Rules and Regulations

sp

Implementing the Migrant Workers and Overseas Filipinos Act

o

of 1995)
pr

While under the Labor Code, the law applicable

for local employment, when committed by a syndicate
or in large scale shall be considered an offense involving
economic sabotage and shall be penalized in accordance
with Article 39 hereof. Illegal recruitment is deemed
committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating
with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first
paragraph hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons
individually or as a group. (Article 38[b])
 LABOR STANDARDS 99

Recruitment and Placement of Workers

46. When is illegal recruitment considered a crime of economic

sabotage? Explain briefly. (2002 BAR Q. No. IXV-A)

Illegal recruitment is considered a crime of economic

sabotage under RA 8042, as further amended by RA 10022,
when committed as follows:

1. By a syndicate - Illegal recruitment is deemed

committed by a syndicate if carried out by a group of three
(3) or more persons conspiring or confederating with one
another.

ph
2. In a large scale It is deemed committed in

u.
large scale if committed against three (3) or more persons

ed
individually or as a group. (Section 6, RA 8042 as amended by

n.
RA 10022; Section 2, Rule IV, Omnibus Rules and Regulations

ai
Implementing the Migrant Workers and Overseas Filipinos Act
m
of 1995)
su

While under the Labor Code, the law applicable

m
s.

for local employment, when committed by a syndicate

@

or in large scale shall be considered an offense involving

91

economic sabotage and shall be penalized in accordance

cx

with Article 39 hereof. Illegal recruitment is deemed

o.

committed by a syndicate if carried out by a group of

er

hree (3) or more persons conspiring and/or confederating

sp

with one another in carrying out any unlawful or illegal

o

transaction, enterprise or scheme defined under the first

pr

paragraph hereof. Illegal recruitment is deemed committed

in large scale if committed against three (3) or more persons
individually or as a group. (Article 38[b])

47. What is the meaning of the terms "committed against

three (3) or more persons individually or as a group" to
qualify illegal recruitment in a large scale?
"When the Labor Code speaks of illegal recruitment
'committed against three (3) or more persons individually
or as a group, it must be understood as referring to the
number of complainants in each case who are complainants
therein, otherwise, prosecutions for single crimes of illegal
100 LABOR LAW REVIEWER

recruitment can be cumulated to make out a case of large

scale illegal recruitment. In other words, a conviction for
large scale illegal recruitment must be based on a finding
in each case of illegal recruitment of three or more persons
whether individually or as a group." (People v. Hernandez,
G.R. N 141221-36, March 7, 2002)

48. Distinguish illegal recruitment under RA 8042, as

amended by RA 10022, from illegal recruitment under the
Labor Code.

ph
Illegal recruitment under Section 6 of RA 8042, Migrant
Workers and Overseas Filipinos Act of 1995, as amended

u.
ed
by RA 10022, broadened the concept of illegal recruitment
(People v. Gamboa, G.R. No. 135382, September 29, 2000), as it

n.
includes the commission of acts (letters a to n in the second
ai
m
sentence of the first paragraph of Section 6 of RA 8042, as
su
amended) whether committed by any person, whether a
m

non-licensee, non-holder of authority, licensee or holder

s.

of authority, and provided for stiffer penalties (Ibid.), while

@

illegal recruitment as defined by Article 38(a) in relation to

91

Articles 13(b) and 34 of the Labor Code is committed only

cx

by non-licensees or non-holders of authority.

o.

By its terms, persons who engage in “canvassing,

er

enlisting, contracting, transporting, utilizing, hiring, or

sp

procuring workers" without the appropriate government

o
pr

license or authority are guilty of illegal recruitment whether

or not they commit the wrongful acts enumerated in that
section. On the other hand, recruiters who engage in the
canvassing, enlisting, etc. of OFWs, although with the
appropriate government license or authority, are guilty of
illegal recruitment only if they commit any of the wrongful
acts enumerated in Section 6 of RA 8042 as amended.

(Republic of the Philippines v. Philippine Association of

Service Exporters Inc. [PASEI], G.R. No. 167590, November
12, 2013 consolidated with other cases)

Unlike illegal recruitment as defined under the Labor

Code which is limited to recruitment activities undertaken

by non-licensees or non-holders of authority, under Article

 LABOR STANDARDS 101

Recruitment and Placement of Workers

6 of RA 8042, illegal recruitment (for overseas employment)

may be committed not only by non-licensees or non-holders
of authority but also by licensees or holders of authority.
Article 6 enumerates thirteen acts or practices [(a) to (m)]
which constitute illegal recruitment, whether committed by
any person, whether a non-licensee, non-holder, licensee or
holder of authority. Except for the last two acts [(1) and (m)]
on the list under Article 6 of RA 8042, the first eleven acts
or practices are also listed in Article 34 of the Labor Code
under the heading "Prohibited practices."

ph
Thus, under Article 34 of the Labor Code, it is unlawful

u.
for any individual, entity, licensee or holder of authority to

ed
engage in any of the enumerated prohibited practices, but

n.
such acts or practices do not constitute illegal recruitment

ai
when undertaken by a licensee or holder of authority.
m
However, under Article 38(A) of the Labor Code, when
su

a non-licensee or non-holder of authority undertakes

m

such "prohibited practices," he or she is liable for illegal

s.
@

recruitment. RA 8042 broadened the definition of illegal

91

recruitment for overseas employment by including thirteen

acts or practices which now constitute as illegal recruitment,
cx

whether committed by a non-licensee, non-holder, licensee

o.

or holder of authority.
er
sp

Under RA 8042, a non-licensee or non-holder of

o

authority commits illegal recruitment for overseas

pr

employment in two ways: (1) by any act of canvassing,

enlisting, contracting, transporting, utilizing, hiring,
or procuring workers, and includes referring, contract
services, promising or advertising for employment abroad,
whether for profit or not; and (2) by undertaking any of the
acts enumerated under Section 6 of RA 8042. On the other
hand, a licensee or holder of authority is also liable for
illegal recruitment for overseas employment when he or she
undertakes any of the thirteen acts or practices [(a) to (m)]
listed under Section 6 of RA 8042. (People v. Tolentino, G.R.
No. 208686, July 1, 2015)
102 LABOR LAW REVIEWER

49. Mr. A signed a one (1)-year contract with XYZ Recruitment

Co. for deployment as welding supervisor for DEF, Inc.
located in Dubai. The employment contract, which the
Philippine Overseas Employment Administration (POEA)
approved, stipulated a salary of US$600.00 a month. Mr. A
had only been in his job in Dubai for six (6) months when
DEF, Inc. announced that it was suffering from severe
financial losses and thus intended to retrench some of its
workers, among them Mr. A. DEF, Inc. hinted, however,
that employees who would accept a lower salary could be
retained. Together with some other Filipino workers, Mr.

ph
A agreed to a reduced salary of US$400.00 a month and

u.
thus, continued with his employment.

ed
Was the reduction of Mr. A's salary valid? Explain. (2019

n.
Part II BAR Q. No. B.13[a])

ai
m
The reduction of A's salary is not valid. The Migrant
su

Workers and Overseas Filipino Act of 1995, prohibits the

m

substitution or alteration to the prejudice of the worker,

s.

employment contracts approved and verified by the

@

Department of Labor and Employment from the time of

91

actual signing thereof by the parties up to and including the

cx

period of the expiration of the same without the approval of

o.

the Department of Labor and Employment. (Section 6[h], RA

er

8042, as amended)
sp

In this case the salary of Mr. A was reduced from

o
pr

US$600.00 a month to US$400.00 a month without the

approval of the Department of Labor and Employment.
Thus, a substitution or alteration of the one (1)-year contract
with XYZ Recruitment Co. The act also constitutes illegal
recruitment. The reduction is, therefore, not valid.

Assuming that the reduction was invalid, may Mr. A hold

XYZ Recruitment Co. liable for underpayment of wages?
Explain. (2019 Part II BAR Q. No. B.13[b])
Yes, Mr. can hold XYZ Recruitment Co. liable for
underpayment of wages.

The law provides that the liability of the principal/

employer and the recruitment/placement agency for any
 LABOR STANDARDS 103

Recruitment and Placement of Workers

and all money shall be joint and several. Further, such

liabilities shall continue during the entire period or duration
of the employment contract and shall not be affected by any
substitution, amendment or modification made locally or
in a foreign country of the said contract. (Second and third
paragraphs of Section 10, RA 8042, as amended)
Applying the law, XYZ Recruitment Co. is, therefore,
liable to Mr. A for the underpayment of his wages.

50. What is illegal recruitment under the Migrant Workers

and Overseas Filipino Act of 1995 (RA 8042, as amended)?

ph
u.
Illegal recruitment shall mean any act of canvassing,

ed
enlisting, contracting, transporting, utilizing, hiring, or

n.
procuring workers and includes referring, contract services,

ai
promising or advertising for employment abroad, whether
m
for profit or not, when undertaken by non-licensee or
su

non-holder of authority contemplated under Article 13(f)

m

of Presidential Decree No. 442, as amended, otherwise

s.

known as the Labor Code of the Philippines: Provided, That

@

any such non-licensee or non-holder who, in any manner,

91

offers or promises for a fee employment abroad to two or

cx

more persons shall be deemed so engaged. It shall likewise

o.

include the following acts, whether committed by any

er

person, whether a non-licensee, non-holder, licensee or

sp

holder of authority:
o
pr

(a) To charge or accept directly or indirectly any

amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay or acknowledge any
amount greater than that actually received by him as a loan
or advance;

(b) To furnish or publish any false notice or

information or document in relation to recruitment or

employment;

(c) To give any false notice, testimony, information or

document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor
104 LABOR LAW REVIEWER

Code, or for the purpose of documenting hired workers

with the POEA, which include the act of reprocessing
workers through a job order that pertains to nonexistent
work, work different from the actual overseas work, or
work with a different employer whether registered or not
with the POEA;

(d) To induce or attempt to induce a worker already

employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a worker
from oppressive terms and conditions of employment;

ph
(e) To influence or attempt to influence any person

u.
or entity not to employ any worker who has not applied for

ed
employment through his agency or who has formed, joined

n.
or supported, or has contacted or is supported by any union
or workers' organization;
ai
m
su

(f) To engage in the recruitment or placement of

m

workers in jobs harmful to public health or morality or to

s.

the dignity of the Republic of the Philippines;

@
91

(g) To obstruct or attempt to obstruct inspection by

cx

the Secretary of Labor and Employment or by his duly

o.

authorized representative;
er

(h) To fail to submit reports on the status of

sp

employment, placement vacancies, remittance of foreign

o
pr

exchange earnings, separation from jobs, departures and

such other matters or information as may be required by
the Secretary of Labor and Employment;

(i) To substitute or alter to the prejudice of the

worker, employment contracts approved and verified by
the Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of
the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or

placement agency to become an officer or member of the
Board of any corporation engaged in travel agency or to be
 LABOR STANDARDS 105

Recruitment and Placement of Workers

engaged directly or indirectly in the management of travel

agency;

(k) To withhold or deny travel documents from

applicant workers before departure for monetary or financial
considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing
rules and regulations;

(1) Failure to actually deploy a contracted worker

without valid reason as determined by the Department of
Labor and Employment;

ph
u.
(m) Failure to reimburse expenses incurred by

ed
the worker in connection with his documentation and

n.
processing for purposes of deployment, in cases where
ai
the deployment does not actually take place without the
m
worker's fault. Illegal recruitment when committed by a
su

syndicate or in large scale shall be considered an offense

m

involving economic sabotage; and

s.
@

(n) To allow a non-Filipino citizen to head or manage

91

a licensed recruitment/manning agency. (First paragraph,

cx

Section 6, RA 8042, Migrant Workers and Overseas Filipinos Act

o.

of1995, as amended by Section 5 of RA 10022 and Section 1, Rule

er

IV, Omnibus Rules and Regulations Implementing the Migrant

sp

Workers and Overseas Filipinos Act of 1995, as amended by RA

o

10022)
pr

51. What are the other prohibited acts declared unlawful by

the Migrant Workers and Overseas Filipino Act of 1995
(RA 8042, as amended)?

In addition to the acts enumerated above, it shall also

be unlawful for any person or entity to commit the following

prohibited acts:

(1) Grant a loan to an overseas Filipino worker with

interest exceeding eight percent (8%) per annum, which
will be used for payment of legal and allowable placement
fees and make the migrant worker issue, either personally
106 LABOR LAW REVIEWER

or through a guarantor or accommodation party, postdated

checks in relation to the said loan;

(2) Impose a compulsory and exclusive arrangement

whereby an overseas Filipino worker is required to avail of
a loan only from specifically designated institutions, entities
or persons;

(3) Refuse to condone or renegotiate a loan incurred

by an overseas Filipino worker after the latter's employment
contract has been prematurely terminated through no fault
of his or her own;

ph
(4) Impose a compulsory and exclusive arrangement

u.
whereby an overseas Filipino worker is required to undergo

ed
health examinations only from specifically designated

n.
medical clinics, institutions, entities or persons, except in
ai
m
the case of a seafarer whose medical examination cost is
su
shouldered by the principal/shipowner;
m

(5) Impose a compulsory and exclusive arrangement

s.

whereby an overseas Filipino worker is required to undergo

@

training, seminar, instruction or schooling of any kind

91

only from specifically designated institutions, entities or

cx

persons, except for recommendatory trainings mandated by

o.

principals/shipowners where the latter shoulder the cost of

er

such trainings;
osp

(6) For a suspended recruitment/manning agency

pr

to engage in any kind of recruitment activity including the

processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign
principal/employer to pass on the overseas Filipino worker
or deduct from his or her salary the payment of the cost of
insurance fees, premium or other insurance related charges,
as provided under the compulsory worker's insurance
coverage. (Section 6 of RA 8042, Migrant Workers and Overseas
Filipinos Act of 1995, as amended by third paragraph, Section
5 of RA 10022 and Section 2, Rule IV, Omnibus Rules and
Regulations Implementing the Migrant Workers and Overseas
Filipinos Act of 1995, as amended by RA 10022)
 LABOR STANDARDS 107

Recruitment and Placement of Workers

52. Who are responsible for illegal recruitment under the

Migrant Workers and Overseas Filipino Act of 1995 (RA
8042, as amended)?

The persons criminally liable for illegal recruitment

are:

1. The principals, accomplices and accessories;

2. In case of juridical persons, the officers having

ownership, control, management or direction of their
business who are responsible for the commission of the

ph
offense and the responsible employees/agents thereof shall
be liable. (Third paragraph, Section 6, RA 8042, Migrant Workers

u.
ed
and Overseas Filipinos Act of 1995, as amended by Section 5 ofRA
10022 and Section Rule IV, Omnibus Rules and Regulations

n.
ai
Implementing the Migrant Workers and Overseas Filipinos Act
m
of 1995, as amended by RA 10022)
su
m

53. What are the penalties for illegal recruitment under the
s.

Migrant Workers and Overseas Filipino Act of 1995 (RA

@

8042, as amended)?
91

Penalty for (simple) illegal recruitment An

cx

imprisonment of not less than twelve (12) years and one (1)
o.
er

day but not more than twenty (20) years and a fine of not
sp

less than One million pesos (P1,000,000.00) nor more than

o

Two million pesos (P2,000,000.00). (Section 7[a] of RA 8042,

pr

Migrant Workers and Overseas Filipinos Act of 1995, as amended

by Section 6 of RA 10022)

Penalty for any of the prohibited acts An

imprisonment of not less than six (6) years and one (1) day
but not more than twelve (12) years and a fine of not less
than Five hundred thousand pesos (P500,000.00) nor more
than One million pesos (P1,000,000.00). (Section 7[c] of RA
8042, Migrant Workers and Overseas Filipinos Act of 1995, as
amended by Section 6 of RA 10022)

Penalty if illegal recruitment constitutes an economic

sabotage Life imprisonment and a fine of not less than
-
108 LABOR LAW REVIEWER

Two million pesos (P2,000,000.00) nor more than Five

million pesos (P5,000,000.00). (Section 7[b] of RA 8042,
Migrant Workers and Overseas Filipinos Act of 1995, as amended
by Section 6 of RA 10022)

Penalty if the person illegally recruited is less than

eighteen (18) years of age or committed by a non-licensee
or non-holder of authority and the offender is an alien -
The maximum penalty shall be imposed. (Section 7[b] of RA
8042, Migrant Workers and Overseas Filipinos Act of 1995, as
amended by Section 6 of RA 10022) If the offender is an alien

ph
the additional penalty other than fine and imprisonment is

u.
deportation without further proceedings. (Section 7, second

ed
paragraph of RA 8042, Migrant Workers and Overseas Filipinos

n.
Act of 1995, as amended by Section 6 of RA 10022)

ai
54. What are the administrative
m
sanctions as a result of
su
conviction for illegal recruitment under the Migrant
m

Workers and Overseas Filipino Act of 1995 (RA 8042, as

s.

amended)?
@
91

It shall cause and carry the automatic revocation of the

license or registration of the recruitment/manning agency,
cx
o.

lending institutions, training school, or medical clinic.

er

(Section 7, last paragraph, of RA 8042, Migrant Workers and

sp

Overseas Filipinos Act of 1995, as amended by Section 6 of RA

o

10022)
pr

55. What is the prescriptive period of illegal recruitment

under the Migrant Workers and Overseas Filipino Act of
1995 (RA 8042, as amended)?

The prescription for (simple) illegal recruitment is

five (5) years. (Section 12 of RA 8042, Migrant Workers and
Overseas Filipinos Act of 1995)

And in case it involves economic sabotage, the

prescription is twenty (20) years. (Section 12 of RA 8042,
Migrant Workers and Overseas Filipinos Act of 1995)
 LABOR STANDARDS 109

Recruitment and Placement of Workers

56. What is the rule on venue of criminal action for illegal

recruitment under the Migrant Workers and Overseas
Filipino Act of 1995 (RA 8042, as amended)?

A criminal action arising from illegal recruitment shall

be filed with:

1. The Regional Trial Court of the province or city

where the offense was committed; or

2. Where the offended party actually resides at the

time of the commission of the offense.

ph
The court where the criminal action is first filed

u.
shall acquire jurisdiction to the exclusion of other courts.

ed
(Section 9, RA 8042 and Section 6, Rule IV, Omnibus Rules and

n.
Regulations Implementing the Migrant Workers and Overseas

ai
Filipinos Act of 1995, as amended by RA 10022)
m
su
57. What is the rule on the filing of an independent action
m

under the Migrant Workers and Overseas Filipino Act of

s.

1995 (RA 8042, as amended)?

@
91

The filing of an offense punishable under RA 8042

as amended is without prejudice to the filing of cases
cx

punishable under other existing laws, rules or regulations

o.

(Section 8, Rule IV, Omnibus Rules Implementing RA 10022)

er
sp

like the crime of estafa under the Revised Penal Code.

o

Illegal recruitment and estafa cases may be filed

pr

simultaneously or separately. The filing of charges for illegal

recruitment does not bar the filing of estafa, and vice versa.
Sy's acquittal in the illegal recruitment case does not prove
that she is not guilty of estafa. Illegal recruitment and estafa
are entirely different offenses and neither one necessarily
includes or is necessarily included in the other. A person
who is convicted of illegal recruitment may, in addition,
be convicted of estafa under Article 315, paragraph 2(a) of
the RPC. (People v. Billaber, 465 Phil. 726 [2004]) In the same
manner, a person acquitted of illegal recruitment may be
held liable for estafa. Double jeopardy will not set in because
110 LABOR LAW REVIEWER

illegal recruitment is malum prohibitum, in which there is no

necessity to prove criminal intent, whereas estafa is malum
in se, in the prosecution of which, proof of criminal intent
is necessary. (Sy v. People of the Philippines, G.R. No. 183879,
April 14, 2010)

58. A was approached for possible overseas deployment to

Dubai by X, an interviewer of job applicants for Alpha
Personnel Services, Inc., an overseas recruitment agency.
X required A to submit certain documents (passport,
NBI clearance, medical certificate) and to pay P25,000 as

ph
processing fee. Upon payment of the said amount to the
agency cashier, A was advised to wait for his visa. After five

u.
ed
months, A visited the office of Alpha Personnel Services,
Inc. during which X told him that he could no longer be

n.
deployed for employment abroad. A was informed by the
ai
m
Philippine Overseas Employment Administration (POEA)
su
that while Alpha Personnel Services, Inc. was a licensed
m

agency, X was not registered as its employee, contrary to

s.

POEA Rules and Regulations. Under POEA Rules and

@

Regulations, the obligation to register personnel with

91

the POEA belongs to the officers of a recruitment agency.

cx

May X be held criminally liable for illegal recruitment?

o.

Explain. (2010 BAR Q. No. XXI)

er

X is not criminally liable for illegal recruitment.

osp

The culpability of the employee hinges on his

pr

knowledge of the offense and his active participation in

its commission. Where it is shown that the employee was
merely acting under the direction of his superiors and was
unaware that his acts constituted a crime, he may not be
held criminally liable for an act done for and in behalf of his
employer. (People v. Chowdury, G.R. Nos. 129577-80, February
15, 2000)

Upon examination of the factual problem, it does not

show that X was aware of Alpha Personnel Services, Inc.'s
failure to register his name with the POEA and that he
actively engaged in recruitment despite this knowledge. The
obligation to register its personnel with the POEA belongs
 LABOR STANDARDS 111

Recruitment and Placement of Workers

to the officers of the agency. A mere employee of the agency

cannot be expected to know the legal requirements for its
operation. The evidence at hand shows that X carried out
his duties as interviewer of Alpha Personnel Services, Inc.
believing that the agency was duly licensed by the POEA
and he, in turn, was duly authorized by his agency to deal
with the applicants in its behalf. X in fact confined his actions
to his job description. He merely interviewed the applicants
and informed them of the requirements for deployment but
he never received money from them. Thus, since X did not
consciously and actively participated in the commission of

ph
the crime of illegal recruitment he cannot be held criminally

u.
liable for illegal recruitment.

ed
59. Maryrose Ganda's application for the renewal of her

n.
ai
license to recruit workers for overseas employment was
m
still pending with the Philippine Overseas Employment
su
Administration (POEA). Nevertheless, she recruited Alma
m

and her three sisters, Ana, Joan and Mavic, for employment
s.

as housemaids in Saudi Arabia. Maryrose represented

@

to the sisters that she had a license to recruit workers

91

for overseas employment. Maryrose also demanded and

cx

received P30,000.00 from each of them for her services.

o.

However, Maryrose's application for the renewal of her

er

license was denied, and consequently failed to employ the

sp

four sisters in Saudi Arabia. The sisters charged Maryrose

o

with large scale illegal recruitment. Testifying in her

pr

defense, Maryrose declared that she acted in good faith

because she believed that her application for the renewal
of her license would be approved. Maryrose adduced
in evidence the Affidavits of Desistance which the four

private complainants had executed after the prosecution

rested its case. In the said affidavits, they acknowledged
receipt of the refund by Maryrose of the total amount
of P120,000.00 and indicated that they were no longer
interested to pursue the case against Maryrose. Resolve
the case with reasons. (2005 BAR Q. No. VIII[2])

Maryrose is liable for illegal recruitment in a large

scale.
112 LABOR LAW REVIEWER

Illegal recruitment shall mean any act of canvassing,

enlisting, contracting, transporting, utilizing, hiring, or
procuring workers and includes referring, contract services,
promising or advertising for employment abroad, whether
for profit or not, when undertaken by non-licensee or non
holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines. (First paragraph, Section
6, RA 8042 as amended by RA 10022) While illegal recruitment
is deemed committed in large scale if committed against
three (3) or more persons individually or as a group. (Second

ph
paragraph, Section 6, RA 8042 as amended by RA 10022) It

u.
must be emphasized that Illegal Recruitment in Large Scale

ed
penalized under The Migrant Workers and Overseas Filipinos

n.
Act of1995, a special law, is malum prohibitum and not malum

ai
in se. The criminal intent of the accused is not necessary and
m
the fact alone that the accused violated the law warrants her
su

conviction. (People v. Gamboa, G.R. No. 135382, September 29,

m
s.

2000)
@

Applying the law and jurisprudence, Maryrose is,

91

therefore, liable for illegal recruitment on a large scale and

cx

her good faith will not lie as a defense.

o.
er

60. Who is required under the Labor Code to obtain an alien

sp

employment permit?
o
pr

Any alien seeking admission to the Philippines

for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment
in the Philippines shall obtain an employment permit from
the Department of Labor and Employment. (First paragraph,
Article 40, Labor Code)

61. When may an alien employment permit be issued to a

non-resident or applicant employer?

The employment permit may be issued to a non-resident

alien or to the applicant employer after a determination of
the non-availability of a person in the Philippines who is
 LABOR STANDARDS 113

Recruitment and Placement of Workers

competent, able, and willing at the time of application to

perform the services for which the alien is desired. (Second
paragraph, Article 40, Labor Code) For an enterprise registered
in preferred areas of investment, the employment permit
may be issued upon recommendation of the government
agency charged with the supervision of said registered
enterprise. (Third paragraph, Article 40, Labor Code)

62. AB, a non-resident American, seeks entry to the country

to work as Vice-President of a local telecommunications

company. You are with the Department of Labor and

ph
Employment (DOLE). What permit, if any, can the DOLE

u.
issue so that AB can assume as Vice-President in the

ed
telecommunications company? Discuss fully. (2007 BAR

n.
Q. No. XX)

ai
m
The permit to be issued is the Alien Employment
su
Permit (AEP).
m

Any alien seeking admission to the Philippines

s.

for employment purposes and any domestic or foreign

@

employer who desires to engage an alien for employment

91

in the Philippines shall obtain an employment permit from

cx

the Department of Labor and Employment. (First paragraph,

o.

Article 40, Labor Code) Therefore, AB should apply for an

er

Alien Employment Permit (AEP).

osp
pr

63. Phil-Norksgard Company, Inc., a domestic corporation

engaged in the optics business, imported from Sweden
highly sophisticated and sensitive instruments for its
laboratory. To install the instruments and operate them,
the company intends to employ Borja Anders, a Swedish
technician sojourning as a tourist in the Philippines. As
lawyer of the company, what measures will you take to
ensure the legitimate employment of Borja Anders and
at the same time protect Philippine labor? Discuss fully.
(1995 BAR Q. No. II[2])

As lawyer, I will apply for the Alien Employment

Permit (AEP) of Borja Anders.
114 LABOR LAW REVIEWER

Any alien seeking admission to the Philippines

for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment
in the Philippines shall obtain an employment permit from
the Department of Labor and Employment. (First paragraph,
Article 40, Labor Code)

ph
u.
ed
n.
ai
m
su
m
s.
@
91
cx
o.
er
osp
pr
 BOOK TWO

Chapter I

APPRENTICES, LEARNERS,
AND

PERSONS WITH DISABILITY

ph
u.
Define the following:

ed
1. Apprenticeship

n.
ai
2. Apprenticeable occupationm
3. Highly Technical Industries
su
m

Apprenticeship means practical training on the job

s.

supplemented by related theoretical instruction. (Article

@

58[a], Labor Code)

91

An apprenticeable occupation means any trade, form of

cx

employment or occupation which requires more than three

o.

(3) months of practical training on the job supplemented by

er

related theoretical instruction. (Article 58[c], Labor Code)

o sp

"Highly Technical Industries" means trade, business,

pr

enterprise, industry, or other activity, which is engaged in

the application of advanced technology. (Section 2[j], Rule
VI, Book II, Rules to Implement the Labor Code)

2. What are the qualifications of an apprentice?

To qualify as apprentice, an applicant shall:

(a) Be at least fifteen years of age; provided those

who are at least fifteen years of age but less than eighteen
may be eligible for apprenticeship only in non-hazardous
occupations;

115
 116 LABOR LAW REVIEWER

(b) Be physically fit for the occupation in which he desires

to be trained;

(c) Possess vocational aptitude and capacity for the

particular occupation as established through appropriate
tests; and

(d) Possess the ability to comprehend and follow oral

and written instructions. (Section 11, Rule VI, Book II, Rules to
Implement the Labor Code)

3. What is not a prerequisite for a valid apprenticeship

agreement?

ph
u.
(A) Qualifications of an apprentice are met;

ed
(B) A duly executed and signed apprenticeship

n.
agreement;

ai
(C)
m
The apprenticeship program is approved by the
su
Secretary of Labor;
m

(D) Included in the list of apprenticeable occupation

s.

of TESDA. (2012 BAR Q. No. 44)

@
91

(C) The apprenticeship program is approved by the

Secretary of Labor
cx
o.

The apprenticeship program should be approved by

er

TESDA. (Section 4[j] TESDA Circular No. 16, RA 7796)

sp

Who are the employers that may employ apprentices?

o

4.
pr

Only employers in the highly technical industries may

employ apprentices and only in apprenticeable occupations
approved by the Secretary of Labor and Employment.
(Article 60, Labor Code)

5. What is the effect if the Apprenticeship Program is not

registered or approved by TESDA?
An apprenticeship program should first be approved
by the DOLE (NOW TESDA) before an apprentice may
be hired, otherwise the person hired will be considered a
regular employee. (Century Canning Corporation v. Court of
Appeals, G.R. No. 152894, August 17, 2007)
 LABOR STANDARDS 117

Apprentices, Learners, and Persons with Disability

6. In case of any violation of apprenticeship agreement, who

has the initial responsibility for settling differences?
The Plant Apprenticeship Committee (PAC)
in participating enterprises. It shall be composed of
management, labor, and government representatives. (See
3.11, TESDA Circular No. 16, Series of 2004)

7. What will happen in case of failure of PAC to settle the

issue?

In case of failure by the PAC to settle the issue, the

TESDA Provincial Office or its authorized representative

ph
shall refer the case to the DOLE Regional/Provincial Office

u.
which has jurisdiction over the concerned company to

ed
investigate and render a decision pursuant to pertinent

n.
rules and regulations. (See 3.12, TESDA Circular No. 16,
Series of 2004)
ai
m
su
8. State the rule on appeal on the decision of the authorized
m

agency of the Department of Labor and Employment

s.

(DOLE) involving the violation of apprenticeship

@

agreement.
91

The decision of the authorized agency of the

cx

Department of Labor and Employment (DOLE) is

o.

appealable by any aggrieved party to the Secretary of the

er

Department of Labor and Employment within five (5) days

sp

from receipt of the decision. The decision of the Secretary

o
pr

of the Department of Labor and Employment is final and

executory. (Article 66, Labor Code)

9. What are the instances that compulsory apprenticeship

may be required?

When grave national emergencies, particularly those

involving the security of the state, arise or particular
requirements of economic development so demand, the
Secretary of Labor and Employment may recommend to
the President of the Philippines the compulsory training of
apprentices required in a certain trades, occupations, jobs or
employment levels where shortage of trained manpower is
deemed critical. (Article 70[b], Labor Code)
118 LABOR LAW REVIEWER

10. How much is the wage of apprentices?

The apprentices are entitled to receive a wage
equivalent to 75 percent of the prevailing minimum wage
and other benefits including overtime pay. (Article 61, Labor
Code)

11. Under what circumstance should an employer pay the

apprentices the minimum wage?
Participating companies shall be entitled to an
additional deduction from taxable income of one half

ph
(1/2) of the value of labor training expenses incurred for

u.
developing the productivity and efficiency of apprentices.

ed
Said incentive shall be given, provided that such deduction

n.
shall not exceed ten (10) percent of direct labor wage and that

ai
the enterprise who wish to avail of this incentive should pay
m
the apprentices the minimum wage. (3.9, TESDA Circular
su

No. 16, Series of 2004; Article 7, Labor Code).

m
s.

12. Who are the apprentices without compensation?

@
91

Those whose training on the job is required by the

school curriculum as a prerequisite for graduation or for
cx
o.

taking a government board examination are classified as

er

apprentices without compensation. (Section 40, Rule VI, Book

sp

II, Rules to Implement the Labor Code)

o
pr

13. Who is a learner?

Learners are persons hired as trainees in semi

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

14. When may learners be employed?

The following are the justifications when learners may

be employed:

1. When no experienced workers are available;

 LABOR STANDARDS 119

Apprentices, Learners, and Persons with Disability

2.
The employment of learners being necessary to
prevent curtailment of employment opportunities; and

3. Such employment will not create unfair

competition in terms of labor costs nor impair working
standards. (Article 74, Labor Code)

15. Which is a characteristic of the learner? a. A person is

hired as a trainee in an industrial occupation; b. Hired in
a highly technical industry; c. Three (3) months practical
on-the-job training with theoretical instruction; d. At least

ph
14 years old. (2012 BAR Q. No. 43)

u.
The answers are a and c.

ed
a. A person is hired as a trainee in an industrial

n.
ai
occupation; and m
C. Three (3) months practical on-the-job training
su

with theoretical instruction.

m
s.

Learners are persons hired as trainees in semi

@

skilled and other industrial occupations which are non

91

apprenticeable and which may be learned through practical

cx

training on the job in a relatively short period of time which

o.

shall not exceed three (3) months. (Article 73, Labor Code)
er
sp

16. Distinguish a learner from an apprentice. (2017 BAR Q.

o

No. V [B])
pr

Differentiate learnership from apprenticeship with

respect to the period of training, type of work, salary and
qualifications. (2016 BAR Q. No. VIII)

Distinctions Apprenticeship Learnership

As to In Apprenticeship, the In learnership, the

agreement agreement entered by agreement entered by
the parties is known as the parties is known as
Apprenticeship Agree Learnership Agreement.
ment. (Article 58[d], (Article 75, Labor Code)
Labor Code)
120 LABOR LAW REVIEWER

As to period of In Apprenticeship, the In learnership, the

agreement agreement shall not be agreement period shall
less than four (4) months not be more than three
and not more than six (6) (3) months. (Article
months. (Article 58[c] in 75[b)], Labor Code, 3.10,
relation to Article 61 and TESDA Circular No. 16,

3.10, TESDA Circular Series of 2004)

No. 16, Series of 2004)

As to In apprenticeship, the In learnership, the

obligations to enterprise is not obliged enterprise is obliged to
hire to hire the apprentice hire the learner after
after the apprenticeship the learnership period.

ph
period. (Article 61, (Article 75[d], Labor
Labor Code, 3.10, TESDA Code, 3.10, TESDA

u.
Circular No. 16, Series of Circular No. 16, Series

ed
2004) of2004)

n.
As to pre In apprenticeship, upon In learnership, a learner
pre-termination of
ai
the allowed or suffered to
termination of m
the agreement agreement there is no work during the first
su

regular employment two (2) months shall

m

by operation of law. be deemed regular

s.

(Articles 57-72, Labor employees if training

@

Code) is terminated by the

91

employer before the end

of the stipulated period
cx

through no fault of the

o.

learners. (Article 75[d],

er

Labor Code)
sp

As to person In apprenticeship, the In learnership, the

o

hired persons hired as trainees persons hired as trainees

pr

is known as apprentice. are known as learners.

(Article 58[b], Labor (Article 73, Labor Code,
Code, 2, TESDA Circular 2, TESDA Circular No.
No. 16, Series of 2004) 16, Series of 2004)

As to In apprenticeship, the In learnership, the

supplement training on the job is practical training on
on theoretical with compulsory related the job may or may
instructions theoretical instructions.
not be supplemented
(Article 58[a], Labor by related theoretical
Code, Section 4[j], RA instructions. (2, TESDA
7796, and 2, TESDA Circular No. 16, Series
Circular No. 16, Series of of 2004)
2004)
 LABOR STANDARDS 121

Apprentices, Learners, and Persons with Disability

As to reasons In apprenticeship, the In learnership, the law

for hiring law did not provide provides the following
any reasons where an reasons for hiring: (1)
apprentice may be hired. when no experienced
(Articles 59-72, Labor workers are available;
Code) (2) the employment of
learners is necessary to
prevent curtailment of
employment opportuni
ties; and (3) the employ
ment does not create

unfair competition in
terms of labor costs or

ph
impair or lower work

u.
ing standards. (Article

ed
74, Labor Code)

n.
As to In apprenticeship, the In learnership, the law

ai
qualifications qualifications are: (a) m did not provide such
At east fifteen (15) qualifications. However,
su
years of age; (b) Possess reasons or justifications
m

vocational aptitude and for hiring are provided

s.

capacity for appropriate by law. (Article 74,

@

tests; and (c) Possess the Labor Code)

ability to comprehend
91

and follow oral and

cx

written instructions.
o.

(Article 59, Labor Code)

er

As to In apprenticeship, the In learnership, the

sp

occupations occupations involve occupations involved

o

involved "highly technical in are semi-skilled and

pr

dustries" which means other industrial оссира

trade, business, enter tions which are non-ap
prise, industry, or other prenticeable and learn
activity, which is en- able occupations must
gaged in the application be approved by TESDA.
of advanced technol- (Article 73, Labor Code

ogy and apprenticeable and 3.3, TESDA Circular

occupations must be No. 16, Series of 2004)
approved by TESDA.
(Article 60, Labor Code
and 3.3, TESDA Circular
No. 16, Series of 2004)
122 LABOR LAW REVIEWER

17. Both apprenticeship and learnership are government

programs to provide practical on-the-job training to new
workers. How do they differ with respect to period of
training?

(A) In highly technical industries, apprenticeship

can exceed 6 months; learnership can exceed one
year.

(B) Apprenticeship cannot exceed 6 months;

learnership can.

(C) Apprenticeship shall not exceed six months;

ph
while learnership shall not exceed three months.

u.
ed
(D) The law lets the employer and the apprentice

n.
agree on the apprenticeship period; but the law

ai
fixes learnership period at six months in non
m
technical industries. (2011 BAR Q. No. 6)
su

(C) Apprenticeship shall not exceed six months; while

m
s.

learnership shall not exceed three months.

@

The period of apprenticeship is not exceeding six (6)

91

months under Article 61 while learnership does not exceed

cx

three (3) months under Article 73 of the Labor Code.

o.
er

18. Although both are training programs, apprenticeship is

sp

different from learnership in that:

o
pr

(A) a learner may be paid 25% less than the legal

minimum wage while an apprentice is entitled
to the minimum wage.

(B) apprenticeship has to be covered by a written

agreement; no such formality is needed in
learnership.

(C) in learnership, the employer undertakes

to make the learner a regular employee; in
apprenticeship, no such undertaking.
(D) a learner is deemed a regular employee if
terminated without his fault within one month
 LABOR STANDARDS 123

Apprentices, Learners, and Persons with Disability

of training; an apprentice attains employment

status after six months of apprenticeship. (2011
BAR Q. No. 8)

(C) in learnership, the employer undertakes to make

the learner a regular employee; in apprenticeship, no such
undertaking.

Article 75(d) of the Labor Code provides for a

commitment to employ the learners if they so desire, as
regular employees upon completion of learnership, while
there is no equivalent provision insofar as apprenticeship is

ph
concerned.

u.
ed
19. The apprenticeship program should be supplemented by

n.
theoretical instruction to be given by:

ai
(A)
m
the apprentice's school only where the apprentice
su
is formally enrolled as a student.
m

(B) the employer if the apprenticeship is done in the

s.

plant.
@
91

(C) the civic organizations that sponsor the program.

cx

(D) the Department. (2011 BAR Q. No. 69)

o.
er

(B) the employer if the apprenticeship is done in the

sp

plant
o

Article 69 of the Labor Code provides that the

pr

responsibility for theoretical instruction may be done by the

employer.

20. How much is the wage or salary rates of the learners?

The wages or salary rates of the learners shall begin at

not less than seventy-five percent (75%) of the applicable
minimum wage. (Article 75[c], Labor Code)

21. When are learners paid the applicable minimum wage?

The learners employed in piece or incentive-rate jobs are

paid in full for the work done. Thus, 100% of the applicable
minimum wage should be paid. (Article 76, Labor Code)
124 LABOR LAW REVIEWER

22. Which of the following is not a privilege of a person with

disability under the Magna Carta for disabled persons?
a. At least 20% discount on purchase of medicines in all
drugstores; b. Free transportation in public railways;
c. Educational assistance in public and private schools
through scholarship grants; A and C. (2012 BAR Q. No.
39)

b. and c.

Letter a is provided by RA 10754 which amended

Section 32 of RA 7277 (RA 10754, otherwise known as "An

ph
Act Expanding the Benefits and Privileges of Persons with

u.
Disability," for the Provision of Medical and Health-related

ed
Discounts and Special Privileges) by granting 20% discount

n.
on purchases of medicines in all drugstores. See also DOH

ai
m
AO 2017-0008 Implementing Guidelines of RA 10754.
su
m

23. According to Article 78 of the Labor Code, a handicapped

s.

worker is one whose earning capacity is impaired by the

@

following, except: a. Age; b. Physical Deficiency; c. Mental

91

Deficiency; d. Psychological Deficiency. (2012 BAR Q. No.

cx

75)
o.

d. Psychological Deficiency
er
sp

Handicapped workers are those whose earning

o

capacity is impaired by age or physical or mental deficiency

pr

or injury. (Article 78, Labor Code) However, under RA 7277,

as amended, disabled persons are those suffering from
restriction of different abilities, as a result of a mental, physical
or sensory impairment, to perform an activity in the manner
or within the range considered normal for a human being.
(Section 4[a])

24. Define the following:

1. Disabled Persons

2. Impairment

3. Disability
 LABOR STANDARDS 125

Apprentices, Learners, and Persons with Disability

4.
Handicap

5. Qualified Individual with a Disability

1. Disabled Persons are those suffering from restriction

of different abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in the manner or within
the range considered normal for a human being. (Section 4[a],
RA 7277)

2. Impairment is any loss, diminution or aberration

of psychological, physiological, or anatomical structure of
function. (Section 4[b], RA 7277)

ph
u.
3. Disability shall mean (1) a physical or mental

ed
impairment that substantially limits one or more

n.
psychological, physiological or anatomical function of an

ai
individual or activities of such individual; (2) a record of
m
such an impairment; or (3) being regarded as having such
su

an impairment. (Section 4[c], RA 7277)

m
s.

4. Handicap refers to a disadvantage for a given

@

individual resulting from an impairment or a disability, that

91

limits or prevents the functions or activity, that is considered

cx

normal given the age and sex of the individual. (Section 4[d],
o.

RA 7277)
er
sp

5. Qualified Individual with a Disability shall

mean an individual with a disability who, with or without
o
pr

reasonable accommodations, can perform the essential

functions of the employment position that such individual
holds or desires. However, consideration shall be given
to the employer's judgment as to what functions of a job
are essential, and if an employer has prepared a written
description before advertising or interviewing applicants
for the job, this description shall be considered evidence of
the essential functions of the job. (Section 4[1], RA 7277)

25. Ana Cruz has a low IQ. She has to be told at least three

times before she understands her daily work assignment.

However, her work output is at least equal to the output of
126 LABOR LAW REVIEWER

the least efficient worker in her work section. Is Ms. Cruz

a handicapped worker? Explain. (2000 BAR Q. No. VII)
Ms. Cruz is not a person with disability.

Disabled Persons are those suffering from restriction of

different abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in the manner or within
the range considered normal for a human being. (Section
4[a], RA 7277)

Based on the said definition, being a person of low IQ

ph
is not a mental, physical or sensory impairment that will
restrict Ms. Cruz to perform an activity in the manner or

u.
ed
within the range considered normal for a human being.
Thus, she cannot be classified as a person with disability.

n.
ai
26. A lady worker was born with a
m physical deformity,
su
specifically, hard hearing, speech impaired and color
m

blind. However, these deficiencies do not impair her

s.

working ability. Can the employer classify the lady

@

worker as a handicapped workers so that her daily wage

91

will only be seventy-five percent (75%) of the applicable

cx

daily minimum wage? (1998 BAR Q. No. III)

o.
er

No, the employer cannot classify the lady worker as a

sp

person with disability.

o

Disabled Persons are those suffering from restriction of

pr

different abilities, as a result of a mental, physical or sensory

impairment, to perform an activity in the manner or within
the range considered normal for a human being. (Section
4[a], RA 7277)

The facts clearly stated that the lady worker's physical

deformity, specifically, hard hearing, speech impairment,
and color blindness do not impair her working ability.
Based on the said definition, the lady worker is not a person
with disability.
 LABOR STANDARDS 127

Apprentices, Learners, and Persons with Disability

27. What are the rights and privileges of persons with

disability in terms of equal opportunity for employment?

Equal opportunity for employment includes:

1. No disabled persons shall be denied access to

opportunities for suitable employment;

2. A qualified disabled employee shall be subject

to the same terms and conditions of employment and the
same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-bodied person;

ph
3. Five percent (5%) of all casual, emergency and

u.
contractual positions in the Department of Social Welfare

ed
and Development; Health; Education, Culture and Sports;

n.
and other government agencies, offices or corporations

ai
engaged in social development shall be reserved for disabled
m
persons. (Section 5, RA 7277)
su
m

What is the wage rate of persons with disability?

s.
@

A qualified disabled employee shall be subject to the

91

same terms and conditions of employment and the same

cx

compensation, privileges, benefits, fringe benefits, incentives

o.

or allowances as a qualified able-bodied person. (Second

er

sentence, Section 5, RA 7277) This means that persons with

sp

disability are entitled to 100% of the applicable minimum

o
pr

wage.

29. What are the tax incentives for employer under the Magna
Carta for Persons with Disability?

The following are the tax incentives to the employer:

1. Private entities that employ disabled persons who

meet the required skills or qualifications, either as regular
employee, apprentice or learner, shall be entitled to an
additional deduction, from their gross income, equivalent to
twenty-five percent (25%) of the total amount paid as salaries
and wages to disabled persons: Provided, however, That
such entities present proof as certified by the Department
128 LABOR LAW REVIEWER

of Labor and Employment that disabled person is under

their employ. Provided, further, That the disabled employee is
accredited with the Department of Labor and Employment
and the Department of Health as to his disability, skills, and
qualifications.

2. Private entities that improved or modify

their physical facilities in order to provide reasonable
accommodation for disabled persons shall also be entitled
to an additional deduction from their net taxable income,

equivalent to fifty percent (50%) of the direct costs of the

ph
improvements or modifications. This section, however, does
not apply to improvements or modifications of facilities

u.
ed
required under Batas Pambansa Bilang 344. (Section 8[b] and

n.
[c], RA 7277)

ai
m
30. May persons with disability be hired as apprentices or
su
learners?
m

Yes, provided, that their handicap is not much as to

s.
@

effectively impede the performance of job operations in the

91

particular occupation for which they are hired. (Section 7,

RA 7277)
cx
o.
er

31. A handicapped worker may be hired as apprentice or

sp

learner, provided:
o

(A) he waives any claim to legal minimum wage.

pr

(B) his work is limited to apprenticeable job suitable to

a handicapped worker.

(C) he does not impede job performance in the

operation for which he is hired.

(D) he does not demand regular status as an

employee. (2011 BAR Q. No. 47)

(C) he does not impede job performance in the

operation for which he is hired.

Subject to the provision of the Labor Code as amended,

disabled persons shall be eligible as apprentices or learners;
 LABOR STANDARDS 129

Apprentices, Learners, and Persons with Disability

Provided, That their handicap is not much as to effectively

impede the performance of job operations in the particular
occupation for which they are hired; Provided, further, That
after the lapse of the period of apprenticeship if found
satisfactory in the job performance, they shall be eligible for
employment. (Section 7, RA 7277)

32. For humanitarian reasons, a bank hired several

handicapped workers to count and sort out currencies.
Their employment contract was for six (6) months. The
bank terminated their employment on the ground that

ph
their contract has expired prompting them to file with the

u.
Labor Arbiter a complaint for illegal dismissal. Will their

ed
action prosper? (2006 BAR Q. No. IV)

n.
ai
The action will prosper. m
Section 7 of RA 7277 provides that after the lapse of
su

the period of apprenticeship if found satisfactory in the job

m
s.

performance, they shall be eligible for employment.

@

33. The minimum wage prescribed by law for persons with

91

disability is
cx
o.

(A) 50% of the applicable minimum wage

er

(B) 75% of the applicable minimum wage

o sp

(C) 100% of the applicable minimum wage

pr

(D) the wage that the parties agree upon, depending

on the capability of the disabled

(E) the wage that the parties agree upon, depending

on the capability of the disabled, but not less
than 50% of the applicable minimum wage.
(2013 BAR Q. No. VII)

(C) 100% of the applicable minimum wage

A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives
or allowances as a qualified able-bodied person. (Second
130 LABOR LAW REVIEWER

sentence, Section 5, RA 7277) This means that persons with

disability are entitled to 100% of the applicable minimum
wage.

34. What is the financial incentive, if any, granted by law to

SPQ Garments whose cutters and sewers in its garments

for-export operations are 80% staffed by deaf and deaf

mute workers?

(A) Additional deduction from its gross income

equivalent to 25% of amount paid as salaries to
persons with disability.

ph
u.
(B) Additional deduction from its gross income

ed
equivalent to 50% of the direct costs of the

n.
construction of facilities for the use of persons

ai
with disability. m
su
(C) Additional deduction from its net taxable
m

income equivalent to 5% of its total payroll.

s.

(D) Exemption from real property tax for one (1)

@

year of the property where facilities for persons

91

with disability have been constructed.

cx
o.

(E) The annual deduction under (A), plus a one-time

er

deduction under (B). (2013 BAR Q. No. VIII)

sp

(A) Additional deduction from its gross income

o
pr

equivalent to 25% of amount paid as salaries to persons

with disability
The following are the tax incentives to the employer:

1. Private entities that employ disabled persons

who meet the required skills or qualifications, either as
regular employee, apprentice or learner, shall be entitled
to an additional deduction, from their gross income,
equivalent to twenty-five percent (25%) of the total amount
paid as salaries and wages to disabled persons: Provided,
however, That such entities present proof as certified by
the Department of Labor and Employment that disabled
person is under their employ. Provided, further, That the
 LABOR STANDARDS 131

Apprentices, Learners, and Persons with Disability

disabled employee is accredited with the Department of

Labor and Employment and the Department of Health as to
his disability, skills, and qualifications.
2. Private entities that improved or modify
their physical facilities in order to provide reasonable
accommodation for disabled persons shall also be entitled
to an additional deduction from their net taxable income,
equivalent to fifty percent (50%) of the direct costs of the
improvements or modifications. This section, however, does
not apply to improvements or modifications of facilities
required under Batas Pambansa Bilang 344. (Section 8[b] and

ph
[c], RA 7277)

u.
ed
n.
ai
m
su
m
s.
@
91
cx
o.
er
osp
pr
 BOOK THREE

Chapter I

HOURS OF WORK

1. What is the coverage of Book III, Title I of the Labor Code

ph
on Working Conditions and Rest Periods?

u.
It shall apply to employees in all establishments and

ed
undertakings whether for profit or not. (Article 82, Labor

n.
Code)

ai
m
What are the statutory benefits under Book III, Title I of
su
2.

the Labor Code on Working Conditions and Rest Periods?

m
s.

The statutory benefits under Articles 83 to 94, Title I of

@

Book III are the hours of work, normal hours of work, hours
91

worked, meal periods, night-shift differential, overtime

cx

work, undertime not offset by overtime, emergency overtime

o.

work, computation of additional compensation, weekly

er

rest periods, right to weekly rest periods, when employer

sp

may require work on a rest day, compensation for rest day,

o

Sunday or holiday work, holiday pay (right to holiday pay),

pr

service incentive leave (right to service incentive leave), and

service charges.

3. Who are those excluded from the coverage of Title I, Book

III on Working Conditions and Rest Periods?

The government employees, managerial employees,

field personnel, members of the family of the employer
who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who
are paid by results. (Article 82, Labor Code)

132
 LABOR STANDARDS 133

Hours of Work

4.
Who are the government employees excluded from the
coverage of Title I, Book III on Working Conditions and
Rest Periods?

Government employees whether employed by the

National Government or any of its political subdivision,
including those employed in government-owned and/or
controlled corporations. (Section 2[a], Rule I, Book III, Rules to
Implement the Labor Code)

5. Who are the employees of the government-owned and

controlled corporation (GOCC) excluded from the

ph
coverage of Title I, Book III on Working Conditions and
Rest Periods?

u.
ed
The Civil Service embraces government-owned or

n.
controlled corporations with original charter and, therefore,

ai
by clear implication, the Civil Service does not include
m
government-owned or controlled corporations which
su
are organized as subsidiaries of government-owned or
m

controlled corporations under the general corporation law.

s.

(National Service Corporation (NASECO) v. NLRC, G.R. No.

@

L-69870, November 29, 1988)

91
cx

6. What is the definition of managerial employees under

o.

Book III of the Labor Code?

er

Those whose primary duty consists of the management

sp

of the establishment in which they are employed or of a

o

department or subdivision thereof, and to other officers or

pr

members of the managerial staff. (Second paragraph, Article

82)

7.
What are the conditions to be a managerial employee
under Book III of the Labor Code?

Managerial employees, if they meet all of the following

conditions:

(1) Their primary duty consists of the management

of the establishment in which they are employed or of a
department or sub-division thereof.
(2) They customarily and regularly direct the work of
two or more employees therein.
134 LABOR LAW REVIEWER

(3) They have the authority to hire or fire employees

of lower rank, or their suggestions and recommendations
as to hiring and firing and as to the promotion or any other
change of status of other employees, are given particular
weight. (Section 2[b], Rule I, Book III, Rules to Implement the
Labor Code)

8. What are the conditions to be considered as officers or

members of a managerial staff under Book III of the Labor
Code?

Officers or members of a managerial staff, if they

ph
perform the following duties and responsibilities:

u.
ed
(1) The primary duty consists of the performance

n.
of work directly related to management policies of their

ai
employer; m
(2) Customarily and regularly exercise discretion and
su

independent judgment; and

m
s.

(3) (i) Regularly and directly assist a proprietor or a

@

managerial employee whose primary duty consists of the

91

management of the establishment in which he is employed

cx

or subdivision thereof; or (ii) execute under general

o.

supervision work along specialized or technical lines

er

requiring special training, experience, or knowledge; or (iii)

sp

execute, under general supervision, special assignments

o

and tasks; and

pr

(4) Who do not devote more than 20 of their hours

worked in a work week to activities which are not directly
and closely related to the performance of the work described
in paragraphs (1), (2), and (3) above. (Section 2[c], Rule I, Book
III, Rules to Implement the Labor Code)

9. How are supervisory employees classified in terms of

their rights to statutory benefits under Book Three of the
Labor Code?

It is the submission of petitioner that while the members

of respondent union, as supervisors, may not be occupying
managerial positions, they are clearly officers or members
 LABOR STANDARDS 135

Hours of Work

of the managerial staff because they meet all the conditions

prescribed by law and, hence, they are not entitled to
overtime, rest day, and supervisory employees under Article
212(m) should be made to apply only to the provisions on
Labor Relations, while the right of said employees to the
questioned benefits should be considered in the light of the
meaning of a managerial employee and of the officers or
members of the managerial staff, as contemplated under
Article 82 of the Code and Section 2, Rule I Book III of
the implementing rules. In other words, for purposes of
forming and joining unions, certification elections, collective

ph
bargaining, and so forth, the union members are supervisory

u.
employees. In terms of working conditions and rest periods

ed
and entitlement to the questioned benefits, however, they

n.
are officers or members of the managerial staff, hence they

ai
are not entitled thereto. m
su
Under the facts obtaining in this case, we are
m

constrained to agree with petitioner that the union

s.

members should be considered as officers and members

@

of the managerial staff and are, therefore, exempt from the

91

coverage of Article 82. Perforce, they are not entitled to

cx

overtime, rest day, and holiday. (National Sugar Refineries

o.

Corporation v. NLRC, G.R. No. 101761, March 24, 1993)

er
sp

10. What is required for the domestic servants and persons in

o

the personal service to be excluded from the coverage of

pr

Book III, Title I on Working Conditions and Rest Periods?

Domestic servants and persons in the personal service

of another if they perform such services in the employer's
home which are usually necessary or desirable for the
maintenance and enjoyment thereof, or minister to the
personal comfort, convenience, or safety of the employer as
well as the members of his employer's household. (Section
2[d], Rule I, Book III, Rules to Implement the Labor Code)

11. Who are the workers paid by results?

The workers paid by results, referred by Article 82 and

the Rules to Implement the Labor Code are the following:
136 LABOR LAW REVIEWER

1. The Secretary of Labor and Employment

shall regulate the payment by results, including pakyao,
piecework, and other non-time work; (Article 101, Labor
Code)

2. Those who are paid on piecework, "takay,"

"pakiao" or task basis, and other non-time work; (Section
2[e], Rule I, Book III, Rules to Implement the Labor Code);

3. Those paid task or contract basis, purely

commission basis, or those paid a fixed amount for
performing work irrespective of the time consumed in the

ph
performance thereof; (Section 1[e], Rule II; Section 1[e], Rule

u.
IV; Section 1[d], Rule V, Book III, Rules to Implement the Labor

ed
Code) and

n.
ai
4. Piece work. (Section 8[b], Rule IV, Book III, Rules to
m
Implement the Labor Code)
su
m

12. The following are excluded from the coverage of Book

s.

III of the Labor Code of the Philippines (Conditions of

@

employment), except: a. Field personnel; b. Supervisors;

91

c. Managers; d. Employees of government-owned and

cx

controlled corporations. (2012 BAR Q. No. 2)

o.
er

b. Supervisors
sp

The provisions ofthis Title shall apply to employees in all

o

establishments and undertakings whether for profit or not,

pr

but not to government employees, managerial employees,

field personnel, members of the family of the employer
who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who
are paid by results as determined by the Secretary of Labor
in appropriate regulations. (First paragraph, Article 82, Labor
Code)

This answer should be viewed in the light of the ruling

in National Sugar Refineries Corporation v. NLRC, G.R. No.
101761, March 24, 1993. See Question No. 9.
 LABOR STANDARDS 137

Hours of Work

13. The provisions of the Labor Code on the Working

Conditions and Rest Periods of employees are inapplicable
to the following employees, except: a. A supervisor in a
fast food chain; b. A family driver; c. A laborer without
any fixed salary, but receiving a compensation depending
upon the result of his work; d. A contractual employee.
(2012 BAR Q. No. 17)

d. A contractual employee
The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not,

ph
but not to government employees, managerial employees,

u.
field personnel, members of the family of the employer

ed
who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who

n.
ai
are paid by results as determined by the Secretary of Labor
m
in appropriate regulations. (First paragraph, Article 82, Labor
su
Code)
m
s.

14. Socorro is a clerk-typist in the Hospicio de San Jose,

@

a charitable institution dependent for its existence on

91

contributions and donations from well wishers. She

cx

renders work eleven (11) hours a day but has not been
o.

given overtime pay since her place of work is a charitable

er

institution. Is Socorro entitled to overtime pay? Explain

sp

briefly. (2002 BAR Q. No. III)

o

Yes, Socorro is entitled to her overtime pay because the

pr

provisions of the working conditions under Book III of the

Labor Code shall apply to employees in all establishments
and undertakings, whether for profit or not. (Article 82,
Labor Code)

15. State the circumstance that those who are paid on

piecework, "takay," "pakiao" or task basis, and other non
time work can be excluded from overtime and premium
pay.

According to Section 2(e), Rule I, Book III of the

Implementing Rules, workers who are paid by results
including those who are paid on piecework, takay, pakiao,
138 LABOR LAW REVIEWER

or task basis, if their output rates are in accordance with the

standards prescribed under Section 8, Rule VII, Book III, of
these regulations, or where such rates have been fixed by the
Secretary of Labor in accordance with the aforesaid section,
are not entitled to receive overtime pay. (Labor Congress of
the Philippines v. NLRC, G.R. No. 123938, May 21, 1998)

16. What are the categories of employees paid by results?

The following are the two categories of employees
paid by results:

ph
(1) those whose time and performance are supervised

u.
by the employer. (Here, there is an element of control and

ed
supervision over the manner as to how the work is to be

n.
performed. A piece-rate worker belongs to this category,

ai
especially ifhe performs his work in the company premises.);
m
and
su
m

(2) those whose time and performance are

s.

unsupervised. (Here, the employer's control is over the result

@

of the work. Workers on pakyao and takay basis belong to

91

this group.)
cx

Both classes of workers are paid per unit accomplished.

o.

Piece-rate payment is generally practiced in garment

er

factories where work is done in the company premises, while

sp

payment on pakyao and takay basis is commonly observed

o
pr

in the agricultural industry, such as in sugar plantations

where the work is performed in bulk or in volumes that are
difficult to quantify. Petitioners (who work as tailors) belong
to the first category, i.e., supervised employees. Therefore,
to determine entitlement to holiday pay, the test is whether
the employees' time and performance are supervised by the
employer. (Lambo v. NLRC, G.R. No. 111042, October 26, 1999)

17. "Piece rate employees" are those who are paid by results
or other non-time basis. As such they are NOT entitled to
overtime pay for work done beyond eight hours if (a) their
workplace is away from the company's principal place of
work, (b) they fail to fill up time sheets, (c) the product
 LABOR STANDARDS 139

Hours of Work

pieces they do are not countable, and (d) the piece rate
formula accords with the labor department's approved
rates. (2011 BAR Q. No. 34)

(d) the piece rate formula accords with the labor

department's approved rates

The workers paid by results, referred by Article 82,

which are excluded in Book III of the Labor Code are those

who are paid on piece-work, "takay,” “pakiao” or task basis,

and other non-time work. (Section 2[e], Rule I, Book III, Rules to
Implement the Labor Code) They are excluded from the benefits

ph
of Book III "if their output rates are in accordance with the

u.
standards prescribed under Section 8, Rule VII, Book Three

ed
of these regulations, or where such rates have been fixed by

n.
the Secretary of Labor and Employment in accordance with

ai
the aforesaid Section." (Underscore supplied) (Section 2[e],
m
Rule I, Book III, Rules to Implement the Labor Code)
su
m

18. Who is a field personnel?

s.
@

"Field personnel" shall refer to non-agricultural

91

employees who regularly perform their duties away from

cx

the principal place of business or branch office of the

employer and whose actual hours of work in the field cannot
o.
er

be determined with reasonable certainty. (Third paragraph,

sp

Article 82, Labor Code)

o
pr

19. What is the rule to conclude that an employee is a field

personnel?

At this point, it is necessary to stress that the definition

of a "field personnel" is not merely concerned with the
location where the employee regularly performs his duties
but also with the fact that the employee's performance is
unsupervised by the employer. As discussed above, field
personnel are those who regularly perform their duties away
from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with
reasonable certainty. Thus, in order to conclude whether an
employee is a field employee, it is also necessary to ascertain
140 LABOR LAW REVIEWER

if actual hours of work in the field can be determined with

reasonable certainty by the employer. In so doing, an inquiry
must be made as to whether or not the employee's time and
performance are constantly supervised by the employer.
(Dasco v. Philtranco Service Enterprises Inc., G.R. No. 211141,
June 29, 2016 citing at 873-874, citing the Bureau of Working
Conditions, Advisory Opinion to Philippine Technical-Clerical
Commercial Employees Association)

20. Republic Drug Co. has 1,000 employees, including 50

managerial personnel, 90 supervisors, and 150 sales

ph
representatives. The regular workday in the Company is

u.
from 8:00a.m. to 5:00p.m. The sales representatives register

ed
their presence with the timekeeper at 8:00 a.m., every day

n.
before they go to their respective sales territories. They

ai
are paid a basic salary plus commission. Sixty of the sales
m
representatives are members of the Republic Salesmen
su

Union which sent to the Company a set of bargaining

m

proposals, including a demand for payment of overtime

s.

pay of the sales representatives for working beyond

@

5:00 p.m. everyday. The Company refused to consider

91

the bargaining proposals and rejected the demand for

cx

overtime pay for the reason that the sales representatives

o.

are not entitled thereto. The Union filed an unfair labor

er

practice case against the Company for refusal to bargain,

sp

and after complying with the legal requirements declared

o

a strike.
pr

Was the Company legally justified in rejecting the Union's

demand for overtime pay? Reason. (1992 BAR Q. No. I[A])
Yes, because the sales representatives are field
personnel.

The Labor Code excludes field personnel from the

coverage of working conditions, which includes overtime,
(Article 82) According to jurisprudence, in order to conclude
whether or not an employee is a field employee, it is also
necessary to ascertain if actual hours of work in the field can
be determined with reasonable certainty by the employer.
In so doing, an inquiry must be made as to whether or
 LABOR STANDARDS 141

Hours of Work

not the employee's time and performance are constantly

supervised by the employer. (Dasco v. Philtranco Service
Enterprises Inc., G.R. No. 211141, June 29, 2016 the Bureau of
Working Conditions, Advisory Opinion to Philippine Technical
Clerical Commercial Employees Association)
In this case, the facts do not show that the sales

representatives' time and performance are being constantly

supervised by the company.
Thus, the sales representatives are field personnel. The
company is, therefore, justified in rejecting the claim for

ph
overtime pay.

u.
ed
21. State the rule on exclusion under Book III of the Labor

n.
Code of those who are engaged on task or contract basis,

ai
purely commission basis provided in Rule II, Section 1[e]
m
(night-shift differential), Rule IV, Section 1[e] (holiday
su

pay) and Rule V Section 1[d] (service incentive leave)

m

Book III of the Rules to Implement the Labor Code.

s.
@

The same is true with respect to the phrase "those who

91

are engaged on task or contract basis, purely commission basis."

cx

Said phrase should be related with "field personnel,"

o.

applying the rule on ejusdem generis that general and

er

unlimited terms are restrained and limited by the particular

sp

terms that they follow. (Cebu Institute of Technology v. Ople,

o

G.R. No. L-58870, December 18, 1987, 156 SCRA 629, 672,
pr

citing Vera v. Cuevas, G.R. No. L-33693, May 31, 1979, 90 SCRA
379) Hence, employees engaged on task or contract basis
or paid on purely commission basis are not automatically
exempted from the grant of service incentive leave, unless,
they fall under the classification of field personnel. (Auto
Bus Transport Systems, Inc. v. Bautista, G.R. No. 156367, May
16, 2005)

22. What are the normal hours of work in a day?

The normal hours of work of any employee shall not

exceed eight (8) hours. (First paragraph, Article 83, Labor
Code)
142 LABOR LAW REVIEWER

23. State if work for less than 8 hours is prohibited under

Article 83 of the Labor Code.

In Legend Hotel Manila v. Realuyo, G.R. No. 153511, July

18, 2012, the Supreme Court interpreted the provision of
Article 83 on normal hours of work and said: In providing
that the "normal hours of work of any employee shall not
exceed eight (8) hours a day," Article 83 of the Labor Code
only set a maximum of number of hours as "normal hours
of work” but did not prohibit work of less than eight (8)
hours.

ph
24. What are the exceptions to normal hours of work?

u.
ed
The exceptions to normal hours of work are the

n.
different types of flexible work arrangements. The Department

ai
of Labor and Employment issued Department Advisory No.
m
2 Series of 2009 known as the Guidelines on the Adoption
su

of Flexible Work Arrangements. It was issued to assist and

m

guide employers and employees in the implementation

s.
@

of various flexible work arrangements as one of the coping

91

mechanisms and remedial measures in times of economic

cx

difficulties and national emergencies. Adoption of flexible work

arrangements is considered a better alternative than the
o.
er

outright termination of the services of the employees or the

sp

total closure of the establishment. Anchored on voluntary

o

basis and conditions mutually acceptable to both the

pr

employer and the employees, it is recognized as beneficial

in terms of reduction of business costs and helps in saving
jobs while maintaining competitiveness and productivity in
industries.

25. What is the concept of flexible work arrangements?

Flexible work arrangements refer to alternative
arrangements or schedules other than the traditional
or standard work hours, workdays and workweek. (II,
Department Advisory No. 2, Series of 2009)
 LABOR STANDARDS 143

Hours of Work

26. What are the kinds of flexible work arrangements?

The following are the flexible work arrangements

which may be considered, among others:

1. Compressed Workweek refers to one where

the normal workweek is reduced to less than six (6) days
but the total number of work-hours of 48 hours per week
shall remain. The normal workday is increased to more
than eight hours but not to exceed twelve hours, without
corresponding overtime premium. The concept can be
adjusted accordingly depending on the normal workweek

ph
of the company pursuant to the provisions of Department
Advisory No. 02, series of 2004, dated 2 December 2004.

u.
ed
2. Reduction of workdays refers to one where the

n.
normal workdays per week are reduced but should not last

ai
for more than six months. m
su
3. Rotation of workers refers to one where the

employees are rotated or alternately provided work within

m
s.

the workweek.
@

4. Forced leave refers to one where the employees

91

are required to go on leave for several days or weeks

cx

utilizing their leave credits it there are any.

o.

5. Broken-time schedule refers to one where the

er

work schedule is not continuous but the work hours within

sp

the day or week remain.

o
pr

6. Flexi-holidays schedule refers to one where the

employees agree to avail the holidays at some other days,
provided there is no diminution of existing benefits as a
result of such arrangement. (III, Department Advisory No. 2,
Series of 2009)

27. Under what conditions may a "compressed work week"

schedule be legally authorized as an exception to the
"eight-hour a day" requirement under the Labor Code?
(2005 BAR Q. No. V[c])

The specific guidelines or onditions on Compressed

Work Week (CWW) scheme are as follows:
144 LABOR LAW REVIEWER

1. The CWW scheme is undertaken as a result of an

express and voluntary agreement of majority of the covered
employees or their duly authorized representatives. This
agreement may be expressed through collective bargaining
or other legitimate workplace mechanisms of participation
such as labor management councils, employee assemblies
or referenda.

2. In firms using substances, chemicals, and

processes or operating under conditions where there
are airborne contaminants, human carcinogens, or noise

ph
prolonged exposure to which may pose hazards to the
employees' health and safety, there must be a certification

u.
ed
from an accredited health and safety organization or

n.
practitioner or from the firm's safety committee that work

ai
beyond eight hours is within threshold limits or tolerable
m
levels of exposure, as set in the OSHS.
su

3. The employer shall notify DOLE, through the

m
s.

Regional Office having jurisdiction over the workplace,

@

the adoption of the CWW scheme. The notice shall be in

91

DOLE CWW Report Form attached to this Advisory. (IV,

cx

Department Advisory No. 2, Series of 2004)

o.
er

28. What are the effects of "compressed work week" which

sp

complies with the conditions for its validity?

o
pr

A CWW scheme which complies with the foregoing

conditions shall have the following effects:
1. Unless there is more favorable practice existing in
the firm, work beyond eight hours will not be compensable
by overtime premium provided the total number of hours
worked per day shall not exceed twelve (12) hours. In any
case, any work performed beyond 12 hours a day or 48
hours a week shall be subject to overtime premium.
2. Consistent with Article 85 of the Labor Code,

employees under a CWW scheme are entitled to meal

periods of not less than sixty (60) minutes. Nothing herein
shall impair the right of employees to rest days as well as to
 LABOR STANDARDS 145

Hours of Work

holiday pay, rest day pay, or leaves in accordance with law

or applicable collective bargaining agreement or company
practice.

3. Adoption of the CWW scheme shall in no case

result in diminution of existing benefits. Reversion to
the normal eight-hour workday shall not constitute a
diminution of benefits. The reversion shall be considered
a legitimate exercise of management prerogative, provided
that the employer shall give the employees prior notice
of such reversion within a reasonable period of time. (IV,

ph
Department Advisory No. 2, Series of2004)

u.
ed
29. What are compensable hours worked?

n.
Hours worked shall include (a) all time during which
ai
an employee is required to be on duty or to be at a prescribed
m
workplace; and (b) all time during which an employee is
su

suffered or permitted to work. (Article 84, Labor Code)

m
s.
@

30. Pol requested Obet, a union officer and concurrently

91

chairman of the company's Labor-Management Council,

to appeal to the company for a recomputation of Pol's
cx

overtime pay. After 5 p.m., his usual knock-off time, Obet

o.
er

spent two hours at the Personnel Office, reconciling the

sp

differing computations of Pol's overtime. Are those two

o

hours compensable?
pr

(A) Yes, because Obet performed work within the

company premises.
(B) No, since Obet's action has nothing to do with
his regular work assignment.

(C) No, because the matter could have been resolved

in the labor-management council of which he is
the chairman.

(D) Yes, because the time he spent on grievance

meetings is considered hours worked. (2011
BAR Q. No. 2)
146 LABOR LAW REVIEWER

D) Yes, because the time he spent on grievance

meetings is considered hours worked.
Hours worked shall include (a) all time during which
an employee is required to be on duty or to be at a prescribed
workplace; and (b) all time during which an employee is
suffered or permitted to work. (Article 84, Labor Code)

31. What are the principles in determining hours worked?

The following general principles shall govern in
determining whether or not the time spent by an employee

ph
is considered hours worked for purposes of this Rule:

u.
(a) All hours are hours worked which the employee

ed
is required to give his employer, regardless of whether or

n.
not such hours are spent in productive labor or involve
physical or mental exertion. ai
m
su

(b) An employee need not leave the premises of the

m

work place in order that his rest period shall not be counted,
s.

it being enough that he stops working, may rest completely

@

and may leave his work place, to go elsewhere, whether

91

within or outside the premises of his work place.

cx
o.

(c) If the work performed was necessary, or it

er

benefited the employer, or the employee could not abandon

sp

his work at the end of his normal working hours because

o

he had no replacement, all time spent for such work shall

pr

be considered as hours worked, if the work was with the

knowledge of his employer or immediate supervisor.

(d) The time during which an employee is inactive

by reason of interruptions in his work beyond his control
shall be considered working time either if the imminence of
the resumption of work requires the employee's presence at
the place of work or if the interval is too brief to be utilized
effectively and gainfully in the employee's own interest.
(Section 4, Rule I, Book III, Rules to Implement the Labor Code)
 LABOR STANDARDS 147

Hours of Work

32. State the rules on waiting time spent by an employee.

The rules on waiting time spent by an employee to be
considered working time are as follows:
1.
If waiting is an integral part of his work; or
2. The employee is required or engaged by the
employer to wait. (Section 5[a], Rule I, Book III, Rules to
Implement the Labor Code)

33. When is an employee considered working while "on

call"?

ph
An employee who is required to remain on call in the

u.
employer's premises or so close thereto that he cannot use

ed
the time effectively and gainfully for his own purpose shall

n.
be considered as working while on call. (Section 5[b], Rule I,

ai
Book III, Rules to Implement the Labor Code)
m
su

34. When is an employee not working while on call?

m
s.

An employee who is not required to leave word at his

@

home or with company officials where he may be reached is

91

not working while on call. (Section 5[b], Rule I, Book III, Rules
cx

to Implement the Labor Code)

o.
er

35. Gil Bates, a computer analyst and programmer of Hard

sp

Drive Company, works eight hours a day for five days a

o

week at the main office providing customers information

pr

technology assistance. On Saturdays, however, the

company requires him to keep his cellular phone open
from 8:00 A.M. to 5:00 P.M. so that the Management could
contact him in case of heavy work load or emergency
problems needing his expertise. May said hours on
Saturdays be considered compensable working hours
"while on call"? (2004 BAR Q. No. VII)

No, it cannot be considered as compensable working

hours "while on call."

According to the Labor Code the hours worked shall

include (a) all time during which an employee is required
148 LABOR LAW REVIEWER

to be on duty or to be at a prescribed workplace; and (b) all

time during which an employee is suffered or permitted to
work. (Article 84)

In this case, although Gil Bates was required to keep

his cellular phone open from 8:00 a.m. to 5:00 p.m. on
Saturdays the facts do not show that he rendered hours
worked as defined by law. Thus, said hours on Saturdays
are not compensable working hours.
On the other hand, the rule on call states that,
"An employee who is required to remain on call in the

ph
employer's premises or so close thereto that he cannot use

u.
the time effectively and gainfully for his own purpose shall

ed
be considered as working while on call." (Section 5[b], Rule

n.
I, Book III, Rules to Implement the Labor Code) Thus, even if

ai
the said rule will be applied by analogy, Gil Bates is still not
m
entitled to compensation. This is because the facts do not
su

show that he cannot use the time effectively and gainfully

m

for his own purpose to be considered as working while on

s.

call.
@
91

36. Lito Kulangkulang and Bong Urongsulong are employed

cx

as truck drivers of Line Movers, Inc. Usually, Lito is

o.
er

required by the personnel manager to just stay at the head

sp

office after office hours because he could be called to drive

o

the trucks. While at the head office, Lito merely waits in

pr

the manager's reception room. On the other hand, Bong

is allowed to go home after office hours but is required to
keep his cellular phone on so that he could be contacted
whenever his services as driver becomes necessary. Would
the hours that Lito and Bong are on call be considered
compensable working hours? (1997 BAR Q. No. XVIII)

As for Lito, his hours while on call is considered

working hours.

An employee who is required to remain on call in the

employer's premises or so close thereto that he cannot use
the time effectively and gainfully for his own purpose shall
 LABOR STANDARDS 149

Hours of Work

be considered as working while on call. (Section 5[b], Rule I,

Book III, Rules to Implement the Labor Code)
In this case, the fact that Lito cannot use the time
effectively and gainfully for his own purpose is evident.
This is because after office hours he is usually required to
just stay at the head office and merely wait in the manager's
reception room. Lito is, therefore, considered as working
while on call.

As for Bong, his hours while on call cannot be

considered compensable working hours.

ph
According to the Labor Code, the hours worked shall

u.
include (a) all time during which an employee is required

ed
to be on duty or to be at a prescribed workplace; and (b) all

n.
time during which an employee is suffered or permitted to
ai
work. (Article 84, Labor Code)
m
su

In this case, although Bong was required to keep his

m

cellular phone the facts do not show that he rendered hours

s.

worked as defined by law. Thus, the hours that Bong was

@

required to keep his cellular phone are not compensable

91

working hours.
cx
o.

37. Pedro Sisid is a seaman who was employed in 1990 by

er

Kuhol Ocean Transport. In May 1993, he was discharged

sp

and correspondingly paid vacation pay, terminal pay and

o
pr

overtime pay for the number of hours he actually rendered

service in excess of his eight (8) working hours a day.
Pedro Sisid, however, is dissatisfied with his overtime
pay contending that he is on board the vessel 24 hours a
day, or even beyond his eight (8) working hours which
circumstance renders him on call whenever his service is
needed. Therefore, he insists that he be paid 16 hours a
day by way of overtime. Is the contention of seaman Pedro
Sisid tenable? Why? (1993 BAR Q. No. XI)

No, the contention of Pedro Sisid is not tenable.

According to the Labor Code the hours worked shall

include (a) all time during which an employee is required
150 LABOR LAW REVIEWER

to be on duty or to be at a prescribed workplace; and (b) all

time during which an employee is suffered or permitted to
work. (Article 84, Labor Code)

Applying the law, the facts do not show that Pedro

Sisid had rendered additional services or sixteen (16) hours
a day of overtime to merit the payment of his overtime pay.
Thus, he is not entitled to his claim for overtime pay.

38. State the rule on attendance at lectures, meetings, and

training programs.

ph
The attendance at lectures, meetings, training

u.
programs, and other similar activities is not counted as

ed
working time if all of the following conditions are met:

n.
ai
(a) Attendance is outside of the employee's regular
m
working hours;
su

(b) Attendance is in fact voluntary; and

m
s.

(c) The employee does not perform any productive

@

work during such attendance. (Section 6, Rule I, Book III,

91

Rules to Implement the Labor Code)

cx
o.

39. State the rule on rest periods or coffee breaks.

er

Rest periods or coffee breaks running from five (5) to

sp

twenty (20) minutes shall be considered as compensable

o
pr

working time. (Last paragraph, Section 7, Rule I, Book III, Rules

to Implement the Labor Code)

40. State the rule on travel time.

The rules on travel time are as follows:

a. Travel from home to work and work to home is

not compensable.

b. Travel from office to jobsite or from jobsite to

jobsite is compensable.

C.
Travel away from home is compensable.
 151
LABOR STANDARDS

Hours of Work

41. Which of the following is not compensable as hours

worked? a. Travel away from home; b. Travel from home
to work; c. Working while on call; d. Travel that is all in a
day's work. (2012 BAR Q. No. 49)

b. Travel from home to work

42. The meal time (lunch break) for the dining crew in
Glorious Restaurant is either from 10 a.m. to 11 a.m. or

from 1:30 p.m. to 2:30 p.m., with pay. But the management
wants to change the mealtime to 11 a.m. to 12 noon or 12:30
p.m. to 1:30 p.m., without pay. Will the change be legal?

ph
u.
(A) Yes, absent an agreement to the contrary, the

ed
management determines work hours and, by

n.
law, meal break is without pay.

ai
(B)
m
No, because lunch break regardless of time
su
should be with pay.
m

(C) Yes, the management has control of its

s.

operations.
@
91

(D) No, because existing practice cannot be

cx

discontinued unilaterally. (2011 BAR Q. No. 17)

o.

(A) Yes, absent an agreement to the contrary, the

er

management determines work hours and, by law, meal

sp

break is without pay.

o
pr

The right to fix the work schedules of the employees

rests principally on their employer. (Sime Darby Pilipinas,
Inc. v. NLRC, G.R. No. 11905, April 15, 1998) The change
in the work schedule is a valid exercise of management
prerogatives.

43. What is the rule on meal and rest period?

Every employer shall give his employees, regardless

of sex, not less than one (1) hour time-off for regular meals.
(Section 7, Rule I, Book III, Rules to Implement the Labor Code)
152 LABOR LAW REVIEWER

44. State the rule on shorter meal period as compensable

hours worked of the employee.
A shorter meal period of not less than twenty (20)
minutes may be given by the employer and credited as
compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or
does not involve strenuous physical exertion;

(b) Where the establishment regularly operates not

less than sixteen (16) hours a day;

ph
(c) In case of actual or impending emergencies or
there is urgent work to be performed on machineries,

u.
equipment or installations to avoid serious loss which the

ed
employer would otherwise suffer; and

n.
(d)
ai
Where the work is necessary to prevent serious
m
loss of perishable goods. (Section 7, Rule I, Book III, Rules to
su

Implement the Labor Code)

m
s.

45. What is Night Shift Differential (NSD)?

@
91

Night Shift Differential (NSD) refers to the additional

cx

compensation of ten percent (10%) of an employee's regular

o.

wage for each hour of work performed between ten o'clock

er

in the evening to six o'clock in the morning. (Article 86,

sp

Labor Code; GMA Network Inc. v. Pabriga, G.R. No. 176419,

o

November 27, 2013)

pr

46. Who are excluded from Night Shift Differential (NSD)?

The following are excluded from entitlement to night

shift differential:

(a) Those of the government and any of its political

subdivisions, including government-owned and/or
controlled corporations;

(b) Those of retail and service establishments

regularly employing not more than five (5) workers;

(c) Domestic helpers and persons in the personal

service of another;
 LABOR STANDARDS 153

Hours of Work

(d) Managerial employees as defined in Book Three

of this Code;

(e) Field personnel and other employees whose

time and performance are unsupervised by the employer
including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a
fixed amount for performing work irrespective of the time
consumed in the performance thereof. (Section 1, Rule II,
Book III, Rules to Implement the Labor Code)

ph
47. Night differential is differentiated from overtime pay in
that

u.
ed
(A) while overtime pay is given for overtime work

n.
done during day or night, night differential is

ai
given only for work done between 10:00 p.m.
m
and 6:00 a.m.
su
m

(B) while overtime pay is paid to an employee

s.

whether on day shift or night shift, night shift

@

differential is only for employees regularly

91

assigned to night work.

cx

(C) while overtime pay is for work done beyond

o.

eight hours, night differential is added to the

er
sp

overtime pay if the overtime work is done

between 6:00 p.m. and 12 midnight.
o
pr

(D) while overtime pay is 25% additional to

the employee's hourly regular wage, night
differential is 10% of such hourly wage without
overtime pay. (2011 BAR Q. No. 57)

(A) while overtime pay is given for overtime work

done during day or night, night differential is given only
for work done between 10:00 p.m. and 6:00 a.m.

Night Shift Differential (NSD) refers to the additional

compensation of ten percent (10%) of an employee's regular
wage for each hour of work performed between ten o'clock
in the evening to six o'clock in the morning. (Article 86,
154 LABOR LAW REVIEWER

Labor Code; GMA Network Inc. v. Pabriga, G.R. No. 176419,

November 27, 2013)

48. As a tireman in a gasoline station, open twenty four (24)

hours a day with only five (5) employees, Goma worked
from 10:00 P.M. until 7:00 P.M. of the following day. He
claims he is entitled to night shift differential. Is he
correct? Explain briefly. (2002 BAR Q. No. XIII-A)
Goma is not correct.

The Rules to Implement the Labor Code exclude

ph
from night shift differential those of retail and service

u.
establishments regularly employing not more than five (5)

ed
workers (Section 1, Rule II, Book III).

n.
In this case, since the gasoline station employs not
ai
m
more than five (5) employees. Goma is not entitled to night
su
shift differential.
m
s.

49. Distinguish overtime work from overtime pay.

@

Overtime work is a work performed beyond eight

91

hours a day. On the other hand, overtime pay refers to the

cx

additional compensation for work performed beyond eight

o.

(8) hours a day. (Handbook on Worker's Statutory Monetary

er

Benefits, 2020 Edition, page 19)

osp
pr

50. What is the additional compensation for overtime work?

For overtime on ordinary working days – Work may

be performed beyond eight (8) hours a day provided that
the employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. (Article 87, Labor Code)

For overtime on holiday or rest day - Work performed

beyond eight (8) hours on a holiday or rest day shall be paid
an additional compensation equivalent to the rate of the
first eight (8) hours on a holiday or rest day plus at least
thirty percent (30%) thereof. (Article 87, Labor Code)
 LABOR STANDARDS 155

Hours of Work

51. Percival was a mechanic of Pacific Airlines. He enjoyed

a meal break of one hour. However, during meal breaks,
he was required to be on stand-by for emergency work.
During emergencies, he was made to forego his meals or
to hurry up eating. He demanded payment of overtime for
work done during his meal periods. Is Percival correct?
Explain your answer. (2017 BAR Q. No. V[A])

Percival is correct. Overtime pay refers to the additional

compensation for work performed beyond eight (8) hours a
day. (Handbook on Worker's Statutory Monetary Benefits, 2020
Edition, page 19)

ph
u.
In this case, the facts clearly stated that on meal breaks

ed
Percival was requested to be on standby for emergency work

n.
and to forego his meals or to hurry up eating. Thus, since

ai
Percival had rendered hours worked during meal breaks
m
he is, therefore, entitled to the additional compensation for
su

work performed beyond eight (8) hours a day.

m
s.

Work may be performed beyond eight (8) hours a day

@

provided that:
91
cx

a. Employee is paid for overtime work an

o.

additional compensation equivalent to his

er

regular wage plus at least 25% thereof;

sp

b. Employee is paid for overtime work an

o
pr

additional compensation equivalent to his

regular wage plus at least 30% thereof;
C.
Employee is paid for overtime work an
additional compensation equivalent to his
regular wage plus at least 20% thereof;
d. None of the above. (2012 BAR Q. No. 3)

a. Employee is paid for overtime work an additional

compensation equivalent to his regular wage plus at least
25% thereof;

Work may be performed beyond eight (8) hours a day

provided that the employee is paid for the overtime work,
156 LABOR LAW REVIEWER

an additional compensation equivalent to his regular wage

plus at least twenty-five percent (25%) thereof. (Article 87,
Labor Code)

53. A manufacturing company operates on a 6-day work

week. It employs 200 workers whose regular workday is 8
hours. On May 1, 1990, the company and the Union “M,"
the employees; bargaining agent, agreed that the workday
be 7 hours from Monday to Wednesday and 9 hours from
Thursday to Saturday. The agreement was ratified by all
the employees. In 1991 Union “M” lost is majority status

ph
and Union "P" was certified as bargaining representative.

u.
Union "P" filed a claim against the Company for unpaid

ed
overtime pay of the 200 employees from May 1, 1990

n.
when they started working 9 hours per day, 3 days a week.

ai
Invoking the 1990 agreement, the Company moved to
m
su
dismiss the claim of Union "P." Decide with reasons. (1992
BAR Q. No. XIV)
m
s.

The claim of Union P for unpaid overtime should be

@

granted.
91
cx

Work may be performed beyond eight (8) hours a day

o.

provided that the employee is paid for the overtime work,

er

an additional compensation equivalent to his regular wage

sp

plus at least twenty-five percent (25%) thereof. (Article 87,

o

Labor Code)
pr

In this case, even if the agreement as to the change of

working hours was ratified by the employees, the same is
not valid. This is because the waiver of the overtime pay is
contrary to the provision of the Labor Code.

54. Who are excluded from overtime pay?

The following are excluded from overtime pay:

(a) Government employees whether employed by

the National Government or any of its political subdivision,
including those employed in government-owned and/or
controlled corporations;
 LABOR STANDARDS 157
Hours of Work

ather (b) Managerial employees;

(c) Officers or members of a managerial staff;

(d) Domestic servants and persons in the personal

service of another;

(e) Workers who are paid by results, including those

who are paid on piece-work, "takay," "pakiao" or task
basis, and other non-time work if their output rates are in
accordance with the standards prescribed under Section
8, Rule VII, Book Three of these regulations, or where
such rates have been fixed by the Secretary of Labor and

ph
Employment in accordance with the aforesaid Section;

u.
(f) Non-agricultural field personnel if they regularly

ed
perform their duties away from the principal or branch office

n.
or place of business of the employer and whose actual hours
ai
of work in the field cannot be determined with reasonable
m
su
certainty. (Section 2, Rule I, Book III, Rules to Implement the
m

Labor Code)
s.
@

55. How is overtime pay computed for work in excess of eight

91

(8) hours performed in ordinary working days?

cx

The COLA shall not be included in the computation

o.

of overtime pay. The minimum overtime pay rates vary

er

according to the day the overtime work is performed, as

sp

follows:
o
pr

For work in excess of eight (8) hours performed

on ordinary working days: Plus 25% of the hourly rate.
(Handbook on Worker's Statutory Monetary Benefits, 2020
Edition, page 19)

Sector Industry Rate Amount

Non-agriculture P537.00 P537.00/8 x 125% ==

P67.125 x 125% x number

of hours OT work

Retail/Service P500.00 P500.00/8 x 125% = P62.50

establishment x 125% x number of hours
OT work
158 LABOR LAW REVIEWER

56. How is overtime pay computed for work in excess of eight

(8) hours performed on a scheduled rest day or a special
day?

For work in excess of eight (8) hours performed on a

scheduled rest day or a special day: Plus 30% of the hourly
rate on said days. (Handbook on Worker's Statutory Monetary
Benefits, 2020 Edition, page 19)

Sector Industry Rate Amount

Non-agriculture P537.00 P537.00/8 x 130% ×

ph
130%= P67.125 × 130%

u.
x 130% × number of

ed
hours OT work

n.
Retail/Service P500.00 P500.00/8 x 130% ×

ai
establishment
m 130%= P62.50 × 130%
su
x 130% × number of
hours OT work
m
s.
@

57. How is overtime pay computed for work in excess of eight

91

(8) hours performed on a special day which falls on a

cx

scheduled rest day?

o.

For work in excess of eight (8) hours performed on a

er

special day which falls on a scheduled rest day: Plus 50% of

sp

the hourly rate on said days. (Handbook on Worker's Statutory

o
pr

Monetary Benefits, 2020 Edition, page 20)

Sector Industry Rate Amount

Non-agriculture P537.00 P537.00/8 x 150%

x 130% = P67.125

x 150% x 130% ×
number of hours OT
work

Retail/Service P500.00 P500.00/8 x 150% ×

establishment 130%= P62.50 × 150%
x 130% x number of
hours OT work
 LABOR STANDARDS 159

Hours of Work

58. How is overtime pay computed for work in excess of eight

(8) hours performed on a regular holiday?
For work in excess of eight (8) hours performed on a
regular holiday: Plus 30% of the hourly rate on said days.
(Handbook on Worker's Statutory Monetary Benefits, 2020
Edition, page 20)

Sector Industry Rate Amount

Non-agriculture P537.00 P537.00/8 × 200%

x 130% = P67.125

ph
x 200% × 130% ×
number of hours OT

u.
ed
work

n.
Retail/Service P500.00 Not covered by the

ai
establishment m rule on holiday pay
employing less
su
than 10 workers
m
s.
@

59. How is overtime pay computed for work in excess of eight

91

(8) hours performed on a regular holiday which falls on a

scheduled rest day?
cx
o.

For work in excess of eight (8) hours performed on a

er

regular holiday which falls on a scheduled rest day: Plus

sp

30% of the hourly rate on said days. (Handbook on Worker's

o

Statutory Monetary Benefits, 2020 Edition, page 20)

pr

Sector Industry Rate Amount

Non-agriculture P537.00 P537.00/8 x 260% ×

130% = P67.125 x 260%
x 130% × number of

hours OT work

Retail/Service P500.00 Not covered by the rule

establishment on holiday pay
employing less
than 10 workers
160 LABOR LAW REVIEWER

60. This year, National Heroes Day (August 25) falls on a

Sunday, Sunday is the rest day of Bonifacio whose daily
rate is P500.00.

If he works for ten (10) hours on that day, how much

should he receive for his work? Explain. (2002 BAR Q. No.
XIV[B])

The overtime pay of Bonifacio for work during regular

holiday which falls on his scheduled rest day are as follows:
For work in excess of eight (8) hours performed on a
regular holiday which falls on a scheduled rest day: Plus

ph
30% of the hourly rate on said days (Handbook on Worker's

u.
Statutory Monetary Benefits, 2020 Edition page 20). Applying

ed
the rule, the computation of Bonifacio's OT is as follows:

n.
P500.00/8 x 260% × 130% = P62.50 × 260% × 130% × 2 hours

ai
of OT work = P422.50
m
su

For work rendered on a regular holiday which falls on

m

a scheduled rest day, Bonifacio is also entitled to the 30% of

s.
@

the regular holiday rate of 200% based on basic wage or a

total of 260%. (Articles 93 and 94, Labor Code) Applying the
91

rule, the computation is as follows:

cx
o.

P500.00 x 260% = P1,300.00

er

Bonifacio will, therefore, receive the total amount of

sp

P1,722.50 (P422.50 + P1,300.00)

o
pr

61. What is the rule on stipulated overtime?

Generally, the premium pay for work performed on

rest days, special days, or regular holidays is included as
part of the regular rate of the employee in the computation
of overtime pay for overtime work rendered on said days,
especially if the employer pays only the minimum overtime
rates prescribed by law. The employees and employer,
however, may stipulate in their collective agreement the
payment for overtime work at rates higher than those
provided by law. (Handbook on Worker's Statutory Monetary
Benefits, 2020 Edition, page 20)
 LABOR STANDARDS 161

Hours of Work

62. May the employer and employee stipulate that the latter's
regular or basic salary already includes the overtime pay,
such that when the employee actually works overtime he
cannot claim overtime pay?
a. Yes, provided there is a clear written agreement
knowingly and freely entered into by the
employees;
b. Yes, provided the mathematical result shows
that the agreed legal wage rate and the overtime
pay, computed separately, are equal to or higher

ph
than the separate amounts legally due;

u.
C. No, the employer and employee cannot stipulate

ed
includes the overtime pay;

n.
ai
d. A and B. (2012 BAR Q. No. 4)
m
b. Yes, provided the mathematical result shows that
su

the agreed legal wage rate and the overtime pay, computed
m

separately, are equal to or higher than the separate amounts

s.

legally due
@
91

Generally, the premium pay for work performed on

cx

rest days, special days, or regular holidays is included as

o.

part of the regular rate of the employee in the computation

er

of overtime pay for overtime work rendered on said days,

sp

especially if the employer pays only the minimum overtime

o

rates prescribed by law. The employees and employer,

pr

however, may stipulate in their collective agreement the

payment for overtime work at rates higher than those
provided by law. (Handbook on Worker's Statutory Monetary
Benefits, 2020 Edition, page 20)

63. State the rule on offsetting of undertime.

Undertime work on any particular day shall not
be offset by overtime work on any other day. Permission
given to the employee to go on leave on some other day of
the week shall not exempt the employer from paying the
additional compensation required in this Chapter. (Article
88, Labor Code)
162 LABOR LAW REVIEWER

64. After working from 10 a.m. to 5 p.m. on a Thursday as

one of 5,000 employees in a beer factory, A hurried home
to catch the early evening news and have dinner with
his family. At around 10 p.m. of the same day, the plant
manager called and ordered A to fill in for C who missed
the second shift. Assuming that A was made to work
from 11 p.m. on Thursday until 2 a.m. on Friday, may the
company argue that, since he was two hours late in coming
to work on Thursday morning, he should only be paid for
work rendered from 1 a.m. to 2 a.m.? Explain. (2010 BAR
Q. No. XI[B])

ph
No, the company cannot validly argue that A should

u.
only be paid for work rendered from 1:00 a.m. to 2:00

ed
a.m. This is based on the rule that undertime work on any

n.
particular day shall not be offset by overtime work on any

ai
other day. (Article 88, Labor Code)
m
su

65. A case against an employer company was filed charging

m

it with having violated the prohibition against offsetting

s.

undertime for overtime work on another day. The

@

complainants were able to show that, pursuant to the

91

Collective Bargaining Agreement (CBA), employees of the

cx

union had been required to work "overtime" on Saturday

o.

but were paid only at regular rates of pay on the thesis

er

that they were not required to complete, and they did not
sp

in fact complete, the eight-hour work period daily from

o

Monday through Friday. Given the circumstances, the

pr

employer contended that the employees were not entitled

to compensation, i.e. with premium rates of pay. Decide
the controversy. (2003 BAR Q. No. VI)
The employer's contention is not tenable. This is based
on the rule that undertime work on any particular day shall
not be offset by overtime work on any other day. (Article 88,
Labor Code)

66. What are the cases when an employee may be required to

render overtime work?

In any of the following cases, an employer may require

any of his employees to work beyond eight (8) hours a day,
 LABOR STANDARDS 163

Hours of Work

provided that the employee required to render overtime

work is paid the additional compensation required by these
regulations:

(a) When the country is at war or when any other

national or local emergency has been declared by Congress
or the Chief Executive;

(b) When overtime work is necessary to prevent

loss of life or property, or in case of imminent danger to
public safety due to actual or impending emergency in the
locality caused by serious accident, fire, floods, typhoons,

ph
earthquake, epidemic or other disaster or calamities;

u.
(c) When there is urgent work to be performed on

ed
machines, installations, or equipment, in order to avoid

n.
serious loss or damage to the employer or some other causes
ai
of similar nature;
m
su

(d) When the work is necessary to prevent loss or

m

damage to perishable goods;

s.
@

(e) When the completion or continuation of work

91

started before the 8th hour is necessary to prevent serious

cx

obstruction or prejudice to the business or operations of the

o.

employer; or
er

(f) When overtime work is necessary to avail of

sp

favorable weather or environmental conditions where

o
pr

performance or quality of work is dependent thereon.

In cases not falling within any of these enumerated in
this Section, no employee may be made to work beyond
eight (8) hours a day against his will. (Article 89, Labor Code
and Section 4, Rule I, Book III, Rules to Implement the Labor
Code)

67. Danilo Flores applied for the position of driver in the

motor-pool of Gold Company, a multinational corporation.
Danilo was informed that he would frequently be working
overtime as he would have to drive for the company's
executives even beyond the ordinary eight-hour work
164 LABOR LAW REVIEWER

day. He was provided with a contract of employment

wherein he would be paid a monthly rate equivalent to
35 times his daily wage, regular sick and vacation leaves,
5-day leave with pay every month, and time off with pay
when the company's executives using the cars do not need
Danilo's service for more than eight hours a day, in lieu
of overtime. Are the above provisions of the contract of
employment in conformity with, or violative of, the law?
(1997 BAR Q. No. II)

The above provisions are not violative of the Labor

Code. The benefits given were even above the statutory

ph
benefits provided by law. However, as to the time off with

u.
pay, it is not clear if the same is an offsetting of overtime

ed
pay. This is because the facts do not show that Danilo Flores

n.
had rendered overtime and it was offset on his undertime.

ai
m
Thus, it is not a violation of the rule that undertime work on
su
any particular day shall not be offset by overtime work on
m

any other day. (Article 88, Labor Code)

s.

As to the fact that Danilo would frequently be working

@

overtime, this will violate the Labor Code and the Rules to
91

Implement the Labor Code, which provide as follows:

cx
o.

In any of the following cases, an employer may require

er

any of his employees to work beyond eight (8) hours a day,

sp

provided that the employee required to render overtime

o

work is paid the additional compensation required by these

pr

regulations:

(a) When the country is at war or when any other

national or local emergency has been declared by Congress
or the Chief Executive;

(b) When overtime work is necessary to prevent

loss of life or property, or in case of imminent danger to
public safety due to actual or impending emergency in the
locality caused by serious accident, fire, floods, typhoons,
earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on

machines, installations, or equipment, in order to avoid
 LABOR STANDARDS 165

Hours of Work

serious loss or damage to the employer or some other causes

of similar nature;

(d) When the work is necessary to prevent loss or

damage to perishable goods;
(e) When the completion or continuation of work
started before the 8th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the
employer; or

(f) When overtime work is necessary to avail of

favorable weather or environmental conditions where

ph
performance or quality of work is dependent thereon.

u.
In cases not falling within any of these enumerated in

ed
this Section, no employee may be made to work beyond

n.
eight hours a day against his will. (Article 89, Labor Code and

ai
Section 4, Rule I, Book III, Rules to Implement the Labor Code)
m
su

68. The following are instances where an employer can

m

require an employee to work overtime, except:

s.
@

a. In case of actual or impending emergencies

91

caused by serious accident, fire, flood, typhoon,

earthquake, epidemic or other disaster or
cx

calamity to prevent loss of life and property, or

o.
er

imminent danger to public safety;

sp

b. When the country is at war or when other

o

national or local emergency has been declared

pr

by the national assembly or the chief executive;

C. When there is urgent work to be performed on

machines, installations, or equipment or some
other cause of similar nature;

d. Where the completion or contribution of the

work started before the eight hour is necessary
to prevent serious obstruction or prejudice to
the business or operations of the employer. (2012
BAR Q. No. 5)

All of the above.

See Article 89 on emergency overtime work.

166 LABOR LAW REVIEWER

69. In a scenario like typhoon Ondoy, who may be required

by the employer to work overtime when necessary to
prevent loss of life or property? (A) Health personnel; (B)
Employees with first aid training; (C) Security and safety
personnel; (D) Any employee. (2011 BAR Q. No. 67)
(D) Any employee
Art. 89. Emergency overtime work. Any employee
may be required by the employer to perform overtime work
X X X.

ph
70. After working from 10 a.m. to 5 p.m. on a Thursday as

u.
one of 5,000 employees in a beer factory, A hurried home

ed
to catch the early evening news and have dinner with

n.
his family. At around 10 p.m. of the same day, the plant

ai
manager called and ordered A to fill in for C who missed
m
the second shift.
su

May A validly refuse the plant manager's directive?

m
s.

Explain. (2010 BAR Q. No. XIV[A])

@

Yes, A can validly refuse the directive of his plant

91

manager.
cx
o.

Based on the following rule, A cannot be compelled to

er

work against his will unless it will fall on cases involving

sp

emergency overtime work, to wit:

o

(a) When the country is at war or when any other

pr

national or local emergency has been declared by Congress

or the Chief Executive;

(b) When overtime work is necessary to prevent

loss of life or property, or in case of imminent danger to
public safety due to actual or impending emergency in the
locality caused by serious accident, fire, floods, typhoons,
earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on

machines, installations, or equipment, in order to avoid
serious loss or damage to the employer or some other causes
of similar nature;
 LABOR STANDARDS 167

Hours of Work

(d) When the work is necessary to prevent loss or

damage to perishable goods;
(e) When the completion or continuation of work
started before the 8th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the
employer; or

(f) When overtime work is necessary to avail of

favorable weather or environmental conditions where

performance or quality of work is dependent thereon.

(Article 89, Labor Code and Section 4, Rule I, Book III, Rules to

ph
Implement the Labor Code)

u.
Applying the rule, unless it will fall on cases involving

ed
emergency overtime work A can, therefore, validly refuse

n.
the directive to render overtime work.

ai
m
71. Arnaldo, President of "Bisig" Union in Femwear Company,
su

readied himself to leave exactly at 5:00 p.m. which was

m

the end of his normal shift to be able to send off his wife
s.

who was scheduled to leave for overseas. However, the

@

General Manager required him to render overtime work

91

to meet the company's export quota. Arnaldo begged off,

cx

explaining to the General Manager that he had to send off

o.

his wife who was leaving to work abroad. The company

er

dismissed Arnaldo for insubordination. He filed a case for

sp

illegal dismissal. Decide. (2008 BAR Q. No. XII)

o
pr

Arnaldo's dismissal is illegal because he did not

commit insubordination.

Based on the following rule, Arnaldo cannot be

compelled to work against his will unless it will fall on cases
involving emergency overtime work, to wit:
(a) When the country is at war or when any other
national or local emergency has been declared by Congress
or the Chief Executive;

(b) When overtime work is necessary to prevent

loss of life or property, or in case of imminent danger to
public safety due to actual or impending emergency in the
168 LABOR LAW REVIEWER

locality caused by serious accident, fire, floods, typhoons,

earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on

machines, installations, or equipment, in order to avoid
serious loss or damage to the employer or some other causes
of similar nature;

(d) When the work is necessary to prevent loss or

damage to perishable goods;

(e) When the completion or continuation of work

started before the 8th hour is necessary to prevent serious

ph
obstruction or prejudice to the business or operations of the

u.
employer; or

ed
n.
(f) When overtime work is necessary to avail of

ai
favorable weather or environmental conditions
m where

performance or quality of work is dependent thereon.

su

(Article 89, Labor Code and Section 4, Rule I, Book III, Rules to
m

Implement the Labor Code)

s.
@
91
cx
o.
er
o sp
pr
 Chapter II

WEEKLY REST PERIODS

1.
What is the coverage of the weekly rest periods?

This Rule shall apply to all employers whether

ph
operating for profit or not, including public utilities

u.
operated by private persons. (Section 1, Rule III, Book III,

ed
Rules to Implement the Labor Code)

n.
ai
2.
A Ladies Dormitory run or managed by a charitable
m
non-profit organization claims that it is exem from the
su
coverage of the Weekly Rest Period provision of the Labor
m

Code. Is the claim valid? (1998 BAR Q. No. IV)

s.
@

No. The claim is not valid.

91

Every employer shall give his employees a rest period

cx

of not less than twenty-four (24) consecutive hours after

o.

every six consecutive normal work days. (Section 3, Rule III,

er

Book III, Rules to Implement the Labor Code) Moreover, the title
sp

on working conditions and rest period under Book III of the

o

Labor Code shall apply to employees in all establishments

pr

and undertakings whether for profit or not. (Article 82, Labor

Code) Thus, the Ladies Dormitory is not exempt from the
coverage of the weekly rest period.

3. What is the rule on the preference of the employee to his

weekly day of rest?
The preference of the employee as to his weekly day of
rest shall be respected by the employer if the same is based
on religious grounds. The employee shall make known
his preference to the employer in writing at least seven (7)

169
170 LABOR LAW REVIEWER

days before the desired effectivity of the initial rest day so

preferred. Where, however, the choice of the employee as
to his rest day based on religious grounds will inevitably
result in serious prejudice or obstruction to the operations
of the undertaking and the employer cannot normally be
expected to resort to other remedial measures, the employer
may so schedule the weekly rest day of his choice for at least
two (2) days in a month. (Section 4, Rule III, Book III, Rules to
Implement the Labor Code)

4. May an employee be required to work on his scheduled

ph
rest day?

u.
No employee shall be required against his will to work

ed
on his scheduled rest day. However, when an employee

n.
volunteers to work on his rest day under other circumstances,

ai
he shall express such desire in writing, subject to the
m
su
provisions regarding additional compensation. (Section 6,
Rule III, Book III, Rules to Implement the Labor Code)
m
s.
@

5. When can an employee be required to work on his

91

scheduled rest day?

cx

The employer may require his employees to work on

o.

any day:
er

(a) In case of actual or impending emergencies

sp

caused by serious accident, fire, flood, typhoon, earthquake,

o
pr

epidemic or other disaster or calamity to prevent loss of life

and property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious loss
which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due

to special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;

(d) To prevent loss or damage to perishable goods;

(e) Where the nature of the work requires continuous

operations and the stoppage of work may result in
irreparable injury or loss to the employer; and
 LABOR STANDARDS 171

Weekly Rest Periods

(f) Under other circumstances analogous or similar

to the foregoing as determined by the Secretary of Labor
and Employment. (Article 92, Labor Code)

(g) When the work is necessary to avail of favorable

weather or environmental conditions where performance
or quality of work is dependent thereon. (Section 6[f], Rule
III, Book III, Rules to Implement the Labor Code)

6. An employer may require an employee to work on the

employee's rest day: (A) to avoid irreparable loss to the
employer; (B) only when there is a state of calamity; (C)

ph
provided he is paid an extra of at least 50% of his regular

u.
rate; (D) subject to 24-hour advance notice to the employee.

ed
(2011 BAR Q. No. 35)

n.
ai
(A) to avoid irreparable loss to the employer
m
The employer may require his employees to work on
su

any day: in cases of urgent work to be performed on the

m

machinery, equipment, or installation, to avoid serious loss

s.
@

which the employer would otherwise suffer. (Article 92[b],

91

Labor Code)
cx

7. What is premium pay?

o.
er

Premium pay refers to the additional compensation for

sp

work performed within eight (8) hours on nonwork days,

o

such as rest days and special days. (Handbook on Worker's

pr

Statutory Monetary Benefits, 2020 Edition, page 16)

8. Who are those excluded from premium pay?

The following are excluded from compensation on

Rest day, Sunday /Holiday:

(a) Government employees whether employed by

the National Government or any of its political subdivision,
including those employed in government-owned and/or
controlled corporations;

) Managerial employees;

(c) Officers or members of a managerial staff;

172
LABOR LAW REVIEWER

(d) Domestic servants and persons in the personal

service of another;

(e) Workers who are paid by results, including

those who are paid on piece-work, "takay," "pakiao" or task
basis, and other non-time work if their output rates are in
accordance with the standards prescribed under Section
8, Rule VII, Book Three of these regulations, or where
such rates have been fixed by the Secretary of Labor and
Employment in accordance with the aforesaid Section;
(f) Non-agricultural field personnel if they regularly

ph
perform their duties away from the principal or branch

u.
office or place of business of the employer and whose

ed
actual hours of work in the field cannot be determined with

n.
reasonable certainty. (Section 2, Rule I, Book III, in relation to

ai
Section 7, Rule III, Book III, Rules to Implement the Labor Code)
m
su
9. How is premium pay computed for work performed on
m

rest days or special days?

s.
@

The COLA shall not be included in the computation of

91

premium pay. The minimum statutory premium pay rates

cx

are as follows:
o.

1. For work performed on rest days or on special

er

days: Plus 30% of the daily basic rate of 100% or a total of

sp

130%. (Handbook on Worker's Statutory Monetary Benefits,

o
pr

2020 Edition, page 18)

Sector/ Industry Rate Amount

Non-agriculture P537.00 P537.00 x 130% = P698.10

Retail/Service P500.00 P500.00 x 130% = P650.00

establishment

10. How is premium pay computed for work performed on a

rest day which is also a special day?

For work performed on a rest day which is also a

special day: Plus 50% of the daily basic rate of 100% or a
 LABOR STANDARDS 173

Weekly Rest Periods

total of 150%. (Handbook on Worker's Statutory Monetary

Benefits, 2020 Edition, page 18)

Sector/ Industry Rate Amount

Non-agriculture P537.00 P537.00 x 150% = P805.50

Retail/Service P500.00 P500.00 × 150% = P750.00

establishment

11. How is premium pay computed for work performed on a

regular holiday which is also the employee's rest day?

ph
For work performed on a regular holiday which is also

u.
the employee's rest day (not applicable to employees who

ed
are not covered by the holiday-pay rule): Plus 30% of the

n.
regular holiday rate of 200% based on his/her daily basic
ai
wage rate or a total of 260%. (Handbook on Worker's Statutory
m
su
Monetary Benefits, 2020 Edition, page 18)
m
s.

Sector/ Industry Rate Amount

@

Non-agriculture P537.00 P537.00 x 260% =

91

P1,396.20
cx

Retail/Service P500.00 Not covered by

o.

Establishment employing holiday pay rule

er

less than 10 workers

o sp
pr

12. When an en loyee works from 8 m. to 5 p.m. on a legal

holiday falling on his rest day, which of the following
formulas do you use to compute for his day's wage on that
day?

(A) His regular daily wage multiplied by 200% plus

30% of the 200%

(B) His regular daily wage multiplied by 200%

(C) His regular daily wage plus 200%

(D) His daily regular wage (2011 BAR Q. No. 25)

(A) His regular daily wage multiplied by 200% plus

30% of the 200%
174 LABOR LAW REVIEWER

For work performed on a regular holiday which is also

the employee's rest day (not applicable to employees who
are not covered by the holiday-pay rule): Plus 30% of the
regular holiday rate of 200% based on his/her daily basic
wage rate or a total of 260%. (Handbook on Worker's Statutory
Monetary Benefits, 2020 Edition, page 18)

13. This year, National Heroes Day (August 25) falls on a

Sunday, Sunday is the rest day of Bonifacio whose daily
rate is P500.00:

If Bonifacio is required by his employer to work on that

ph
day for eight (8) hours, how much should he be paid for

u.
his work? Explain. (2002 BAR Q. No. XIV[A])

ed
n.
For work performed on a regular holiday which is

ai
also the employee's rest day (not applicable to employees
m
who are not covered by the holiday-pay rule): Plus 30%
su

of the regular holiday rate of 200% based on his/her daily

m

basic wage rate or a total of 260%. (Handbook on Worker's

s.

Statutory Monetary Benefits, 2020 Edition page 18). Thus, the

@

computation is as follows: P500.00 × 260% = P1,300.00

91
cx

Bonifacio is also entitled to the 200% of his regular

o.

wage of P500.00 for working during National Heroes Day

er

(Article 94, Labor Code) and the 30% of the regular holiday
sp

rate of 200% based on his daily basic wage rate. Thus,

o

Bonifacio will receive a total of P1,300.00 representing his

pr

regular holiday pay and premium for his scheduled rest

day that falls on a regular holiday.
 Chapter III

HOLIDAYS, SERVICE INCENTIVE LEAVES,

AND SERVICE CHARGE

1.
What is holiday pay?
Although the worker is forced to take a rest, he

ph
earns what he should earn, that is, his holiday pay. (Asian

u.
Transmission Corporation v. Court of Appeals, G.R. No. 144664,

ed
March 15, 2004) According to Handbook on Worker's

n.
Statutory Benefits, 2020 Edition, holiday pay refers to the

ai
payment of the regular daily wage for any unworked
m
regular holiday. (see page 12 of the Handbook)
su
m

2.
What are the 12 Regular Holidays and 4 Nationwide
s.

Special Days?
@
91

Unless otherwise modified by law, order, or

cx

proclamation, the following regular holidays and special

o.

days shall be observed in the country:

er
sp

(a) Regular Holidays

o

New Year's Day January 1

pr

Maundy Thursday Movable Date

Good Friday Movable Date

Eid'l Fitr Movable Date

Eid'l Adha Movable Date

Araw ng Kagitingan Monday nearest April 9

Labor Day Monday nearest May 1
Independence Day Monday nearest June 12
National Heroes' Day Last Monday of August
Bonifacio Day Monday nearest November 30

175
176 LABOR LAW REVIEWER

Christmas Day December 25

Rizal Day Monday nearest December 30

(b) Nationwide Special Holidays

Ninoy Aquino Day Monday nearest August 21

All Saints' Day November 1

Last Day of the Year December 31

Feast of the Immaculate December 8

Conception of Mary (RA 10966)

ph
3. Which of the following is not a regular holiday? a. New
Year's Eve; b. Eidil Fitr; c. Father's Day; d. Independence

u.
ed
Day (2012 BAR Q. No. 40)

n.
C. Father's Day

ai
m
4. Who are covered by holidays with pay?
su
m

Under Article 94 of the Labor Code, the general rule

s.

is that holiday pay provisions cover all employees. "To be

@

excluded from their coverage, an employee must be one

91

of those that these provisions expressly exempt, strictly in

cx

accordance with the exemption." (David v. Macasio, G.R. No.

o.

195466, July 2, 2014)

er
sp

5.
Who are excluded from coverage of holidays with pay?
o
pr

The following are excluded from the coverage of

holidays with pay:

(a) Those of the government and any of the political

subdivision, including government-owned and controlled
corporation;

(b) Those of retail and service establishments

regularly employing less than ten (10) workers;

(c) Domestic helpers and persons in the personal

service of another;

(d) Managerial employees as defined in Book Three

of the Code;
 LABOR STANDARDS 177

Holidays, Service Incentive Leaves, and Service Charge

(e) Field personnel and other employees whose

time and performance are unsupervised by the employer
including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a
fixed amount for performing work irrespective of the time
consumed in the performance thereof. (Section 1, Rule IV,
Book III, Rules to Implement the Labor Code)

6. Ms. F, a sales assistant, is one of the eight (8) workers

regularly employed by ABC Convenience Store. She was
required to report on December 25 and 30. Should ABC

ph
Convenience Store pay her holiday pay? Explain. (2019

u.
Part I BAR Q. No. A.5)

ed
n.
No, ABC Convenience Store is excluded from paying

ai
the holiday pay of Ms. F. m
su
Those of retail and service establishments regularly
m

employing less than ten (10) workers are excluded from the
s.

coverage of holidays with pay (Section 1[b], Rule IV, Book III,
@

Rules to Implement the Labor Code)

91

Applying the rule, since ABC Convenience Store is

cx

regularly employing eight (8) workers it is not required to

o.

pay Ms. F her holiday pay.

er
sp

7. Z owns and operates a carinderia. His regular employees

o
pr

are his wife, his two (2) children, the family maid, a cook,
two (2) waiters, a dishwasher and a janitor. The family
driver occasionally works for him during store hours to
make deliveries. On April 09, the dishwasher did not
report for work. The employer did not give his pay for
that day. Is the employer correct?
a. No, because employees have a right to receive
their regular daily wage during regular holidays;
b. Yes, because April 09 is not regular holidays;

C. Yes, because of the principle of "a fair day's

wage for a fair day's work";
178 LABOR LAW REVIEWER

d. Yes, because he employs less than ten (10)

employees. (2012 BAR Q. No. 6)
d. Yes, because he employs less than ten (10)
employees.

Those of retail and service establishments regularly

employing less than ten (10) workers are excluded from the
coverage of holidays with pay. (Section 1[b], Rule IV, Book III,
Rules to Implement the Labor Code)

8. What is the compensation for holiday work?

Any employee who is permitted or suffered to work

ph
on any regular holiday, not exceeding eight (8) hours, shall

u.
be paid at least two hundred percent (200%) of his regular

ed
daily wage. If the holiday work falls on the scheduled rest

n.
day of the employee, he shall be entitled to an additional

ai
premium pay of at least 30% of his regular holiday rate of
m
200% based on his regular wage rate. (Section 4, Rule IV, Book
su

III, Rules to Implement the Labor Code)

m
s.

9. How is holiday pay computed for work performed on that

@

day?
91

Every employee covered by the Holiday Pay Rule is

cx

entitled to the minimum wage rate (daily basic wage and

o.

COLA). This means that the employee is entitled to at least

er

100% of his/her minimum wage rate even if he/she did not

sp

report for work, provided he/she is present or is on leave of

o
pr

absence with pay on the work day immediately preceding

the holiday.
For work within eight (8) hours, plus 100% of the
minimum wage rate of 100% or a total of 200%. (Handbook
on Worker's Statutory Monetary Benefits, 2020 Edition, page 13)

Sector/ Industry Rate Amount

Non-agriculture P537.00 P537.00 x 200% = P1,074.00

Retail/Service P500.00 Not covered or exempted

establishment

employing less than

10 workers
 LABOR STANDARDS 179

Holidays, Service Incentive Leaves, and Service Charge

10. On orders of his superior, Efren, a high-speed sewing

machine technician, worked on May 1, Labor Day. If he
worked eight (8) hours on that day, how much should
he receive if his daily rate is P400.00? (2002 BAR Q. No.
XIII[B])

For work within eight (8) ho plus 100% of the

minimum wage rate of 100% or a total of 200%. Applying
the rule, the computation is as follows:

P400.00 x 200% = P800.00

Thus, Efren is entitled to P800.00.

ph
11. How is holiday pay computed for work performed on a

u.
ed
regular holiday which is also the employee's rest day?

n.
For work performed on a regular holiday which is also

ai
the employee's rest day (not applicable to employees who
m
are not covered by the holiday pay rule): Plus 30% of the
su

regular holiday rate of 200% based on his/her daily basic

m

wage rate or a total of 260%. (Handbook on Worker's Statutory

s.

Monetary Benefits, 2020 Edition, page 18)

@
91

Sector/ Industry Rate Amount

cx
o.

Non-agriculture P537.00 (P537.00 x 260%) =

er

P1,396.20
sp

Retail/Service P500.00 Not covered by

o

establishment holiday pay rule

pr

employing less than

10 workers

12. What are the rules on absences during holidays?

The rules on absences during holidays are as follows:

(a) All covered employees shall be entitled to the

benefit provided herein when they are on leave of absence
with pay. Employees who are on leave of absence without
pay on the day immediately preceding a regular holiday
may not be paid the required holiday pay if he has not
worked on such regular holiday.
 180 LABOR LAW REVIEWER

(b) Employees shall grant the same percentage of the

holiday pay as the benefit granted by competent authority
in the form of employee's compensation or social security
payment, whichever is higher, if they are not reporting for
work while on such benefits.

(c) Where the day immediately preceding the

holiday is a non-working day in the establishment or the
scheduled rest day of the employee, he shall not be deemed
to be on leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked on the day
immediately preceding the non-working day or rest day.

ph
(Section 6, Rule IV, Book III, Rules to Implement the Labor Code)

u.
ed
13. What are the rules on regular holidays during temporary

n.
or periodic shutdown and temporary cessation of work?

ai
m
In case of temporary or periodic shutdown and
su

temporary cessation of work, the rules are as follows:

m
s.

(a) In cases of temporary or periodic shutdown

@

and temporary cessation of work of an establishment, as

91

when a yearly inventory or when the repair or cleaning

cx

of machineries and equipment is undertaken, the regular

holidays falling within the period shall be compensated in
o.
er

accordance with this Rule.

sp

(b) The regular holiday during the cessation of

o
pr

operation of an enterprise due to business reverses as

authorized by the Secretary of Labor and Employment may
not be paid by the employer. (Section 7, Rule IV, Book III,
Rules to Implement the Labor Code)

14. State the holiday pay of certain employees.

The following employees are entitled to holiday pay:
(a) Private school teachers, including faculty
members of colleges and universities, may not be paid for
the regular holidays during semestral vacations. They shall,
however, be paid for the regular holidays during Christmas
vacation.
 LABOR STANDARDS 181

Holidays, Service Incentive Leaves, and Service Charge

(b) Where a covered employee, is paid by results or

output, such as payment on piece work, his holiday pay
shall not be less than his average daily earnings for the
last seven (7) actual working days preceding the regular
holiday; Provided, However, that in no case shall the holiday
pay be less than the applicable statutory minimum wage
rate.

(c) Seasonal workers may not be paid the required

holiday pay during off-season when they are not at work.
(d) Workers who have no regular working days shall

ph
be entitled to the benefits provided in this Rule. (Section 8,

u.
Rule IV, Book III, Rules to Implement the Labor Code)

ed
n.
15. Nemia earns P7.00 for every manicure she does in the

ai
barber shop of a friend which has nineteen (19) employees.
m
At times she takes home P175.00 a day and at other times
su

she earns nothing. She now claims holiday pay. Is Nemia

m
s.

entitled to this benefit? Explain briefly. (2002 BAR Q. No.

@

V)
91

Nemia is entitled to her holiday pay. Under the rules,

cx

where a covered employee is paid by results or output, such

o.

as payment on piece work, his holiday pay shall not be less

er

than his average daily earnings for the last seven (7) actual
sp

working days preceding the regular holiday; Provided,

o
pr

However, that in no case shall the holiday pay be less than

the applicable statutory minimum wage rate. (Section 8,
Rule IV, Book III, Rules to Implement the Labor Code)

Applying the above rule, Nemia, even though she is

paid by result, is therefore entitled to her holiday pay of not
less than her average daily earnings for the last seven (7)
actual working days preceding the regular holiday.

16. State the rule on regular holiday falling on rest days or

Sundays.

(a) A regular holiday falling on the employee's rest

day shall be compensated accordingly.
182 LABOR LAW REVIEWER

(b) Where a regular holiday falls on a Sunday, the

following day shall be considered a special holiday for
purposes of the Labor Code, unless said day is also a regular
holiday. (Section 9, Rule IV, Book III, Rules to Implement the
Labor Code)

17. What is the rule on successive regular holidays?

Where there are two (2) successive regular holidays,

like Holy Thursday and Good Friday, an employee may not
be paid for both holidays if he absents himself from work on
the day immediately preceding the first holiday, unless he

ph
works on the first holiday, in which case he is entitled to his
holiday pay on the second holiday. (Section 10, Rule IV, Book

u.
ed
III, Rules to Implement the Labor Code)

n.
ai
18. Nelda worked as a chambermaid in Hotel Neverland with
m
a basic wag of Php560.00 for an eight-hour workday. On
su
Good Friday, she worked for one (1) hour from 10:00 PM to
m

11:00 PM. Her employer paid her only PhP480.00 for each
s.

8-hour workday, and PhP70.00 for the work done on Good

@

Friday. She sued for underpayment of wages and non

91

payment of holiday pay and night shift differential pay

cx

for working on a Good Friday. Hotel Neverland denied

o.

the alleged underpayment, arguing that based on long

er

standing unwritten tradition, food and lodging costs were

sp

partially shouldered by the employer and partially paid

o

for by the employee through salary deduction. According

pr

to the employer, such valid deduction caused the payment

of Nelda's wage to be below the prescribed minimum.
The hotel also claimed that she was not entitled to holiday
pay and night shift differential pay because hotel workers
have to work on holidays and may be assigned to work at
night.

Applying labor standards law, how much should Nelda

be paid for work done on Good Friday? Show the
computation in your test booklet and encircle your final
answer. (2018 BAR Q. No. V[b])

Nelda is entitled to her compensation done on Good

Friday, computed as follows:
 183
LABOR STANDARDS

Holidays, Service Incentive Leaves, and Service Charge

For rendering night shift work for one (1) hour

from 10:00 PM to 11:00 PM, Nelda's hourly rate of P70.00
(P560.00/8) shall be multiplied by 10% or using the formula
1 × 1.1% (Handbook on Worker's Statutory Monetary Benefits,
2020 Edition, page 22), specifically computed as follows:
P70.00 × 1.1% = P77.00. Thus, Nelda's night shift differential
is P7.00.

For her holiday pay, she is entitled to P630.00,

representing her daily rate of P560.00 and the P70.00 she
worked for one (1) hour from 10:00 PM to 11:00 PM during

ph
Good Friday, a regular holiday.

u.
Nelda is, therefore, entitled to a total amount of

ed
P637.00, representing her regular holiday pay and night

n.
shift differential.

ai
m
19. A, a worker at ABC Company, was on leave with pay on
su

March 31, 2010. He reported for work on April 1 and 2,

m

Maundy Thursday and Good Friday, respectively, both

s.

regular holidays. Is A entitled to holiday pay for the two

@

successive holidays? Explain. (2010 BAR Q. No. IV)

91
cx

Yes, A is entitled to holiday pay for the two successive

o.

holidays.
er

Every worker shall be paid his regular daily wage

sp

during regular holidays. (Article 94, Labor Code) Moreover,

o
pr

any employee who is permitted or suffered to work on any

regular holiday, not exceeding eight (8) hours, shall be paid
at least two hundred percent (200%) of his regular daily
wage. (Section 4, Rule IV, Book III, Rules to Implement the Labor
Code)

Applying the rule, since A reported for work on April

1 and 2 he is therefore entitled to the holiday pay for both
regular holidays equivalent to 400% (200% for April 1 and
200% for April 2) of his regular wage.

20. What is the rule on two regular holidays on the same day?

An employee should receive 400%.

184 LABOR LAW REVIEWER

Every worker shall be paid his regular daily wage

during regular holidays. (Article 94, Labor Code) As
interpreted by the Rules to Implement the Labor Code,
any employee who is permitted or suffered to work on any
regular holiday, not exceeding eight (8) hours, shall be paid
at least two hundred percent (200%) of his regular daily
wage.

Since it is a double holiday, the 200% should be

multiplied by two. Thus, the product is the 400% of the
regular daily wage. In other terms, if it is unworked, the

ph
compensation is 200% (100% for Araw ng Kagitingan
and another 100% for Good Friday) and if worked, the

u.
ed
compensation is 400% (200% for Araw ng Kagitingan and
another 200% for Good Friday).

n.
Alternative answer:
ai
m
su
In Asian Transmission Corporation v. Court of Appeals
m

G.R. No. 144664, March 15, 2004 it was ruled:

s.
@

On the correct payment of holiday compensation on

91

April 9, 1993 which apart from being Good Friday is also

cx

Araw ng Kagitingan, i.e., two regular holidays falling on the

same day, this Department is of the view that the covered
o.
er

employees are entitled to at least two hundred percent

sp

(200%) of their basic wage even if said holiday is unworked.

o

The first 100% represents the payment of holiday pay on

pr

April 9, 1993 as Good Friday and the second 100% is the

payment of holiday pay for the same date as Araw ng
Kagitingan. Said bulletin was reproduced on January 23,
1998, when April 9, 1998 was both Maundy Thursday and
Araw ng Kagitingan x x x x

The foregoing rules are simply stated:

1. If unworked - the employee is entitled to 200%

(the first 100% represents the payment of holiday pay on
April 9, 1993 as Good Friday and the second 100% is the
payment of holiday pay for the same date as Araw ng
Kagitingan) of his basic wage; and
 LABOR STANDARDS 185

Holidays, Service Incentive Leaves, and Service Charge

2.
If worked - the employee is entitled to 300% of
the basic wage (the 100% in addition to 200% represents the
basic pay for working not more than eight hours).

21. During the open forum following your lecture before

members of various unions affiliated with a labor

federation, you were asked the following questions

(State your answers and your reasons therefor): Araw
ng Kagitingan and Good Friday are among the 10 paid
regular holidays under Article 94 of the Labor Code. How
much will an employee receive when both holidays fall
on the same day? (2005 BAR Q. No. V[a])

ph
u.
See answer in Question No. 20.

ed
22. What is service incentive leave?

n.
ai
Every employee who has rendered at least one year of
m
service shall be entitled to a yearly service incentive leave of
su

five days with pay. (Article 95, Labor Code and Section 2, Rule
m

V, Book III, Rules to Implement the Labor Code)

s.
@

23. What is the meaning of the term "at least one-year service"?
91

The term "at least one-year service" shall mean service

cx

for not less than 12 months, whether continuous or broken

o.

reckoned from the date the employee started working,

er

is including authorized absences and paid regular holidays

sp

unless the working days in the establishment as a matter

o

of practice or policy, or that provided in the employment

pr

contract is less than 12 months, in which case said period

shall be considered as one year. (Section 3, Rule V, Book III,
Rules to Implement the Labor Code)

24. Who are excluded from entitlement to service incentive

leave under Book III, Rule V of the Rules to Implement
the Labor Code?

The following are excluded from entitlement to service

incentive leave:

(a) Those of the government and any of its political

subdivisions, including government-owned and controlled
corporations;
186 LABOR LAW REVIEWER

(b) Domestic helpers and persons in the personal

service of another; (see Section 29, RA 10361)

(c) Managerial employees as defined in Book Three

of this Code;

(d) Field personnel and other employees whose

performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed in the
performance thereof;

ph
(e) Those who are already enjoying the benefit herein

u.
ed
provided;

n.
(f) Those enjoying vacation leave with pay of at least
five days; and
ai
m
su
(g) Those employed in establishments regularly
m

employing less than ten employees. (Section 1, Rule V, Book

s.

III, Rules to Implement the Labor Code)

@
91

25. The members of the administrative staff of Zeta, a

cx

construction company, enjoy ten (10) days of vacation

o.

leave with pay and ten (10) days of sick leave with pay,
er

annually. The workers' union, Bukluran, demands that

sp

Zeta grant its workers service incentive leave of five (5)

o

days in compliance with the Labor Code. Is the union

pr

demand meritorious?

(A) Yes, because non-compliance with the law will

result in the diminution of employee benefits.
(B) Yes, because service incentive leave is a benefit

expressly provided under and required by the

Labor Code.

(C) No, because Zeta already complies with the law.

(D) No, because service incentive leave is a

Labor Code benefit that does not apply in the
construction industry.
 LABOR STANDARDS 187

Holidays, Service Incentive Leaves, and Service Charge

(E) Yes, because Labor Code benefits are separate

from those voluntarily granted by the company.
(2013 BAR Q. No. XI)

(C) No, because Zeta already complies with the law.

See the rules on exclusion on service incentive leave.

(Section 1, Rule V, Book III, Rules to Implement the Labor Code)

26. Which type of employee is entitled to a service incentive

leave? a. managerial employees; b. field personnel; c.
government workers; d. part-time workers. (2012 BAR Q.

ph
No. 31)

u.
d. part-time workers

ed
The following are excluded from entitlement to service

n.
ai
incentive leave:
m
(a) Those of the government and any of its political
su

subdivisions, including government-owned and controlled

m
s.

corporations;
@

(b) Domestic helpers and persons in the personal

91

service of another; (see Section 29, RA 10361)

cx

(c) Managerial employees as defined in Book Three

o.

of this Code;
er
sp

(d) Field personnel and other employees whose

o

performance is unsupervised by the employer including

pr

those who are engaged on task or contract basis, purely

commission basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed in the
performance thereof;
(e) Those who are already enjoying the benefit herein
provided;

(f) Those enjoying vacation leave with pay of at least

five days; and

(g) Those employed in establishments regularly

employing less than ten employees. (Section 1, Rule V, Book
III, Rules to Implement the Labor Code)
188 LABOR LAW REVIEWER

27. Which of the following grounds exempts an enterprise

from the service incentive leave law?

(A) The employees already enjoy 15 days vacation

leave with pay.

(B) The employer's business has been suffering

losses in the past three years.

(C) The employer regularly employs seven

employees or less.
(D) The company is located in a special economic
zone. (2011 BAR Q. No. 50)

ph
u.
(A) The employees already enjoy 15 days vacation

ed
leave with pay.

n.
Those enjoying vacation leave with pay of at least five
ai
days are excluded from entitlement to service incentive
m
su
leave. (Section 1, Rule V, Book III, Rules to Implement the Labor
Code)
m
s.
@

28. State the rule on entitlement of domestic worker's/

kasambahay's to service incentive leave.
91
cx

A domestic worker who has rendered at least one

o.

(1) year of service shall be entitled to an annual service

er

incentive leave of five (5) days with pay: Provided, That any
sp

unused portion of said annual leave shall not be cumulative

o

or carried over to the succeeding years. Unused leaves shall

pr

not be convertible to cash. (Section 29, RA 10361)

29. A, a driver for a bus company, sued his employer for

nonpayment of commutable service incentive leave credits
upon his resignation after five years of employment. The
bus company argued that A was not entitled to service
incentive leave since he was considered a field personnel
and was paid on commission basis and that, in any event,
his claim had prescribed. If you were the Labor Arbiter,
how would you rule? Explain. (2010 BAR Q. No. XX)

The Labor Code excludes field personnel from the

coverage of working conditions, which includes service
 LABOR STANDARDS 189

Holidays, Service Incentive Leaves, and Service Charge

incentive leave. (Article 82) In order to conclude whether

or not an employee is a field employee, it is also necessary
to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer.
In so doing, an inquiry must be made as to whether or
not the employee's time and performance are constantly
supervised by the employer. On the other hand, those paid
on commission basis can be exempted from the coverage of
SIL pay only if they qualify as "field personnel." (Dasco v.
Philtranco Service Enterprises Inc., G.R. No. 211141, June 29,
2016 the Bureau of Working Conditions, Advisory Opinion to

ph
Philippine Technical-Clerical Commercial Employees Association)

u.
ed
Applying the law and the doctrinal rule, since the facts

n.
do not show that A's time and performance are constantly

ai
supervised by the bus company, A is a field personnel.
m
Therefore, A is not entitled to his claim for service incentive
su
leave credits.
m
s.

30. What is the effect if the service incentive leave is not used
@

at the end of the year?

91

The service incentive leave shall be commutable to its

cx

money equivalent if not used or exhausted at the end of the

o.

year. (Section 5, Rule V, Book III, Rules to Implement the Labor

er
sp

Code)
o
pr

31. If not used by the end of the year, the service incentive leave
shall be (A) carried over to the next year. (B) converted to
its money equivalent. (C) forfeited. (D) converted to cash
and paid when the employee resigns or retires. (2011 BAR
Q. No. 27)

(B) converted to its money equivalent

See answer in Question No. 30.

32. What is the DOLE's opinion on the commutation of SIL to

its money equivalent?
The following is the rule on usage/conversion to cash
of the service incentive leave (SIL):
190 LABOR LAW REVIEWER

The service incentive leave may be used for sick and

vacation leave purposes. The unused service incentive leave
is commutable to its money equivalent at the end of the year.
In computing, the basis shall be the salary rate at the date of
conversion. The use and conversion of this benefit may be
on a pro rata basis. (Handbook on Worker's Statutory Monetary
Benefits, 2020 Edition, page 25)

Illustration: An employee was hired on 1 January 2000

and resigned on 1 March 2001. Assuming that he/she has
not used or commuted any of his/her accrued SIL, he/she
is entitled to the conversion of his/her accrued SIL, upon

ph
his/her resignation, as follows:

u.
ed
SIL earned as of 31 December 2000 5 days

n.
ai
Proportionate SIL for January m
and February 2001
su
(2/12) × 5 days 0.833 day
m

Total accrued SIL as of 1 March 2001 5.833 days

s.
@

33. What is the prescriptive period of service incentive leave

91

(SIL)?
cx
o.

Applying Article 291 of the Labor Code in light of this

er

peculiarity of the service incentive leave, we can conclude

sp

that the three (3)-year prescriptive period commences,

o

not at the end of the year when the employee becomes

pr

entitled to the commutation of his service incentive leave,

but from the time when the employer refuses to pay its
monetary equivalent after demand of commutation or
upon termination of the employee's services, as the case
may be. (Rodriguez v. Park N Ride, G.R. No. 222980, March
20, 2017, citing Auto Bus Transport System, Inc. v. Bautista, 497
Phil. 863 (2005) [Per J. Chico-Nazario, Second Division])

34. What is paternity leave under RA 8187?

"Paternity leave" refers to the leave benefits granted

to a married male employee allowing him not to report
for work for seven (7) days but continues to earn the
compensation therefor, on the condition that his spouse has
 LABOR STANDARDS 191

Holidays, Service Incentive Leaves, and Service Charge

delivered a child or suffered a miscarriage for the purpose

of lending support to his wife during her period of recovery
and/or in nursing of the newly born child. (Section 3, RA
8187 and Section 1, Revised Implementing Rules and Regulations
of RA 8187 for the Private Sector)

35. What is the coverage of paternity leave under RA 8187?

Every married male employee in the private sector

shall be entitled paternity leave benefits of seven (7) days
with full pay for the first four (4) deliveries by his lawful
spouse under such terms and conditions as hereinafter

ph
provided. The rules on paternity leave of employees in

u.
the public sector shall be promulgated by the Civil Service

ed
Commission. (Section 2, Revised Implementing Rules and

n.
Regulations of RA 8187 for the Private Sector)

ai
m
36. What are the conditions for entitlement to paternity leave
su
benefits under RA 8187?
m

A married male employee shall be entitled to paternity

s.

benefits, provided that:

@
91

a. he is an employee at the time of delivery of his

cx

child;
o.

b. he is cohabiting with his spouse at the time she

er

gives birth or suffers a miscarriage;

o sp

C. he has applied for paternity leave in accordance

pr

with Section 4 hereof; and

d. his wife has given birth or suffered a miscarriage.

(Section 3, Revised Implementing Rules and Regulations of RA
8187 for the Private Sector)

37. What is the period to avail the paternity leave benefits

under RA 8187?

Paternity leave benefits shall be granted to the qualified

employee after the delivery by his wife, without prejudice
to an employer allowing an employee to avail of the benefit
before or during the delivery; provided, that the total number
of days shall not exceed seven (7) days for each delivery.
192 LABOR LAW REVIEWER

(Section 5, Revised Implementing Rules and Regulations of RA

8187 for the Private Sector)

Author's note: The Revised Implementing Rules and

Regulations of RA 8187 for the Private Sector had already
deleted that proviso which requires that this benefit shall be
availed of not later than sixty (60) days after the date of said
delivery.

38. What is the effect of paternity leave benefits if not availed?

In the event that paternity leave benefit is not availed

ph
of, said leave shall not be convertible to cash. (Section 7,

u.
Revised Implementing Rules and Regulations of RA 8187 for the

ed
Private Sector)

n.
ai
39. Nestor and Nadine have been living in for the last 10 years
m
without the benefit of marriage. Their union has produced
su

four children. Nadine was three months pregnant with

m

her 5th child when Nestor left her for another woman.
s.

When Nadine was eight months pregnant with her 5th

@

child, she applied for maternity leave benefits. Her

91

employer refused on the ground that this was already

cx

her 5th pregnancy and that she was only living in with
o.

the father of her child, who is now in a relationship with

er

another woman. When Nadine gave birth, Nestor applied

sp

for paternity leave benefits. His employer also denied the

o

application on the same grounds that Nadine's employer

pr

denied her application.

Can Nestor's employer legally deny his claim for paternity
benefits? (2018 BAR Q. No. XVIII[b])

Yes, the claim can be denied.

A married male employee shall be entitled to paternity

benefits provided that:
a.
he is an employee at the time of delivery of his
child;

b. he is cohabiting with his spouse at the time she

gives birth or suffers a miscarriage.;
 193
LABOR STANDARDS

Holidays, Service Incentive Leaves, and Service Charge

C. he has applied for paternity leave in accordance

with Section 4 hereof; and

d. his wife has given birth or suffered a miscarriage.

(Section 3, Revised Implementing Rules and Regulations of RA
8187 for the Private Sector)

On the other hand, a spouse refers to the lawful wife.

For this purpose, lawful wife refers to a woman who is
legally married to the male employee concerned. (Section
1[d], Revised Implementing Rules and Regulations of RA 8187
for the Private Sector)

ph
The facts clearly show that Nestor and Nadine have

u.
been living in for the last 10 years without the benefit of

ed
marriage. Thus, Nadine is not his lawful wife.

n.
ai
Applying the rules, Nestor is therefore not entitled to
m
paternity benefits.
su
m

40. Because of the stress in caring for her four (4) growing
s.

children, Tammy suffered a miscarriage late in her

@

pregnancy and had to undergo an operation. In the course

91

of the operation, her obstetrician further discovered a

cx

suspicious-looking mass that required the subsequent

o.

removal of her uterus (hysterectomy). After surgery,

er

her physician advised Tammy to be on full bed rest

sp

for six (6) weeks. Meanwhile, the biopsy of the sample

o

tissue taken from the mass in Tammy's uterus showed

pr

a beginning malignancy that required an immediate

series of chemotherapy once a week for four (4) weeks.
What can Roger-Tammy's 2nd husband and the father of
her two (2) younger children claim as benefits under the
circumstances? (2013 BAR Q. No. VI[B])

Roger can avail the paternity leave benefits. However,

he must comply with the following conditions:
a. he is an employee at the time of delivery of his
child;

b. he is cohabiting with his spouse at the time she

gives birth or suffers a miscarriage;
194 LABOR LAW REVIEWER

C.
he has applied for paternity leave in accordance
with Section 4 hereof; and

d. his wife has given birth or suffered a miscarriage.

(Section 3, Revised Implementing Rules and Regulations of RA
8187 for the Private Sector)

41. H files for a seven-day paternity leave for the purpose of

lending support to his wife, W, who suffered a miscarriage
through intentional abortion. W also filed for maternity
leave for five weeks. H and W are legally married but the
latter is with her parents, which is a few blocks away from

ph
H's house. Which of the following statements is the most

u.
accurate?

ed
Paternity leave shall be denied because it does

n.
a.

ai
not cover aborted babies;
m
b. Paternity leave shall be denied because W is
su

with her parents;

m
s.

C. Maternity leave shall be denied because it does

@

not cover aborted babies;

91

d. Maternity leave shall be denied because grant

cx

of paternity leave bars claim for maternity leave.

o.

(2012 BAR Q. No. 38)

er
sp

b. Paternity leave shall be denied because W is with

o

her parents
pr

A married male employee shall be entitled to paternity

benefits provided that:

a. he is an employee at the time of delivery of his

child; b. he is cohabiting with his spouse at the time she
gives birth or suffers a miscarriage; c. he has applied for
paternity leave in accordance with Section 4 hereof; and d.
his wife has given birth or suffered a miscarriage. (Section 3,
Revised Implementing Rules and Regulations of RA 8187 for the
Private Sector)

H is not cohabiting with his wife, W. Thus, he is not

entitled to paternity leave benefits.
 LABOR STANDARDS 195

Holidays, Service Incentive Leaves, and Service Charge

42. To avail himself of paternity leave with pay, when must

the male employee file his application for leave?
(A) Within one week from the expected date of
delivery by the wife.

(B) Not later than one week after his wife's delivery
or miscarriage.

(C) Within a reasonable time from the expected

deliver date of his wife.

(D) When a physician has already ascertained the

date the wife will give birth. (2011 BAR Q. No.

ph
41)

u.
(C) Within a reasonable time from the expected

ed
deliver date of his wife.

n.
ai
The married male employee shall apply for paternity
m
leave with his employer within a reasonable period of
su

time from the expected date of delivery by the pregnant

m

spouse, or within such period as may be provided by

s.

company rules and regulations or by collective bargaining

@

agreement, provided that prior application for leave shall

91

not be required in case of miscarriage. (Section 4, Revised

cx

Implementing Rules and Regulations of RA 8187 for the Private

o.

Sector)
er
sp

43. Mans Weto had been an employee of Nopolt Assurance

o
pr

Company for the last ten (10) years. His wife of six (6)
years died last year. They had four (4) children. He then
fell in love with Jovy, his co-employee, and they got
married. In October this year, Weto's new wife is expected
to give birth to her first child. He has accordingly filed
his application for paternity leave, conformably with the
provisions of the Paternity Leave Law which took effect
in 1996. The HRD manager of the assurance firm denied
his application, on the ground that Weto had already
used up his entitlement under the law. Weto argued that
he has a new wife who will be giving birth for the first
time, therefore, his entitlement to paternity leave benefits
would begin to run anew.
196 LABOR LAW REVIEWER

Whose contention is correct, Weto or the HRD manager?

(2005 BAR Q. No. III[2][a])

Weto's contention is correct.

A married male employee shall be entitled to paternity

benefits provided that:

a. he is an employee at the time of delivery of his

child; b. he is cohabiting with his spouse at the time she
gives birth or suffers a miscarriage; c. he has applied for
paternity leave in accordance with Section 4 hereof; and d.
his wife has given birth or suffered a miscarriage. (Section 3,

ph
Revised Implementing Rules and Regulations of RA 8187 for the

u.
ed
Private Sector)

n.
For this purpose, lawful wife refers to a woman who
ai
is legally married to the male employee concerned. (Section
m
1[d], Revised Implementing Rules and Regulations of RA 8187
su

for the Private Sector)

m
s.

In this case, Jovy is the lawful wife of Weto. This is

@

because there is no legal impediment for him to remarry.

91

Moreover, the law did not distinguish whether or not a male

cx

employee, who legally contracted marriage for the second

o.

time, can no longer avail the benefits when he used up the

er

entitlement for the first four deliveries by his first lawful

sp

deceased wife. Where the law does not distinguish, neither

o
pr

should we. (Plopenio v. Department of Agrarian Reform, G.R.

No. 161090, July 4, 2012)

Weto is, therefore, entitled to the paternity leave

benefits.

44. How many times may a male employee go on Paternity

Leave? Can he avail himself of this benefit for example, 50
days after the first delivery by his wife? (2002 BAR Q. No.
XVI)

Yes, the male employee can avail the paternity leave

benefits regardless of the period after the first delivery by
his wife.
 LABOR STANDARDS 197

Holidays, Service Incentive Leaves, and Service Charge

Paternity leave benefits shall be granted to the qualified

employee after the delivery by his wife, without prejudice
to an employer allowing an employee to avail of the benefit
before or during the delivery; provided, that the total number
of days shall not exceed seven (7) days for each delivery.
(Section 5, Revised Implementing Rules and Regulations of RA
8187 for the Private Sector) The Revised Implementing Rules
and Regulations of RA 8187 for the Private Sector had
already deleted that proviso which requires that this benefit
shall be availed of not later than sixty (60) days after the
date of said delivery. Thus, the said benefits can be availed

ph
before, during, and after delivery of the male employee's

u.
wife.

ed
n.
45. Who are covered by RA 11210, the Expanded Maternity

ai
Leave Law? m
su
The 105-Day Expanded Maternity Leave Law (EMLL)
m

shall cover the following:

s.

1. ;
@
91

2. Female workers in the Private Sector;

cx

3. Female workers in the Informal Economy;

o.
er

4. Female members who are voluntary contributors

sp

to the Social Security System (SSS); and

o

5. Female national athletes. (Section 1, Rule III, IRR,

pr

RA 11210)

46. What are the benefits granted by RA 11210, the Expanded

Maternity Leave Law?
The following benefits are granted under the 105
Day Expanded Maternity Leave Law (EMLL) to the
corresponding sectors:
1. Paid leave benefit granted to a qualified female
worker in the public sector, for the duration of:

a. One Hundred Five (105) days for live

childbirth, regardless of the mode of delivery, and an
198 LABOR LAW REVIEWER

additional fifteen (15) days paid leave if the female

worker qualifies as a solo parent under RA 8972, or the
"Solo Parents' Welfare Act of 2000"; or

b. Sixty (60) days paid leave for miscarriage

and emergency termination of pregnancy;

2. Paid leave benefit granted to a qualified female

worker in the private sector covered by the SSS, including
those in the informal economy, for the duration of:

a. One Hundred Five (105) days for live

childbirth, regardless of the mode of delivery, and an

ph
additional fifteen (15) days paid leave if the female

u.
worker qualifies as a solo parent under RA 8972, or the

ed
"Solo Parents' Welfare Act of 2000"; or

n.
ai
b. Sixty (60) days paid leave for miscarriage
m
and emergency termination of pregnancy;
su

Employed female workers shall receive full pay which

m

consists of (i) SSS maternity benefit computed based on

s.
@

their average daily salary credit and (ii) salary differential

91

to be paid by the employer, if any;

cx

3. An option to extend for an additional thirty (30)

o.

days without pay in case of live childbirth;

er

4. Paid maternity leave, allowances, and benefits

sp

granted to female national athletes; and

o
pr

5. Health care services for prenatal, delivery,

postpartum, and pregnancy-related conditions granted
to female workers, particularly those who are neither
voluntary nor regular members of the SSS, as governed by
the existing rules and regulations of the Philippine Health
Insurance Corporation (PhilHealth). (Section 1, Rule III, IRR,
RA 11210)

47. What is the rule on the grant of maternity leave under RA

11210, the Expanded Maternity Leave Law?
All covered females, regardless of civil status,
employment status, and the legitimacy of her child, shall be
 LABOR STANDARDS 199

Holidays, Service Incentive Leaves, and Service Charge

granted one hundred five (105) days maternity leave with

full pay and an additional fifteen (15) days with full pay
in case the female worker qualifies as a solo parent under
RA 8972 or the "Solo Parents' Welfare Act of 2000." (First
paragraph, Section 1, Rule IV, IRR, RA 11210)

In cases of miscarriage or emergency termination of

pregnancy, sixty (60) days maternity leave with full pay
shall be granted. (Second paragraph, Section 1, Rule IV, IRR,
RA 11210)

ph
48. What is the rule on the manner of enjoyment of the benefit
under RA 11210, the Expanded Maternity Leave Law?

u.
ed
Enjoyment of maternity leave cannot be deferred but

n.
should be availed of either before or after the actual period

ai
of delivery in a continuous and uninterrupted manner, and
m
such that:
su
m

a. In cases of live childbirth, one hundred five (105)

s.

days maternity leave with full pay shall be granted; or

@
91

b. In cases of miscarriage or emergency termination

of pregnancy, sixty (60) days maternity leave shall be
cx

granted.
o.
er

In all of the above instances, the maternity leave can

sp

be credited as combinations of prenatal and postnatal leave

o

as long as it does not exceed one hundred five (105) days or

pr

sixty (60) days, as the case may be. In no case shall postnatal
care be less than sixty (60) days. (Section 2, Rule IV, IRR, RA
11210)

49. What is the rule on extended maternity leave under RA

11210, the Expanded Maternity Leave Law?

In cases of live childbirth, an additional maternity

leave of thirty (30) days, without pay, can be availed of, at
the option of the female worker, provided that the employer
shall be given due notice. Due notice to the employer must
be in writing and must be given at least forty-five (45) days
before the end of the female worker's maternity leave.
200 LABOR LAW REVIEWER

However, no prior notice shall be necessary in the event of

a medical emergency but subsequent notice shall be given
to the employer. The above period of extended maternity
leave without pay shall not be considered as gap in the
service. (Section 3, Rule IV, IRR, RA 11210)

50. What is the frequency of the grant of maternity leave

under RA 11210, the Expanded Maternity Leave Law?

Maternity leave shall be granted to a qualified female

worker in every instance of pregnancy, miscarriage,
or emergency termination of pregnancy regardless of

ph
frequency. (Section 4, Rule IV, IRR, RA 11210)

u.
ed
51. What is the rule on the grant of maternity leave benefits

n.
after termination of employment?
ai
m
Maternity leave with full pay shall be granted even
su

if the childbirth, miscarriage, or emergency termination of

m

pregnancy occurs not more than fifteen (15) calendar days

s.

after the termination of an employee's service, as her right

@

thereto has already accrued. Such period is not applicable

91

when the employment of the pregnant woman worker

cx

has been terminated without just cause, in which case the

o.

employer will pay her the full amount equivalent to her

er

salary for one hundred five (105) days for childbirth and
sp

sixty (60) days for miscarriage or emergency termination of

o
pr

pregnancy based on her full pay, in addition to the other

applicable daily cash maternity benefits that she should
have received had her employment not been illegally
terminated. (Section 5, Rule IV, IRR, RA 11210)

52. What is the rule on the maternity leave of a female worker

with pending administrative case"?

The maternity leave benefits granted under RA 11210

and this Rules shall be enjoyed by a female worker in the
public sector and in the private sector even if she has a
pending administrative case. (Section 6, Rule IV, IRR, RA
11210)
 LABOR STANDARDS 201

Holidays, Service Incentive Leaves, and Service Charge

53. What are the requirements for the grant of maternity leave
benefit in the private sector?

To qualify for the grant of maternity leave benefit, the

female worker must meet the following requirements:
a. She must have at least three (3) monthly
contributions in the 12-month period immediately
preceding the semester of childbirth, miscarriage, or
emergency termination of pregnancy. In determining the
female member's entitlement to the benefit, the SSS shall

consider only those contributions paid prior to the semester

ph
of contingency; and

u.
b. She shall have notified her employer of her

ed
pregnancy and the probable date of her childbirth, which

n.
notice shall be transmitted to the SSS in accordance with

ai
m
the rules and regulations it may provide. (Section 1, Rule VI,
su
IRR, RA 11210)
m
s.

54. What are the rules on the notice requirement for the grant
@

of maternity leave benefit in the private sector?

91

The notification process for SSS-covered female

cx

workers and/or members and employers shall be governed

o.

by the following rules:

er
sp

a. The female member, upon confirmation of

o

pregnancy, shall immediately inform her employer of such

pr

fact and the expected date of childbirth;

b. The employer shall, in turn, notify the SSS through
the prescribed manner;
C. The above rules notwithstanding, failure of the
pregnant female worker to notify the employer shall not
bar her from receiving the maternity benefits, subject to
guidelines to be prescribed by the SSS; and
d. Self-employed female members, including those
in the informal economy, OFWs and voluntary SSS members
may give notice directly to the SSS. (Section 2, Rule VI, IRR,
RA 11210)
202 LABOR LAW REVIEWER

55. How much is the amount of maternity leave benefits in

the private sector?

Covered female workers availing of the maternity

leave benefits must receive their full pay. Full payment
of the maternity leave benefit shall be advanced by the
employer within thirty (30) days from the filing of the
maternity leave application. In the case of self-employed
female members, including those in the informal economy,
OFWs and voluntary SSS members, the SSS shall directly
pay the maternity benefit. (Section 3, Rule VI, IRR, RA 11210)

ph
56. What is the effect of payment of daily SSS maternity
benefits to the sickness benefits under SSS Law?

u.
ed
The payment of daily SSS maternity benefits shall be

n.
a bar to recovery of sickness benefits provided under RA

ai
11199, for the same period for which daily maternity benefits
m
have been received. (Section Rule VI, IRR, RA 11210)
su
m

57. What are the rules in the case of consecutive pregnancies

s.

and multiple childbirths in the private sector?

@

The payment of the SSS maternity benefits in cases of

91

consecutive pregnancies resulting in overlapping maternity

cx

leaves and in cases of multiple childbirths shall be governed

o.

by the following rules:

er

a. In case of the overlapping of two (2) maternity

sp

benefit claims, the female member shall be granted maternity

o
pr

benefits for the two contingencies in a consecutive manner.

However, the amount of benefit corresponding to the period
where there is an overlap shall be deducted from the current
maternity benefit claim; and
b. The female member shall be paid only one
maternity benefit, regardless of the number of offspring, per
childbirth/delivery. (Section 7, Rule VI, IRR, RA 11210)

58. What are the instances that the employer is liable for
damages to SSS?
The employer shall pay to the SSS damages equivalent
to the benefits which said female member would otherwise
have been entitled to in any of the following instances:
 LABOR STANDARDS 203

Holidays, Service Incentive Leaves, and Service Charge

a. Failure of employer to remit to the SSS the required

contributions for the female worker; or

b. Failure of the employer to transmit to SSS the

female worker's notification on the fact of pregnancy and
probable date of child birth. (Section 8, Rule VI, IRR, RA
11210)

59. Are women in the informal economy and voluntary

contributors to the SSS covered by the maternity leave
benefits?

ph
Maternity benefits shall cover all married and
unmarried women, including female workers in the informal

u.
ed
economy. Female workers in the informal economy are
entitled to maternity leave benefits if they have remitted to

n.
the SSS at least three (3) monthly contributions in the twelve
ai
m
(12)-month period immediately preceding the semester of
su
her childbirth, miscarriage, or emergency termination of
m

pregnancy. (Section 1, Rule VII, IRR, RA 11210)

s.

60. How is maternity leave credits to the child's father or

@

alternative caregiver allocated?

91

Allocation to the child's father A female worker

cx

entitled to maternity leave benefits may, at her option,

o.

allocate up to seven (7) days of said benefits to the child's

er

father, whether or not the same is married to the female

sp

worker. The allocated benefit granted to the child's father

o
pr

under this law is over and above that which is provided

under RA 8187 or the "Paternity Leave Act of 1996." (Section
1, Rule VII, IRR, RA 11210)

Alternate Caregiver In case of death, absence, or

-

incapacity of the child's father, the female worker may

allocate to an alternate caregiver who may be any of the
following, upon the election of the mother taking into
account the best interests of the child:
a. A relative within the fourth degree of
consanguinity; or
b. The current partner, regardless of sexual
orientation or gender identity, of the female worker sharing
204 LABOR LAW REVIEWER

the same household. The option to allocate maternity leave

credits shall not be applicable in case the female worker
suffers miscarriage or emergency termination of pregnancy.
(Section 1, Rule VIII, IRR, RA 11210)

61. What are the effects of availing the option to allocate?

In case the female worker avails of the option to

allocate, the SSS shall pay her the amount of the maternity
benefit corresponding to the period not allocated.

As applicable, the father or, in his death, absence, or

ph
incapacity, the alternate caregiver shall be granted by his

u.
employer a leave with pay equivalent to a period from

ed
one (1) to seven (7) days, which may be enjoyed either in a

n.
continuous or in an intermittent manner not later than the

ai
period of the maternity leave availed of. The female worker
m
shall notify her employer of her option to allocate with
su
her application for maternity leave. The father or alternate
m

caregiver, as the case may be, shall notify the employer

s.

concerned of his or her availment of the allocated leave

@

and the inclusive dates therefor. This written notice to the

91

employers shall be required even if the child's father or the

cx

alternate caregiver is employed in the public sector. (Section

o.

2, Rule VIII, IRR, RA 11210)

er
sp

62. What is the effect of death or permanent incapacity of the

o

beneficiary female worker?

pr

In the event the beneficiary female worker dies or

becomes permanently incapacitated, the balance of her
maternity leave benefits, if any, shall accrue to the child's
father or to a qualified alternate caregiver as provided in the
preceding sections subject to the following conditions:

a. That the maternity leave benefits have not yet

been commuted to cash, if applicable; and

b. That a certified true copy of the death certificate or

medical certificate or abstract is provided to the employers
of both the female worker and the child's father or alternate
caregiver.
 LABOR STANDARDS 205

Holidays, Service Incentive Leaves, and Service Charge

In case the maternity leave benefits of the deceased

or permanently incapacitated female worker have already
been paid to the latter in full, the child's father or alternate
caregiver shall be entitled to enjoy the remaining unexpired
leave credits of the female worker, if there be any, without
pay: Provided, That such leave without pay shall not be
considered as a gap in the service of the child's father or
alternate caregiver, in both the public and private sector.
(Section 4, Rule VIII, IRR, RA 11210)

63. Nestor and Nadine have been living in for the last 10 years

ph
without the benefit of marriage. Their union has produced

u.
four children. Nadine was three months pregnant with

ed
her 5th child when Nestor left her for another woman.

n.
When Nadine was eight months pregnant with her 5th

ai
child, she applied for maternity leave benefits. Her
m
employer refused on the ground that this was already
su

her 5th pregnancy and that she was only living in with
m

the father of her child, who is now in a relationship with

s.
@

another woman. When Nadine gave birth, Nestor applied

for paternity leave benefits. His employer also denied the
91

application on the same grounds that Nadine's employer

cx

denied her application.

o.
er

Can Nadine's employer legally deny her claim for

sp

maternity benefits? (2018 BAR Q. No. XVIII[a])

o
pr

No, the employer cannot legally deny Nadine's claim

for maternity benefits.
The "105-Day Expanded Maternity Leave Law"
provides that all covered female workers in the private
sector are entitled to maternity benefits regardless of civil
status or the legitimacy of their child and in every instance
of pregnancy regardless of frequency. (Sections 1 and 4, Rule
IV, IRR, RA 11210)

Applying the law, notwithstanding that Nadine is

in a common law relationship with Nestor and it's her 5th
pregnancy, she is, therefore, entitled to maternity leave
benefits.
206 LABOR LAW REVIEWER

64. Luisa is an unwed mother with 3 children from different

fathers. In 2004, she became a member of the Social Security
System (SSS). That same year, she suffered a miscarriage
of a baby out of wedlock from the father of her third child.
She wants to claim maternity benefits under the SSS Act.
Is she entitled to claim? (2015 BAR Q. No. XIII)

Luisa is not is entitled to maternity leave benefits.

While the 105-Day Expanded Maternity Leave Law

(EMLL) shall cover the female workers in the private sector,
(Section 1, Rule III, IRR, RA 11210) however, to qualify for

ph
the grant of maternity leave benefit, the female worker must

u.
have at least three (3) monthly contributions in the 12-month

ed
period immediately preceding the semester of childbirth,

n.
miscarriage, or emergency termination of pregnancy. In

ai
determining the female member's entitlement to the benefit,
m
the SSS shall consider only those contributions paid prior
su

to the semester of contingency. (Section 1, Rule VI, IRR, RA

m

11210)
s.
@

The facts do not show that Luisa had complied with

91

the above requirements. This is because she only became

cx

a member of the Social Security System (SSS) in 2004 and

o.

it was in that same year when she suffered a miscarriage.

er

Thus, Luisa is not entitled to maternity leave benefits.

o sp

65. Jennifer, a receptionist at Company X, is covered by the

pr

SSS. She was pregnant with her fourth child when she
slipped in the bathroom of her home and had a miscarriage.
Meanwhile, Company X neglected to remit the required
contributions to the SSS. Jennifer claims maternity leave
benefits and sickness benefits. Which of these two may
she claim? a. None of them; b. Either one of them; c. Only
maternity leave benefits; d. Only sickness benefits. (2012
BAR Q. No. 37)

C. Only maternity leave benefits

The payment of daily SSS maternity benefits shall be

a bar to recovery of sickness benefits provided under RA
 LABOR STANDARDS 207

Holidays, Service Incentive Leaves, and Service Charge

11199, for the same period for which daily maternity benefits
have been received. (Section 6, Rule VI, IRR, RA 11210)

66. A, single, has been an active member of the Social Security

System for the past 20 months. She became pregnant out
of wedlock and on her 7th month of pregnancy, she was
informed that she would have to deliver the baby through
caesarean section because of some complications. Can A
claim maternity benefits? If yes, how many days can she
go on maternity leave? If not, why is she not entitled?
(2010 BAR Q. No. III)

ph
Yes, A can claim her maternity benefits.

u.
ed
The "105-Day Expanded Maternity Leave Law"

n.
provides that all covered female workers in the private

ai
sector are entitled to maternity benefits regardless of civil
m
status or the legitimacy of their child and in every instance
su

of pregnancy regardless of frequency. (Sections 1 and 4, Rule

m

IV, IRR, RA 11210) Further, any pregnant female worker in

s.

the private sector shall be granted a maternity leave of one

@

hundred five (105) days with full pay, regardless of whether

91

she gave birth via caesarean section or natural delivery and

cx

in every instance of pregnancy regardless of frequency.

o.

(Section 1, Rule III, IRR, RA 11210) However, to qualify for

er

the grant of maternity leave benefit, the female worker must

sp

have at least three (3) monthly contributions in the 12-month

o
pr

period immediately preceding the semester of childbirth,

miscarriage, or emergency termination of pregnancy. In
determining the female member's entitlement to the benefit,
the SSS shall consider only those contributions paid prior
to the semester of contingency. (Section 1, Rule VI, IRR, RA
11210)

Applying the law, A, being an active SSS member for

the past 20 months is, therefore, entitled to maternity leave
of one hundred five (105) days with full pay in case of live
birth.
208 LABOR LAW REVIEWER

67. Mans Weto had been an employee of Nopolt Assurance

Company for the last ten (10) years. His wife of six (6)
years died last year. They had four (4) children. He then
fell in love with Jovy, his co-employee, and they got
married. In October this year, Weto's new wife is expected
to give birth to her first child. He has accordingly filed
his application for paternity leave, conformably with the
provisions of the Paternity Leave Law which took effect
in 1996. The HRD manager of the assurance firm denied
his application, on the ground that Weto had already
used up his entitlement under the law. Weto argued that

ph
he has a new wife who will be giving birth for the first
time, therefore, his entitlement to paternity leave benefits

u.
ed
would begin to run anew.

n.
Is Jovy entitled to maternity leave benefits? (2005 BAR Q.

ai
No. III[2][b]) m
su
Yes, Jovy is entitled to maternity leave benefits.
m

The "105-Day Expanded Maternity Leave Law"

s.

provides that all covered female workers in the private

@

sector are entitled to maternity benefits regardless of civil

91

status or the legitimacy of their child and in every instance

cx

of pregnancy regardless of frequency. (Sections 1 and 4, Rule

o.

IV, IRR, RA 11210) However, to qualify for the grant of

er

maternity leave benefit, the female worker must meet the

sp

following requirements:
o
pr

a. She must have at least three (3) monthly

contributions in the 12-month period immediately
preceding the semester of childbirth, miscarriage, or
emergency termination of pregnancy. In determining the
female member's entitlement to the benefit, the SSS shall
consider only those contributions paid prior to the semester
of contingency; and

b. She shall have notified her employer of her

pregnancy and the probable date of her childbirth, which
notice shall be transmitted to the SSS in accordance with
the rules and regulations it may provide. (Section 1, Rule VI,
IRR, RA 11210)
 209
LABOR STANDARDS
Holidays, Service Incentive Leaves, and Service Charge

Thus, to claim the maternity leave benefits Jovy should

comply with the above requirements.

68. Ms. Sara Mira is an unwed mother with three children

from three different fathers. In 1999, she became a member

of the Social Security System. In August 2000, she suffered
a miscarriage, also out of wedlock, and again by a different
father. Can Ms. Mira claim maternity benefits under the
Social Security Act of 1997? Reason. (2000 BAR Q. No. I)

Yes, Sara Mira can claim maternity benefits under the

"105-Day Expanded Maternity Leave Law."

ph
u.
The "105-Day Expanded Maternity Leave Law"

ed
provides that all covered female workers in the private

n.
sector are entitled to maternity benefits regardless of civil

ai
status or the legitimacy of her child and in every instance
m
of pregnancy regardless of frequency. (Sections 1 and 4,
su
Rule IV, IRR, RA 11210) However, to qualify for the grant of
m

maternity leave benefit, the female worker must meet the

s.

following requirements:
@
91

a. She must have at least three (3) monthly contri

butions in the 12-month period immediately preceding the
cx

semester of childbirth, miscarriage, or emergency termina

o.

tion of pregnancy. In determining the female member's en

er

titlement to the benefit, the SSS shall consider only those

sp

contributions paid prior to the semester of contingency; and

o
pr

b. She shall have notified her employer of her

pregnancy and the probable date of her childbirth, which
notice shall be transmitted to the SSS in accordance with

the rules and regulations it may provide. (Section 1, Rule VI,

IRR, RA 11210)

Thus, to claim the maternity leave benefits Sara Mira

should comply with the above requirements.

69. Who is a solo parent under RA 8972, the Parental Leave for
Solo Parents?

Solo Parent is any individual who falls under any of

the following categories:
210 LABOR LAW REVIEWER

1. A woman who gives birth as a result of rape and

other crimes against chastity even without a final conviction
of the offender, provided that the mother keeps and raises
the child.

2. Parent left solo or alone with the responsibility of

parenthood due to the following circumstances:

a. to death of spouse;
b. while the spouse is detained or is serving
sentence for a criminal conviction for at least one (1)

ph
year;

u.
C. due to physical and/or mental incapacity of

ed
spouse as certified by a public medical practitioner;

n.
d. due to legal separation or de facto separation
ai
from spouse for at least one (1) year, as long as he/she
m
su
is entrusted with the custody of the children;
m

e. due to declaration of nullity or annulment of

s.

marriage as decreed by a court or by a church as long

@

as he/she is entrusted with the custody of the children;

91

f. due to abandonment of spouse for at least

cx

one (1) year;

o.
er

3. Unmarried mother/father who has preferred

sp

to keep and rear her/his child/children instead of having

o

others care for them or give them up to a welfare institution.

pr

4. Any other person who solely provides parental

care and support to a child or children.
5. Any family member who assumes the
responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the
parents or solo parent.

70. What is the meaning of children under RA 8972, the

Parental Leave for Solo Parents?

"Children" refers to those living with and dependent

upon the solo parent for support who are unmarried,
 LABOR STANDARDS 211

Holidays, Service Incentive Leaves, and Service Charge

unemployed and not more than eighteen (18) years of

age, or even over eighteen (18) years but are incapable of
self-support because of mental and/or physical defect/
disability. (Section 3[b], RA 8972)

71. What is the parental leave under RA 8972, the Parental

Leave for Solo Parents?

In addition to leave privileges under existing laws,

parental leave of not more than seven (7) working days
every year shall be granted to any solo parent employee
who has rendered service of at least one (1) year. The seven

ph
day parental leave shall be non-cumulative. (Section 18,

u.
Rules and Regulations Implementing RA 8972)

ed
n.
72. What are the conditions for entitlement of parental leave

ai
under RA 8972, the Parental Leave for Solo Parents?
m
su
A solo parent shall be entitled to parental leave
provided that:
m
s.

(a) He/She has rendered at least one (1) year of

@

service whether continuous or broken at the time of the

91

affectivity of the Act;

cx

(b) He/She has notified his/her employer of the

o.
er

availment thereof within a reasonable time period; and

sp

(c) He/She has presented a Solo Parent Identification

o

Card to his/her employer. (Section 19, Rules and Regulations

pr

Implementing RA 8972)

73. What is the effect in case the parental leave under RA 8972,
the Parental Leave for Solo Parents, is not availed?

In the event that the parental leave is not availed

of, said leave shall not be convertible to cash unless
specifically agreed upon previously. However, if said leave
were denied an employee as a result of non-compliance
with the provisions of these Rules by an employer,
basis for the
the aforementioned leave may be used
computation of damages. (Section 20, Rules and Regulations
Implementing RA 8972)
212 LABOR LAW REVIEWER

74. Of the four definitions below, which one does NOT fit the
definition of "solo parent" under the Solo Parents Welfare
Act?

(A) Solo parenthood while the other parent serves

sentence for at least one year.

(B) A woman who gives birth as a result of rape.

(C) Solo parenthood due to death of spouse.

(D) Solo parenthood where the spouse left for

abroad and fails to give support for more than a

ph
year. (2011 BAR Q. No. 45)

u.
(D) Solo parenthood where the spouse left for abroad

ed
and fails to give support for more than a year

n.
See answer on the categories as a Solo Parent in Q. No.
ai
69.
m
su
m

75. What is the leave for victims of violence under RA 9262?

s.

Victims under this Act shall be entitled to take a paid

@

leave of absence up to ten (10) days in addition to other

91

paid leaves under the Labor Code and Civil Service Rules
cx

and Regulations, extendible when the necessity arises as

o.

specified in the protection order. Any employer who shall

er

prejudice the right of the person under this section shall be

sp

penalized in accordance with the provisions of the Labor

o
pr

Code and Civil Service Rules and Regulations. Likewise, an

employer who shall prejudice any person for assisting a co
employee who is a victim under this Act shall likewise be
liable for discrimination. (Section 43, RA 9262)

76. What is required for the employer to comply with the 10

day paid leave for victims of violence under RA 9262?

The Punong Barangay/Kagawad or prosecutor or the

Clerk of Court, as the case may be, shall issue a certification
at no cost to the woman that such an action is pending, and
this is all that is required for the employer to comply with
the 10-day paid leave. (Section 42, Rule VI, The Rules and
 LABOR STANDARDS 213

Holidays, Service Incentive Leaves, and Service Charge

Regulations Implementing the Anti-Violence Against Women

and Their Children Act of 2004)

77. Melissa, a coffee shop worker of 5 months, requested her

employer for 5 days' leave with pay to attend to the case
that she filed against her husband for physical assault
two weeks earlier. May the employer deny her request for
leave with pay?

(A) Yes, the reason being purely personal, approval

depends on the employer's discretion and is
without pay.

ph
u.
(B) No, as victim of physical violence of her

ed
husband, she is entitled to five days paid leave

n.
to attend to her action against him.

ai
(C)
m
No, the employer must grant the request but the
su
leave will be without pay.
m

(D) Yes, since she is not yet a permanent employee.

s.

(2011 BAR Q. No. 38)

@
91

(B) No, as victim of physical violence of her husband,

cx

she is entitled to five days paid leave to attend to her action

o.

against him.
er

Victims under this Act shall be entitled to take a paid

sp

leave of absence up to ten (10) days in addition to other

o
pr

paid leaves under the Labor Code and Civil Service Rules
and Regulations, extendible when the necessity arises as
specified in the protection order. (Section 43, RA 9262)

78. What is the special leave benefit for women under RA

9710, the Magna Carta of Women?
A woman employee having rendered continuous
aggregate employment service of at least six (6) months
for the last twelve (12) months shall be entitled to a special
leave benefit of two (2) months with full pay based on her
gross monthly compensation following surgery caused by
gynecological disorders. (Section 18, RA 9710)
214 LABOR LAW REVIEWER

79. Define the following terms under RA 9710, the Magna

Carta of Women:

1. "Special leave benefit for women,"

2. "Gynecological disorders," and
3. "At least six (6) months continuous aggregate
employment service for the last twelve (12) months prior
to surgery."

1. "Special leave benefit for women" means a

female employee's leave entitlement of two (2) months with

ph
full pay from her employer based on her gross monthly

u.
compensation following surgery caused by gynecological

ed
disorders, provided that she has rendered continuous

n.
aggregate employment service of at least six (6) months for

ai
the last 12 months. m
2. "Gynecological disorders" refers to disorders that
su

would require surgical procedures such as, but not limited

m
s.

to, dilation and curettage and those involving female

@

reproductive organs such as the vagina, cervix, uterus,

91

fallopian tubes, ovaries, breast, adnexa, and pelvic floor, as

cx

certified by a competent physician. For purposes of the Act

o.

and the Rules and Regulations of this Act, gynecological

er

surgeries shall also include hysterectomy, ovariectomy, and

sp

mastectomy.
o
pr

3. "At least six (6) months continuous aggregate

employment service for the last twelve (12) months prior
to surgery" means that the woman employee should have
been with the company for twelve (12) months, prior to
surgery. An aggregate service of at least six (6) months
within the said 12-month period is sufficient to entitle her
to avail of the special leave benefit (SLB) (Section 1[a], [b],
and [e], D.O. No. 112-11, Series of 2011, as amended by D.O. No.
112-A, Series of 2012, Implementing Rules and Regulations of
RA 9710, otherwise known as the "Magna Carta of Women")
 215
LABOR STANDARDS
Holidays, Service Incentive Leaves, and Service Charge

80. What are the conditions for entitlement of special leave

under RA 9710, the Magna Carta of Women?

Any female employee, regardless of age and civil

status, shall be entitled to a special leave, provided that she
has complied with the following conditions:
(a) She has rendered at least six (6) months continuous
aggregate employment service for the last twelve (12)
months prior to surgery;
(b) She has filed an application for special leave in
accordance with Section 3 hereof; and

ph
u.
(c) She has undergone surgery due to gynecological

ed
disorders as certified by a competent physician. (Section

n.
2, D.O. No. 112-11, Series of 2011, Implementing Rules and

ai
Regulations of RA 9710, otherwise known as the "Magna Carta
m
of Women")
su
m

81. Distinguish special leave benefit under RA 9710, the

s.

Magna Carta of Women, from sickness benefit under the

@

SSS Law.
91

The special leave benefit is different from the SSS

cx

sickness benefit. The former is granted by the employer in

o.

accordance with RA 9710, as implemented under this Rules.

er

It is granted to a woman employee who has undergone

sp

surgery due to gynecological disorder. The SSS sickness

o
pr

benefit, on the other hand, is administered and given by the

SSS in accordance with the SSS law or RA 1161 as amended
by RA 8282. (Section 7, D.O. No. 112-11, Series of 2011, as
amended by D.O. No. 112-A, Series of 2012, Implementing Rules
and Regulations of RA 9710, otherwise known as the "Magna
Carta of Women")

82. What is the effect of availing special leave benefit under

RA 9710, the Magna Carta of Women, on maternity leave
benefit?

Where the woman employee had undergone surgery

due to gynecological disorder during her maternity leave,
216 LABOR LAW REVIEWER

she is entitled only to the difference between the SL

and maternity leave benefit. (Section 9, D.O. No. 112-11,
Series of 2011, as amended by D.O. No. 112-A, Series of 2012,
Implementing Rules and Regulations of RA 9710, otherwise
known as the "Magna Carta of Women")

83. What is the treatment of special leave benefit under RA

9710, the Magna Carta of Women?

The special leave shall be non-cumulative and non

convertible to cash unless otherwise provided by a collective
bargaining agreement (CBA). (Section 12, D.O. No. 112-11,

ph
Series of 2011, as amended by D.O. No. 112-A, Series of 2012,

u.
Implementing Rules and Regulations of RA 9710, otherwise

ed
known as the "Magna Carta of Women")

n.
84.
ai
Because of the stress in caring for her four (4) growing
m
su
children, Tammy suffered a miscarriage late in her
pregnancy and had to undergo an operation. In the course
m
s.

of the operation, her obstetrician further discovered a

@

suspicious-looking mass that required the subsequent

91

removal of her uterus (hysterectomy). After surgery,

cx

her physician advised Tammy to be on full bed rest

for six (6) weeks. Meanwhile, the biopsy of the sample
o.
er

tissue taken from the mass in Tammy's uterus showed

sp

a beginning malignancy that required an immediate

o

series of chemotherapy once a week for four (4) weeks.

pr

(A) What benefits can Tammy claim under existing social

legislation? (2013 BAR Q. No. VI[A])

Tammy can claim the special leave benefits.

Any female employee, regardless of age and civil

status, shall be entitled to a special leave, provided she has
complied with the following conditions:

(a) She has rendered at least six (6) months

continuous aggregate employment service for the last
twelve (12) months prior to surgery; (b) She has filed
an application for special leat in accordance with
Section 3 hereof; and (c) She has undergone surgery
 LABOR STANDARDS 217

Holidays, Service Incentive Leaves, and Service Charge

due to gynecological disorders as certified by a

competent physician. (Section 2, D.O. No. 112-11, Series
of 2011, Implementing Rules and Regulations of RA 9710,
otherwise known as the "Magna Carta of Women")

Thus, to be entitled to the special leave Tammy should

comply with the above requirements.

85. What is service charge under Article 96 of the Labor Code,

as amended by RA 11360?

Service charge refers to the amount that is added to the

ph
bill for work or service rendered. (Section 2, D.O. No. 206,

u.
Series of 2019, IRR of RA 11360)

ed
n.
86. Who are covered by service charge under Article 96 of the

ai
Labor Code, as amended by RA 11360? m
su
All establishments collecting service charges such
as hotels, restaurants and other similar establishments
m
s.

including those entities operating primarily as private

@

subsidiaries of the Government. (Section 1, D.O. No. 206,

91

Series of 2019, IRR of RA 11360)

cx
o.

87. Who are the covered employees and establishments under

er

Article 96 of the Labor Code, as amended by RA 11360?

sp

a. Covered employees refer to all employees,

o
pr

except managerial employees as defined herein, under the

direct employ of the covered establishment, regardless of
their positions, designations or employment status, and
irrespective of the method by which their wages are paid.

b. Covered establishments refer to those that collect

service charge for work or service they offer. (Section 2, D.O.

No. 206, Series of 2019, IRR of RA 11360)

88. How are service charges distributed under Article 96 of

the Labor Code, as amended by RA 11360?

All service charges actually collected by covered

establishments shall be distributed completely and equally
218 LABOR LAW REVIEWER

based on actual hours or days of work or service rendered,

among the covered employees, including those already
receiving the benefit of sharing in the service charges.
(Section 3, D.O. No. 206, Series of 2019, IRR of RA 11360)

89. What is the frequency of distribution of service charges

under Article 96 of the Labor Code, as amended by RA
11360?

The shares referred to herein shall be distributed and

paid to the covered employees not less than once every

ph
two (2) weeks or twice a month at intervals not exceeding
sixteen (16) days. (Section 4, D.O. No. 206, Series of 2019)

u.
ed
Author's note: The rule on integration has been

n.
removed by the amendments.

ai
m
90. How often should the collected service charges be
su

distributed to employees in hotels and restaurants? (A)

m

Every end of the month (B) Every two weeks (C) Every
s.
@

week (D) At the end of each work day. (2011 BAR Q. No.
91

73)
cx

(B) Every two weeks

o.

The shares referred to herein shall be distributed and

er

paid to the covered employees not less than once every

sp

two (2) weeks or twice a month at intervals not exceeding

o
pr

sixteen (16) days. (Section 4, D.O. No. 206, Series of2019)

 Chapter IV

THIRTEENTH MONTH PAY

1. What is 13th month pay?

13th month pay is a form of monetary benefit equivalent

to the monthly basic compensation received by an employee,

ph
computed pro rata according to the number of months

u.
within a year that the employee has rendered service to the

ed
employer. (PD 851)

n.
ai
2. Who are those required to pay the 13th month pay?
m
All employers are required to pay their rank-and-file
su

employees the 13th month pay not later than December 24

m

of every year. (Revised Guidelines on the Implementation of the

s.
@

13th Month Pay Law, dated November 16, 1987; Section 1, PD

91

851, as modified by Memorandum Order No. 28, dated August

13, 1986)
cx
o.

3. Who are those entitled to receive the 13th month pay?

er
sp

All rank-and-file employees regardless of the nature

o

of their employment, and irrespective of the methods by

pr

which they are paid, provided they worked for at least one
month during a calendar year. (No. 1 in relation to No. 2,
Revised Guidelines on the Implementation of the 13th Month Pay
Law, dated November 16, 1987)

4. State the components of "basic salary" under the 13th

Month Pay Law.

"Basic salary" shall include all remunerations or

earnings paid by an employer to an employee for services
rendered but does not include allowances and monetary

219
220 LABOR LAW REVIEWER

benefits which are not considered or integrated, as part of

the regular or basic, salary, such as the cash equivalent of
unused vacation and sick leave credits, overtime, premium,
night differential, and holiday pay. Basic salary includes
cost-of-living allowances. However, these salary-related
benefits should be included as part of the basic salary in
the computation of the 13th month pay if, by individual or
collective agreement or company practice or policy, the same
are treated as part of the basic salary of the employees. (No.
4[a], fourth paragraph, Revised Guidelines on the Implementation
of the 13th Month Pay Law, dated November 16, 1987)

ph
u.
5. In computing for 13th month pay, Balagtas Company used

ed
as basis both the employee's regular base pay and the cash

n.
value of his unused vacation and sick leaves. After two

ai
and a half years, it announced that it had made a mistake
m
su
and was discontinuing such practice. Is the management
action legally justified?
m
s.

(A) Yes, since 13th month pay should only be one

@

twelfth of the regular pay.

91

(B) No, since the erroneous computation has ripened

cx

into an established, non-withdrawable practice.

o.
er

(C) Yes, an error is not a deliberate decision, hence

sp

may be rectified.
o
pr

(D) No, employment benefits can be withdrawn

only through a CBA negotiation. (2011 BAR Q.
No. 52)

(B) No, since the erroneous computation has ripened

into an established, non-withdrawable practice.

6. What is the distinction of the term "basic salary" from

"fringe benefits"?
The term "basic salary" used in PD 851 and
Memorandum Order No. 28 is not to be confused with the
term "fixed or guaranteed wage." The term "basic salary"
is used to distinguish wage or salary from "fringe benefits"
 LABOR STANDARDS 221

Thirteenth Month Pay

which are not integrated into “basic salary" for certain

specific purposes. In San Miguel Corporation v. Inciong, 103
SCRA 139 (1981), the catch-all phrase "allowances" and
"monetary benefits" which is deemed not considered or
integrated as part of "basic salary" was construed to refer to
"any and all additions which may be in the form of allowances
or 'fringe' benefits." These fringe benefits include payments
for sick leave, vacation leave, or maternity leave; premium
pay for work performed on rest day and special holidays;
premium pay for regular holidays and night differential
pay; and cost of living allowances. (See Item No. 4[a], Revised

ph
Guidelines on the Implementation of the 13th Month Pay Law)

u.
Sales commissions form part of the "wage" or "salary" of

ed
salesmen and are not in the nature of an "allowance" or

n.
"additional fringe" benefit. Once more, we note that in the

ai
instant case, sales commissions form the bulk of the salaries
m
or wages of petitioner's salesmen. (Philippine Duplicators v.
su

NLRC, G.R. No. 110068, November 11, 1993)

m
s.
@

7. What is the rule on the determination of whether or not a

91

(sales) commission forms part of the basic salary?

cx

It is well-established in jurisprudence that the

o.

determination of whether or not a commission forms part

er

of the basic salary depends upon the circumstances or

sp

conditions for its payment. In Phil Duplicators, Inc. v. NLRC,

o

G.R. No. 110068, November 11, 1993, 227 SCRA 747, the
pr

Supreme Court ruled that commissions earned by salesmen

form part of their basic salary. The salesmen's commissions,
comprising a predetermined percentage of the selling price
of the goods sold by each salesman, were properly included
in the term basic salary for purposes of computing the 13th
month pay. The salesmen's commissions are not overtime
payments, nor profit-sharing payments nor any other fringe
benefit but a portion of the salary structure which represents
an automatic increment to the monetary value initially
assigned to each unit of work rendered by a salesman. On
the other hand, in Boie-Takeda Chemicals, Inc. v. De la Serna,
G.R. Nos. 92174 and 102552, December 10, 1993, 228 SCRA 329,
222 LABOR LAW REVIEWER

the so-called commissions paid to or received by medical

representatives were excluded from the term basic salary
because these were paid to the medical representatives
and rank-and-file employees as productivity bonuses,
which were generally tied to the productivity, or capacity
for revenue production, of a corporation and such bonuses
closely resemble profit-sharing payments and had no clear
direct or necessary relation to the amount of work actually
done by each individual employee. (Philippine Spring Water
Resources, Inc. v. Court of Appeals, G.R. No. 205278, June 11,
2014)

ph
Who are the employers exempted from paying the 13th

u.
8.

ed
month?

n.
The following employers are exempted to pay 13th

ai
month under PD 851: m
su
(a) Government and any of its political subdivision,
m

including government-owned and controlled corporations,

s.

except those corporations operating essentially as private

@

subsidiaries of the Government;

91

(b) Employers already paying their employees 13th

cx

month pay or more in a calendar year or its equivalent at

o.

the time of this issuance;

er
sp

(c) Persons in the personal service of another in

o

relation to such workers; and

pr

(d) Employees who are paid on purely commission,

boundary, or task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the
time consumed in the performance thereof, except where
the workers are paid on piece-rate basis in which case the
employer shall grant the required 13th month pay to such
workers.

As used herein, workers paid on piece-rate basis shall

refer to those who are paid a standard amount for every
piece or unit of work produced that is more or less regularly
replicated, without regard to the time spent in producing
the same.
 LABOR STANDARDS 223

Thirteenth Month Pay

The term "its equivalent" as used on paragraph (b)

hereof shall include Christmas bonus, mid-year bonus, cash
bonuses, and other payments amounting to not less than
1/12 of the basic salary but shall not include cash and stock
dividends, cost of living allowances, and all other allowances
regularly enjoyed by the employee, as well as non-monetary
benefits. Where an employer pays less than required 1/12th
of the employees' basic salary, the employer shall pay the
difference. (No. 2, Revised Guidelines on the Implementation of
the 13th Month Pay Law, dated November 16, 1987)

ph
9. Dennis was a taxi driver who was being paid on the

u.
"boundary" system basis. He worked tirelessly for

ed
Cabrera Transport Inc. for fourteen (14) years until he

n.
was eligible for retirement. He was entitled to retirement

ai
benefits. During the entire duration of his service, Dennis
m
was not given his 13th month pay or his service incentive
su

leave pay. Is Dennis entitled to 13th month pay and service

m

leave incentive pay? Explain. (2012 BAR Q. No. IX)

s.
@

Dennis is not entitled to 13th month pay. The employers

91

of those who are paid on boundary are exempted to pay 13th

cx

month. (No. 2, Revised Guidelines on the Implementation of the

o.

13th Month Pay Law, dated November 16, 1987)

er

Since Dennis is being paid on a boundary basis, his

sp

employer is exempted from paying the 13th month pay

o
pr

under PD 851.

As to service incentive leave (SIL), the Labor Code

excludes field personnel from the coverage of working
conditions, which includes service incentive leave. (Article
82) In order to conclude whether or not an employee is a field
employee, it is also necessary to ascertain if actual hours of
work in the field can be determined with reasonable certainty
by the employer. In so doing, an inquiry must be made as
to whether or not the employee's time and performance are
constantly supervised by the employer. (Dasco v. Philtranco
Service Enterprises Inc., G.R. No. 211141, June 29, 2016; the
Bureau of Working Conditions, Advisory Opinion to Philippine
Technical-Clerical Commercial Employees Association)
224 LABOR LAW REVIEWER

In this case, the facts do not show whether or not

Dennis' time and performance are constantly being
supervised by his employer, Cabrera Transport Inc. Thus,
Dennis is a field personnel. Therefore, he is not entitled to
his claim for service incentive leave pay.

10. Who among the following is not entitled to 13th month

pay?

a) Stephanie, a probationary employee of a

cooperative bank who rendered six (6) months of service
during the calendar year before filing her resignation;

ph
b) Rafael, the secretary of a Senator;

u.
ed
c) Selina, a cook employed by and who lives with

n.
an old maid and who also tends the sari-sari store of the

ai
latter; m
su
d) Roger, a house gardener who is required to
m

report to work only thrice a week. (2012 BAR Q. No. 30)

s.

b) Rafael, the secretary of a Senator

@
91

Government and any of its political subdivision,

cx

including government-owned and controlled corporations,

o.

except those corporations operating essentially as private

er

subsidiaries of the Government are exempted to pay

sp

13th month under PD 851. (No. 2, Revised Guidelines on the

o

Implementation of the 13th Month Pay Law, dated November 16,

pr

1987)

11. State the 13th month pay of certain types of employees.

The following types of employees are entitled to 13th
month pay:
(a) Employees Paid by Results. - Employees who
are paid on piece work basis are by law entitled to the 13th
month pay.

Employees who are paid a fixed or guaranteed wage

plus commission are also entitled to the mandated 13th
month pay based on their total earnings during the calendar
 LABOR STANDARDS 225

Thirteenth Month Pay

year, i.e., on both their fixed or guaranteed wage and

commission.

(b) Those with Multiple Employers. Government

1

employees working part time in a private enterprise,

including private educational institutions, as well as
employees working in two or more private firms, whether
on full or part time basis, are entitled to the required 13th
month pay from all their private employers regardless of
their total earnings from each or all their employers.

(c) Private School Teachers. - Private school teachers,

ph
including faculty members of universities and colleges, are

u.
entitled to the required 13th month pay, regardless of the

ed
number of months they teach or are paid within a year, if

n.
they have rendered service for at least one (1) month within

ai
a year. (No. 5, Revised Guidelines on the Implementation of the
m
13th Month Pay Law, dated November 16, 1987)
su

(d) 13th Month Pay of Resigned or Separated

m

Employee An employee who has resigned or whose

s.

-
@

services were terminated at any time before the time for

91

payment of the 13th month pay is entitled to this monetary

benefit in proportion to the length of time he worked
cx

during the year, reckoned from the time he started working

o.
er

during the calendar year up to the time of his resignation or

sp

termination from the service. Thus, if he worked only from

o

January up to September his proportionate 13th month pay

pr

should be equivalent of 1/12 his total salary he earned

during that period.

The payment of the 13th month pay may be demanded

by the employee upon the cessation of employer-employee
relationship. This is consistent with the principle of equity
that as the employer can require the employee to clear
himself of all liabilities and property accountability, so can
the employee demand the payment of all benefits due him
upon the termination of the relationship. (No. 6, Revised
Guidelines on the Implementation of the 13th Month Pay Law,
dated November 16, 1987)
 Chapter V
WAGES

1. What is a wage?

"Wage" paid to any employee shall mean the

remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or

ph
other method of calculating the same, which is payable by

u.
an employer to an employee under a written or unwritten

ed
contract of employment for work done or to be done, or for

n.
services rendered or to be rendered and includes the fair

ai
m
and reasonable value, as determined by the Secretary of
su
Labor and Employment, of board, lodging, or other facilities
m

customarily furnished by the employer to the employee.

s.

"Fair and reasonable value" shall not include any profit to

@

the employer, or to any person affiliated with the employer.

91

(Article 97[f], Labor Code)

cx
o.

2. What is the basic factor in determining employees' wages?

er

The age-old rule governing the relation between labor

sp

and capital, or management and employee of a "fair day's

o

wage for a fair day's labor" remains as the basic factor

pr

in determining employees' wages, and for that matter

backwages. If there is no work performed by the employee
there can be no wage or pay unless, of course, the laborer
was able, willing and ready to work but was illegally locked
out, or suspended or dismissed, or otherwise illegally
prevented from working, a situation which is not prevailing
in the present case. (Wuerth Philippines, Inc. v. Ynson, G.R.
No. 175932, February 15, 2012 citing Navarro v. P.V. Pajarillo
Liner, Inc., G.R. No. 164681, April 24, 2009, 586 SCRA 489,
498)

226
 LABOR STANDARDS 227

Wages

3.
For purposes of including sales commissions, is a wage
the same as a salary?
The ambiguity between Article 97(f), which defines
the term 'wage' and Article XIV of the Collective Bargaining
Agreement, Article 284 of the Labor Code and Sections 9(b)
and 10 of the Implementing Rules, which mention the terms
"pay" and "salary," is more apparent than real. Broadly,
the word "salary" means a recompense or consideration
made to a person for his pains or industry in another
man's business. Whether it be derived from "salarium," or
more fancifully from "sal," the pay of the Roman soldier,

ph
it carries with it the fundamental idea of compensation for

u.
services rendered. Indeed, there is eminent authority for

ed
holding that the words "wages" and "salary" are in essence

n.
synonymous (Words and Phrases, Vol. 38 Permanent Edition,

ai
p. 44, citing Hopkins v. Cromwell, 85 N.Y.S. 839,841,89 App.
m
Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which
su

is the Latin word "salarium," is often used interchangeably

m

with "wage," the etymology of which is the Middle English

s.
@

word "wagen." Both words generally refer to one and the

same meaning, that is, a reward or recompense for services
91

performed. Likewise, "pay" is the synonym of "wages" and

cx

"salary" (Black's Law Dictionary, 5th Edition). Inasmuch as the

o.

words "wages," "pay," and "salary" have the same meaning,

er

and commission is included in the definition of "wage,"

sp

the logical conclusion, therefore, is, in the computation of

o

the separation pay of petitioners, their salary base should

pr

include also their earned sales commissions. (Songco v.

National Labor Relations Commission, G.R. Nos. 50999, March
23, 1990)

4. Distinguish wage from salary for the purpose of Article

1708 of the Civil Code.

Article 1708 used the word "wages" and not "salary"

in relation to "laborer" when it declared what are to be
exempted from attachment and execution. The term "wages"
as distinguished from "salary," applies to the compensation
for manual labor, skilled or unskilled, paid at stated times,
and measured by the day, week, month, or season, while
228 LABOR LAW REVIEWER

"salary" denotes a higher degree of employment or a

superior grade of services and implies a position of office:
by contrast, the term "wages" indicates considerable pay
for a lower and less responsible character of employment,
while "salary" is suggestive of a larger and more important
service. (35 Am. Jur. 496)

The distinction between wages and salary was adverted

to in Bell v. Indian Livestock Co. (Tex. Sup.), 11 S.W. 344,
wherein it was said: "Wages' are the compensation given
to a hired person for service, and the same is true of 'salary.'
The words seem to be synonymous, convertible terms,

ph
though we believe that use and general acceptation have

u.
given to the word 'salary' a significance somewhat different

ed
from the word 'wages' in this: that the former is understood

n.
to relate to position of office, to be the compensation given

ai
for official or other service, as distinguished from 'wages,'
m
the compensation for labor." (Gaa v. Court of Appeals, G.R.
su

No. L-44169, December 3, 1985).

m
s.
@

5. What is the rule on execution or attachment of wage under

Article 1708 of the Civil Code?
91
cx

The laborer's wages shall not be subject to execution

o.

or attachment, except for debts incurred for food, shelter,

er

clothing, and medical attendance. (Article 1708, Civil Code)

o sp

6. Tarcisio was employed as operations manager and

pr

received a monthly salary of P25,000.00 through his payroll

account with DB Bank. He obtained a loan from Roberto
to purchase a car. Tarcisio failed to pay Roberto when the
loan fell due. Roberto sued to collect, and moved to garnish
Tarcisio's payroll account. The latter vigorously objected
and argued that salaries were exempt from garnishment.
Is Tarcisio correct? Explain your answer. (2017 BAR Q. No.
VI[B])

Tarcisio is not correct.

Jurisprudence explained that Article 1708 used the

word "wages" and not "salary" in relation to "laborer"
when it declared what are to be exempted from attachment
 LABOR STANDARDS 229

Wages

and execution. The term "wages" as distinguished from

"salary" applies to the compensation for manual labor,
skilled or unskilled, paid at stated times and measured by
the day, week, month, or season, while "salary" denotes a
higher degree of employment or a superior grade of services
and implies a position of office: by contrast, the term wages
"indicates considerable pay for a lower and less responsible
character of employment, while "salary" is suggestive of a
larger and more important service. (Gaa v. Court of Appeals,
G.R. No. L-44169, December 3, 1985)

ph
Applying the distinction, since Tarcisio was employed

u.
as operations manager and not as a mere laborer his

ed
compensation is a salary. Thus, his salary is not exempt

n.
from garnishment.

ai
m
7. Distinguish "salary" from "wages." (1994 BAR Q. No.
su
III[1])
m

Salary can be distinguished from wages as follows:

s.
@

The term "wages" as distinguished from "salary"

91

applies to the compensation for manual labor, skilled or

cx

unskilled, paid at stated times and measured by the day,

o.

week, month, or season, while "salary" denotes a higher

er

degree of employment or a superior grade of services, and

sp

implies a position of office: by contrast, the term "wages"

o
pr

indicates considerable pay for a lower and less responsible

character of employment, while "salary" is suggestive of a
larger and more important service. (Gaa v. Court of Appeals,
G.R. No. L-44169, December 3, 1985 citing 35 Am. Jur. 496)

Are these subject to attachment and execution? (1994 BAR

Q. No. III[2])

Salary is subject to attachment and execution. However,

by express provision of law, the laborer's wages shall not be
subject to execution or attachment, except for debts incurred
for food, shelter, clothing, and medical attendance. (Article
1708, Civil Code)
230 LABOR LAW REVIEWER

8. Distinguish supplements from facilities.

constitute extra
"Supplements," therefore,

remuneration or special privileges or benefits given to or

received by the laborers over and above their ordinary
earnings or wages. "Facilities," on the other hand, are items
of expense necessary for the laborer's and his family's
existence and subsistence so that by express provision of
law (Section 2[g]), they form part of the wage and when
furnished by the employer are deductible therefrom, since
if they are not so furnished, the laborer would spend and

ph
pay for them just the same. (Our Haus Realty Development

u.
Corporation v. Parian, G.R. No. 204651, August 6, 2014)

ed
n.
9. What are the rules governing facilities?

ai
The following are the relevant rules on facilities:
m
su
1. Subsidized meals and snacks - An employer may
m

provide subsidized meals and snacks to his employees

s.

provided that the subsidy shall not be less than 30% of the
@

fair and reasonable value of such facilities. In such case, the

91

employer may deduct from the wages of the employees

cx

not more than 70% of the value of the meals and snacks
o.

enjoyed by the employees, provided that such deduction is

er

with the written authorization of the employees concerned.

sp

(Section 4, Rule VII-A, Book III, Rules to Implement the Labor

o
pr

Code) For the computation of the fair and reasonable value

of the meals given, the employees may seek assistance from
concerned Regional Tripartite Wages and Productivity
Board. (Handbook on Worker's Statutory Monetary Benefits,
2020 Edition, page 1)
2. Facilities The term "facilities"
-

as used in this
Rule shall include articles or services for the benefit of the
employee or his family but shall not include tools of the
trade or articles or service primarily for the benefits of the
employer or necessary to the conduct of the employer's
business. (Section 5, Rule VII-A, Book III, Rules to Implement
the Labor Code)
 LABOR STANDARDS 231

Wages

3. Value of Facilities - The fair and reasonable value

of facilities is hereby determined to be the cost of operation
and maintenance, including adequate depreciation plus
reasonable allowance (but not more than 5 1/2% interest on
the depreciated amount of capital invested by the employer);
provided that if the total so computed is more than the fair
rental value (or fair price of the commodities or facilities
offered for sale) the fair rental value (or the fair price of
the commodities or facilities offered for sale) shall be the
reasonable cost of the operation and maintenance. The rate
of depreciation and depreciated amount computed by the

ph
employer shall be those arrived at under good accounting

u.
practices. (Second paragraph, Section 6, Rule VII-A, Book III,

ed
Rules to Implement the Labor Code)

n.
10. What is the purpose test? ai
m
su

Under this test, if a benefit or privilege granted to the

m

employee is clearly for the employer's convenience, it will

s.

not be considered a facility but a supplement. (Our Haus

@

Realty Development Corporation v. Parian, G.R. No. 204651,

91

August 6, 2014, citing Mabeza v. National Labor Relations

cx

Commission, G.R. No. 118506, April 18, 1997)

o.
er

11. What are the requirements for the deductibility of a

sp

facility?
o
pr

The requirements for deductibility of a facility are the

following:

a. The facility must be customarily furnished by the

trade;

b. The provision of deductible facilities must be

voluntarily accepted in writing by the employee; and
C. The facility must be charged at a fair and
reasonable value. (Our Haus Realty Development Corporation
v. Parian, G.R. No. 204651, August 6, 2014, citing Mabeza v.
National Labor Relations Commission, G.R. No. 118506, April
18, 1997)
232 LABOR LAW REVIEWER

12. Nelda worked as a chambermaid in Hotel Neverland with

a basic wage of PhP560.00 for an eight-hour workday. On
Good Friday, she worked for one (1) hour from 10:00 PM to
11:00 PM. Her employer paid her only PhP480.00 for each
8-hour workday, and PhP70.00 for the work done on Good
Friday. She sued for underpayment of wages and non
payment of holiday pay and night shift differential pay
for working on a Good Friday. Hotel Neverland denied
the alleged underpayment, arguing that based on long
standing unwritten tradition, food and lodging costs were
partially shouldered by the employer and partially paid

ph
for by the employee through salary deduction. According

u.
to the employer, such valid deduction caused the payment

ed
of Nelda's wage to be below the prescribed minimum.

n.
The hotel also claimed that she was not entitled to holiday

ai
pay and night shift differential pay because hotel workers
m
have to work on holidays and may be assigned to work at
su

night.
m
s.

Does the hotel have valid legal grounds to deduct food

@

and lodging costs from Nelda's basic salary? (2018 BAR

91

Q. No. V[a])
cx

No, the hotel has no legal grounds.

o.
er

In order that the food and lodging can be deducted,

sp

these should be classified as facilities. In determining

o

whether or not a privilege is a facility, the criterion is not so

pr

much its kind but its purpose. (Millares v. NLRC, G.R. No.
122827, March 29, 1999) If it is primarily for the employee's
gain, then the benefit is a facility; if its provision is mainly
for the employer's advantage, then it is a supplement. The
requirements for deductibility of a facility are as follows:

a. The facility must be customarily furnished by

the trade; b. The provision of deductible facilities must
be voluntarily accepted in writing by the employee; and c.
The facility must be charged at a fair and reasonable value.
(Our Haus Realty Development Corporation v. Parian, G.R.
No. 204651, August 6, 2014, citing Mabeza v. National Labor
Relations Commission, G.R. No. 118506, April 18, 1997)

1
 LABOR STANDARDS 233

Wages

Applying the doctrinal rule, granting that the food

and lodging are facilities unless the legal requirements for
deductibility are present the hotel has no legal grounds to
deduct the food and lodging costs from Nelda's basic salary.
13. Gamma Company pays its regular employees P350.00
a day, and houses them in a dormitory inside its factory
compound in Manila. Gamma Company also provides
them with three full meals a day. In the course of a routine
inspection, a Department of Labor and Employment
(DOLE) Inspector noted that the workers' pay is below

ph
the prescribed minimum wage of P426.00 plus P30.00

u.
allowance, and thus required Gamma Company to pay

ed
wage differentials. Gamma Company denies any liability,

n.
explaining that after the market value of the company

ai
provided board and lodging are added to the employees'
m
su
P350 cash daily wage, the employees' effective daily
m

rate would be way above the minimum pay required by

s.

law. The company counsel further points out that the

@

employees are aware that their food and lodging form part
91

of their salary, and have long accepted the arrangement. Is

cx

the company's position legally correct? (2013 BAR Q. No.

o.

II)
er

No, the company's position is not legally correct.

o sp

In order that the board and lodging can be deducted,

pr

these should be classified as facilities. In determining

whether or not a privilege is a facility, the criterion is not so
much its kind but its purpose. (Millares v. NLRC, G.R. No.
122827, March 29, 1999) If it is primarily for the employee's
gain, then the benefit is a facility; if its provision is mainly
for the employer's advantage, then it is a supplement. The
requirements for deductibility of a facility are as follows:
a. The facility must be customarily furnished by
the trade; b. The provision of deductible facilities must be
voluntarily accepted in writing by the employee; and c.
The facility must be charged at a fair and reasonable value.
(Our Haus Realty Development Corporation v. Parian, G.R.
234 LABOR LAW REVIEWER 1

No. 204651, August 6, 2014, citing Mabeza v. National Labor

Relations Commission, G.R. No. 118506, April 18, 1997)

Applying the doctrinal rule, granting that the board

and lodging are facilities the foregoing requirements were
not complied by Gamma Company. Thus, its position is not
legally correct.

14. A worked as a roomboy in La Mallorca Hotel. He sued for

underpayment of wages before the NLRC, alleging that he
was paid below the minimum wage. The employer denied
any underpayment, arguing that based on long standing,

ph
unwritten policy, the Hotel provided food and lodging

u.
to its housekeeping employees, the costs of which were

ed
partly shouldered by it and the balance was charged to the

n.
employees. The employees' corresponding share in the
ai
costs was thus deducted from their wages. The employer
m
concluded that such valid deduction naturally resulted in
su

the payment of wages below the prescribed minimum. If

m

you were the Labor Arbiter, how would you rule? Explain.
s.
@

(2010 BAR Q. No. XXIII)

91

I will rule in favor of A.

cx

In order that the food and lodging can be deducted,

o.

these should be classified as facilities. The purpose test is

er

being applied to determine if a benefit or privilege granted to

sp

the employee is a facility. If it is primarily for the employee's

o
pr

gain, then the benefit is a facility; if its provision is mainly

for the employer's advantage, then it is a supplement. The
requirements for deductibility of a facility are as follows:

a. The facility must be customarily furnished by

the trade; b. The provision of deductible facilities must be
voluntarily accepted in writing by the employee; and c.
The facility must be charged at a fair and reasonable value.
(Our Haus Realty Development Corporation v. Parian, G.R.
No. 204651, August 6, 2014, citing Mabeza v. National Labor
Relations Commission, G.R. No. 118506, April 18, 1997)

Applying the doctrinal rule, granting that the food

and lodging are facilities unless the legal requirements for
 LABOR STANDARDS 235

Wages

deductibility are present La Mallorca hotel has no valid and

legal grounds to deduct the food and lodging costs from A's
basic salary.

15. When is bonus considered part of the wage, salary, or

compensation?

From a legal point of view, a bonus is a gratuity or

act of liberality of the giver which the recipient has no
right to demand as a matter of right. (Philippine National
Construction Corp. v. National Labor Relations Commission,
345 Phil. 324, 331 [1997]) The grant of a bonus is basically a

ph
management prerogative which cannot be forced upon the

u.
employer who may not be obliged to assume the onerous

ed
burden of granting bonuses or other benefits aside from

n.
the employee's basic salaries or wages. (Trader's Royal
ai
Bank v. National Labor Relations Commission, G.R. No. 88168,
m
August 30, 1990, 189 SCRA 274, 277) A bonus, however,
su

becomes a demandable or enforceable obligation when it

m
s.

is made part of the wage or salary or compensation of the

@

employee. (Philippine National Construction Corp. v. National

91

Labor Relations Commission, 366 Phil. 678 (1999); Philippine

cx

Duplicators, Inc. v. National Labor Relations Commission, 311

o.

Phil. 407, 419 [1995]) Particularly instructive is the ruling of

er

the Court in Metro Transit Organization, Inc. v. National Labor

sp

Relations Commission, 315 Phil. 860, 871 (1995) where it was

o

written:
pr

Whether or not a bonus forms part of wages

depends upon the circumstances and conditions
for its payment. If it is additional compensation
which the employer promised and agreed to
give without any conditions imposed for its
payment, such as success of business or greater
production or output, then it is part of the wage.
But if it is paid only if profits are realized or if a
certain level of productivity is achieved, it cannot
be considered part of the wage. Where it is not
payable to all but only to some employees and
only when their labor becomes more efficient or
236 LABOR LAW REVIEWER

more productive, it is only an inducement for

efficiency, a prize therefore, not a part of the wage.
(Eastern Telecommunications Philippines, Inc. v.
Eastern Telecommunications, Employees Union, G.R.
No. 185665, February 8, 2012)

16. Is a (sales) commission included in the computation of

actual wages/salary?
Article 97(f) of the Labor Code explicitly includes
commissions as part of wages. While commissions are,
indeed, incentives or forms of encouragement to inspire

ph
employees to put a little more industry on the jobs

u.
particularly assigned to them, still these commissions

ed
are direct remunerations for services rendered. In fact,

n.
commissions have been defined as the recompense,

ai
compensation or reward of an agent, salesman, executor,
m
su
trustee, receiver, factor, broker or bailee, when the same is

calculated as a percentage on the amount of his transactions

m
s.

or on the profit to the principal. The nature of the work of a

@

salesman and the reason for such type of remuneration for

91

services rendered demonstrate clearly that commissions are

cx

part of a salesman's wage or salary. (Iran v. NLRC, G.R. No.

o.

121927, April 22, 1998, citing Philippine Duplicator's, Inc. v.

er

NLRC, 227 SCRA 747 [1993])

osp

17. Is a sales a commission is part of a basic salary and

pr

included in the computation of the retirement benefits

and 13th month pay.
Jurisprudence explained that as to whether a
commission should be included in the computation of the
retirement and 13th month pay will depend on whether
a commission forms part of the basic salary. Thus, it was
clarified that salemen's commissions which are not overtime
payments nor profit sharing-sharing payments nor any
other fringe benefit, but a portion of the salary structure
which represents an automatic increment to the monetary
value initially assigned to each unit of work rendered by a
salesman shall be included in determining the retirement
 LABOR STANDARDS 237

Wages

and 13th month pay. (Reyes v. NLRC, G.R. No. 160233, August
8, 2007 citing Philippine Duplicators v. NLRC, G.R. No. 110068,
February 15, 1995)

18. What are the allowances that can be considered as

components of separation pay?

Jurisprudence provides that separation pay when

awarded to an illegally dismissed employee in lieu of
reinstatement or to a retrenched employee should be
computed based not only on the basic salary but also on the
regular allowances that the employee had been receiving.

ph
(Millares v. NLRC, G.R. No. 122827, March 29, 1999)

u.
ed
19. Nico is a medical representative engaged in the

n.
promotion of pharmaceutical products and medical

ai
devices for Northern Pharmaceuticals, Inc. He regularly
m
visits physicians' clinics to inform them of the chemical
su

composition and benefits of his employer's products. At

m

the end of every day, he receives a basic wage of PhP700.00

s.

plus a Php150.00 "productivity allowance." For purposes

@

of computing Nico's 13th month pay, should the daily

91

"productivity allowance" be included? (2018 BAR Q. No.

cx

VII)
o.
er

The "productivity allowance" should not be included.

sp

The term "basic salary" in PD 851 is used to distinguish

o
pr

wage or salary from "fringe benefits" which are not integrated

into "basic salary" for certain specific purposes. In San
Miguel Corporation v. Inciong, 103 SCRA 139 (1981), the catch
all phrase "allowances" and "monetary benefits"" which is
deemed not considered or integrated as part of "basic salary"
was construed to refer to "any and all additions which may
be in the form of allowances or 'fringe' benefits." (Philippine
Duplicators v. NLRC, G.R. No. 110068, November 11, 1993)
Applying the above doctrinal rule, the productivity
allowance is not considered or integrated part of Nico's
basic salary. Thus, it cannot be included in the computation
of his 13th month pay.
238 LABOR LAW REVIEWER

20. Lizzy Lu is a sales associate for Luna Properties. The latter

is looking to retrench Lizzy and five other sales associates
due to financial losses. Aside from a basic monthly salary,
Lizzy and her colleagues receive commissions on the sales
they make as well as cost of living and representation
allowances. In computing Lizzy's separation pay, Luna
Properties should consider her: (1%)
(A) monthly salary only;

(B) monthly salary plus sales commissions;

(C) monthly salary plus sales commissions, plus

ph
cost of living allowance;

u.
(D) monthly salary plus sales commissions, plus

ed
cost of living allowance and representation

n.
allowance (2014 BAR Q. No. XXV)

ai
m
(D) monthly salary plus sales commissions, plus cost
su

of living allowance and representation allowance

m
s.

Separation pay when awarded to an illegally dismissed

@

employee in lieu of reinstatement or to a retrenched

91

employee should be computed based not only on the basic

cx

salary but also on the regular allowances that the employee

o.

had been receiving. (Millares v. NLRC, G.R. No. 122827,

er

March 29, 1999)

sp

As to commission, Article 97(f) of the Labor Code

o

explicitly includes commissions as part of wages.

pr

While commissions are, indeed, incentives or forms of

encouragement to inspire employees to put a little more
industry on the jobs particularly assigned to them, still
these commissions are direct remunerations for services
rendered. (Iran v. NLRC, G.R. No. 121927, April 22, 1998)

21. Robert Suarez is a salesman for Star Pharmaceuticals,

Star Pharmaceuticals has applied with the Department
of Labor and Employment for clearance to terminate
(by way of retrenchment) the services of Suarez due to
financial losses. Robert Suarez, aside from his monthly
salary, receives commissions on the sales he makes. He
 LABOR STANDARDS 239

Wages

also receives allowances. The existing CBA between Star

Pharmaceuticals and the union, of which Robert Suarez
is a member, states that any employee separated from
employment for causes not due to the fault of the employee
shall receive from the company a retirement gratuity in
an amount equivalent to one month's salary per year of
service. Robert Suarez contends that in computing his
separation pay, his sales commission and his allowances
should be included in the monthly salary. Do you agree?
(1997 BAR Q. No. 3)

ph
I agree insofar as the inclusion in the monthly salary of
the sales commission but not as to the allowances.

u.
ed
As to sales commission, Article 97(f) of the Labor

n.
Code explicitly includes commissions as part of wages.

ai
While commissions are, indeed, incentives or forms of
m
encouragement to inspire employees to put a little more
su

industry on the jobs particularly assigned to them, still

m

these commissions are direct remunerations for services

s.

rendered. (Iran v. NLRC, G.R. No. 121927, April 22, 1998)

@

Thus, in computing Robert's separation pay the sales

91

commission should be included in the monthly salary.

cx
o.

On the other hand, separation pay when awarded to

er

an illegally dismissed employee in lieu of reinstatement or

sp

to a retrenched employee should be computed based not

o

only on the basic salary but also on the regular allowances

pr

that the employee had been receiving. (Millares v. NLRC,

G.R. No. 122827, March 29, 1999)

Clearly, only the regular allowances are included in the

computation of the separation pay. In this case, since the
facts do not show that the subject allowances are regular
allowances the same cannot be included in the computation
of Robert's separation pay.

22. Pedro Tiongco was a salesman for ten years of Lakas

Appliance Company (LAC). Due to business reverses, the
Company laid off Tiongco and three other salesmen and
offered them separation pay based on their monthly basic
240 LABOR LAW REVIEWER

salary of P5,700.00. The three salesmen accepted their

separation pay and signed individual quitclaims stating,
among others, that they have no more claims or causes
of action whatsoever against LAC. The quitclaims were
duly notarized. Tiongco refused to accept his separation
pay and instead, demanded that the said pay should be
computed on the basis of his monthly basic salary and
his sales commissions. Upon LAC's rejection of Tiongco's
demand, Tiongco filed the appropriate complaint with the
Labor Arbiter.

As Labor Arbiter, how will you resolve Tiongco's

ph
complaint? Reasons. (1992 BAR Q. No. VII[a])

u.
ed
I will resolve the complaint in Tiongco's favor.

n.
Article 97(f) of the Labor Code defines wage. This

ai
definition explicitly includes commissions as part of wages.
m
su
While commissions are, indeed, incentives or forms of

encouragement to inspire employees to put a little more

m

industry on the jobs particularly assigned to them, still

s.
@

these commissions are direct remunerations for services

91

rendered. (Iran v. NLRC, G.R. No. 121927, April 22, 1998)

cx

Applying the foregoing doctrinal rule, Tiongco's sales

o.

commissions should be included in the computation of his

er

separation pay.
sp
o

23. What is the non-elimination or diminution rule?

pr

The Non-Diminution Rule found in Article 100 of the

Labor Code explicitly prohibits employers from eliminating

or reducing the benefits received by their employees.
(Wesleyan University-Philippines v. Wesleyan University
Philippines Faculty and Staff Association, G.R. No. 181806,
March 12, 2014)

24. What is the basis of benefit for the application of the Non
Diminution Rule?

This rule, however, applies only if the benefit is based

on an express policy, a written contract, or has ripened
into a practice. (Wesleyan University-Philippines v. Wesleyan
 LABOR STANDARDS 241

Wages

University-Philippines Faculty and Staff Association, G.R. No.

181806, March 12, 2014 citing Central Azucarera De Tarlac
v. Central Azucarera De Tarlac Labor Union-NLU, G.R. No.

188949, July 26, 2010, 625 SCRA 622, 630-631)

25. What are the requisites for the application of the non
elimination or diminution rule?

"There is diminution of benefits when the following

requisites are present: (1) the grant or benefit is founded on
a policy or has ripened into a practice over a long period
of time; (2) the practice is consistent and deliberate; (3) the

ph
practice is not due to error in the construction or application

u.
of a doubtful or difficult question of law; and (4) the

ed
diminution or discontinuance is done unilaterally by the

n.
employer." (Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.,
ai
G.R. No. 176985, April 1, 2013 citing Supreme Steel Corporation
m
v. Nagkakaisang Manggagawa ng Supreme Independent Union
su

(NMS-IND-APL), G.R. No. 185556, March 28, 2011, 646 SCRA

m

501, 527 cited in Vergara, Jr. v. Coca-Cola Bottlers Philippines,

s.
@

Inc., G.R. No. 176985, April 1, 2013)

91

26. When is a benefit considered as a regular company

cx

practice?
o.
er

"To be considered as a regular company practice, the

sp

employee must prove by substantial evidence that the giving

o

of the benefit is done over a long period of time, and that it

pr

has been made consistently and deliberately." (Vergara, Jr.

v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 176985, April
1, 2013 citing Eastern Telecommunications Philippines, Inc.
v. Eastern Telecoms Employees Union, supra note 15, at 532;
Supreme Steel Corporation v. Nagkakaisang Manggagawa ng
Supreme Independent Union (NMS-IND-APL), supra, at 528;
and Metropolitan Bank and Trust Company v. National Labor
Relations Commission, G.R. No. 152928, June 18, 2009, 589
SCRA 376, 384)

Jurisprudence has not laid down any rule specifying

a minimum number of years within which a company
practice must be exercised in order to constitute voluntary
242 LABOR LAW REVIEWER

company practice. Thus, it can be six (6) years, three (3)

years, or even as short as two (2) years. (Arco Metal products,
Co. v. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU
[SAMARM-NAFLU]), May 14, 2008, G.R. No. 170734)

27. What are the instances when non-diminution rule will not
apply?

The non-diminution rule will not apply in the

following:

1. Also, even assuming arguendo that the Saturday

ph
work involved in this case falls within the definition of a
"benefit" protected by law, the fact that it was made subject

u.
to a condition (i.e., the existence of operational necessity)

ed
negates the application of Article 100 pursuant to the

n.
established doctrine that when the grant of a benefit is made
ai
m
subject to a condition and such condition prevails, the rule
su
on non-diminution finds no application. Otherwise stated,
m

if Saturday work and its corresponding premium pay

s.

were granted to CCBPI's employees without qualification,

@

then the company's policy of permitting its employees to

91

suffer work on Saturdays could have perhaps ripened into

cx

company practice protected by the non-diminution rule.

o.

(Coca-Cola Bottlers Philippines, Inc. v. Iloilo Coca-Cola Plant

er

Employees Labor Union (ICCPELU), G.R. No. 195297, December

sp

5, 2018)
o
pr

2. An exception to the rule is when "the practice is

due to error in the construction or application of a doubtful
or difficult question of law." The error, however, must be
corrected immediately after its discovery; otherwise, the rule
on Non-Diminution of Benefits would still apply. (Wesleyan
University-Philippines v. Wesleyan University-Philippine
Faculty and Staff Association, G.R. No. 181806, March 12, 2014)

28. What is the meaning of the term "benefits" mentioned in

the non-diminution rule?

This Court has already decided several cases

regarding the non-diminution rule where the benefits or
privileges involved in those cases mainly concern monetary
 243
LABOR STANDARDS
Wages

considerations or privileges with monetary equivalents.

Some of these cases are: Eastern Telecommunication Phils.
Inc. v. Eastern Telecoms Employees Union, (G.R. No. 185665,
February 8, 2012, 665 SCRA 516) where the case involves
the payment of 14th, 15th, and 16th month bonuses; Central
Azucarera De Tarlac v. Central Azucarera De Tarlac Labor

Union-NLU, (G.R. No. 188949, July 26, 2010, 625 SCRA 622)
regarding the 13th month pay, legal/special holiday pay,
night premium pay, and vacation and sick leaves; TSPIC
Corp. v. TSPIC Employees Union, (G.R. 163419, February 13,
2008, 545 SCRA 215) regarding salary wage increases; and

ph
American Wire and Cable Daily Employees Union v. American

u.
Wire and Cable Company, Inc., (497 Phil. 213 [2005]) involving

ed
service awards with cash incentives, premium pay,

n.
Christmas party with incidental benefits and promotional

ai
increase. (Royal Plant Workers Union v. Coca-Cola Bottlers
m
Philippines, Inc.-Cebu Plant, G.R. No. 198783, April 15, 2013)
su
m

29. Is overtime within the term benefits on Non-elimination

s.

or Diminution Rule under Article 100 of the Labor Code?

@
91

The requirement of rendering additional service

cx

differentiates overtime pay from benefits such as 13th month

pay or yearly merit increase. These benefits do not require
o.
er

any additional service from their beneficiaries. Thus,

sp

overtime pay does not fall within the definition of benefits

o

under Article 100 of the Labor Code. (San Miguel Corporation

pr

v. Layoc, Jr., G.R. No. 149640, October 19, 2007 citing See Manila
Jockey Club Employees Labor Union - PTGWO v. Manila Jockey
Club, Inc., G.R. No. 167760, March 7, 2007, 517 SCRA 707)

30. D, one of the sales representatives of OP, Inc., was receiving

a basic pay of P50,000.00 a month, plus a 1% overriding
commission on his actual sales transactions. In addition,
beginning three (3) months ago, or in August 2019, D was
able to receive a monthly gas and transportation allowance
of P5,000.00 despite the lack of any company policy
therefor. In November 2019, D approached his manager
and asked for his gas and transportation allowance for the
244 LABOR LAW REVIEWER

month. The manager declined his request, saying that the

company had decided to discontinue the aforementioned
allowance considering the increased costs of its overhead
expenses. In response, D argued that OP, Inc.'s removal
of the gas and transportation allowance amounted to a
violation of the rule on non-diminution of benefits. Is the

argument of D tenable? Explain. (2019 Part I BAR Q. No.

A.6)

The argument of D is not tenable.

The Non-Diminution Rule however, applies only if the

ph
benefit is based on express policy, a written contract, or has

u.
ripened into a practice. (Wesleyan University-Philippines v.

ed
Wesleyan University-Philippines Faculty and Staff Association,

n.
G.R. No. 181806, March 12, 2014) "To be considered as a

ai
regular company practice, the employee must prove by
m
substantial evidence that the giving of the benefit is done
su
over a long period of time, and that it has been made
m

consistently and deliberately." (Vergara, Jr. v. Coca-Cola

s.

Bottlers Philippines, Inc., G.R. No. 176985, April 1, 2013)

@
91

In the given facts, the absence of company policy was

clearly stated. Moreover, the grant of the subject gas and
cx

transportation allowances is not a regular company practice.

o.

This is because there was no substantial evidence that it was

er

done over a long period of time or it was made consistently

sp

and deliberately.
o
pr

Applying the doctrinal rule, the removal of the gas

and transportation allowances is not a violation of the non
diminution rule.

31. Far East Bank (FEB) is one of the leading banks in the
country. Its compensation and bonus packages are
top of the industry. For the last years, FEB had been
providing the following bonuses across-the-board to all
its employees:

(a) 13th month pay; (b) 14th to 18th month pay;

(c) Christmas basket worth P6,000; (d) Gift check worth
P4,000; and (e) Productivity-based incentive ranging from
 LABOR STANDARDS 245

Wages

a 20% to 40% increase in gross monthly salary for all

employees who would receive an evaluation of "Excellent"
for 3 straight quarters in the same year. Because of its poor
performance over-all, FEB decided to cut back on the
bonuses this year and limited itself to the following: (a)
13th month pay; (b) 14th month ay; (c) Christmas basket
worth P4,000; and (d) Gift check worth P2,000. Katrina, an

employee of FEB, who had gotten a rating of "Excellent"

for the last 3 quarters was looking forward to the bonuses
plus the productivity incentive bonus. After learning that
FEB had modified the bonus scheme, she objected. Is

ph
Katrina's objection justified? Explain. (2015 BAR Q. No.

u.
IV)

ed
n.
Katrina's objection is justified.

ai
The Non-Diminution Rule found in Article 100 of the
m
Labor Code explicitly prohibits employers from eliminating
su

or reducing the benefits received by their employees.

m
s.

(Wesleyan University-Philippines v. Wesleyan University

@

Philippines Faculty and Staff Association, G.R. No. 181806,

91

March 12, 2014) There is diminution of benefits when the

cx

following requisites are present:

o.

(1) the grant or benefit is founded on a policy or

er

has ripened into a practice over a long period of time; (2)

sp

the practice is consistent and deliberate; (3) the practice

o
pr

is not due to error in the construction or application of a

doubtful or difficult question of law; and (4) the diminution
or discontinuance is done unilaterally by the employer.
(Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No.
176985, April 1, 2013)
In this case, the grant of the said bonuses, Christmas
basket and gift check, has ripened into company practice
because it has been done over a long period of time or it
was made consistently and deliberately for the last six (6)
years. Thus, the cut back on the bonuses and reduction of
the Christmas basket and gift check are in violation of the
non-diminution rule under the Labor Code. (Article 100)
246 LABOR LAW REVIEWER

As to discontinuance of the productivity-based

incentive, the facts clearly stated that the grant of
productivity-based incentive shall be given to the
employees who would receive an evaluation of "Excellent"
for 3 straight quarters in the same year. In this case, Katrina
obtained the rating of Excellent for the last 3 quarters. Thus,
she is entitled to the productivity-based incentive.

32. Lito was anticipating the bonus he would receive for 2013.
Aside from the 13th month pay, the company has been
awarding him and his other co-employees a two to three

ph
months bonus for the last 10 years. However, because of

u.
poor over-all sales performance for the year, the company

ed
unilaterally decided to pay only a one month bonus in

n.
2013. Is Lito's employer legally allowed to reduce the

ai
bonus? (2014 BAR Q. No. XX)
m
No, the employer is not allowed to reduce the bonus.
su
m

The Non-Diminution Rule found in Article 100 of the

s.

Labor Code explicitly prohibits employers from eliminating

@

or reducing the benefits received by their employees.

91

(Wesleyan University-Philippines v. Wesleyan University

cx

Philippines Faculty and Staff Association, G.R. No. 181806,

o.

March 12, 2014) There is diminution of benefits when the

er

following requisites are present:

sp

(1) the grant or benefit is founded on a policy or

o
pr

has ripened into a practice over a long period of time; (2)

the practice is consistent and deliberate; (3) the practice
is not due to error in the construction or application of a
doubtful or difficult question of law; and (4) the diminution
or discontinuance is done unilaterally by the employer.
(Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No.
176985, April 1, 2013)

In this case, the grant of the said bonuses has ripened

into company practice because it has been done over a long
period of time or it was made consistently and deliberately
for the last ten (10) years. Thus, the payment of the one
month bonus instead of the two to three months bonuses
 LABOR STANDARDS 247

Wages

is a violation of the non-diminution rule under the Labor

Code. (Article 100)

The poor overall sales performance for the year

2013 could not be cited as grounds for Lito's company to
repudiate its obligation that ripened into company practice.
(Eastern Telecommunications Philippines, Inc. v. Eastern
Telecoms Employees Union, G.R. No. 185665, February 8, 2012)

33. Hector, a topnotch Human Resource Specialist who had

worked in multinational firms both in the Philippines
and overseas, was recruited by ABC Corp., because of

ph
his impressive credentials. In the course of Hector's

u.
employment, the company management frequently did

ed
not follow his recommendations and he felt offended

n.
by this constant rebuff. Thus, he toyed with the idea of
ai
resigning and of asking for the same separation pay that
m
ABC earlier granted to two (2) department heads when
su

they left the company. To obtain a legal opinion regarding

m

his options, Hector sent an email to ABC's retained

s.

counsel, requesting for advice on whether the grant by

@

the company of separation pay to his resigned colleagues

91

has already ripened into a company practice, and whether

cx

he can similarly avail of this benefit if he resigns from his

o.

job. As the company's retained legal counsel, how will

er

you respond to Hector?

o sp

(A) I would advise him to write management

pr

directly and inquire about the benefits he can

expect if he resigns.
(B) I would advise him that the previous grant
of separation pay to his colleagues cannot be
considered a company practice because several
other employees had resigned and were not
given separation pay.

(C) I would advise him to ask for separation pay, not

on account of company practice, but on the basis
of discrimination as he is similarly situated as
the two resigned department heads who were
paid their separation pay.
248 LABOR LAW REVIEWER

(D) I would not give him any legal advice because

he is not my client.

(E) I would maintain that his question involves a

policy matter beyond the competence of a legal
counsel to give. (2013 BAR Q. No. XIII)

(D) I would not give him any legal advice because he

is not my client.

"To be considered as a regular company practice, the

employee must prove by substantial evidence that the giving
of the benefit is done over a long period of time, and that it

ph
has been made consistently and deliberately." (Vergara, Jr. v.

u.
Coca-Cola Bottlers Philippines, Inc., G.R. No: 176985, April 1,

ed
2013)

n.
34.
ai
In order to improve the Cebu service and sales, Ricardo
m
su
decided to assign some of its Makati-based employees
to Cebu to train Cebu employees and expose them to the
m
s.

Makati standard of service. A chef and three waiters were

@

assigned to Cebu for the task. While in Cebu, the assigned

91

personnel shared in the Cebu service charge collection

cx

and thus received service charge benefits lesser than what

o.

they were receiving in Makati. If you were the lawyer for

er

the assigned personnel, what would you advise them to

sp

do?
o
pr

(A) I would advise them to file a complaint for

unlawful diminution of service charge benefits
and for payment of differentials.

(B) I would advise them to file a complaint for

illegal transfer because work in Cebu is highly
prejudicial to them in terms of convenience and
service charge benefits.

(C) I would advise them to file a complaint for

discrimination in the grant of service charge
benefits.
 LABOR STANDARDS 249

Wages

(D) I would advise them to accept their Cebu training

assignment as an exercise of the company's
management prerogative.

(E) I would advise them to demand the continuation

of their Makati-based benefits and to file a

complaint under (B) above if the demand is not

heeded. (2013 BAR Q. No. XVI[2])

(A) I would advise them to file a complaint for

unlawful diminution of service charge benefits and for
payment of differentials.

ph
The Non-Diminution Rule found in Article 100 of the

u.
Labor Code explicitly prohibits employers from eliminating

ed
or reducing the benefits received by their employees.

n.
(Wesleyan University-Philippines v. Wesleyan University

ai
Philippines Faculty and Staff Association, G.R. No. 181806,
m
March 12, 2014) There is diminution of benefits when the
su

following requisites are present:

m
s.

(1) the grant or benefit is founded on a policy or

@

has ripened into a practice over a long period of time; (2)

91

the practice is consistent and deliberate; (3) the practice

cx

is not due to error in the construction or application of a

o.

doubtful or difficult question of law; and (4) the diminution

er

or discontinuance is done unilaterally by the employer.

sp

(Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No.

o

176985, April 1, 2013)

pr

In this case, there is diminution of benefits when they

received the service charge benefits lesser than what they
have been receiving in Makati. Thus, the payment of the
lesser amount as service charge is a violation of the non
diminution rule under the Labor Code. (Article 100)

35. Little Hands Garment Company, an unorganized

manufacturer of children's apparel with around 1,000
workers, suffered losses for the first time in history when
its US and European customers shifted their huge orders
to China and Bangladesh. The management informed
its employees that it could no longer afford to provide
250 LABOR LAW REVIEWER

transportation shuttle services. Consequently, it announced

that a nominal fare would be charged depending on the
distance traveled by the workers availing of the service.
Was the Little Hands Garments Company within its rights
to withdraw this benefit which it had unilaterally been
providing to its employees? Select the best answer(s) and
briefly explain your reason(s) therefor.
(a) Yes, because it can withdraw a benefit that is
unilaterally given;

(b) Yes, because it is suffering losses for the first

ph
time;

u.
(c) Yes, because this is a management prerogative

ed
which is not due to any legal or contractual

n.
obligation;

ai
(d)
m
No, because this amounts to a diminution of
su
benefits which is prohibited by the Labor Code;
m

(e) No, because it is a fringe benefit that has already

s.
@

ripened into a demandable right or entitlement.

(2005 BAR Q. No. I[2])
91
cx

(a) Yes, because it can withdraw a benefit that is

o.

unilaterally given;
er

(c) Yes, because this is a management prerogative

sp

which is not due to any legal or contractual obligation;

o
pr

The Non-Diminution Rule found in Article 100 of the

Labor Code explicitly prohibits employers from eliminating

or reducing the benefits received by their employees.
(Wesleyan University-Philippines v. Wesleyan University
Philippines Faculty and Staff Association, G.R. No. 181806,
March 12, 2014) There is diminution of benefits when the
following requisites are present:

(1) the grant or benefit is founded on a policy or

has ripened into a practice over a long period of time; (2)
the practice is consistent and deliberate; (3) the practice
is not due to error in the construction or application of a
doubtful or difficult question of law; and (4) the diminution
 251
LABOR STANDARDS

Wages

or discontinuance is done unilaterally by the employer.

(Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No.
176985, April 1, 2013)

In this case, it does not appear that the foregoing

requisites are present.

36. LKG Garments Inc. makes baby clothes for export. As

part of its measures to meet its orders, LKG requires its
employees to work beyond eight (8) hours everyday, from
Monday to Saturday. It pays its employees an additional
35% of their regular hourly wage for work rendered in

ph
excess of eight (8) hours per day. Because of additional

u.
orders, LKG now requires two (2) shifts of workers with

ed
both shifts working beyond eight (8) hours but only up to

n.
a maximum of four (4) hours. Carding is an employee who

ai
used to render up to six (6) hours of overtime work before
m
su
the change in schedule. He complains that the change
adversely affected him because now he can only earn up
m
s.

to a maximum of four (4) hours' worth of overtime pay.

@

Does Carding have a cause of action against the company?

91

(2015 BAR Q. No. II)

cx

No, Carding has no cause of action against the

o.

company.
er
sp

The requirement of rendering additional service

differentiates overtime pay from benefits such as thirteenth
o
pr

month pay or yearly merit increase. These benefits do not

require any additional service from their beneficiaries. Thus,
overtime pay does not fall within the definition of benefits
under Article 100 of the Labor Code. (San Miguel Corporation
v. Layoc, Jr., G.R. No. 149640, October 19, 2007) Moreover, the
change of schedule is a management prerogative. (Manila
Jockey Club Employees Labor Union - PTGWO v. Manila Jockey
Club, Inc., G.R. No. 167760, March 7, 2007)

Applying the above rule, the fact that Carding used

to render up to six (6) hours of overtime work and the
change in schedule adversely affected him is not a violation
of non-diminution rule under the Labor Code. (Article
252
LABOR LAW REVIEWER

100) Moreover, the change of schedule is a management

prerogative.

37. Inter-Garments Co. manufactures garments for export and

requires its employees to render overtime work ranging
from two to three hours a day to meet its clients' deadlines.
Since 2009, it has been paying its employees on overtime
an additional 35% of their hourly rate for work rendered
in excess of their regular eight working hours. Due to the
slowdown of its export business in 2012, Inter-Garments
had to reduce its overtime work; at the same time, it

ph
adjusted the overtime rates so that those who worked

u.
overtime were only paid an additional 25% instead of

ed
the previous 35%. To replace the workers' overtime rate

n.
loss, the company granted a one-time 5% across-the

ai
board wage increase. Vigilant Union, the rank-and-file
m
bargaining agent, charged the company with Unfair Labor
su

Practice on the ground that (1) no consultations had been

m

made on who would render overtime work; and (2) the

s.

unilateral overtime pay rate reduction is a violation of

@

Article 100 (entitled Prohibition Against Elimination or

91

Diminution of Benefits) of the Labor Code. Is the union

cx

position meritorious? (2013 BAR Q. NO. III)

o.
er

The position of the union is not meritorious.

sp

By established jurisprudence, overtime pay was not

o

given to each employee consistently, deliberately, and

pr

unconditionally but as a compensation for additional

services rendered. Thus, overtime pay does not fall within
the definition of benefits under Article 100 of the Labor
Code on prohibition against elimination or diminution of
benefits. Moreover, the change of schedule is a management
prerogative. (Manila Jockey Club Employees Labor Union
PTGWO v. Manila Jockey Club, Inc., G.R. No. 167760, March 7,
2007)

In this case, the facts clearly show that Inter-Garments

Co. was not obliged to allow all its employees to render
overtime work every day but only to meet its clients'
deadlines, and it was given as a compensation for additional
 253
LABOR STANDARDS

Wages

services rendered. Further, the adjustment of the overtime

pay rate to 25% is in accordance with the Labor Code.
(Article 87)

Thus, the reduction of the overtime work and

adjustment of overtime rates pay to what the law provides
is not a violation of non-diminution rule under the Labor
Code. (Article 100)

38. What are the other provisions on non-diminution rule?

The other provisions on non-diminution are as follows:

ph
1. On wage order issued by RTWPB under Article

u.
127 of the Labor Code;

ed
2. On Night Shift Differential under Section 6, Rule

n.
ai
II, Book III, Rules to Implement the Labor Code;
m
3. On Weekly Rest Periods under Section 9, Rule III,
su

Book III, Rules to Implement the Labor Code;

m
s.

4. On Holidays with pay under Section 11, Rule IV,

@

Book III, Rules to Implement the Labor Code;

91

5. On Service Incentive Leave under Section 6, Rule

cx

V, Book III, Rules to Implement the Labor Code;

o.
er

6. On Service Charge under Section 7, Rule VI, Book

sp

III, Rules to Implement the Labor Code;

o

7. On Employment of Women and Minors under

pr

Section 12, Rule XII, Book III, Rules to Implement the Labor
Code;

8. On Employment of Homeworkers under Section

15, Rule XIV, Book III, Rules to Implement the Labor Code;
9. On Domestic Workers Act under Section 41,
Article IX, Book III, RA 10361

39. How are wages paid by an employer?

No employer shall pay the wages of an employee by
means of promissory notes, vouchers, coupons, tokens,
tickets, chits, or any object other than legal tender, even
254 LABOR LAW REVIEWER

when expressly requested by the employee. (Article 102,

Labor Code) Under the Civil Code (see Article 1705), the
laborer's wages shall be paid in legal currency.
40. What is the time-frequency on payment of wages? State
the exceptions, if any.
Wages shall be paid at least once every two (2) weeks
or twice a month at intervals not exceeding sixteen (16)
days. (Article 103, Labor Code)

If on account of force majeure or circumstances beyond

ph
the employer's control, payment of wages on or within

u.
the time herein provided cannot be made, the employer

ed
shall pay the wages immediately after such force majeure

n.
or circumstances have ceased. No employer shall make

ai
payment with less frequency than once a month. (Article
m
103, Labor Code)
su
m

41. How are wages paid on a task which cannot be completed

s.

in two (2) weeks?

@
91

The payment of wages of employees engaged to

cx

perform a task which cannot be completed in two (2) weeks

shall be subject to the following conditions, in the absence
o.
er

of a collective bargaining agreement or arbitration award:

sp

(1) That payments are made at intervals not

o

exceeding sixteen (16) days, in proportion to the amount of

pr

work completed;

(2) That final settlement is made upon completion of

the work. (Article 103, Labor Code)

42. To whom do the wages should be paid?

Wages shall be paid directly to the workers to whom
they are due. (Article 104, Labor Code)

43. What are the exceptions to direct payment of wages?

(a) In cases of force majeure rendering such payment
impossible or under other special circumstances to be
 LABOR STANDARDS 255

Wages

determined by the Secretary of Labor and Employment in

appropriate regulations, in which case, the worker may be
paid through another person under written authority given
by the worker for the purpose; or
(b) Where the worker has died, in which case, the
employer may pay the wages of the deceased worker to
the heirs of the latter without the necessity of intestate
proceedings. The claimants, if they are all of age, shall
execute an affidavit attesting to their relationship to the
deceased and the fact that they are his heirs, to the exclusion

ph
of all other persons. If any of the heirs is a minor, the affidavit
shall be executed on his behalf by his natural guardian or

u.
ed
next-of-kin. The affidavit shall be presented to the employer
who shall make payment through the Secretary of Labor and

n.
ai
Employment or his representative. The representative of the
m
Secretary of Labor and Employment shall act as referee in
su

dividing the amount paid among the heirs. The payment of

m

wages under this Article shall absolve the employer of any

s.

further liability with respect to the amount paid. (Article

@

105, Labor Code)

91
cx

44. When can an employer pay the wages of a worker to

o.

another person?
er

Payment of wages shall be made direct to the employees

o sp

entitled thereto, except in the following cases:

pr

(a) Where the employer is authorized in writing by

the employee to pay his wages to a member of his family;
(b) Where payment to another person of any part
of the employee's wages is authorized by existing law,
including payments for the insurance premiums of the
employee and union dues where the right to check-off
has been recognized by the employer in accordance with
a collective agreement or authorized in writing by the
individual employees concerned; or
(c) In case of death of the employee. (Section 5, Rule
VIII, Book III, Rules to Implement the Labor Code)
256 LABOR LAW REVIEWER

45. Benito is the owner of an eponymous clothing brand that

is a top seller. He employs a number of male and female
models who wear Benito's clothes in promotional shoots
and videos. His deal with the models is that Benito will
pay them with 3 sets of free clothes per week. Is this
arrangement allowed? (2015 BAR Q. No. III)
No, the arrangement is not allowed.

No employer shall pay the wages of an employee by

means of promissory notes, vouchers, coupons, tokens,
tickets, chits, or any object other than legal tender, even

ph
when expressly requested by the employee. (Article 102,

u.
Labor Code) Under the Civil Code (Article 1705), the laborer's

ed
wages shall be paid in legal currency.

n.
Applying the above provisions of law, Benito cannot
ai
pay the models with 3 sets of free clothes per week.
m
su
m

46. Robert, an employee of ABC Company, is married to

s.

Wanda. One day, Wanda visited the company office with

@

her three (3) emaciated minor children, and narrated

91

to the Manager that Robert had been squandering his

cx

earnings on his mistress, leaving only a paltry sum for the

o.

support of their children. Wanda tearfully pleaded with

er

the Manager to let her have one half of Robert's pay every
sp

payday to ensure that her children would at least have

o

food on the table. To support her plea, Wanda presented

pr

a Kasulatan signed by Robert giving her one half of his

salary, on the condition that she would not complain if
he stayed with his mistress on weekends. If you were the
Manager, would you release one half of Robert's salary to
Wanda?

(A) No, because an employer is prohibited from

interfering with the freedom of its employees to
dispose of their wages.
(B) Yes, because of Robert's signed authorization to
give Wanda one half of his salary.
 LABOR STANDARDS 257

Wages

(C) No, because there is no written authorization

for ABC Company to release Robert's salary to
Wanda.

(D) Yes, because it is Robert's duty to financially

support his minor children.

(E) No, because Robert's Kasulatan is based on an

illegal consideration and is of doubtful legal
validity. (2013 BAR Q. No. XV)

(A) No, because an employer is prohibited from

interfering with the freedom of its employees to dispose of

ph
their wages.

u.
ed
See Article 112 of the Labor Code.

n.
ai
47. An explosion in a mine site resulted in the death of fifty
m
(50) miners. At the time of the accident:
su

1. The Mining Company has not yet paid the wages,

m
s.

overtime, holiday and rest day compensation of

@

the deceased miners;

91

2. All the deceased miners owed the Miners

cx

Cooperative Union sums of money;

o.

The Mining Company served by a sheriff

er

3.
sp

Writs of Garnishment of Wages of some of the

deceased miners by virtue of final judgments in
o
pr

several collection suits.

After the accident, the wives, paramours, brothers,

sisters and parents of the deceased miners filed their
claims for unpaid wages, overtime, holiday and rest
day compensation. The Company acknowledged its
obligations. However, it is in a quandary as to how to
adjudicate the conflicting claims; and whether it can
deduct from the monies due the miners their unpaid debts
with the credit union. How will you advise the mining
company on the following:
258 LABOR LAW REVIEWER

Can the Mining Company defer payment of the

money claims until an appropriate court has ruled on the
conflicting claims? (1998 BAR Q. No. V[1])

No, the Mining Company cannot defer payment of the

money claims.
The procedure is as follows:

Wages shall be paid directly to the workers to whom

they are due, except where the worker has died, in which
case, the employer may pay the wages of the deceased
worker to the heirs of the latter without the necessity of

ph
intestate proceedings. The claimants, if they are all of age,

u.
shall execute an affidavit attesting to their relationship to the

ed
deceased and the fact that they are his heirs, to the exclusion

n.
of all other persons. If any of the heirs is a minor, the affidavit
ai
m
shall be executed on his behalf by his natural guardian or
su
next-of-kin. The affidavit shall be presented to the employer
m

who shall make payment through the Secretary of Labor and

s.

Employment or his representative. The representative of the

@

Secretary of Labor and Employment shall act as referee in

91

dividing the amount paid among the heirs. The payment of

cx

wages under this Article shall absolve the employer of any

o.

further liability with respect to the amount paid. (Article

er

105[b], Labor Code)

o sp

Applying the above provision of law, the Mining

pr

Company may pay the wages of the deceased workers to

the heirs without the necessity of intestate proceedings. On
the other hand, the claimants, if they are all of age, shall
execute an affidavit attesting to their relationship to the
deceased and the fact that they are his heirs, to the exclusion
of all other persons. In case any of the heirs is a minor, the
affidavit shall be executed on his behalf by his natural
guardian or next-of-kin. The affidavit shall be presented to
the Mining Company as the employer.
 LABOR STANDARDS 259

Wages

Can the Mining Company deduct from the amount due to

each miner an amount equivalent to their debit and remit
the same to the credit union? (1998 BAR Q. No. V[2])
As to the deductions of the miners' unpaid debts with
the credit union, the rules provide that deductions can only
be made with the written authorization of the employees
for payment to third person and the Mining Company as
the employer agrees to do so provided the latter does not
receive any pecuniary benefit, directly or indirectly from
the transaction. (Section 10[b], Rule VIII, Book III, Rules to

ph
Implement the Labor Code)

u.
Unfortunately, the miners are already dead. Thus, the

ed
procedure can no longer be followed. The remedy is for the

n.
credit union to initiate a collection suit before the regular

ai
courts against the estate of the deceased miners.
m
su
m
s.
@
91
cx
o.
er
osp
pr
 Chapter VI
JOB-CONTRACTING
AND

LABOR-ONLY CONTRACTING

Define the following: a. Bond, b. Cabo, c. Contracting or

ph
1.

subcontracting, d. Contractor, e. Contractor's employee, f.

u.
In-house agency, g. In-house cooperative, h. Labor-only

ed
contracting, i. Principal, j. Service Agreement, k. Solidary

n.
liability, and 1. Substantial capital.
ai
m
a) Bond refers to the bond under Article 108 of
-
su

the Labor Code that the principal may require from the
m

contractor to be posted equal to the cost of labor under the

s.
@

contract.
91

b) "Cabo" - refers to a person or group of persons

cx

or to a labor group which, under the guise of a labor

o.

organization, cooperative or any entity, supplies workers

er

to an employer, with or without any monetary or other

sp

consideration, whether in the capacity of an agent of the

o

employer or as an ostensible independent contractor.

pr

c) "Contracting" or "Subcontracting" - refers to an

arrangement whereby a principal agrees to farm out to a
contractor the performance or completion of a specific job or
work within a definite or predetermined period, regardless
of whether such job or work is to be performed or completed
within or outside the premises of the principal.
d) "Contractor" - refers to any person or entity
engaged in a legitimate contracting or subcontracting
arrangement providing services for a specific job or

260
 LABOR STANDARDS 261

Job-Contracting and Labor-Only Contracting

undertaking farmed out by principal under a Service

Agreement.

e) "Contractor's employee" refers to employee

-

of the contractor hired to perform or complete a job or

work farmed out by the principal pursuant to a Service
Agreement.

f) "In-house agency" - refers to a contractor which

is owned, managed, or controlled directly by the principal
or one where the principal owns/represents any share of
stock and which operates solely or mainly for the principal.

ph
g) "In-house cooperative" - refers to a cooperative

u.
which is managed or controlled directly or indirectly by the

ed
principal or one where the principal or any of its officers

n.
owns/represents any equity or interest, and which operates
ai
solely or mainly for the principal.
m
su

h) "Labor-only contracting" - refers to arrangement

m

where the contractor or subcontractor merely recruits,

s.

supplies or places workers to perform a job or work for a

@

principal, and the elements enumerated in Section 5 hereof

91

are present.
cx
o.

Fox ci) "Principal" refers to any natural or juridical

er

entity, whether an employer or not, who puts out or farms

sp

out a job or work to a contractor.

o

refers to the contract

pr

1-j) "Service Agreement"

containing the terms and conditions governing the
performance or completion of a specific job or work being
farmed out for a definite or predetermined period.
k) "Solidary liability" - refers to the liability of the
principal, pursuant to the provision of Article 109 of the
Labor Code, as direct employer together with the contractor
for any violation of any provision of the Labor Code.

It also refers to the liability of the principal, in the same

manner and extent that he/she is liable to his/her direct
employees, to the extent of the work performed under the
contract when the contractor fails to pay the wages of his/
262 LABOR LAW REVIEWER

her employees, as provided in Article 106 of the Labor Code,

as amended.

1) "Substantial Capital" - refers to paid-up capital

stock/shares at least Five Million Pesos (P5,000,000.00) in
the case of corporations, partnerships and cooperatives; in
the case of single proprietorship, a net worth of at least Five
Million Pesos (P5,000,000.00). (Section 3, D.O. No. 174-17)

2. What is trilateral relationship in job-contracting?

"Trilateral Relationship" refers to the relationship in

ph
a contracting or subcontracting arrangement where there
is a contract for a specific job, work or service between the

u.
ed
principal and the contractor, and a contract of employment
between the contractor and its workers. There are three (3)

n.
parties involved in these arrangements: the principal who
ai
m
decides to farm out a job, work or service to a contractor;
su
the contractor who has the capacity to independently
m

undertake the performance of the job, work or service;

s.

and the contractual workers engaged by the contractor to

@

accomplish the job, work or service. (Section 3[m], D.O. No.

91

18-A)
cx

Is outsourcing of specific jobs, works, or services allowed

o.

3.
er

by law?
sp

Clearly, the law and its implementing rules allow

o

contracting arrangements for the performance of specific

pr

jobs, works or services. Indeed, it is management prerogative

to farm out any of its activities, regardless of whether
such activity is peripheral or core in nature. However, in
order for such outsourcing to be valid, it must be made to
an independent contractor because the current labor rules
expressly prohibit labor-only contracting. (Aliviado v. Procter
& Gamble Phils., Inc., G.R. No. 160506, March 9, 2010)

4. What is the test of independent contractorship?

The test of independent contractorship is "whether one
claiming to be an independent contractor has contracted to
do the work according to his own methods and without
 LABOR STANDARDS 263

Job-Contracting and Labor-Only Contracting

being subject to the control of the employer, except only

as to the results of the work." (Polyfoam-RGC International
Corporation v. Concepcion, G.R. No. 172349, June 13, 2012
citing San Miguel Corporation v. Aballa, G.R. No. 149011, June
28, 2005, 461 SCRA 392, 421)

What are the different kinds of independent contractors?

State their distinctions.

The kinds and distinctive characteristics of

independent contractors under the Labor Code and its

implementing Rules and Regulations and those recognized

ph
by jurisprudence are as follows:

u.
ed
Independent contractors are recognized under Article
106 of the Labor Code: xxx

n.
ai
In D.O. No. 18-A, Series of 2011, of the Department of
m
Labor and Employment, a contractor is defined as having:
su
m

Section 3....
s.
@
91

(c) ..
an arrangement whereby a principal
cx

agrees to put out or farm out with a contractor the

o.

performance or completion of a specific job, work or

er

service within a definite or predetermined period,

sp

regardless of whether such job, work or service is to

o

be performed or completed within or outside the

pr

premises of the principal.

This department order also states that there is a

trilateral relationship in legitimate job contracting and
subcontracting arrangements among the principal,
contractor, and employees of the contractor. There is no
employer-employee relationship between the contractor
and principal who engages the contractor's services, but
there is an employer-employee relationship between the
contractor and workers hired to accomplish the work for
he principal. (DOLE D.O. No. 18-A [2011], Sections 3[m] and
264 LABOR LAW REVIEWER

Jurisprudence has recognized another kind of

independent contractor: individuals with unique skills
and talents that set them apart from ordinary employees.
There is no trilateral relationship in this case because the
independent contractor himself or herself performs the
work for the principal. In other words, the relationship is
bilateral.

In other words, there are different kinds of independent

contractors: those engaged in legitimate job contracting and
those who have unique skills and talents that set them apart
from ordinary employees.

ph
u.
Since no employer-employee relationship exists

ed
between independent contractors and their principals, their

n.
contracts are governed by the Civil Code provisions on

ai
contracts and other applicable laws. (Fuji Television Network,
m
Inc. v. Espiritu, G.R os. 204944-45, December 3, 2014 citing
su
DOLE D.O. 18-A (2011), Section 5(b); See also Sonza v. ABS
m

CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004,

s.

431 SCRA 583, 592 [Per J. Carpio, First Division])

@
91

6. Who are the independent contractors recognized by

cx

jurisprudence?
o.

The following were recognized as independent

er
sp

contractors because of their unique skills and talents and

the lack of control over the means and methods in the
o
pr

performance of their work:

1. In Orozco v. Court of Appeals, 584 Phil. 35 (2008)
[Per J. Nashira, Third Division] Wilhelmina Orozco was a
columnist for the Philippine Daily Inquirer. This court
ruled that she was an independent contractor because of
her "talent, skill, experience, and her unique viewpoint as
a feminist advocate." (Id. at 56) In addition, the Philippine
Daily Inquirer did not have the power of control over
Orozco, and she worked at her own pleasure.

2. Semblante v. Court of Appeals, G.R. No. 196426,

August 15, 2011, 655 SCRA 444 [Per J. Velasco, Jr., Third
Division] involved a masiador. (Id. at 446) Semblance v. Court
 LABOR STANDARDS 265

Job-Contracting and Labor-Only Contracting

of Appeals defined "masiador" as the person who "calls and

takes the bets from the gamecock owners and other bettors
and orders the start of the cockfight. He also distributes
the winnings after deducting the Arriba, or the commission
for the "cockpit.") and a sentenciador. (Id.) A "sentenciador"
is defined as the person who "oversees the proper gaffing
of fighting cocks, determines the fighting cocks' physical
condition and capabilities to continue the cockfight, and
eventually declares the result of the cockfight.") This
court ruled that "petitioners performed their functions
as masiador and sentenciador free from the direction and

ph
control of respondents” (Id. at 452) and that the masiador

u.
and sentenciador "relied mainly on their 'expertise that is

ed
characteristic of the cockfight gambling."" (Id.) Hence, no

n.
employer-employee relationship existed.
ai
m
3. Bernarte v. Philippine Basketball Association, G.R. No.
su
192084, September 14, 2011, 657 SCRA 745 [Per J. Carpio, Second
m

Division] involved a basketball referee. This court ruled

s.

that "a referee is an independent contractor, whose special

@

skills and independent judgment are required specifically

91

for such position and cannot possibly be controlled by the

cx

hiring party."(Id. at 757)

o.
er

7.
Can employees under fixed-term contracts be independent
sp

contractors?
o
pr

Fuji's argument that Arlene was an independent

contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts cannot be
independent contractors because in fixed-term contracts,
an employer-employee relationship exists. The test in this
kind of contract is not the necessity and desirability of the
employee's activities, "but the day certain agreed upon
by the parties for the commencement and termination
of the employment relationship." (Id. at 709) For regular
employees, the necessity and desirability of their work
in the usual course of the employer's business are the
determining factors. On the other hand, independent
contractors do not have employer-employee relationships
266 LABOR LAW REVIEWER

with their principals. (Fuji Television Network, Inc. v. Espiritu,

G.R. Nos. 204944-45, December 3, 2014)

8. What are the arrangements which are excluded from the

coverage of D.O. No. 174, Series of 2017?
D.O. No. 174, Series of 2017 implementing Articles 106
to 109 of the Labor Code applies only to trilateral relationship
which characterizes contracting or subcontracting
arrangement. As clarified by Department Circular No. 01,
Series of 2018, the following are excluded:

ph
1. It does not contemplate to cover information
technology-enabled services involving an entire or specific

u.
ed
business process such as:

n.
Business Process Outsourcing;

ai
●
m
Knowledge Process Outsourcing;
su
Legal Process Outsourcing;
m

IT Infrastructure Outsourcing;
s.

●
@

Application Development;
91

Hardware and/or Software Support;

cx

Medical Transcription;
o.
er

Animation Services; and

sp

Back Office Operations/Support.

o
pr

2. Contracting or subcontracting arrangements in

the Construction Industry under the licensing coverage of
the Philippine Construction Accreditation Board (PCAB),
shall be governed by D.O. No. 19, Series of 1993 (Guidelines
Governing the Employment of Workers in the Construction
Industry) and D.O. No. 13, Series of 1998 (Guidelines
Governing the Occupational Safety and Health in the
Construction Industry); and DOLE-DPWH-DILG-DTI and
PCAB Memorandum of Agreement-Joint Administrative
Order No. 1, Series of 2011 on coordination and

harmonization of policies and programs on occupational

safety and health in the construction industry.
 LABOR STANDARDS 267

Job-Contracting and Labor-Only Contracting

3. Except for the registration requirements as

provided for in D.O. No. 174, Series of 2017, contracting or
subcontracting arrangements in the private security industry
shall be governed by D.O. No. 150, Series of 2016. (Revised
Guidelines Governing the Employment and Working Conditions
of Security Guards and other Private Security Personnel in the
Private Security Industry)

4. D.O. No. 174, Series of 2017 also does not

contemplate to cover contractual relationships such as in

contract of sale or purchase, contract of lease, contract of

ph
management, operation, and maintenance and such other

u.
contracts governed by the Civil Code of the Philippines and

ed
other special laws.

n.
5. D.O. No. 174, Series of 2017 does not also cover

ai
m
the contracting out of job or work to a professional or
su
individual with unique skills and talents who himself or
m

herself performs the job or work for the principal.

s.
@

What are the elements of labor-only contracting?

91

Labor-only contracting, which is totally prohibited,

cx

refers to an arrangement where:

o.
er

a) i. The contractor or subcontractor does not

sp

have substantial capital, or

o
pr

ii. The contractor or subcontractor does not

have investments in the form of tools, equipment,

machineries, supervision, work premises, among
others, and

iii. The contractor's or subcontractor's

employees recruited and placed are performing

activities which are directly related to the main business
operation of the principal; or
b) The contractor or subcontractor does not exercise
the right to control over the performance of the work of the
employee. (Section 5, D.O. No. 174, Series of 2017)
268 LABOR LAW REVIEWER

10. Who has the burden to prove substantial capital,

investment, etc.?

The law casts the burden on the contractor to prove that

it has substantial capital, investment, tools, etc. Employees,
on the other hand, need not prove that the contractor does
not have substantial capital, investment, and tools to engage
in job-contracting. (Babas v. Lorenzo Shipping Corporation,
G.R. No. 186091, December 15, 2010)

11. What is the effect of failing to discharge the burden of

ph
proof on substantial capital?

u.
"Generally, the presumption is that the contractor is a

ed
labor-only [contractor] unless such contractor overcomes

n.
the burden of proving that it has the substantial capital,

ai
investment, tools and the like." (Valencia v. Classique Vinyl
m
products Corporation, G.R. No. 206390, January 30, 2017)
su
m

12. What are the other illicit forms of employment

s.

arrangements?
@
91

The following are hereby declared prohibited for being

cx

contrary to the law or public policy:

o.

a) When the principal farms out work to a "Cabo."

er

"Cabo" refers to a person or group of persons or to a labor

sp

group which, under the guise of a labor organization,

o

cooperative or any entity, supplies workers to an employer,

pr

with or without any monetary or other consideration,

whether in the capacity of an agent of the employer or as
an ostensible independent contractor. (Section 3[b], D.O. No.
174, Series of 2017)

b) Contracting out of a job or work through an in

house agency.
c) Contracting out of job or work through an in
house cooperative which merely supplies workers to the
principal.

d) Contracting out of job or work by reason of a

strike or lockout whether actual or imminent.
 LABOR STANDARDS 269

Job-Contracting and Labor-Only Contracting

e) Contracting out of a job or work being performed

by union members and such will interfere with, restrain
or coerce employees in the exercise of their rights to self
organization as provided in Article 259 of the Labor Code,
as amended.

f) Requiring the contractor's/subcontractor's

employees to perform functions which are currently being
performed by the regular employees of the principal.
g) Requiring the contractor's/subcontractor's
employees to sign, as a precondition to employment or

ph
continued employment, an antedated resignation letter;

u.
a blank payroll; a waiver of labor standards including

ed
minimum wages and social or welfare benefits; or a

n.
quitclaim releasing the principal or contractor from liability

ai
as to payment of future claims; or require the employee to
m
become member of a cooperative.
su
m

h) Repeated hiring by the contractor/subcontractor

s.

of employees under an employment contract of short

@

duration.
91

i) Requiring employees under a contracting/

cx

subcontracting arrangement to sign a contract fixing the

o.

period of employment to a term shorter than the term of

er

the Service Agreement, unless the contract is divisible into

sp

phases for which substantially different skills are required

o
pr

and this is made known to the employee at the time of

engagement.

j) Such other practices, schemes or employment

arrangements designed to circumvent the right of workers
to security of tenure. (Section 6, D.O. No. 174, Series of 2017)

13. When is the principal deemed to be the direct employer of

the contractor's or subcontractor's employees?
In the event that there is a finding that the contractor
or subcontractor is engaged in labor-only contracting
under Section 5 and other illicit forms of employment
arrangements under Section 6 of these Rules, the principal
270 LABOR LAW REVIEWER

shall be deemed the direct employer of the contractor's or

subcontractor's employees. (Section 7, D.O. No. 174, Series of
2017)

14. What are the elements of permissible contracting or

subcontracting arrangements (job contracting) under
Article 106 of the Labor Code?

Contracting or subcontracting shall only be allowed if

all the following circumstances concur:

a) The contractor or subcontractor is engaged in

ph
a distinct and independent business and undertakes to

u.
perform the job or work on its own responsibility, according

ed
to its own manner and method;

n.
b) The contractor or subcontractor has substantial

ai
capital to carry out the job farmed out by the principal on
m
his account, manner and method, investment in the form of
su

tools, equipment, machinery and supervision;

m
s.

c) In performing the work farmed out, the contractor

@

or subcontractor is free from the control and/or direction of

91

the principal in all matters connected with the performance

cx

of the work except as to the result thereto; and

o.

d) The Service Agreement ensures compliance

er

with all the rights and benefits for all the employees of the
sp

contractor or subcontractor under the labor laws. (Section 8,

o

D.O. No. 174, Series of2017)

pr

15. What is the required "substantial capital"?

"Substantial capital" - refers to paid-up capital stock/

shares at least Five Million Pesos (P5,000,000.00) in the case
of corporations, partnerships and cooperatives; in the case
of single proprietorship, a net worth of at least Five Million
Pesos (P3,000,000.00). (Section 3 (1), D.O. No. 174, Series of
2017)

16. What is not an element of legitimate contracting?

a. The contract calls for the performance of a

specific job, work or service;
 LABOR STANDARDS 271

Job-Contracting and Labor-Only Contracting

b. It is stipulated that the performance of a specific

job, work or service must be within a definite
predetermined period;
C. The performance of specific job, work or service
has to be completed either within or outside the
premises of the principal;

d. The principal has control over the performance

of a specific job, work or service. (2012 BAR Q.
No. 42)

d. The principal has control over the performance of

ph
a specific job, work or service.

u.
ed
See answer in Q. No. 14.

n.
17. A golf and country club outsourced the jobs in its food and
ai
m
beverage department and offered the affected employees
su
an early retirement package of 1 1/2 month's pay for
m

each year of service. The employees who accepted the

s.

package executed quitclaims. Thereafter, employees of

@

a service contractor performed their jobs. Subsequently,

91

the management contracted with other job contractors to

cx

provide other services like the maintenance of physical

facilities, golf operations, and administrative and support
o.
er

services. Some of the separated employees who signed

sp

quitclaims later filed complaints for illegal dismissal.

Were they validly dismissed?
o
pr

(A) Yes. The jobs were given to job contractors, not

to labor-only contractors, and the dismissed
employees received higher separation pay than
the law required.

(B) No. The outsourcing and the employment

termination were invalid since the management
failed to show that it suffered severe financial
losses.

(C) No. Since the outsourcing of jobs in several

departments entailed the separation of many
employees, the club needed the Secretary of
Labor's approval of its actions.
272 LABOR LAW REVIEWER

(D) No. Since the outsourced jobs were held by

old-time regular employees, it was illegal for
the club to terminate them and give the jobs to
others. (2011 BAR Q. No. 9)

(A) Yes. The jobs were given to job contractors, not

to labor-only contractors, and the dismissed employees
received higher separation pay than the law required.

Clearly, the law and its implementing rules allow

contracting arrangements for the performance of specific
jobs, works or services. Indeed, it is management prerogative

ph
to farm out any of its activities, regardless of whether

u.
such activity is peripheral or core in nature. However, in

ed
order for such outsourcing to be valid, it must be made to

n.
an independent contractor because the current labor rules
ai
expressly prohibit labor-only contracting. (Aliviado v. Procter
m
su
& Gamble Phils., Inc., G.R. No. 160506, March 9, 2010)
m

18. Of the four tests below, which is the most determinative

s.
@

of the status of a legitimate contractor-employer?

91

(A) The contractor performs activities not directly

cx

related to the principal's main business.

o.
er

(B) The contractor has substantial investments in

sp

tools, equipment, and other devices.

o

(C) The contractor does not merely recruit, supply,

pr

or place workers.
(D) The contractor has direct control over the

employees' manner and method of work

performance. (2011 BAR Q. No. 55)

(D) The contractor has direct control over the

employees' manner and method of work performance.

19. What are the rights of contractor's/subcontractor's

employees as stated by D.O. No. 174-17?
All contractor's/subcontractor's employees shall be
entitled to security of tenure and all the rights and privileges
 LABOR STANDARDS 273

Job-Contracting and Labor-Only Contracting

as provided for in the Labor Code, as amended, to include

the following:

(a) Safe and healthful working conditions;

(b) Labor standards such as but not limited to service
incentive leave, rest days, overtime pay, holiday pay, 13th
month pay and separation pay;
(c) Retirement benefits under the SSS, or retirement
plans of the contractor/subcontractor;

(d) Social security and welfare benefits; and

ph
u.
(e) Self-organization, collective bargaining and

ed
peaceful concerted activities including the right to strike.

n.
(Section 10, D.O. No. 174, Series of 2017)

ai
m
20. What are the mandatory stipulations required by D.O. No.
su
174-17 in the employment contract between the contractor/
m

subcontractor and its employees and the service agreement

s.

between the principal and the contractor?

@
91

Employment contract between the contractor/

subcontractor and its employees. Notwithstanding any
cx

oral or written stipulations to the contrary, the contractor/

o.
er

subcontractor between the contractor and its employees

sp

shall be governed by the provisions of Articles 294 and 295

of the Labor Code, as amended, including the provisions
o
pr

on general labor standards. It shall include the following

stipulations:

i The specific description of the job or work to

be performed by the employee; and

ii The place of work and terms and conditions

of employment, including a statement of the wage rate
applicable to the individual employee.
The contractor/subcontractor shall inform the

employee of the foregoing stipulations in writing on or

before the first day of his/her employment.
274 LABOR LAW REVIEWER

Service Agreement between the principal and the

contractor. The Service Agreement shall include the
following:

i. The specific description of the job or work

being subcontracted, including its term or duration.
ii. The place of work and terms and conditions
governing the contracting arrangement, to include the
agreed amount of the contracted job or work as well
as the standard administrative fee of not less than ten
percent (10%) of the total contract cost; and

ph
iii. A provision on the issuance of the bond/s

u.
defined under Section 3(a) renewable every year.

ed
(Section 11, D.O. No. 174, Series of 2017)

n.
21.
ai
What are the effects of violation of the provisions on
m
the rights of contractor's employees and the required
su

stipulations in the contracts (employment contract and

m

service agreement) under D.O. No. 174-17?

s.
@

A finding of violation of either, shall render the

91

principal the direct employer of the employees of the

cx

contractor or subcontractor, pursuant to Article 109 of the

o.

Labor Code, as amended. (Section 12, D.O. No. 174, Series of

er

2017)
o sp

22. Jolli-Mac Restaurant Company (Jolli-Mac) owns and

pr

operates the largest food chain in the country. It engaged

Matiyaga Manpower Services, Inc. (MMSI), a job
contractor registered with the Department of Labor and
Employment, to provide its restaurants the necessary
personnel, consisting of cashiers, motorcycle delivery
boys and food servers, in its operations. The Service
Agreement warrants, among others, that MMSI has a
paid-up capital of P2,000,000.00; that it would train and
determine the qualification and fitness of all personnel
to be assigned to Jolli-Mac; that it would provide these
personnel with proper Jolli-Mac uniforms; and that it
is exclusively responsible to these personnel for their
respective salaries and all other mandatory statutory
 275
LABOR STANDARDS

Job-Contracting and Labor-Only Contracting

benefits. After the contract was signed, it was revealed,

based on research conducted, that MMSI had no other
clients except Jolli-Mac, and one of its major owners was
a member of the Board of Directors of Jolli-Mac.

Is the Service Agreement between Jolli-Mac and MMSI

legal and valid? Why or why not? (2009 BAR Q. No. XI[a])
The Service Agreement between Jolli-Mac and MMSI
is not legal and valid.
Labor-only contracting, which is totally prohibited,
refers to an arrangement where:

ph
a) i. The contractor or subcontractor does not

u.
have substantial capital, or

ed
n.
ii. The contractor or subcontractor does not

ai
have investments in the form of tools,m equipment,
machineries, supervision, work premises, among
su

others, and
m
s.

iii. The contractor's or subcontractor's

@

employees recruited and placed are performing

91

activities which are directly related to the main business

operation of the principal; or
cx
o.

b) The contractor or subcontractor does not exercise

er

the right to control over the performance of the work of the

sp

employee. (Section 5, D.O. No. 174, Series of 2017)

o
pr

The "substantial capital" refers to paid-up capital

stock/shares of at least P5,000,000.00 in case of corporations.
(Section 3[1], D.O. No. 174, Series of 2017)

In this case, MMSI does not have the required

substantial capital stocks or shares as it has only a paid-up
capital of P2,000,000.00. Thus, for failure to comply with the
required substantial capital the arrangement between the
parties is labor-only contracting.
Alternative answer:

The Service Agreement between Jolli-Mac and

MMSI is not legal and valid because it does not contain
the provisions required by the rules.
276 LABOR LAW REVIEWER

The Service Agreement between the principal and

the contractor shall include the following:
i. The specific description of the job or
work being subcontracted, including its term or
duration;

ii. The place of work and terms

and conditions governing the contracting
arrangement, to include the agreed amount of
the contracted job or work as well as the standard
administrative fee of not less than ten percent
(10%) of the total contract cost; and

ph
iii. A provision on the issuance of the

u.
bond/s defined under Section 3(a) renewable

ed
every year. (Section 11, D.O. No. 174, Series of2017)

n.
ai
The effect of the violation of the foregoing rule shall
m
render the principal the direct employer of the employees
su

of the contractor or subcontractor, pursuant to Article 109 of

m

the Labor Code. (Section 12, D.O. No. 174, Series of 2017)
s.
@

In this case, the Service Agreement between Jolli-Mac

and MMSI does not contain the foregoing terms. Thus, the
91

parties violated the Labor Code. (Article 109) Consequently,

cx

the Service Agreement is not legal and valid.

o.
er

23. What is the rule on mandatory registration and registry of

sp

legitimate contractors?
o
pr

Consistent with the authority of the Secretary of Labor

and Employment to restrict or prohibit the contracting of
labor to protect the rights of workers, it shall be mandatory
for all persons or entities acting as contractors to register
with the Regional Office of the Department of Labor
and Employment (DOLE) where it principally operates.
Failure to register shall give rise to the presumption
that the contractor is engaged in labor-only contracting.
Accordingly, the registration system, governing contracting
arrangements and implemented by the Regional Offices of
the DOLE is hereby established, with the Bureau of Working
Conditions (BWC) as the central registry. (Section 14, D.O.
No. 174, Series of 2017)
 277
LABOR STANDARDS

Job-Contracting and Labor-Only Contracting

24. What is the effect of registration of independent

contractorship?

A Certificate of Registration issued by the Department

of Labor and Employment is not conclusive evidence of
such status. The fact of registration simply prevents the
legal presumption of being a mere labor-only contractor
from arising. (Babas v. Lorenzo Shipping Corporation, G.R. No.
186091, December 15, 2010)

25. Distinguish job contracting/subcontracting from "labor

only" contracting.

ph
u.
As to the elements, permissible job contracting

ed
or subcontracting is distinguished from "labor-only"

n.
contracting in this manner:

ai
"Permissible job contracting or subcontracting refers
m
su
to an arrangement whereby a principal agrees to put out or
farm out to a contractor or subcontractor the performance
m
s.

or completion of a specific job, work or service within a

@

definite or predetermined period, regardless of whether

91

such job, work or service is to be performed or completed

cx

within or outside the premises of the principal. A person

o.

is considered engaged in legitimate job contracting or

er

subcontracting if the following conditions concur:

sp

(a) The contractor or subcontractor carries on a

o
pr

distinct and independent business and undertakes to

perform the job, work or service on its own account
and under its own responsibility according to its own
manner and method, and free from the control and
direction of the principal in all matters connected with
the performance of the work except as to the results
thereof;

(b) The contractor or subcontractor has

substantial capital or investment; and

(c) The agreement between the principal and

contractor or subcontractor assures the contractual

employees entitlement to all labor and occupational

278 LABOR LAW REVIEWER

safety and health standards, free exercise of the right

to self-organization, security of tenure, and social and
welfare benefits.

In contrast, labor-only contracting, a prohibited act,

is an arrangement where the contractor or subcontractor
merely recruits, supplies or places workers to perform a job,
work or service for a principal. In labor-only contracting,
the following elements are present:
(a) The contractor or subcontractor does not
have substantial capital or investment to actually

ph
perform the job, work or service under its own account

u.
and responsibility; and

ed
(b) The employees recruited, supplied or placed

n.
by such contractor or subcontractor are performing
activities which are
ai
directly related to the main
m
business of the principal." (Polyfoam-RGC International
su

Corporation v. Concepcion, G.R. No. 172349, June 13, 2012

m

citing Sasan, Sr. v. National Labor Relations Commission

s.
@

4th Division, G.R. No. 176240, October 17, 2008, 569

91

SCRA 670 citing Sasan, Sr. v. National Labor Relations

Commission 4th Division, supra, at pp. 689-690. [Citations
cx

omitted])
o.
er

As to the extent of employer-employee relationship

sp

and solidary liability, their distinctions are as follows:

o
pr

In legitimate job contracting, no employer-employee

relationship exists between the employees of the job
contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable with
the job contractor for the payment of the employees' wages
whenever the contractor fails to pay the same. In such case,
the law creates an employer-employee relationship between
the principal employer and the job contractor's employees
for a limited purpose, that is, to ensure that the employees
are paid their wages. Other than the payment of wages, the
principal employer is not responsible for any claim made by
the employees. (Philippine Bank of Communications v. NLRC,
146 SCRA 347 [1986])
 279
LABOR STANDARDS

Job-Contracting and Labor-Only Contracting

On the other hand, in labor-only contracting, an

employer-employee relationship is created by law between
the principal employer and the employees of the labor
only contractor. In this case, the labor-only contractor is
considered merely an agent of the principal employer.
The principal employer is responsible to the employees of
the labor-only contractor as if such employees had been
directly employed by the principal employer. The principal
employer therefore becomes solidarily liable with the labor
only contractor for all the rightful claims of the employees.
(Philippine Bank of Communications v. NLRC, 146 SCRA 347

ph
[1986])

u.
ed
Thus, in legitimate job contracting, the principal

n.
employer is considered only an indirect employer, (Article

ai
107, Labor Code, as amended) while in labor-only contracting,
m
the principal employer is considered the direct employer of
su

the employees. (Last paragraph of Article 106, Labor Code, as

m

amended)
s.
@

In short, the legitimate job contractor provides services

91

while the labor-only contractor provides only manpower.

cx

The legitimate job contractor undertakes to perform a

o.

specific job for the principal employer while the labor-only

er

contractor merely provides the personnel to work for the

sp

principal employer. (PCI Automation Center, Inc. v. NLRC,

o

G.R. No. 115920, January 29, 1996)

pr

26. WGas Corp. is engaged in the manufacture and distribution

to the general public of various petroleum products.
On January 1, 2010, W Gas Corp. entered into a Service
Agreement with Q Manpower Co., whereby the latter
undertook to provide utility workers for the maintenance
of the former's manufacturing plant. Although the
workers were hired by Q Manpower Co., they used the
equipment owed by W Gas Corp. in performing their
tasks, and were likewise subject to constant checking
based on W Gas Corp.'s procedures. On February 1, 2010,
Mr. R, one of the utility workers, was dismissed from
280 LABOR LAW REVIEWER

employment in line with the termination of the Service

Agreement between W Gas Corp. and Q Manpower Co.
Thus, Mr. R filed a complaint for illegal dismissal against
W Gas Corp., claiming that Q Manpower Co. is only a
labor-only contractor. In the course of the proceedings, W
Gas Corp. presented no evidence to prove Q manpower
Co.'s capitalization.

Is Q Manpower Co. a labor-only contractor? Explain. (2019

Part I BAR Q. No. A.7[a])

Q Manpower Co. is a labor-only contractor.

ph
u.
Jurisprudence is settled that generally, the presumption

ed
is that the contractor is a labor-only [contractor] unless such

n.
contractor overcomes the burden of proving that it has the

ai
substantial capital, investment, tools and the like. (Valencia
m
v. Classique Vinyl products Corporation, G.R. No. 206390,
su

January 30, 2017)

m
s.

Applying the doctrinal rule, the effect of failure

@

of W Gas Corp to discharge its burden of proof on

91

substantial capitalization of Q Manpower Co. gives rise

cx

to the presumption that Q Manpower Co. is a labor-only

o.

contractor.
er
sp

27. The labor sector has been loudly agitating for the end
o

of labor-only contracting, as distinguished from job

pr

contracting. Explain these two kinds of labor contracting,

give the effect of a finding that one is a labor-only
contractor. Explain your answers. (2017 BAR Q. No. X[A])

The following are the distinctions between permissible

job contracting or subcontracting and "labor-only"
contracting:

In legitimate job contracting, no employer-employee

relationship exists between the employees of the job
contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable with
the job contractor for the payment of the employees' wages
 LABOR STANDARDS 281

Job-Contracting and Labor-Only Contracting

whenever the contractor fails to pay the same. In such case,

the law creates an employer-employee relationship between
the principal employer and the job contractor's employees
for a limited purpose, that is, to ensure that the employees
are paid their wages. Other than the payment of wages, the
principal employer is not responsible for any claim made by
the employees. (Philippine Bank of Communications v. NLRC,
146 SCRA 347 [1986])

On the other hand, in labor-only contracting, an

employer-employee relationship is created by law between

ph
the principal employer and the employees of the labor

u.
only contractor. In this case, the labor-only contractor is

ed
considered merely an agent of the principal employer.

n.
The principal employer is responsible to the employees of

ai
the labor-only contractor as if such employees had been
m
directly employed by the principal employer. The principal
su

employer therefore becomes solidarily liable with the labor

m

only contractor for all the rightful claims of the employees.

s.

(Philippine Bank of Communications v. NLRC, 146 SCRA 347

@

[1986])
91
cx

Thus, in legitimate job contracting, the principal

o.

employer is considered only an indirect employer,

er

(Article 107, Labor Code, as amended) while in labor-only

sp

contracting, the principal employer is considered the direct

o

employer of the employees. (Last paragraph of Article 106,

pr

Labor Code, as amended)

In short, the legitimate job contractor provides services

while the labor-only contractor provides only manpower.
The legitimate job contractor undertakes to perform a
specific job for the principal employer while the labor-only
contractor merely provides the personnel to work for the
principal employer. (PCI Automation Center, Inc. v. NLRC,
G.R. No. 115920, January 29, 1996)

28. Empire Brands (Empire) contracted the services of Style

Corporation (Style) for the marketing and promotion of its
clothing line. Under the contract, Style provided Empire
282 LABOR LAW REVIEWER

with Trade Merchandising Representatives (TMRs) whose

services began on September 15, 2004 and ended on June
6, 2007, when Empire terminated the promotions contract
with Style. Empire then entered into an agreement for
manpower supply with Wave Human Resources (Wave).
Wave owns its condo office, owns equipment for the use
by the TMRs, and has assets amounting to P1,000,000.00.
Wave provided the supervisors who supervised the TMRs,
who, in turn, received orders from the Marketing Director
of Empire. In their agreement, the parties stipulated
that Wave shall be liable for the wages and salaries

ph
of its employees or workers, including benefits, and

u.
protection due them, as well as remittance to the proper

ed
government entities of all withholding taxes, Social

n.
Security Service, and Philhealth premiums, in accordance
ai
with relevant laws. As the
m
TMRs wanted to continue
su
working at Empire, they submitted job applications as
m

TMRs with Wave. Consequently, Wave hired them for a

s.

term of five (5) months, or from June 7, 2007 to November

@

6, 2007, specifically to promote Empire's products. When

91

the TMRs' 5-month contracts with Wave were about to

cx

expire, they sought renewal thereof, but were refused.

o.

Their contracts with Wave were no longer renewed as

er

Empire hired another agency. This prompted them to

sp

file complaints for illegal dismissal, regularization, non

o
pr

payment of service incentive leave and 13th month pay

against Empire and Wave.

Are the TMRs employees of Empire? (2016 BAR Q. No.

XVIII[a])

Yes, the TMRs are employees of Empire Brands. This is

because Style Corporation, who initially seconded the TMRS
to Empire Brand, is engaged in labor-only contracting.
Labor-only contracting, which is totally prohibited,
refers to an arrangement where:

a) i. The contractor or subcontractor does not

have substantial capital, or
 LABOR STANDARDS 283

Job-Contracting and Labor-Only Contracting

ii. The contractor or subcontractor does not

have investments in the form of tools, equipment,
machineries, supervision, work premises, among
others, and

iii. The contractor's or subcontractor's

employees recruited and placed are performing

activities which are directly related to the main business
operation of the principal; or
b) The contractor or subcontractor does not exercise
the right to control over the performance of the work of the

ph
employee. (Section 5, D.O. No. 174, Series of 2017)

u.
The "substantial capital" refers to paid-up capital

ed
stock/shares of at least P5,000,000.00 in case of corporations.

n.
(Section 3[1], D.O. No. 174, Series of 2017)

ai
m
In this case, the facts do not show that Style Corporation
su

possessed the required paid-up capital stocks or shares of

m

P5,000,000.00. Thus, the elements of labor-only contracting

s.

are present.
@
91

In labor-only contracting, an employer-employee

relationship is created by law between the principal
cx

employer and the employees of the labor-only contractor.

o.
er

In this case, the labor-only contractor is considered merely

sp

an agent of the principal employer. The principal employer

o

is responsible to the employees of the labor-only contractor

pr

as if such employees had been directly employed by the

principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for
all the rightful claims of the employees. (PCI Automation
Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996 citing
Philippine Bank of Communications v. NLRC, 146 SCRA 347
[1986])

Notwithstanding the subsequent engagement with

Wave Human Resources, the TMRs remained to be the
employees of Empire Brand.
284 LABOR LAW REVIEWER

29. Is the contractor a necessary party in a case where labor

contracting is the main issue and labor-only contracting is
found to exist?

a. Yes, the contractor is necessary in the full

determination of the case as he is the purported
employer of the worker;
b. Yes, no full remedy can be granted and executed
without impleading the purported contractor;
C. No, the contractor becomes a mere agent of the
employer-principal in labor contracting;

ph
d. No, the contractor has no standing in a labor

u.
contracting case. (2012 BAR Q. No. 29)

ed
a. Yes, the contractor is necessary in the full

n.
determination of the case as he is the purported employer
of the worker
ai
m
su
b. Yes, no full remedy can be granted and executed
m

without impleading the purported contractor

s.
@

30. Which is a characteristic of a labor-only contractor?

91

a. Carries an independent business different from

cx

the employer's;
o.
er

b. The principal's liability extends to all rights,

sp

duties and liabilities under labor standards laws

including the right to self-organization;
o
pr

C. No employer-employee relationship;
d. Has sufficient substantial capital or investment
in machinery, tools or equipment directly or
intended to be related to the job contracted.
(2012 BAR Q. No. 41)

b. The principal's liability extends to all rights,

duties and liabilities under labor standards laws including
the right to self-organization

In labor-only contracting, an employer-employee

relationship is created by law between the principal
employer and the employees of the labor-only contractor.
 285
LABOR STANDARDS

Job-Contracting and Labor-Only Contracting

In this case, the labor-only contractor is considered merely

an agent of the principal employer. The principal employer
is responsible to the employees of the labor-only contractor
as if such employees had been directly employed by the
principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for
all the rightful claims of the employees. (PCI Automation
Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996 citing
Philippine Bank of Communications v. NLRC, 146 SCRA 347
[1986])

ph
31. With respect to legitimate independent contracting, an

u.
employer or one who engages the services of a bona fide

ed
independent contractor is -

n.
An indirect employer, by operation of law, of his
ai
a.
m
contractor's employees; he becomes solidarily
su
liable with the contractor not only for unpaid
wages but also for all the rightful claims of the
m
s.

employees under the Labor Code;

@

b. Treated as direct employer of his contractor's

91

employees in all instances; he becomes

cx

subsidiarily liable with the contractor only in

o.

the event the latter fails to pay the employees'

er

wages and for violation of labor standard laws;

sp

An indirect employer, by operation of law, of his

o

C.
pr

contractor's employees; he becomes solidarily

liable with the contractor only in the event the
latter fails to pay the employees' wages and for
violation of labor standard laws;

d. Treated as direct employer of his contractor's

employees in all instances; the principal becomes
solidarily liable with the contractor not only for
unpaid wages but also for all the rightful claims
of the employees under the Labor Code. (2012
BAR Q. No. 47)

C. An indirect employer, operation of law, of his

contractor's employees; he becomes solidarily liable with
286 LABOR LAW REVIEWER

the contractor only in the event the latter fails to pay the
employees' wages and for violation of labor standard laws
In legitimate job contracting, no employer-employee
relationship exists between the employees of the job
contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable
with the job contractor for the payment of the employees'
wages whenever the contractor fails to pay the same. In such
case, the law creates an employer-employee relationship
between the principal employer and the job contractor's

ph
employees for a limited purpose, that is, to ensure that the

u.
employees are paid their wages. Other than the payment

ed
of wages, the principal employer is not responsible for any

n.
claim made by the employees. (PCI Automation Center, Inc.

ai
v. NLRC, G.R. No. 115920, January 29, 1996 citing Philippine
m
Bank of Communications v. NLRC, 146 SCRA 347 [1986])
su
m

32. Distinguish Labor-Only contracting and Job-Only

s.

contracting. (2012 BAR Q. No. I[a])

@
91

Distinguish between “job contracting” and “labor-only

contracting." (1997 BAR Q. No. XVI)
cx
o.

As to the elements, permissible job contracting

er

or subcontracting is distinguished from "labor-only"

sp

contracting in this manner:

o
pr

"Permissible job contracting or subcontracting refers

to an arrangement whereby a principal agrees to put out or
farm out to a contractor or subcontractor the performance
or completion of a specific job, work or service within a
definite or predetermined period, regardless of whether
such job, work or service is to be performed or completed
within or outside the premises of the principal. A person
is considered engaged in legitimate job contracting or
subcontracting if the following conditions concur:

(a) The contractor or subcontractor carries on a

distinct and independent business and undertakes to
perform the job, work or service on its own account
 LABOR STANDARDS 287

Job-Contracting and Labor-Only Contracting

and under its own responsibility according to its own

manner and method, and free from the control and
direction of the principal in all matters connected with
the performance of the work except as to the results
thereof;

(b) The contractor or subcontractor has

substantial capital or investment; and

(c) The agreement between the principal and

contractor or subcontractor assures the contractual
employees entitlement to all labor and occupational

ph
safety and health standards, free exercise of the right
to self-organization, security of tenure, and social and

u.
ed
welfare benefits.

n.
In contrast, labor-only contracting, a prohibited act,

ai
is an arrangement where the contractor or subcontractor
m
merely recruits, supplies or places workers to perform a job,
su

work or service for a principal. In labor-only contracting,

m

the following elements are present:

s.
@

(a) The contractor or subcontractor does not

91

have substantial capital or investment to actually

cx

perform the job, work or service under its own account

o.

and responsibility; and

er

(b) The employees recruited, supplied or placed

sp

by such contractor or subcontractor are performing

o
pr

activities which are directly related to the main

business of the principal." (Polyfoam-RGC International
Corporation v. Concepcion, G.R. No. 172349, June 13, 2012
citing Sasan, Sr. v. National Labor Relations Commission
4th Division, G.R. No. 176240, October 17, 2008, 569
SCRA 670 citing Sasan, Sr. v. National Labor Relations
Commission 4th Division, supra, at pp. 689-690. [Citations
omitted])

As to the extent of employer-employee relationship

and solidary liability, their distinctions are as follows:
In legitimate job contracting, no employer-employee
relationship exists between the employees of the job
288 LABOR LAW REVIEWER

contractor and the principal employer. Even then, the

principal employer becomes jointly and severally liable with
the job contractor for the payment of the employees' wages
whenever the contractor fails to pay the same. In such case,
the law creates an employer-employee relationship between
the principal employer and the job contractor's employees
for a limited purpose, that is, to ensure that the employees
are paid their wages. Other than the payment of wages, the
principal employer is not responsible for any claim made by
the employees. (Philippine Bank of Communications v. NLRC,
146 SCRA 347 [1986])

ph
On the other hand, in labor-only contracting, an

u.
employer-employee relationship is created by law between

ed
the principal employer and the employees of the labor

n.
only contractor. In this case, the labor-only contractor is
ai
m
considered merely an agent of the principal employer.
su
The principal employer is responsible to the employees of
m

the labor-only contractor as if such employees had been

s.

directly employed by the principal employer. The principal

@

employer therefore becomes solidarily liable with the labor

91

only contractor for all the rightful claims of the employees.

cx

(Philippine Bank of Communications v. NLRC, 146 SCRA 347

o.

[1986])
er

Thus, in legitimate job contracting, the principal

sp

employer is considered only an indirect employer, (Article

o
pr

107, Labor Code, as amended) while in labor-only contracting,

the principal employer is considered the direct employer of
the employees. (Last paragraph of Article 106, Labor Code, as
amended)

In short, the legitimate job contractor provides services

while the labor-only contractor provides only manpower.
The legitimate job contractor undertakes to perform a
specific job for the principal employer while the labor-only
contractor merely provides the personnel to work for the
principal employer. (PCI Automation Center, Inc. v. NLRC,
G.R. No. 115920, January 29, 1996)
 LABOR STANDARDS 289

Job-Contracting and Labor-Only Contracting

33. XYZ Manpower Services (XYZ) was sued by its employees

together with its client, ABC Polyester Manufacturing
Company (ABC). ABC is one of the many clients of
XYZ. During the proceedings before the Labor Arbiter,
XYZ was able to prove that it had substantial capital of
Three Million Pesos. The Labor Arbiter ruled in favor
of the employees because it deemed XYZ as a labor only
contractor. XYZ was not able to prove that it had invested
in tools, equipment, etc. Is the Labor Arbiter's ruling
valid? Explain. (2012 BAR Q. No. X[a])
The Labor Arbiter's ruling is valid.

ph
u.
Labor-only contracting, which is totally prohibited,

ed
refers to an arrangement where:

n.
a) i. The contractor or subcontractor does not
ai
m
have substantial capital, or
su

ii. The contractor or subcontractor does not

m

have investments in the form of tools, equipment,

s.
@

machineries, supervision, work premises, among

91

others, and
cx

iii. The contractor's or subcontractor's

o.

employees recruited and placed are performing

er

activities which are directly related to the main business

sp

operation of the principal; or

o
pr

b) The contractor or subcontractor does not exercise

the right to control over the performance of the work of the
employee. (Section 5, D.O. No. 174, Series of 2017)

The "substantial capital" refers to paid-up capital

stock/shares of at least P5,000,000.00 in case of corporations.
(Section 3[1], D.O. No. 174, Series of 2017)

In this case, XYZ Manpower Services' substantial

capital is only Three Million Pesos. Thus, the elements of
labor-only contracting are present.
290 LABOR LAW REVIEWER

34. Does the performance by a contractual employee, supplied

by a legitimate contractor, of activities directly related to
the main business of the principal make him a regular
employee of the principal? Explain. (2012 BAR Q. No. X
[b])

No, the performance by a contractual employee

of activities directly related to the main business of the
principal does not make him a regular employee of the
principal.
There is "labor-only" contracting where the person

ph
supplying workers to an employer does not have substantial

u.
capital or investment in the form of tools, equipment,

ed
machineries, work premises, among others, and the workers

n.
recruited and placed by such person are performing

ai
activities which are directly related to the principal business
m
of such employer. (4th paragraph, Article 106, Labor Code)
su
m

Based on the foregoing paragraph, one of the factors

s.

in determining whether there is labor-only contracting is

@

the nature of the employee's job, i.e., whether the work he

91

performs is necessary and desirable to the business of the

cx

principal. (Daguinod v. Southgate Foods, Inc. G.R. No. 227795,

o.

February 20, 2019) Thus, the nature of the employee's job is a

er

factor used to determine whether the arrangement is labor

sp

only contracting.
o
pr

35. Sta. Monica Plywood Corporation entered into a contract

with Arnold for the milling of lumber as well as the
hauling of waste wood products. The company provided
the equipment and tools because Arnold had neither tools
and equipment nor capital for the job. Arnold, on the other
hand, hired his friends, relatives and neighbors for the
job. Their wages were paid by Sta. Monica Plywood Corp.
to Arnold, based on their production or the number of
workers and the time used in certain areas of work. All
work activities and schedules were fixed by the company.
 LABOR STANDARDS 291

Job-Contracting and Labor-Only Contracting

Is Arnold a job contractor? Explain briefly. (2002 BAR Q.

No. VIII[A])

No, Arnold is not a job contractor. Job contracting under

the rules requires that the contractor is engaged in a distinct
and independent business and undertakes to perform the
job or work on its own responsibility, according to its own
manner and method; has substantial capital to carry out
the job farmed out by the principal on his account, manner
and method, investment in the form of tools, equipment,
machinery, and supervision.

ph
In this case, Sta. Monica Plywood Corporation provided

u.
the equipment and tools because Arnold had neither tools

ed
and equipment nor capital for the job. Moreover, Arnold

n.
merely recruited, supplied or placed the workers to perform

ai
the job. Thus, Arnold is not engaged in job contracting as
m
defined by law.
su
m

Who is liable for the claims of the workers hired by

s.

Arnold? Explain briefly. (2002 BAR Q. No. VIII[B])

@
91

Sta. Monica Plywood Corporation is liable. A finding of

labor-only contracting means that the principal is the direct
cx

employer of the contractor's employees. The person or

o.

intermediary is only considered the agent of the principal,

er

who shall be responsible to the workers in the same manner

sp

and extent as if the latter were directly employed by him.

o
pr

Consequently, as the direct employer, Sta. Maria Plywood is

liable for the worker's claims.

36. What is a "labor-only" contract? (1994 BAR Q. No. I[1])

Labor-only contracting refers to arrangement where

the contractor or subcontractor merely recruits, supplies or
places workers to perform a job or work for a principal and
the following elements are present:
a) i. The contractor or subcontractor does not
have substantial capital, or
ii. The contractor or subcontractor does not

have investments in the form of tools, equipment,

292 LABOR LAW REVIEWER

machineries, supervision, work premises, among

others, and

iii. The contractor's or subcontractor's

employees recruited and placed are performing
activities which are directly related to the main business
operation of the principal; or
b) The contractor or subcontractor does not exercise
the right to control over the performance of the work of the
employee. (Section 3 [h] in relation to Section 5, D.O. No. 174,
Series of 2017)

ph
37. Distinguish the liabilities of an employer who engages

u.
ed
the services of a bona fide "independent contractor" from
one who engages a "labor-only" contractor? (1994 BAR Q.

n.
ai
No. I[2])
m
Jurisprudence distinguished the liabilities of
su

an employer, who engages the services of a bona fide

m

"independent contractor," from one who engages a "labor

s.
@

only" contractor in this manner:

91

In legitimate job contracting, no employer-employee

cx

relationship exists between the employees of the job

o.

contractor and the principal employer. Even then, the

er

principal employer becomes jointly and severally liable with

sp

the job contractor for the payment of the employees' wages

o

whenever the contractor fails to pay the same. In such case,

pr

the law creates an employer-employee relationship between

the principal employer and the job contractor's employees
for a limited purpose, that is, to ensure that the employees
are paid their wages. Other than the payment of wages, the
principal employer is not responsible for any claim made by
the employees.
On the other hand, in labor-only contracting, an
employer-employee relationship is created by law between
the principal employer and the employees of the labor
only contractor. In this case, the labor-only contractor is
considered merely an agent of the principal employer.
The principal employer is responsible to the employees of
 LABOR STANDARDS 293

Job-Contracting and Labor-Only Contracting

the labor-only contractor as if such employees had been

directly employed by the principal employer. The principal
employer therefore becomes solidarily liable with the labor
only contractor for all the rightful claims of the employees.
(PCI Automation Center, Inc. v. NLRC, G.R. No. 115920,
January 29, 1996 citing Philippine Bank of Communications v.
NLRC, 146 SCRA 347 [1986])

38. How is the solidary liability of the principal in case the

arrangement is job-contracting distinguished from the
solidary liability of the principal in case the arrangement

ph
is labor-only contracting?

u.
The distinctions between solidary liability in legitimate

ed
job contracting and in labor-only contracting are as follows:

n.
ai
Jurisprudence is also replete with pronouncements that
m
a job-only contractor is solidarily liable with the employer.
su

One of these is the case of Philippine Bank of Communications

m

v. NLRC, 230 Phil. 430 (1986), where this Court explained the
s.
@

legal effects of a job-only contracting, to wit:

91

Under the general rule set out in the first and

cx

second paragraphs of Article 106, an employer

o.

who enters into a contract with a contractor

er

for the performance of work for the employer,

sp

does not thereby create an employer-employees

o

relationship between himself and the employees

pr

of the contractor. Thus, the employees of the

contractor remain the contractor's employees and
his alone. Nonetheless when a contractor fails to

pay the wages of his employees in accordance with

the Labor Code, the employer who contracted
out the job to the contractor becomes jointly
and severally liable with his contractor to the
employees of the latter "to the extent of the work
performed under the contract" as such employer
were the employer of the contractor's employees.
The law itself, in other words, establishes an

employer-employee relationship between the

294 LABOR LAW REVIEWER

employer and the job contractor's employees for

a limited purpose, i.e., in order to ensure that the
latter get paid the wages due to them.
A similar situation obtains where there
is "labor only" contracting. The "labor-only"
contractor-i.e. "the person or intermediary" - is
considered "merely as an agent of the employer."
The employer is made by the statute responsible
to the employees of the "labor only" contractor
as if such employees had been directly employed
by the employer. Thus, where "labor-only"

ph
contracting exists in a given case, the statute itself

u.
implies or establishes an employer-employee

ed
relationship between the employer (the owner

n.
of the project) and the employees of the "labor
ai
only" contractor, this time for a comprehensive
m
purpose: "employer for purposes of this Code,
su

to prevent any violation or circumvention of

m

any provision of this Code." The law in effect

s.
@

holds both the employer and the "labor-only"

91

contractor responsible to the latter's employees

for the more effective safeguarding of the
cx

employees' rights under the Labor Code. (Id. at

o.

439-440) (Emphasis supplied).

er
sp

The case of San Miguel Corporation v. MAERC Integrated

o

Services, Inc., 453 Phil. 543 (2003) also recognized this

pr

solidary liability between a labor-only contractor and the

employer. In the said case, this Court gave the distinctions
between solidary liability in legitimate job contracting and
in labor-only contracting, to wit:

In legitimate job contracting, the law

creates an employer-employee relationship for a
limited purpose, i.e., to ensure that the employees
are paid their wages. The principal employer
becomes jointly and severally liable with the
job contractor only for the payment of the
employees' wages whenever the contractor fails
to pay the same. Other than that, the principal
 295
LABOR STANDARDS
Job-Contracting and Labor-Only Contracting

employer is not responsible for any claim made

by the employees.
On the other hand, in labor-only contracting,
the statute creates an employer-employee
relationship for a comprehensive purpose: to
prevent a circumvention of labor laws. The
contractor is considered merely an agent of the
principal employer and the latter is responsible
to the employees of the labor-only contractor as
if such employees had been directly employed by
the principal employer. The principal employer

ph
therefore becomes solidarily liable with the

u.
labor-only contractor for all the rightful claims

ed
of the employees. (Id. at 566-567) (Emphases

n.
supplied; Citations omitted) (Vigilla v. Philippine
ai
College of Criminology, Inc. G.R. No. 200094, June
m
su
10, 2013)
m

39. Mario Brothers, plumbing works contractor, entered into

s.

an agreement with Axis Business Corporation (Axis) for

@

the plumbing works of its building under construction.

91

Mario Brothers engaged the services of Tristan, Arthur,

cx

and Jojo as plumber, pipe fitter, and threader, respectively.

o.

These workers have worked for Mario Brothers in

er

numerous construction projects in the past but because

sp

of their long relationship, they were never asked to sign

o
pr

contracts for each project. No reports to government

agencies were made regarding their work in the company.
During the implementation of the works contract, Axis
suffered financial difficulties and was not able to pay
Mario Brothers its past billings. As a result, the three (3)
employees were not paid their salaries for two (2) months
and their 13th month pay. Because Axis cannot pay, Mario
Brothers cancelled the contract and laid off Tristan, Arthur,
and Jojo. The 3 employees sued Mario Brothers and Axis
for illegal dismissal, unpaid wages, and benefits.
Can Axis be made solidarily liable with Mario Brothers
to pay the unpaid wages and 13th month pay of Tristan,
Arthur, and Jolo? Explain. (2016 BAR Q. No. XX[B])
296 LABOR LAW REVIEWER

The solidary liability of Axis Business Corporation

with Mario Brothers concerning unpaid wages and 13th
month pay of Tristan, Arthur, and Jolo can be determined
by the following rules:

Jurisprudence distinguished the liabilities of an

employer, who engages the services of a bona fide
"independent contractor," from one who engages a "labor
only" contractor in this manner:

In legitimate job contracting, no employer

employee relationship exists between the

ph
employees of the job contractor and the principal

u.
employer. Even then, the principal employer

ed
becomes jointly and severally liable with the job

n.
contractor for the payment of the employees'

ai
wages whenever the contractor fails to pay the
m
same. In such case, the law creates an employer
su

employee relationship between the principal

m

employer and the job contractor's employees

s.

for a limited purpose, that is, to ensure that the

@

employees are paid their wages. Other than the

91

payment of wages, the principal employer is not

cx

responsible for any claim made by the employees.

o.

(PCI Automation Center, Inc. v. NLRC, G.R. No.

er

115920, January 29, 1996 citing Philippine Bank of

sp

Communications v. NLRC, 146 SCRA 347 [1986])

o
pr

On the other hand, in labor-only contracting,

an employer-employee relationship is created
by law between the principal employer and the
employees of the labor-only contractor. In this
case, the labor-only contractor is considered
merely an agent of the principal employer.
The principal employer is responsible to the
employees of the labor-only contractor as if
such employees had been directly employed by
the principal employer. The principal employer
therefore becomes solidarily ble with the labor
only contractor for all the rightful claims of the
 LABOR STANDARDS 297

Job-Contracting and Labor-Only Contracting

un employees. (PCI Automation Center, Inc. v. NLRC,

G.R. No. 115920, January 29, 1996 citing Philippine
Bank of Communications v. NLRC, 146 SCRA 347
[1986])

Applying the above doctrinal rule, if the arrangement

between Axis Business Corporation and Mario Brothers
is legitimate job contracting then the former's liability is
limited to the unpaid wages and not to the illegal dismissal
and the reliefs thereof, such as backwages and reinstatement
or separation pay. However, if the arrangement is labor-only

ph
contracting Axis Business Corporation is responsible to

u.
Tristan, Arthur, and Jolo as if such employees were directly

ed
employed by Axis Business Corporation. Axis Business

n.
Corporation, therefore, becomes solidarily liable with Mario

ai
Brothers for all the rightful claims of Tristan, Arthur, and
m
Jolo.
su
m

40. K is a legitimate contractor hired by G for six (6) months.

s.

On the third month, G remitted to K the salaries and

@

wages of the employees. However, K absconded with the

91

money leaving the employees unpaid. The disgruntled

cx

employees demanded from G the payment of their

o.

salaries. Is G liable?
er
sp

a. No, because G has already remitted the

o

employees' salaries to K, validly excusing G

pr

from liability;
b. Yes, because he is jointly and solidarily liable
for whatever monetary claims the employees
may have against K;
C. Yes, because of the principle of "a fair day's
wage for a fair day's work";
d. B and C. (2012 BAR Q. No. 10)

b. Yes, because he is jointly and solidarily liable

for whatever monetary claims the employees may have
against K;
298 LABOR LAW REVIEWER

In legitimate job contracting, no employer-employee

relationship exists between the employees of the job
contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable
with the job contractor for the payment of the employees'
wages whenever the contractor fails to pay the same. In such
case, the law creates an employer-employee relationship
between the principal employer and the job contractor's
employees for a limited purpose, that is, to ensure that the
employees are paid their wages. Other than the payment
of wages, the principal employer is not responsible for any

ph
claim made by the employees. (PCI Automation Center, Inc.

u.
v. NLRC, G.R. No. 115920, January 29, 1996 citing Philippine

ed
Bank of Communications v. NLRC, 146 SCRA 347 [1986])

n.
41.
ai
Metro Grocery Inc. arranged with Mr. Juan Dado, a
m
su
Barangay Chairman, to provide the grocery with workers
m

who will work as cashiers, bag boys, shelf counter helpers

s.

and sanitation workers. The grocery will pay Mr. Dado an

@

amount equivalent to the direct and hidden costs of the

91

wages of each worker assigned, plus ten percent (10%) to

cx

cover the administrative costs related to their arrangement.

o.

Mr. Dado, in turn, will pay directly the workers their

er

wages. As far as the workers are concerned, Mr. Dado is

sp

their employer. A group of concerned workers consulted

o

you if Mr. Dado is really under the law their employer.

pr

How will you analyze the problem in order to formulate

your answer? (2000 BAR Q. No. XIII[A])

In the formulation of the answer, it is important to

characterize the relationship between Metro Grocery Inc.
and Mr. Juan Dado. This is to distinguish the liabilities of
the principal employer, who engages the services of a bona
fide "independent contractor," from one who engages a
"labor-only" contractor.

In legitimate job contracting, no employer-employee

relationship exists between the employees of the job
contractor and the principal employer. The principal
 299
LABOR STANDARDS

Job-Contracting and Labor-Only Contracting

employer becomes jointly and severally liable with the

job contractor for the payment of the employees' wages
whenever the contractor fails to pay the same. Other than the
payment of wages, the principal employer is not responsible
for any claim made by the employees. On the other hand, in
labor-only contracting, an employer-employee relationship
is created by law between the principal employer and the
employees of the labor-only contractor. In this case, the
labor-only contractor is considered merely an agent of the
principal employer. The principal employer is responsible
to the employees of the labor-only contractor as if such

ph
employees had been directly employed by the principal

u.
employer. The principal employer therefore becomes

ed
solidarily liable with the labor-only contractor for all the

n.
rightful claims of the employees. (PCI Automation Center, Inc.
ai
v. NLRC, G.R. No. 115920, January 29, 1996 citing Philippine
m
Bank of Communications v. NLRC, 146 SCRA 347 [1986])
su
m

What is the legal significance, if any, of the question of

s.
@

the concerned workers as to who is their employer? (2000

91

BAR Q. No. XIII[B])

cx

The legal significance of the question is for the workers

o.

to determine against whom they can file their rightful

er

claims, such as unpaid wages and other money claims,

sp

regularization, illegal dismissal, backwages, reinstatement

o

or separation pay or those which are punitive in character.

pr

42. Jolli-Mac Restaurant Company (Jolli-Mac) owns and

operates the largest food chain in the country. It engaged
Matiyaga Manpower Services, Inc. (MMSI), a job
contractor registered with the Department of Labor and
Employment, to provide its restaurants the necessary
personnel, consisting of cashiers, motorcycle delivery
boys and food servers, in its operations. The Service
Agreement warrants, among others, that MMSI has a
paid-up capital of P2,000,000.00; that it would train and
determine the qualification and fitness of all personnel
to be assigned to Jolli-Mac; that it would provide these
300 LABOR LAW REVIEWER

personnel with proper Jolli-Mac uniforms; and that it

is exclusively responsible to these personnel for their
respective salaries and all other mandatory statutory
benefits. After the contract was signed, it was revealed,
based on research conducted, that MMSI had no other
clients except Jolli-Mac, and one of its major owners was
a member of the Board of Directors of Jolli-Mac.

If the cashiers, delivery boys and food servers are not paid
their lawful salaries, including overtime pay, holiday pay,
13th month pay, and service incentive leave pay, against
whom may these workers file their claims? Explain. (2009

ph
BAR Q. No. XIV[B])

u.
ed
The cashiers, delivery boys, and food servers can initiate

n.
their money claims against Jolli-Mac.

ai
m
Labor-only contracting, which is totally prohibited,
su
refers to an arrangement where:
m

a) i. The contractor or subcontractor does not

s.

have substantial capital, or

@
91

ii. The contractor or subcontractor does not

have investments in the form of tools, equipment,

cx

machineries, supervision, work premises, among

o.
er

others, and
sp

iii. The contractor's or subcontractor's

o

employees recruited and placed are performing

pr

activities which are directly related to the main business

operation of the principal; or
b) The contractor or subcontractor does not exercise
the right to control over the performance of the work of the
employee. (Section 5, D.O. No. 174, Series of 2017)

The "substantial capital" refers to paid-up capital

stock/shares of at least P5,000,000.00 in case of corporations.
(Section 3[1], D.O. No. 174, Series of 2017)

The facts clearly state that MMSI's paid-up capital is

only of P2,000,000.00. Thus, MMSI is engaged in labor-only
contracting.
 LABOR STANDARDS 301

Job-Contracting and Labor-Only Contracting

In labor-only contracting an employer-employee

relationship is created by law between the principal
employer and the employees of the labor-only contractor.
In this case, the labor-only contractor is considered merely
an agent of the principal employer. The principal employer
is responsible to the employees of the labor-only contractor
as if such employees had been directly employed by the
principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for
all the rightful claims of the employees. (PCI Automation
Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996 citing

ph
Philippine Bank of Communications v. NLRC, 146 SCRA 347

u.
[1986])

ed
n.
Applying the doctrinal rule, the cashiers, delivery

ai
boys, and food servers can file their money claims against
m
MMSI.
su

Alternative answer:
m
s.

The cashiers, delivery boys, and food servers can

@

initiate their money claims against Jolli-Mac.

91

The Service Agreement between the principal and the

cx

contractor shall include the following:

o.
er

i. The specific description of the job or work

sp

being subcontracted, including its term or duration;

o
pr

ii. The place of work and terms and conditions

governing the contracting arrangement, to include the
agreed amount of the contracted job or work as well
as the standard administrative fee of not less than ten
percent (10%) of the total contract cost; and
iii. A provision on the issuance of the bond/s
defined under Section 3(a) renewable every year.
(Section 11, D.O. No. 174, Series of2017)
The effect of the violation of the foregoing rule, shall
render the principal the direct employer of the employees
of the contractor or subcontractor, pursuant to Article 109 of
the Labor Code. (Section 12, D.O. No. 174, Series of 2017)
302 LABOR LAW REVIEWER

In this case, the Service Agreement between Jolli-Mac

and MMSI is not legal and valid for failure to state the
above provisions required by the rules. Thus, the cashiers,
delivery boys, and food servers can file their money claims
against Jolli-Mac, as the direct employer.

43. Jose Pescador had been employed by the Forward Security

Agency since 1988 and was assigned to Freedom Enterprises,
Inc. with which the agency has a service contract. On June
30, 1992, he resigned from the agency and subsequently
filed a complaint with the Labor Arbiter against the agency

ph
and the company (Freedom Enterprises) for money claims

u.
arising out of his employment. The agency admitted its

ed
liability for said claims. The Company moved to dismiss

n.
Pescador's complaint, contending that Pescador was not

ai
an employee of the Company and that the agency pursuant
m
to the service contract, was exclusively and solely liable
su

for Pescador's claims. Rule on the company's motion to

m

dismiss. (1992 BAR Q. No. III)

s.
@

I will deny the motion to dismiss.

91

Forward Security Agency and Freedom Enterprises,

cx

Inc. are jointly and severally liable.

o.
er

According to the Revised Guidelines Governing the

sp

Employment and Working Conditions of Security Guards

o

and Other Private Security Personnel in the Private Security

pr

Industry, the Security Service Contractor (SSC) or Private

Security Agency (PSA) and its principal or client shall be
jointly and solidarily liable with each other in any of the
following circumstances:

a.
When the SSC/PSA fails to pay the wages of
its security guards and other private security personnel,
the principal or client shall be considered the "indirect
employer" and shall be jointly and severally liable with
the SSC/PSA to the extent of the work performed by such
security guards and other private security personnel under
the Service Agreement, in the same manner and extent that
the principal is liable to its direct employees.
 LABOR STANDARDS 303

Job-Contracting and Labor-Only Contracting

b. When the SSC/PSA is found to be engaged in

labor-only contracting, the principal shall be jointly and
solidarily liable with it in the same manner that the principal
is liable to employees directly hired by him. (Section 9, 9.1,
D.O. No. 150-16)

Applying the foregoing rules, the failure of Forward

Security Agency to pay the wages of Jose Pescador
Freedom Enterprises, Inc. shall be considered the indirect
employer and therefore jointly and severally liable with the
security agency. However, if there is a finding of labor-only

ph
contracting, Freedom Enterprises, Inc. shall be jointly and
severally liable as the direct employer.

u.
ed
44. Can a government agency be within the scope of the Labor

n.
ai
Code?
m
Yes. It is settled that notwithstanding that the
su

petitioner is a government agency, its liabilities, which are

m

joint and solidary with that of the contractor, are provided

s.
@

in Articles 106, 107, and 109 of the Labor Code. This places
91

the petitioner's liabilities under the scope of the NLRC.

Moreover, Book Three, Title II on Wages specifically
cx

provides that the term "employer" includes any person

o.

acting directly or indirectly in the interest of an employer in

er
sp

relation to an employee and shall include the Government

o

and all its branches, subdivisions and instrumentalities,

pr

all government-owned or controlled corporation and

institutions as well as non-profit private institutions, or
organizations (Article 97[b], Labor Code; Eagle Security Agency,
Inc. v. NLRC, 173 SCRA 479 [1989]; Rabago v. NLRC, 200
SCRA 158 [1991]). Settled is the rule that in job contracting,
the petitioner as principal is jointly and severally liable
with the contractor for the payment of unpaid wages. The
statutory basis for the joint and several liability is set forth
in Articles 107 and 109 in relation to Article 106 of the Labor

Code. (Philippine Fisheries Development Authority v. NLRC,

G.R. No. 94825, September 4, 1992)
304 LABOR LAW REVIEWER

45. Linis Manpower, Inc. (LMI) had provided janitorial

services to the Philippine Overseas Employment
Administration (POEA) since March 2009. Its service
contract was renewed every three months. However, in
the bidding held in June 2012, LMI was disqualified and
excluded. In 2013, six janitors of LMI formerly assigned
at POEA filed a complaint for underpayment of wages.
Both LMI and POEA were impleaded as respondents.
Should POEA, a government agency subject to budgetary
appropriations from Congress, be held liable solidarily
with LMI for the payment of salary differentials due to the

ph
complainants? Cite the legal basis of your answer. (2014

u.
BAR Q. No. IV)

ed
n.
Yes, the POEA can be held liable solidarily with LMI for

ai
the payment of salary differentials due to the complainants.
m
su
Notwithstanding that the POEA is a government
agency, its liabilities, which are joint and solidary with that
m
s.

of the contractor, are provided in the Labor Code. (Articles

@

106, 107, and 109) Moreover, the term "employer" includes

91

the Government and all its branches, subdivisions and

cx

instrumentalities, all government-owned or controlled

o.

corporation and institutions as well as non-profit private

er

institutions, or organizations (Article 97[b], Labor Code; Eagle

sp

Security Agency, Inc. v. NLRC, 173 SCRA 479 [1989]; Rabago

o

v. NLRC, 200 SCRA 158 [1991]). Settled is the rule that in

pr

job contracting, the principal is jointly and severally liable

with the contractor for the payment of unpaid wages. The
statutory basis for the joint and several liability is set forth
in (Article 107 in relation to Article 106) the Labor Code.
(Philippine Fisheries Development Authority v. NLRC, G.R. No.
94825, September 4, 1992)

Applying the law, the POEA is, therefore, solidarily

liable with LMI.

46. Clean Manpower Inc. (CMI) had provided janitorial

services to the National Economic Development
Authority (NEDA) since April 1988. Its service contract
 LABOR STANDARDS 305

Job-Contracting and Labor-Only Contracting

was renewed every three months. However, in the

bidding held on July 1992, CMI was disqualified and
excluded. In 1993, six janitors of CMI formerly assigned
at NEDA filed a complaint for underpayment of wages.
Both CMI and NEDA were impleaded as respondents
for failure to comply with NCR Wage Orders Nos. 01 and
02, which took effect on November 1, 1990 and January
2, 1992, respectively. Should NEDA, a government agency
subject to budgetary constraints, be held liable solidarily
with CMI for the payment of salary differentials due the
complainants? Cite the legal basis of your answer. (2004

ph
BAR Q. No. VIII[A])

u.
ed
Yes, NEDA can be held liable solidarily with CMI for
the payment of salary differentials due the complainants.

n.
ai
Notwithstanding that the NEDA is a government
m
agency, its liabilities, which are joint and solidary with that
su

of the contractor, are provided in the Labor Code. (Articles

m

106, 107, and 109) Moreover, the term "employer" includes

s.

the Government and all its branches, subdivisions and

@
91

instrumentalities, all government-owned or controlled

corporation and institutions (Article 97[b], Labor Code; Eagle
cx

Security Agency, Inc. v. NLRC, 173 SCRA 479 [1989]; Rabago

o.

v. NLRC, 200 SCRA 158 [1991]). Settled is the rule that in

er

job contracting. The principal is jointly and severally liable

sp

with the contractor for the payment of unpaid wages. The

o
pr

statutory basis for the joint and several liability is set forth
in (Article 107 in relation to Article 106) the Labor Code.
(Philippine Fisheries Development Authority v. NLRC, G.R. No.
94825, September 4, 1992)

Applying the above doctrinal rules, NEDA is solidarily

liable with LMI.

47. Distinguish Article 107 from Article 106 of the Labor

Code.
bood
The distinction between Articles 106 and 107 was in

the fact that Article 106 deals with "labor-only" contracting.

Here, by operation of law, the contractor is merely considered
 306 LABOR LAW REVIEWER

an agent of the employer who is deemed "re-sponsible to

the workers to the same extent as if the latter were directly

employed by him." On the other hand, Article 107 deals

with "job contracting." In the latter situation, while the
contractor himself is the direct employer of the employees,
the employer is deemed, by operation of law, as an indirect
employer.

In other words, the phrase "not an employer" found

in Article 107 must be read in conjunction with Article 106.
A contrary interpretation would render the provisions of
Article 107 meaningless considering that every time an

ph
employer engages a contractor, the latter is always acting in

u.
the interest of the former, whether directly or indirectly, in

ed
relation to his employees.

n.
ai
It should be recalled that a finding that a contractor is a
m
"labor-only" contractor is equivalent to declaring that there
su

is an employer-employee relationship between the owner of

m

the project and the employees of the "labor-only" contractor

s.

(Associated Anglo-American Tobacco Corp. v. Clave, G.R. No.

@

50915, August 30, 1990, 189 SCRA 127; Industrial Timber Corp.
91

v. NLRC, G.R. No. 83616, January 20, 1989, 169 SCRA 341).
cx

This is evidently because, as heretofore stated, the “labor

o.

only" contractor is considered a mere agent of an employer.

er

In contrast, in "job contracting," no employer-employee

sp

relation-ship exists between the owner and the employees

o
pr

of his contractor. The owner of the project is not the direct

employer but merely an indirect employer, by operation of
law, of his contractor's employees. (Baguio v. NLRC, G.R.
Nos. 79004-08 October 4, 1991)

48. What is the remedy of the principal on its being made

liable to the indirect employees?

The principal is made liable to its indirect employees

because, after all, it can protect itself from irresponsible
contractors by withholding payment of such sums that are
due the employees and by paying the employees directly,
or by requiring a bond from the contractor or subcontractor
 LABOR STANDARDS 307

Job-Contracting and Labor-Only Contracting

for this purpose. (Rosewood Processing, Inc. v. NLRC, 352 Phil.

1013 [1998])

It should be understood, though, that the solidary

liability of petitioner does not preclude the application of
Article 1217 of the Civil Code on the right of reimbursement
from its co-debtor, viz.: (Manila Electric Company v. Benamira,
501 Phil. 621, 644 [2005])

Art. 1217. Payment made by one of the solidary

debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may choose

ph
which offer to accept.

u.
ed
He who made the payment may claim from his co

n.
debtors only the share which corresponds to each, with the

ai
interest for the payment already made. If the payment is
m
made before the debt is due, no interest for the intervening
su

period may be demanded.

m
s.

When one of the solidary debtors cannot, because of

@

his insolvency, reimburse his share to the debtor paying the

91

obligation, such share shall be borne by all his co-debtors, in

cx

proportion to the debt of each. (Government Service Insurance

o.

System v. National Labor Relations Commission, G.R. No.

er

180045, November 17, 2010)

osp
pr

49. What is the extent of the solidary liability under Articles

106 and 109 of the Labor Code?

The Supreme Court distinguished the solidary liability

for unpaid wages and all the rightful claims of the employees
by explaining the effects of legitimate job contracting and
labor-only contracting as follows:
In legitimate job contracting, the law creates
an employer-employee relationship for a limited
purpose, i.e., to ensure that the employees are
paid their wages. (PBC v. NLRC, G.R. No. 66598,
19 December 1986, 146 SCRA 347) The principal
employer becomes jointly and severally liable
308 LABOR LAW REVIEWER

with the job contractor only for the payment of the

employees' wages whenever the contractor fails
to pay the same. Other than that, the principal
employer is not responsible for any claim made
by the employees.

On the other hand, in labor-only contracting,

the statute creates an employer-employee
relationship for a comprehensive purpose: to
prevent circumvention of labor laws. The

contractor is considered merely an agent of the

ph
principal employer and the latter is responsible

u.
to the employees of the labor-only contractor as

ed
if such employees had been directly employed by

n.
the principal employer. The principal employer

ai
therefore becomes solidarily liable with the labor
m
only contractor for all the rightful claims of the
su

employees. (Underscore supplied) (Valencia v.

m

Classique Vinyl Products Corporation, G.R. No.

s.

206390, January 30, 2017)

@
91

50. Under what circumstance is an indirect employer

cx

liable for backwages and/or separation pay arising as a

o.

consequence of unlawful termination?

er
sp

Accordingly, petitioner is bound by the provisions of

o

the Labor Code on indirect employment. Petitioner cannot

pr

be allowed to deny its obligation to respondents after it

had benefited from their services. So long as the work, task,
job, or project has been performed for petitioner's benefit
or on its his behalf, the liability accrues for such services.
(New Golden City Builders & Dev't. Corp. v. CA, 463 Phil.
821, 833 [2003]; id. at 1034) The principal is made liable to
its indirect employees because, after all, it can protect itself
from irresponsible contractors by withholding payment
of such sums that are due the employees and by paying
the employees directly, or by requiring a bond from the
contractor or subcontractor for this purpose. (Rosewood
Processing, Inc. v. NLRC, supra, at 1034)
 LABOR STANDARDS 309

Job-Contracting and Labor-Only Contracting

Petitioner's liability, however, cannot extend to the

payment of separation pay. An order to pay separation pay
is invested with a punitive character, such that an indirect
employer should not be made liable without a finding that
it had conspired in the illegal dismissal of the employees.
(Government Service Insurance System v. National Labor
Relations Commission, G.R. No. 180045, November 17, 2010)

51. What is the interpretation of the phrase "any violation of

any provision of this Code" under Article 109 of the Labor
Code?

ph
Similarly, the solidary liability for payment of

u.
backwages and separation pay is limited, under Article 106,

ed
"to the extent of the work performed under the contract";

n.
under Article 107, to "the performance of any work, task,
ai
job or project"; and under Article 109, to "the extent of their
m
su
civil liability under this Chapter [on payment of wages]."
m

These provisions cannot apply to petitioner,

s.

considering that the complainants were no longer working

@

for or assigned to it when they were illegally dismissed.

91

Furthermore, an order to pay backwages and separation pay

cx

is invested with a punitive character, such that an indirect

o.

employer should not be made liable without a finding that

er

it had committed or conspired in the illegal dismissal.

sp

The liability arising from an illegal dismissal is unlike

o
pr

an order to pay the statutory minimum wage because

the workers' right to such wage is derived from law. The
proposition that payment of backwages and separation pay
should be covered by Article 109, which holds an indirect
employer solidarily responsible with his contractor or
subcontractor for "any violation of any provision of this
Code," would have been tenable if there were proof-there
was none in this case that the principal/employer had
-

conspired with the contractor in the acts giving rise to the

illegal dismissal. (Rosewood Processing, Inc. v. NLRC, G.R.
Nos. 116476-84, May 21, 1998, cited in Government Service
Insurance System v. National Labor Relations Commission, G.R.
No. 180045, November 17, 2010)
310 LABOR LAW REVIEWER

52. Constant Builders, an independent contractor, was charged

with illegal dismissal and non-payment of wages and
benefits of ten dismissed employees. The complainants
impleaded as co-respondent Able Company, Constant
Builder's principal in the construction of Able's office
building. The complaint demanded that Constant and
Able be held solidarily liable for the payment of their
backwages, separation pay, and all their unpaid wages
and benefits. If the Labor Arbiter rules in favor of the
complainants, choose the statement that best describes
the extent of the liabilities of Constant and Able.

ph
(A) Constant and Able should be held solidarily

u.
ed
liable for the unpaid wages and benefits, as

n.
well as backwages and separation pay, based on

ai
Article 109 of the Labor Code which provides
m
that "every employer or indirect employer
su

shall be held responsible with his contractor or

m

subcontractor for any violation of any provision

s.

of this Code."
@
91

(B) Constant and Able should be held solidarily

cx

liable for the unpaid wages and benefits, and

o.

should order Constant, as the workers' direct

er

employer, to be solely liable for the backwages

sp

and separation pay.

o
pr

(C) Constant and Able should be held solidarily

liable for the unpaid wages and benefits and the
backwages since these pertain to labor standard
benefits for which the employer and contractor
are liable under the law, while Constant alone
-

as the actual employer - should be ordered to

pay the separation pay.

(D) Constant and Able should be held solidarily

liable for the unpaid wages and benefits,
and Constant should be held liable for their

backwages and separation pay unless Able is

shown to have participated with malice or bad
 LABOR STANDARDS 311

Job-Contracting and Labor-Only Contracting

faith in the workers' dismissal, in which case

both should be held solidarily liable.
(E) The above statements are all inaccurate. (2013

BAR Q. No. XVII)

(B) Constant and Able should be held solidarily

liable for the unpaid wages and benefits, and should order
Constant, as the workers' direct employer, to be solely liable
for the backwages and separation pay.
The facts clearly stated that the arrangement is job

ph
contracting since Constant Builders is an independent

u.
contractor. Thus, the following rule should apply:

ed
In legitimate job contracting, no employer

n.
employee relationship exists between the
ai
m
employees of the job contractor and the principal
su
employer. Even then, the principal employer
m

becomes jointly and severally liable with the job

s.

contractor for the payment of the employees'

@

wages whenever the contractor fails to pay the

91

same. In such case, the law creates an employer

cx

employee relationship between the principal

o.

employer and the job contractor's employees

er

for a limited purpose, that is, to ensure that the

sp

employees are paid their wages. Other than the

o

payment of wages, the principal employer is not

pr

responsible for any claim made by the employees.

(PCI Automation Center, Inc. v. NLRC, G.R. No.

115920, January 29, 1996 citing Philippine Bank of

Communications v. NLRC, 146 SCRA 347 [1986])

The liability of Able Company should be limited to the

unpaid wages and benefits (Second paragraph of Article 106,
Labor Code) and not to backwages and separation pay as a
consequence of illegal dismissal. The reliefs of backwages
and separation pay are punitive in character (Rosewood
Processing, Inc. v. NLRC, 352 Phil. 1013 [1998]) for which
Able Company cannot be held liable.
312 LABOR LAW REVIEWER

53. Antonio Antuquin, a security guard, was caught sleeping

on the job while on duty at the Yosi Cigarette Factory.
As a result, he was dismissed from employment by the
Wagan Security Agency, an independent contractor. At
the time of his dismissal, Antonio had been serving as a
watchman in the factory for many years, often at stretches
of up to 12 hours, even on Sundays and holidays, without
overtime, nighttime and rest day benefits. He thereafter
filed a complaint for illegal dismissal and non-payment of
benefits against Yosi Cigarette Factory, which he claimed
was his actual and direct employer.

ph
u.
As the Labor Arbiter assigned to hear the case, how would

ed
you correctly resolve the following:

n.
Antonio's charge of illegal dismissal; (2005 BAR Q. No.
III[1a])
ai
m
su

I will dismiss the charge for illegal dismissal.

m
s.

The facts clearly stated that Wagan Security Agency is

@

an independent contractor.
91

In legitimate job contracting, no employer-employee

cx

relationship exists between the employees of the job

o.

contractor and the principal employer. Other than the

er

payment of wages, the principal employer is not responsible

sp

for any claim made by the employees. (PCI Automation

o
pr

Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996 citing
Philippine Bank of Communications v. NLRC, 146 SCRA 347
[1986])

Applying the above doctrinal rule, Yosi Cigarette

Factory cannot be held liable for illegal dismissal.

Antonio's claim for overtime and other benefits. (2005

BAR Q. No. III[16])

I will grant the claim for overtime and other benefits.

In legitimate job contracting, no employer-employee

relationship exists between the employees of the job
contractor and the principal employer. Even then, the
 LABOR STANDARDS 313

Job-Contracting and Labor-Only Contracting

po principal employer becomes jointly and severally liable

and with the job contractor for the payment of the employees'
Hotwages whenever the contractor fails to pay the same. In such
case, the law creates an employer-employee relationship
between the principal employer and the job contractor's
employees for a limited purpose, that is, to ensure that the
employees are paid their wages. Other than the payment
of wages, the principal employer is not responsible for any
claim made by the employees. (PCI Automation Center, Inc.
v. NLRC, G.R. No. 115920, January 29, 1996 citing Philippine

ph
Bank of Communications v. NLRC, 146 SCRA 347 [1986])

u.
In this case, the facts clearly stated that Wagan Security

ed
Agency is an independent contractor.

n.
Applying the above rule, Yosi Cigarette Factory is

ai
jointly and severally liable with Wagan Security Agency
m
su
only to the extent of the unpaid wages or benefits. This
is because Yosi Cigarette Factory is an indirect employer.
m
s.

(Article 107, Labor Code)

@
91

54. "X" is a bona fide service contractor providing manpower

services to various companies, possessing the necessary
cx

capital and equipment needed to effectively carry out its

o.
er

commitments. "Y" is an employee of "X" and assigned to

sp

work as a janitor in Company "Z". In the course of Y's

assignment, Z's supervisors and employees would give
o
pr

verbal instructions to Y to how and where to perform

his work. X pays Y salary. Subsequently, Y's services were
terminated by X. Y sued Z for illegal dismissal. May Y's
case against Z prosper? Why? (2001 BAR Q. No. XIII[a])
No, the illegal dismissal case will not prosper.
In legitimate job contracting, no employer-employee
relationship exists between the employees of the job
contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable
with the job contractor for the payment of the employees'
wages whenever the contractor fails to pay the same. In such
case, the law creates an employer-employee relationship
314 LABOR LAW REVIEWER

between the principal employer and the job contractor's

employees for a limited purpose, that is, to ensure that the
employees are paid their wages. Other than the payment
of wages, the principal employer is not responsible for any
claim made by the employees. (PCI Automation Center, Inc.
v. NLRC, G.R. No. 115920, January 29, 1996 citing Philippine
Bank of Communications v. NLRC, 146 SCRA 347 [1986])

In this case, the facts clearly stated that "X' is a bona

fide service contractor.

Applying the above doctrinal rule, Company Z is

ph
jointly and severally liable with X to the extent of the unpaid

u.
wages or benefits. This is because Company Z is an indirect

ed
employer. (Article 107, Labor Code)

n.
ai
Alternative answer: m
su
Yes, the illegal dismissal case will prosper.
m

The facts stated that in the course of Y's assignment, Z's

s.

supervisors and employees would give verbal instructions

@

to Y as to how and where to perform his work. Thus, it is

91

clear that Z is exercising control on the manner and method

cx

of Y's performance of his work. Being the employer of Y, Z

o.

can be held liable for illegal dismissal.

er
sp

55. What are the cases wherein the principal is considered

o
pr

the direct employer of the contractor's or subcontractor's

employees under D.O. No. 174-17?

As provided under D.O. No. 174-17, the principal

is considered the direct employer of the contractor's or
subcontractor's employees:
1. In the event that there is a finding that the
contractor or sub-contractor is engaged in labor-only
contracting (See Section 5, D.O. No. 174-17) and other illicit
forms of employment arrangements (See Section 6, D.O. No.
174-17), the principal shall be deemed the direct employer
of the contractor's or subcontractor's employees. (Section 7,
D.O. No. 174-17)
 LABOR STANDARDS 315

Job-Contracting and Labor-Only Contracting

2. A finding of violation of either the rights of

contractor's/subcontractor's employees (See Section 10, D.O.
No. 174-17) or the required contracts (See Section 11, D.O. No.
174-17) shall render the principal the direct employer of the
employees of the contractor or subcontractor pursuant to
Article 109 of the Labor Code, as amended. (Section 12, D.O.
No. 174-17)

ph
u.
ed
n.
ai
m
su
m
s.
@
91
cx
o.
er
o sp
pr
 Chapter VII
PAYMENT OF WAGES

1. What is the rule to enforce the workers' preference under

Article 110 of the Labor Code?

In a number of cases decided by this Court, it has

ph
been repeatedly held that there must first be a declaration

u.
of bankruptcy or judicial liquidation of the employer's

ed
business before the workers' preference can be enforced just

n.
as all other creditors of the employer company can assert

ai
their preferences, if any, only in the course of a bankruptcy or
m
su
judicial liquidation proceeding. (China Banking Corporation
v. Young, G.R. No. 76061, July 28, 1993 and China Banking
m
s.

Corporation v. NLRC, G.R. No. 82566, July 28, 1993)

@
91

2. What is the order of preference between the mortgage

cx

credit and the worker preference under Article 110 of the

o.

Labor Code?
er

It was ruled that under Articles 2241 and 2242 of

sp

the Civil Code, a mortgage credit is a special preferred

o
pr

credit that enjoys preference with respect to a specific/

determinate property of the debtor. On the other hand, the
worker's preference under Article 110 of the Labor Code
is an ordinary preferred credit. While this provision raises
the worker's money claim to first priority in the order of
preference established under Article 2244 of the Civil Code,
the claim has no preference over special preferred credits.
(Barayoga v. Asset Privatization Trust, G.R. No. 160073, October
24, 2005)

316
 LABOR STANDARDS 317

Payment of Wages

3. Premiere Bank, a banking corporation, being the creditor

mortgagee of XYZ & Co., a garment firm, foreclosed the
hypothecated assets of the latter. Despite the foreclosure,
XYZ & Co. continued its business operations. A year
later, the bank took possession of the foreclosed property.
The garment firm's business operations ceased without a
declaration of bankruptcy. Jose Caspar, an employee of
XYZ & Co., was dismissed from employment due to the
cessation of business of the firm. He filed a complaint
against XYZ & Co. and the bank. The Labor Arbiter,
after hearing, so found the company liable, as claimed

ph
by Jose Caspar, for separation pay. Premiere Bank was

u.
additionally found subsidiarily liable upon the thesis that

ed
the satisfaction of labor benefits due to the employee is

n.
superior to the right of a mortgagee of property. Was the

ai
Labor Arbiter correct in his decision? (2003 BAR Q. No.
m
XII)
su
m

The Labor Arbiter's decision is not correct.

s.

As to the finding that labor benefits due to the employee

@

is superior to the right of a mortgagee of property, it was

91

ruled that under Articles 2241 and 2242 of the Civil Code,
cx

a mortgage credit is a special preferred credit that enjoys

o.

preference with respect to a specific/determinate property

er

of the debtor. On the other hand, the worker's preference

sp

under Article 110 of the Labor Code is an ordinary preferred

o
pr

credit. While this provision raises the worker's money claim

to first priority in the order of preference established under
Article 2244 of the Civil Code, the claim has no preference
over special preferred credits. (Barayoga v. Asset Privatization
Trust, G.R. No. 160073, October 24, 2005)

Applying the doctrinal rule, the right of Jose Gaspar to

be paid the benefits due him from the properties of XYZ &
Co. cannot have any preference over the latter's mortgage
credit. In other words, being a mortgage credit, Premiere
Bank's lien on XYZ & Co.'s mortgaged assets is a special
preferred lien that must be satisfied first before the claims of
the workers.
318 LABOR LAW REVIEWER

4. FACTS: Lowland Cement & Factory Company (LCFC)

borrowed P500M from the Development Bank of the
Philippines and mortgaged the entire company, inclusive
of its land, buildings and equipment, to guarantee the
payment of the loan. However, because of the economic
conditions, LCFC incurred heavy losses and eventually
failed to pay DBP the required monthly amortizations
over a period of more than one (1) year. In due time, DBP
foreclosed the mortgaged assets of LCTC resulting in
the closure of the company and the displacement of all
its employees for want of work. The LCFC Labor Union

ph
[Union] filed in behalf of the displaced workers a labor

u.
case against DBP as the new owner of the defunct cement

ed
factory for wage differentials, retirement pay and other

n.
money claims. The Labor Arbiter decided in the favor of

ai
the Union. DBP appealed to the NLRC. DBP contended
m
su
in its appeal that its acquisition of the mortgage assets of
LCFC through foreclosure sale did not make it the owner
m
s.

of the defunct Lowland Cement, and that the doctrine of

@

successor-employer is not applicable in this case, since

91

DBP did not continue the business operation of LCFC.

cx

The NLRC while finding merit in DBP's contention,

o.

nonetheless held DBP liable to the extent of the proceeds

er

of the foreclosure sale since the Union's claims in behalf

sp

of the workers constitute a first preference with respect

o

thereto pursuant to article 110 of the Labor Code. Is the

pr

NLRC correct in holding DBP liable to the extent of the

proceeds of the foreclosure sale? Explain briefly. (1999
BAR Q. No. XVIII)

The NLRC is not correct.

Jurisprudence explained that under Articles 2241

and 2242 of the Civil Code, a mortgage credit is a special
preferred credit that enjoys preference with respect to a
specific/determinate property of the debtor. On the other
hand, the worker's preference under Article 110 of the
Labor Code is an ordinary preferred credit. While this
provision raises the worker's money claim to first priority
 LABOR STANDARDS 319

Payment of Wages

in the order of preference established under Article 2244

of the Civil Code, the claim has no preference over special
preferred credits. (Barayoga v. Asset Privatization Trust, G.R.
No. 160073, October 24, 2005)

Applying the doctrinal rule, the right of the workers to

be paid the benefits due them from the properties of LCFC
cannot have any preference over the latter's mortgage
credit. In other words, being a mortgage credit, DBP's lien
on LCFC's mortgaged assets is a special preferred lien that
must be satisfied first before the claims of the workers.

ph
5. Under the Labor Code, is the right of first preference a

u.
lien on the property of the insolvent debtor in favor of the

ed
workers? Explain. (1995 BAR Q. No. X[1])

n.
ai
No, the right of first preference is not a lien on the
m
property of the insolvent debtor.
su

A preference applies only to claims which do not attach

m
s.

to specific properties. A lien creates a charge on a particular

@

property. The right of first preference as regards unpaid

91

wages recognized by Article 110 does not constitute a lien

on the property of the insolvent debtor in favor of workers.
cx

It is but a preference of credit in their favor, a preference

o.
er

in application. It is a method adopted to determine and

sp

specify the order in which credits should be paid in the final

o

distribution of the proceeds of the insolvent's assets. It is a

pr

right to a first preference in the discharge of the funds of the

judgment debtor. (Barayoga v. Asset Privatization Trust, G.R.
No. 160073, October 24, 2005 citing Development Bank of the
Philippines v. NLRC, 183 SCRA 328, 337-338, March 19, 1990)

6. Distinguish the mortgage created under the Civil Code

from the right of first preference created by the Labor
Code as regards the unpaid wages of workers. Explain.
(1995 BAR Q. No. X[2])

Under Articles 2241 and 2242 of the Civil Code, a

mortgage credit is a special preferred credit that enjoys

preference with respect to a specific/determinate property
320 LABOR LAW REVIEWER

of the debtor. On the other hand, the worker's preference

under Article 110 of the Labor Code is an ordinary preferred
credit. While this provision raises the worker's money claim
to first priority in the order of preference established under
Article 2244 of the Civil Code, the claim has no preference
over special preferred credits. (Barayoga v. Asset Privatization
Trust, G.R. No. 160073, October 24, 2005)

7. The Independence Bank of the Philippines (IBP) is the

mortgage creditor of San Juan Trading Company (SJTC).
For failure of SJTC to pay its obligations, IBP foreclosed

ph
the former's mortgaged properties and in the bidding

u.
acquired the properties as the highest bidder. SJTC's

ed
workers, whose claims for separation pay, unpaid wages

n.
and other benefits could not be satisfied, filed an action

ai
against IBP to enforce their claims, contending that they
m
enjoyed preference in respect of separation pay, wages
su

and other benefits due them prior to the cessation of

m

SJTC's operations. Will the action of the workers against

s.
@

IBP prosper? (1992 BAR Q. No. VI)

91

No, the action of the workers against IBP will not

cx

prosper.
o.

Under Articles 2241 and 2242 of the Civil Code, a

er
sp

mortgage credit is a special preferred credit that enjoys

o

preference with respect to a specific/determinate property

pr

of the debtor. On the other hand, the worker's preference

under Article 110 of the Labor Code is an ordinary preferred
credit. While this provision raises the worker's money claim
to first priority in the order of preference established under
Article 2244 of the Civil Code, the claim has no preference
over special preferred credits. (Barayoga v. Asset Privatization
Trust, G.R. No. 160073, October 24, 2005)

P Applying the doctrinal rule, the right of SJTC's workers

to be paid the separation pay, wages and other benefits due
them from the properties of their employer cannot have
any preference over the latter's mortgage credit. In other
words, being a mortgage credit, Independence Bank of the
 LABOR STANDARDS 321

Payment of Wages

Philippines' lien on San Juan Trading Company's mortgaged

assets is a special preferred lien that must be satisfied first
7
before the claims of the workers.

8.
What is the basis of the deduction of attorney's fees under
Article 111 of the Labor Code?

Attorney's fees in any judicial or administrative

proceedings for the recovery of wages shall not exceed 10%
of the amount awarded. The fees may be deducted from the
total amount due the winning party. (Rule VIII, Section 8,

ph
Rules to Implement the Labor Code)

u.
9. What is the concept of attorney's fees under Article 111 of

ed
the Labor Code?

n.
ai
We explained in PCL Shipping Philippines, Inc. v. National
m
Labor Relations Commission, G.R. No. 153031, December 14,
su

2006, 511 SCRA 44 that there are two commonly accepted

m

concepts of attorney's fees-the ordinary and extraordinary.

s.

In its ordinary concept, an attorney's fee is the reasonable

@

compensation paid to a lawyer by his client for the legal

91

services the former renders; compensation is paid for the

cx

cost and/or results of legal services per agreement or as may

o.

be assessed. In its extraordinary concept, attorney's fees are

er

deemed indemnity for damages ordered by the court to be

sp

paid by the losing party to the winning party. The instances

o
pr

when these may be awarded are enumerated in Article 2208

of the Civil Code, specifically in its paragraph 7 on actions
for recovery of wages, and is payable not to the lawyer but
to the client, unless the client and his lawyer have agreed
that the award shall accrue to the lawyer as additional or
part of compensation. (Id. at 64-65, citing Dr. Reyes v. Court
of Appeals, 456 Phil. 520, 539-540 [2003])
We also held in PCL Shipping that Article 111 of the
Labor Code, as amended, contemplates the extraordinary
concept of attorney's fees and that Article 111 is an exception
to the declared policy of strict construction in the award of
attorney's fees. Although an express finding of facts and law
322 LABOR LAW REVIEWER

is still necessary to prove the merit of the award, there need

not be any showing that the employer acted maliciously or in
bad faith when it withheld the wages. (Kaisahan at Kapatiran
ng mga Manggagawa at Kawani sa MWC-East Zone Union v.
Manila Water Company, Inc., G.R. No. 174179, November 16,
2011)

10. In a case for illegal dismissal and non-payment of

benefits, with prayer for Damages, Apollo was awarded
the following: 1) P200,000.00 as backwages; 2) P80,000.00
as unpaid wages; 3) P20,000.00 as unpaid holiday pay;

ph
4) P5,000.00 as unpaid service incentive leave pay;

u.
5) P50,000.00 as moral damages; and 6) P10,000.00 as

ed
exemplary damages. Attorney's fees of ten percent (10%)

n.
of all the amounts covered by items 1 to 6 inclusive, plus

ai
interests of 6% per annum from the date the same were
m
unlawfully withheld, were also awarded.
su
m

Robbie, the employer, contests the award of attorney

s.

fees amounting to 10% on all the amounts adjudged on

@

the ground that Article 111 of the Labor Code authorizes

91

only 10% "of the amount of wages recovered". Rule on the

cx

issue and explain. (2016 BAR Q. No. XVI[a])

o.

I will rule that the 10% attorney's fees is based on the

er

total amount due to Apollo.

o sp

Attorney's fees in any judicial or administrative

pr

proceedings for the recovery of wages shall not exceed 10%

of the amount awarded. The fees may be deducted from the
total amount due the winning party. (Rule VIII, Section 8,
Rules to Implement the Labor Code)

Applying the above rule, the basis of the ten percent

(10%) is the total amount due the winning party and not
merely the amount of wages recovered.

11. Eduardo Santiago, a project worker, was being assigned

by his employer, Bagsak Builders, to Laoag, Ilocos Norte.
Santiago refused to comply with the transfer claiming that
it, in effect, constituted a constructive dismissal because it
 LABOR STANDARDS 323

Payment of Wages

would take him away from his family and his usual work
assignments in Metro Manila. The Labor Arbiter found
that there was no constructive dismissal but ordered

the payment of separation pay due to strained relations

between Santiago and Bagsak Builders plus attorney's fees
equivalent to ten percent (10%) of the value of Santiago's
separation pay. Is the award of attorney's fees valid? State
the reasons for your answer. (2001 BAR Q. No. XVII[a])

The award of attorney's fees is not valid.

In cases of unlawful withholding of wages, the

ph
culpable party may be assessed attorney's fees equivalent

u.
to ten percent of the amount of wages recovered. (Article

ed
111, Labor Code)

n.
ai
In this case, there was no unlawful withholding of
m
wages because the Labor Arbiter found that Eduardo
su

Santiago was not constructively dismissed. Thus, the ten

m

percent (10%) award of attorney's fees is not valid.

s.
@

12. How much attorney's fees may a lawyer assess a culpable

91

party in cases of unlawful withholding of wages? (1993

cx

BAR Q. No. XII)

o.

Attorney's fees in any judicial or administrative

er

proceedings for the recovery of wages shall not exceed 10%

sp

of the amount awarded. The fees may be deducted from the

o
pr

total amount due the winning party. (Rule VIII, Section 8,

Rules to Implement the Labor Code)

13. Distinguish attorney's fees under Article 111 from

attorney's fees under Article 228(b) of the Labor Code.
The distinctions are as follows:

Article 111 provides for ten percent (10%) as the amount

to be charged as attorney's fees while Article 228(b) (222[b])
prohibits the payment of attorney's fees to be imposed on
individual member of the contracting union.

In Article 111, the attorney's fees are in cases of unlawful

withholding of wages while in Article 228(b) (222[b]),
324 LABOR LAW REVIEWER

there is a prohibition on attorney's fees being imposed on

individual member of the contracting union arising from
any collective bargaining agreement.
Article 111 of the Labor Code contemplates the
extraordinary concept of attorney's fees. In its extraordinary
concept, attorney's fees are deemed indemnity for damages
ordered by the court to be paid by the losing party to the
winning party. The instances when these may be awarded
are enumerated in Article 2208 of the Civil Code, specifically
in its paragraph 7 on actions for recovery of wages, and is

ph
payable not to the lawyer but to the client, unless the client and

u.
his lawyer have agreed that the award shall accrue to the

ed
lawyer as additional or part of compensation while Article

n.
228[b] (222[b]) as prohibiting the payment of attorney's fees

ai
only when it is effected through forced contributions from
m
the workers from their own funds as distinguished from the
su

union funds.
m
s.

14. What is the rule on the award of interest on money claims?

@
91

In Total Petroleum Philippines Corporation v. Lim, G.R. No.

cx

203566, June 23, 2020, it was explained: On the application

of interest, Nacar v. Gallery Frames, 716 Phil. 267, 281 (2013)
o.

decrees that in the absence of express stipulation regarding

er
sp

the interest rate, the twelve percent (12%) interest rate per
o

annum stated in Eastern Shipping Lines v. Hon. Court of

pr

Appeals and Mercantile Insurance Company, Inc., 304 Phil. 236,

252-254 (1994) applies until June 30, 2013. From July 1, 2013,
the new interest rate of six percent (6%) per annum shall
apply, pursuant to BSP-MB Circular No. 799. Thus:
I. When an obligation, regardless of its source, i.e.,
law, contracts, quasi-contracts, delicts or quasi-delicts is
breached, the contravenor can be held liable for damages.
The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable
damages.

II. With regard particularly to an award of interest

in the concept of actual and compensatory damages, the
 LABOR STANDARDS 325

Payment of Wages

rate of interest, as well as the accrual thereof, is imposed, as

Nabu follows:

1. When the obligation is breached, and it

consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should
be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be
6% per annum to be computed from default, i.e., from

ph
judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code.

u.
ed
2. When an obligation, not constituting a loan

n.
or forbearance of money, is breached, an interest on the

ai
amount of damages awarded may be imposed at the
m
discretion of the court at the rate of 6% per annum. No
su

interest, however, shall be adjudged on unliquidated

m
s.

claims or damages, except when or until the demand

@

can be established with reasonable certainty.

91

Accordingly, where the demand is established with

cx

reasonable certainty, the interest shall begin to run from

o.

the time the claim is made judicially or extrajudicially

er

(Art. 1169, Civil Code), but when such certainty cannot

sp

be so reasonably established at the time the demand

o

is made, the interest shall begin to run only from the

pr

date the judgment of the court is made (at which time

the quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on
the amount finally adjudged.

3. When the judgment of the court awarding a

sum of money becomes final and executory, the rate of
legal interest, whether the case falls under paragraph 1
or paragraph 2, above, shall be 6% per annum from such
finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
credit.
326 LABOR LAW REVIEWER

15. In a case for illegal dismissal and non-payment of

benefits, with prayer for Damages, Apollo was awarded
the following: 1) P200,000.00 as backwages; 2) P80,000.00
as unpaid wages; 3) P20,000.00 as unpaid holiday pay;
4) P5,000.00 as unpaid service incentive leave pay;
5) P50,000.00 as moral damages; and 6) P10,000.00 as
exemplary damages. Attorney's fees of ten percent (10%)
of all the amounts covered by items 1 to 6 inclusive, plus
interests of 6% per annum from the date the same were
unlawfully withheld, were also awarded.

ph
Robbie likewise questions the imposition of interests on
the amounts in question because it was not claimed by

u.
Apollo, and the Civil Code provision on interests does not

ed
apply to a labor case. Rule on the issue and explain. (2016

n.
ai
BAR Q. No. XVI[b])
m
Robbie is not correct.
su
m

The award of interest is in the concept of actual and

s.

compensatory damages. Thus, the rate of 6% interest is

@

applicable. (Total Petroleum Philippines Corporation v. Lim,

91

G.R. No. 203566, June 23, 2020)

cx
o.
er
osp
pr
 Chapter VIII
PROHIBITION REGARDING WAGES

1. What is the rule on wage deduction? State the exceptions,

if any.

ph
The general rule on wage deduction is that no employer,
in his own behalf or in behalf of any person, shall make any

u.
ed
deduction from the wages of his employees. (Article 113,
Labor Code)

n.
ai
The following are the exceptions on the prohibition on
m
wage deduction:
su
m

(a) In cases where the worker is insured with his

s.

consent by the employer, and the deduction is to recompense

@

the employer for the amount paid by him as premium on

91

the insurance;
cx

(b) For union dues, in cases where the right of the

o.
er

worker or his union to check-off has been recognized by the

sp

employer or authorized in writing by the individual worker

o

concerned; and
pr

(c) In cases where the employer is authorized by

law or regulations issued by the Secretary of Labor and
Employment. (Article 113, Labor Code)
As provided under the Rules to Implement the Labor
Code, deductions from the wages of the employees may be
made by the employer in any of the following cases:

(a) When the deductions are authorized by law,

including deductions for the insurance premiums advanced
by the employer in behalf of the employee as well as union

327
328 LABOR LAW REVIEWER

dues where the right to check-off has been recognized by

the employer or authorized in writing by the individual
employee himself.
(b) When the deductions are with the written
authorization of the employees for payment to the employer
or to a third person and the employer agrees to do so;
Provided, That the latter does not receive any pecuniary
benefit, directly or indirectly, from the transaction. (Section
10, Rule VIII, Book III, Rules to Implement the Labor Code, as
amended by D.O. No. 195, Series of 2018)

ph
u.
2. Corporation X is owned by L's family. L is the President.

ed
M, L's wife, occasionally gives loans to employees of

n.
Corporation X. It was customary that loan payment were

ai
paid to M by directly deducting from the employee's
m
monthly salary. Is this practice of directly deducting
su

payments of debts from the employee's wages allowed?

m
s.

a. Yes, because where the employee is indebted

@

to the employer, it is sanctioned by the law on

91

compensation under Article 1706 of the Civil

cx

Code;
o.

b. Yes, because it has already become customary

er

such that no express authorization is required;

sp

COATS LE
o

C. No, because an employee's payment of

pr

obligation to a third person is deductible

from the employee's wages if the deduction is
authorized in writing;
d. No, because Article 116 of the Labor Code

absolutely prohibits the withholding of wages

and kickbacks. Article 116 provides for no
exception. (2012 BAR Q. No. 11)

d. Article 116 of the Labor Code absolutely prohibits

the withholding of wages and kickbacks. Article 116
provides for no ception.
 LABOR STANDARDS 329

Prohibition Regarding Wages

The acts involving withholding of wages and kickbacks

are as follows:

1. It shall be unlawful for any person, directly or

indirectly, to withhold any amount from the wages of a
worker; or

2. Induce him to give up any part of his wages by

force, stealth, intimidation, threat or by any other means
whatsoever without the worker's consent. (Article 116, Labor
Code)

ph
The exceptions are Article 1706 of the Civil Code and

u.
clearance procedure as ruled in Milan v. NLRC, G.R. No.

ed
202961, February 4, 2015.

n.
ai
3. Which of the following is not a valid wage deduction?
m
su
a. Where the worker was insured with his consent
m

by the employer, and the deduction is allowed

s.

to recompense the employer for the amount

@

paid by him as the premium on the insurance;

91

b. When the wage is subject of execution or

cx

attachment, but only for debts incurred for food,

o.

shelter, clothing and medical attendance;

er
sp

C. Payment for lost or damaged equipment

o

provided the deduction does not exceed 25% of

pr

the employee's salary for a week;

d. Union dues. (2012 BAR Q. No. 28)

C. Payment for lost or damaged equipment provided

the deduction does not exceed 25% of the employee's salary
for a week

That the deduction from the wages of the employee

does not exceed 20 percent of the employee's wages in a
week (Section 11[d], Rule VIII, Book III, Rules to Implement the
Labor Code)
330 LABOR LAW REVIEWER

4. An explosion in a mine site resulted in the death of fifty

(50) miners. At the time of the accident:

1. The Mining Company has not yet paid the wages,

overtime, holiday and rest day compensation of
the deceased miners;

2. All the deceased miners owed the Miners

Cooperative Union sums of money;

3. The Mining Company served by a sheriff

Writs of Garnishment of Wages of some of the
deceased miners by virtue of final judgments in

ph
several collection suits.

u.
ed
After the accident, the wives, paramours, brothers,
sisters and parents of the deceased miners filed their

n.
claims for unpaid wages, overtime, holiday and rest
ai
m
day compensation. The Company acknowledged its
su
obligations. However, it is in a quandary as to how to
m

adjudicate the conflicting claims; and whether it can

s.

deduct from the monies due the miners their unpaid debts
@

with the credit union. How will you advise the mining
91

company on the following:

cx

Can the Mining Company deduct from the amount due to

o.

each miner an amount equivalent to their debt and remit

er

the same to the Credit Union? (1998 BAR Q. No. V[2])

o sp

I will advise the Mining Company that it cannot

pr

deduct from the amount due to each miner and remit the
same to the Credit Union.
The advise is base on the rule that deductions from the

wages of the employees are allowed when the deductions

are with the written authorization of the employees for
payment to the employer or to a third person and the
employer agrees to do so; Provided, That the latter does not
receive any pecuniary benefit, directly or indirectly, from the
transaction. (Section 10, Rule VIII, Book III, Rules to Implement
the Labor Code, as amended by D.O. No. 195, Series of 2018)

In this case, the miners are already dead as a result of

the accident. Since, there can be no way that they can give
 LABOR STANDARDS 331

Prohibition Regarding Wages

a written authorization for the payment of the said debt

due to the third party, the Credit Union. Thus, I will advise
the Mining Company to file a complaint for interpleader
against the conflicting claimants.

5. Is legal compensation of the Civil Code allowed under

Article 113 of the Labor Code?

The application of compensation is effectively barred

by Article 113 of the Labor Code which prohibits wage
deductions, except in three circumstances:

ph
ART. 113. Wage Deduction. - No employer,
in his own behalf or in behalf of any person, shall

u.
ed
make any deduction from wages of his employees,

n.
except:

(a)
ai
In cases where the worker is insured
m
with his consent by the employer, and the
su

deduction is to recompense the employer for the

m

amount paid by him as premium on the insurance;

s.
@

(b) For union dues, in cases where the right

91

of the worker or his union to check-off has been

cx

recognized by the employer or authorized in

o.

writing by the individual worker concerned; and

er

(c) In cases where the employer is

sp

authorized by law or regulations issued by the

o
pr

Secretary of Labor. (Portillo v. Rudolf Lietz, Inc.,

G.R. No. 196539, October 10, 2012)

6. What are the deductions allowed by law?

The following are the deductions allowed by law:
1. Premiums for SSS (RA 8282), PhilHealth (RA
7875), employee's compensation and PAG-IBIG (RA 9679)
and withholding tax under the National Internal Revenue
Code (NIRC);

2. In cases where the worker is insured with his

consent by the employer, and the deduction is to recompense
332 LABOR LAW REVIEWER

the employer for the amount paid by him as premium on

the insurance under Article 113(a) of the Labor Code;
3. For union dues, in cases where the right of the
worker or his union to check-off has been recognized by the
employer or authorized in writing by the individual worker
concerned under Article 113(b) of the Labor Code;

4. When the deductions are with the written

authorization of the employees for payment to the third
person and the employer agrees to do so; Provided, That
the latter does not receive any pecuniary benefit, directly

ph
or indirectly, from the transaction under Section 10(b), Rule

u.
VIII, Book III, Omnibus Rules Implementing the Labor

ed
Code;

n.
5. Deposit for loss or damage under Article 114 of
ai
the Labor Code;
m
su

6. Agency fees under Article 259(e) of the Labor

m

Code;
s.
@

7. Withholding of the wages for a debt due of an

91

employee under Article 1706 of the Civil Code;

cx

8. By court order or by way of execution or

o.

attachment of laborer's wages for debts incurred for food,

er

shelter, clothing, and medical attendance under Article 1708

sp

of the Civil Code; and

o
pr

9. Judgment awarded to employees in labor dispute

or forced through garnishment of debts is subject to
withholding tax on wages equivalent to 5% as per RMC 39
2012.

7. What are the conditions for wage deductions under Article

114 in relation to 115 of the Labor Code?

Where the employer is engaged in a trade, occupation

or business where the practice of making deductions
or requiring deposits is recognized to answer for the
reimbursement of loss or damage to tools, materials, or
 333
LABOR STANDARDS
Prohibition Regarding Wages

equipment supplied by the employer to the employee,

the employer may make wage deductions or require the
employees to make deposits from which deductions shall
be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to

be responsible for the loss or damage;

(b) That the employee is given reasonable

opportunity to show cause why deduction should not be
made;

(c) That the amount of such deduction is fair and

ph
reasonable and shall not exceed the actual loss or damage;

u.
and

ed
n.
(d) That the deduction from the wages of the

ai
employee does not exceed 20 percent of the employee's
m
wages in a week. (Section 11, Rule VIII, Book III, Rules to
su

Implement the Labor Code)

m
s.

What are the exceptions to the rule against the withholding

@

8.

of wages under Article 116 and non-diminution of benefits

91

under Article 110 of the Labor Code?

cx
o.

In Milan v. NLRC, G.R. No. 202961, February 4, 2015

er

it was ruled: Requiring clearance before the release of last

sp

payments to the employee is a standard procedure among

o

employers, whether public or private. Clearance procedures

pr

are instituted to ensure that the properties, real or personal,

belonging to the employer but are in the possession of the
separated employee, are returned to the employer before
the employee's departure.

However, our law supports the employers' institution

of clearance procedures before the release of wages. As
an exception to the general rule that wages may not be
withheld and benefits may not be diminished, the Labor
Code provides:

Art. 13. Wage deduction. No employer,

in his own behalf or in behalf of any person,
334 LABOR LAW REVIEWER

shall make any deduction from the wages of his

employees, except: (Omitted)

The Civil Code provides that the employer is authorized

to withhold wages for debts due:

Article 1706. Withholding of the wages,

except for a debt due, shall not be made by the
employer.

ph
u.
ed
n.
ai
m
su
m
s.
@
91
cx
o.
er
osp
pr
 Chapter IX
NATIONAL WAGES AND PRODUCTIVITY
COMMISSION AND

REGIONAL TRIPARTITE WAGES AND

PRODUCTIVITY BOARDS

ph
What is the National Wages and Productivity Commission

u.
ed
(NWPC)?

n.
RA 6727, known as the "Wage Rationalization

ai
Act" provided for the creation of the National Wages
m
and Productivity Commission (NWPC). The NWPC
su

is an attached agency of the Department of Labor and

m

Employment (DOLE). It is the key policy making body

s.
@

on wages, incomes and productivity mandated under RA

6727, known as the Wage Rationalization Act (1989) and
91

RA 6971, known as the Productivity Incentives Act of 1990.

cx

Further, it is vested with the power to prescribe rules and

o.

guidelines for the determination of appropriate minimum

er
sp

wage and productivity measures at the regional, provincial,

or industry levels; and authorized the RTWPB to determine
o
pr

and fix the minimum wage rates applicable. It exercises

technical and administrative supervision over the RTWPBs.

2. What are the powers and functions of National Wages and

Productivity Commission (NWPC)?

The National Wages and Productivity Commission

(NWPC) shall have the following powers and functions:

(a) To act as the national consultative and advisory

body to the President of the Philippines and Congress on
matters relating to wages, incomes and productivity;

335
336 LABOR LAW REVIEWER

(b) To formulate policies and guidelines on wages,

incomes and productivity improvement at the enterprise,
industry and national levels;

(c) To prescribe rules and guidelines for the deter

mination of appropriate minimum wage and productivity
measures at the regional, provincial, or industry levels;
(d) To review regional wage levels set by the Regional
Tripartite Wages and Productivity Boards to determine
if these are in accordance with prescribed guidelines and
national development plans;

ph
(e) To undertake studies, researches and surveys

u.
necessary for the attainment of its functions and objectives,

ed
and to collect and compile data and periodically disseminate

n.
information on wages and productivity and other related
ai
information, including, but not limited to, employment,
m
su
cost-of-living, labor costs, investments and returns;
m

(f) To review plans and programs of the Regional

s.

Tripartite Wages and Productivity Boards to determine

@

whether these are consistent with national development

91

plans;
cx

(g) To exercise technical and administrative

o.
er

supervision over the Regional Tripartite Wages and

sp

Productivity Boards;
o
pr

(h) To call, from time to time, a national tripartite

conference of representatives of government, workers, and
employers for the consideration of measures to promote
wage rationalization and productivity; and

(i) To exercise such powers and functions as may be

necessary to implement this Act. (Article 121, Labor Code)

3. What is the Regional Tripartite Wages and Productivity

Boards (RTWPBs)?

On June 9, 1989, RA 6727, known as the "Wage

Rationalization Act" was approved. The "Wage
Rationalization Act" established a new mechanism for
 LABOR STANDARDS 337

National Wages and Productivity Commission and Regional Tripartite

Wages and Productivity Boards

minimum wage determination through the creation of

the Regional Tripartite Wages and Productivity Boards
(RTWPBS) in all regions of the country. It is mandated to
prescribe the minimum wage rates, which should not be
lower than the statutory minimum wage rates, and promote
productivity improvement programs, for all private
enterprise workers in their respective regions, provinces, or
industries therein and issue the corresponding wage orders,
subject to the guidelines issued by the NWPC. This does not
cover minimum wage for household helpers and persons in
the personal employ of another. Pursuant to its wage fixing

ph
authority, the RTWPB may issue wage orders which set
the daily minimum wage rates based on the standards or

u.
ed
criteria set by Article 124 of the Labor Code.

n.
What are the powers of Regional Tripartite Wages and
ai
4.

Productivity Boards (RTWPBs)?

m
su

The Regional Boards shall have the following powers

m

and functions in their respective territorial jurisdictions:

s.
@

(a) To develop plans, programs and projects relative

91

to wages, incomes and productivity improvement for their

cx

respective regions;
o.

(b) To determine and fix minimum wage rates

er

applicable in their regions, provinces or industries therein

sp

and to issue the corresponding wage orders, subject to

o

guidelines issued by the Commission;

pr

(c) To undertake studies, researches, and surveys

necessary for the attainment of their functions, objectives
and programs, and to collect and compile data on wages,
incomes, productivity and other related information and
periodically disseminate the same;
(d) To coordinate with the other Regional Boards as
may be necessary to attain the policy and intention of this
Code;

(e) To receive, process and act on applications for

exemption from prescribed wage rates as may be provided
by law or any Wage Order; and
338 LABOR LAW REVIEWER

(f) To exercise such other powers and functions as

may be necessary to carry out their mandate under this
Code. (Article 122, Labor Code)

5. When does wage order take effect?

Any such Wage Order shall take effect after fifteen

(15) days from its complete publication in at least one (1)
newspaper of general circulation in the region. (Article 123,
Labor Code)

6.
What is the remedy of an aggrieved party on the wage

ph
order issued by the RTWPB?

u.
ed
Not later than ten (10) days from the date of publication

n.
of the Order, any party aggrieved by a Wage Order issued

ai
by the Board may appeal such Order to the Commission
m
by filing a verified appeal with the Board in three (3)
su

printed legible copies. The appeal shall be accompanied

m

by a memorandum of appeal which shall state the grounds

s.

relied upon, the arguments in support of the appeal and the

@

relief being sought.

91
cx

The Board shall serve notice of the appeal to concerned

parties. Failure to file an appeal within the reglementary
o.
er

period fixed under this section or to submit the required

sp

documents shall be a ground for dismissal of the appeal.

o
pr

A motion for reconsideration on the Wage Order filed

with the Board, shall be treated as an appeal subject to the
requisites for the perfection of appeal under this Rules.
(Section 1, Rule V, NWPC GUIDELINES NO. 01 Series of 2007,
dated June 19, 2007; Article 123, Labor Code)

7.
What are the grounds for appeal from the Wage Order?
An appeal may be filed on the following grounds:
a) non-conformity with prescribed guidelines and/
or procedures;

b) questions of law;
 LABOR STANDARDS 339

National Wages and Productivity Commission and Regional Tripartite

Wages and Productivity Boards

c) grave abuse of discretion. (Section 2, Rule V, NWPC

GUIDELINES NO. 01 Series of 2007, dated June 19, 2007)

8. The Regional Tripartite and Productivity Board (RTWPB)

for Region 3 issued a wage order on November 2, 2017
fixing the minimum wages for all industries throughout
Region 3.

Is the wage order subject to the approval of the National

Wages and Productivity Commission before it takes effect?
(2017 BAR Q. No. IV[a])

ph
No, the wage order is not subject to the approval of
the National Wages and Productivity Commission before it

u.
ed
takes effect.

n.
The powers and functions of the National Wages

ai
and Productivity Commission only involve the review
m
of the Wage Order issued by the Regional Tripartite and
su

Productivity Board (See Article 121[d], Labor Code; Section

m

4, Rule IV, NWPC GUIDELINES NO. 01 Series of 2007, dated

s.

June 19, 2007) and to exercise technical and administrative

@

supervision over the Regional Tripartite Wages and

91

Productivity Boards. (See Article 121[f], Labor Code)

cx
o.

9. The law mandates that no petition for wage increase shall

er

be entertained within a period of 12 months from the

sp

effectivity of the wage order. Under what circumstances

o
pr

may the Kilusang Walang Takot, a federation of labor

organizations that publicly and openly assails the wage
order as blatantly unjust, initiate the review of the wage
increases under the wage order without waiting for the
end of the 12-month period? Explain your answer. (2017
BAR Q. No. IV[b])

Kilusang Walang Takot can assail the Wage Order

issued by the Regional Tripartite and Productivity Board
with the National Wages and Productivity Commission.
This can be done by filing a verified appeal with the Board
not later than ten (10) days from the date of publication of
the Order on the grounds of non-conformity with prescribed
340 LABOR LAW REVIEWER

guidelines and/or procedures, questions of law and grave

abuse of discretion. (See Section 1, Rule IV, in relation to
Section 2 Rule V, NWPC GUIDELINES NO. 01 Series of2007,
dated June 19, 2007)

10. A wage order may be reviewed on appeal by the National

Wages and Productivity Commission under these grounds,
except: a. grave abuse of discretion; b. non-conformity
with prescribed procedure; c. questions of law; d. gross
under or over-valuation. (2012 BAR Q. No. 32)

d. gross under or over-valuation

ph
An appeal may be filed on the following grounds:

u.
ed
a) non-conformity with prescribed guidelines and/

n.
or procedures;

ai
b) questions of law;
m
su

c) grave abuse of discretion. (Section 2, Rule V, NWPC

m

GUIDELINES NO. 01 Series of 2007, dated June 19, 2007)

s.
@

11. What is the nature of the RTWPB's power to issue a Wage

91

Order?
cx

In the issuance of the assailed Wage Order, respondent

o.
er

RTWPB did not act in any judicial, quasi-judicial capacity,

sp

or ministerial capacity. It was in the nature of subordinate

o

legislation, promulgated by it in the exercise of delegated

pr

power under RA 6727. It was issued in the exercise of

quasi-legislative power. Quasi-legislative or rule-making
power is exercised by administrative agencies through the
promulgation of rules and regulations within the confines
of the granting statute and the doctrine of non-delegation
of certain powers flowing from the separation of the great
branches of the government. (Metropolitan Bank and Trust
Company, Inc. v. National Wages and Productivity Commission,
G.R. No. 144322, February 6, 2007 citing Abella, Jr. v. Civil
Service Commission, G.R. No. 152574, November 17, 2004, 442
SCRA 507,530; Bellosillo, J., Separate Opinion, Commissioner of
Internal Revenue v. Court of Appeals, 329 Phil. 987, 1017 [1996])
 LABOR STANDARDS 341

National Wages and Productivity Commission and Regional Tripartite

Wages and Productivity Boards

12. Can the Wage Order issued by RTWPB be assailed by

certiorari/prohibition?

The Supreme Court explained that in the issuance of

the assailed Wage Order, the RTWPB did not act in any
judicial, quasi-judicial capacity, or ministerial capacity
but in the exercise of its quasi-legislative power. That any
party aggrieved by the Wage Order may file an appeal with
the NWPC through the RTWPB within 10 days from the
publication of the wage order. Thus, being quasi-legislative
power the remedy to assail the issuance of wage order is

ph
not petition for certiorari/prohibition before the Court
of Appeals. (Metropolitan Bank and Trust Company, Inc. v.

u.
National Wages and Productivity Commission, G.R. No. 144322,

ed
February 6, 2007)

n.
ai
m
su
m
s.
@
91
cx
o.
er
o sp
pr
 Chapter X

WAGE DISTORTION

1. What are the procedural remedies to correct a wage

distortion?

Where wage distortion arises from the implementation

ph
of wage increase, it involves jurisdictional and procedural

u.
remedies for its correction. The procedure is as follows:

ed
1. In case there is a CBA/organized establishment

n.
ai
Where the application of any prescribed wage increase
m
by virtue of a law or wage order issued by any Regional
su
Board results in distortions of the wage structure within an
m

establishment, the employer and the union shall negotiate

s.

to correct the distortions. Any dispute arising from wage

@

distortions shall be resolved through the grievance

91

procedure under their collective bargaining agreement and,

cx

if it remains unresolved, through voluntary arbitration.

o.

Unless otherwise agreed by the parties in writing, such

er

dispute shall be decided by the voluntary arbitrators within

sp

ten (10) calendar days from the time said dispute was
referred to voluntary arbitration. (Fourth paragraph, Article
o
pr

124, Labor Code)

2. In case there is no CBA/unorganized

establishment

In cases where there are no collective agreements or

recognized labor unions, the employers and workers shall
endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation
and Mediation Board and, if it remains unresolved after

ten (10) calendar days of conciliation, shall be referred to

the appropriate branch of the National Labor Relations

342
 LABOR STANDARDS 343

Wage Distortion

Commission (NLRC). It shall be mandatory for the NLRC

to conduct continuous hearings and decide the dispute
within twenty (20) calendar days from the time said dispute
is submitted for compulsory arbitration. (Fifth paragraph,
Article 124, Labor Code)

2.
In what instances do labor arbiters have jurisdiction over
wage distortion cases?

a.
When jurisdiction is invoked by the employer
and employees in organized establishments;
b. When the case is unresolved by Grievance

ph
Committee;

u.
ed
C.
After the panel of voluntarily arbitrators has

n.
made a decision and the same is contested by

ai
either party; m
d. In unorganized establishments when the same
su

is not voluntarily resolved by the parties before

m

the NCMB. (2012 BAR Q. No. 53)

s.
@

d. In unorganized establishments when the same is

91

not voluntarily resolved by the parties before the NCMB.

cx

In cases where there are no collective agreements or

o.

recognized labor unions, the employers and workers shall

er

endeavor to correct such distortions. Any dispute arising

sp

therefrom shall be settled through the National Conciliation

o
pr

and Mediation Board and, if it remains unresolved after

ten (10) calendar days of conciliation, shall be referred to

the appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the NLRC
to conduct continuous hearings and decide the dispute
within twenty (20) calendar days from the time said dispute
is submitted for compulsory arbitration. (Fifth paragraph,
Article 124, as amended by RA 6727, June 9, 1989)

3. Which is not a procedural requirement for the correction

of wage distortion in an unorganized establishment?

a.
Both employer and employee will attempt to
correct the distortion;
344 LABOR LAW REVIEWER

b. Settlement of the dispute through National

Conciliation and Mediation Board (NCMB);

C. Settlement of the dispute through voluntary

arbitration in case of failure to resolve dispute
through CBA dispute mechanism;
1999 sued. A and B. (2012 BAR Q. No. 21) denlyratt

C. Settlement of the dispute through voluntary

mas arbitration in case of failure to resolve dispute through CBA
dispute mechanism.

ph
In cases where there are no collective agreements or
recognized labor unions, the employers and workers shall

u.
ed
endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation

n.
ai
and Mediation Board and, if it remains unresolved after
m
ten (10) calendar days of conciliation, shall be referred to
su
the appropriate branch of the National Labor Relations
m

Commission (NLRC). It shall be mandatory for the NLRC

s.

to conduct continuous hearings and decide the dispute

@

within twenty (20) calendar days from the time said dispute
91

is submitted for compulsory arbitration. (Fifth paragraph,

cx

Article 124, as amended by RA 6727, June 9, 1989)

o.
er

4.
What procedural remedies are open to workers who seek
sp

correction of wage distortion? (2009 BAR Q. No. IX[b])

o

What issues or disputes may be the subject of voluntary

pr

arbitration under the Labor Code? (2008 BAR Q. No. II[a])

How should a wage distortion be settled? 2006 BAR Q.

No. VI[2])

How should a wage distortion be resolved (1) in case there

is a collective bargaining agreement and (2) in case there
is none? Explain briefly. (2002 BAR Q. No. XVII[A])

The procedural remedies are as follows:

1. In case there is a CBA/organized establishment

Where the application of any prescribed wage increase

by virtue of a law or wage order issued by any Regional
 LABOR STANDARDS 345

Wage Distortion

Board results in distortions of the wage structure within an

establishment, the employer and the union shall negotiate
to correct the distortions. Any dispute arising from wage
distortions shall be resolved through the grievance
procedure under their collective bargaining agreement and,
if it remains unresolved, through voluntary arbitration.
Unless otherwise agreed by the parties in writing, such
dispute shall be decided by the voluntary arbitrators within
ten (10) calendar days from the time said dispute was
referred to voluntary arbitration. (Fourth paragraph, Article
124)

ph
2. In case there is no CBA/unorganized

u.
establishment

ed
In cases where there are no collective agreements or

n.
recognized labor unions, the employers and workers shall
ai
m
endeavor to correct such distortions. Any dispute arising
su
therefrom shall be settled through the National Conciliation
and Mediation Board and, if it remains unresolved after
m
s.

ten (10) calendar days of conciliation, shall be referred to

@

the appropriate branch of the National Labor Relations

91

Commission (NLRC). It shall be mandatory for the NLRC

cx

to conduct continuous hearings and decide the dispute

within twenty (20) calendar days from the time said dispute
o.

is submitted for compulsory arbitration. (Fifth paragraph,

er
sp

Article 124)
o
pr

5. What is the effect of the pending dispute arising from

wage distortion?
The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability of any
increase in prescribed wage rates pursuant to the provisions
of law or wage order. (Sixth paragraph, Article 124, Labor
Code)

6. What is wage distortion?

As used herein, a wage distortion shall mean a situation

where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative
346 LABOR LAW REVIEWER

differences in wage or salary rates between and among

employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of
differentiation. (Seventh paragraph, Article 124, Labor Code)
Otherwise stated, wage distortion means the disappearance
or virtual disappearance of pay differentials between lower
and higher positions in an enterprise because of compliance
with a wage order. (P.I. Manufacturing, Incorporated v. P.I.
Manufacturing Supervisors and Foremen Association, G.R. No.
167217, February 4, 2008)

ph
7. What are the effects of increase in prescribed wage rates?

u.
ed
In case of increase in prescribed wage rates, it results in

n.
the following situations:

1.
ai
Elimination of intentional quantitative differences
m
in wage or salary rates; or
su
m

2. Severe contraction of intentional quantitative

s.

differences in wage or salary rates.

@
91

8. What are the elements of wage distortion?

cx

Wage distortion involves four elements:

o.
er

1. An existing hierarchy of positions with

sp

corresponding salary rates,

o

2. A significant change in the salary rate of a lower

pr

pay class without a concomitant increase in the salary rate

of a higher one,
3. The elimination of the distinction between the
two levels, and

4.
The existence of the distortion in the same region
of the country. (Prubankers Association v. Prudential Bank
& Trust Company, G.R. No. 131247, January 25, 1999)

9. What are the cases when no wage distortion exists?

Thus in Cardona v. LRC, G.R. No. 89007, March 11,

1991, 195 SCRA 92, 97, it was held that there was no wage
 LABOR STANDARDS 347

Wage Distortion

distortion where the employer made salary adjustments

in terms of restructuring of benefits and allowances and
there was an increase pursuant to the CBA. (Associated Labor
Unions-TUCP v. National Labor Relations Commission G.R. No.

109328, August 16, 1994)

10. Upon a review of the wage rate and structure pertaining to

its regular rank and file employees, K Corporation found
it necessary to increase its hiring rates for employees
belonging to the different job classification levels to make
their salary rates more competitive in the labor market.

ph
After the implementation of the new hiring salary, Union

u.
X, the exclusive bargaining agent of the rank and file

ed
employees, demanded a similar salary adjustment for the

n.
old employees. It argued that the increase in hiring rates

ai
resulted in wage distortion since it erased the wage gap
m
between the new and old employees. In other words, new
su

employees would enjoy almost the same salary rates as

m

K Corporation's old employees. What is wage distortion?

s.

(2019 Part II BAR Q. No. B.14[a])

@

A wage distortion shall mean a situation where an

91

increase in prescribed wage rates results in the elimination or

cx

severe contraction of intentional quantitative differences in

o.

wage or salary rates between and among employee groups in

er

an establishment as to effectively obliterate the distinctions

sp

embodied in such wage structure based on skills, length

o
pr

of service, or other logical bases of differentiation. (Seventh

paragraph, Article 124, as amended by RA 6727, June 9, 1989)
Otherwise stated, wage distortion means the disappearance
or virtual disappearance of pay differentials between lower
and higher positions in an enterprise because of compliance
with a wage order. (P.I. Manufacturing, Incorporated v. P.I.
Manufacturing Supervisors and Foremen Association, G.R. No.
167217, February 4, 2008)
Did a wage distortion arise under the circumstances which
legally obligated K Corporation to rectify the wages of its
old employees? Explain. (2019 Part II BAR Q. No. B.14[b])

There was no wage distortion under the circumstances.

A wage distortion will only arise in case of the application
348 LABOR LAW REVIEWER

of any prescribed wage increase by virtue of a law or wage

order issued by any Regional Board. (Fourth paragraph,
Article 124)

In this case, the salary increase initiated by K

Corporation was a result of its review of the wage rate and
structure pertaining to its regular rank-and-file employees
belonging to the different job classification levels and not
because of the application of any prescribed wage increase
by virtue of a law or wage order. Thus, there was no wage
distortion.

ph
u.
11. What is wage distortion? Explain. (2009 BAR Q. No. IX[a])

ed
When is there a wage distortion? (2006 BAR Q. No. VI[1])

n.
ai
Define Wage Distortion. (1997 BAR Q. No. VIII[A])
m
A wage distortion shall mean a situation where an
su

increase in prescribed wage rates results in the elimination or

m
s.

severe contraction of intentional quantitative differences in

@

wage or salary rates between and among employee groups in

91

an establishment as to effectively obliterate the distinctions

embodied in such wage structure based on skills, length
cx
o.

of service, or other logical bases of differentiation. (Seventh

er

paragraph, Article 124, as amended by RA 6727, June 9, 1989)

sp

Otherwise stated, wage distortion means the disappearance

o

or virtual disappearance of pay differentials between lower

pr

and higher positions in an enterprise because of compliance

with a wage order. (P.I. Manufacturing, Incorporated v. P.I.
Manufacturing Supervisors and Foremen Association, G.R. No.
167217, February 4, 2008)

12. Is wage distortion a ground for strike/lockout?

In the particular instance of "distortions of the wage

shed structure within an establishment" resulting from "the
application of any prescribed wage increase by virtue
of a law or wage order," Section 3 of RA 6727 prescribes
a specific, detailed, and comprehensive procedure for the
correction thereof, thereby implicitly excluding strikes or
 LABOR STANDARDS 349

Wage Distortion

lockouts or other concerted activities as modes of settlement

of the issue.

X X X X X X X X X

The legislative intent that solution of the problem of

wage distortions shall be sought by voluntary negotiation or
arbitration, and not by strikes, lockouts, or other concerted
activities of the employees or management, is made clear
in the rules implementing RA 6727 issued by the Secretary
of Labor and Employment (on July 7, 1989, with effect as of
July 1, 1989) pursuant to the authority granted by Section

ph
13 of the Act. Section 16, Chapter I of these implementing

u.
rules, after reiterating the policy that wage distortions be

ed
first settled voluntarily by the parties and eventually by

n.
compulsory arbitration, declares that, "Any issue involving

ai
wage distortion shall not be a ground for a strike/lockout." (Ilaw
m
at Buklod ng Manggagawa [IBM] v. NLRC, G.R. No. 91980,
su

June 27, 1991)

m
s.
@

13. Can a labor union invoke wage distortion as a valid

ground to go on strike? Explain. (2009 BAR Q. No. IX[a])
91
cx

Can the issue of wage distortion be raised in a notice of

o.

strike? Explain. (2006 BAR Q. No. VI[3])

er

May a wage distortion, alleged by the employees but

sp

rejected by the employer to be such, be a valid ground for

o
pr

staging a strike? (1997 BAR Q. No. VIII[B])

No, wage distortion is not a valid ground to stage a

strike. There are only two (2) grounds provided by law
to stage a strike: Unfair Labor Practices and Bargaining
Deadlock. (Article 278[c], Labor Code)

The solution of the problem of wage distortions shall

be sought by voluntary negotiation or arbitration, and not
by strikes, lockouts, or other concerted activities of the
employees or management, is made clear by the Labor
Code. (Ilaw at Buklod ng Manggagawa [IBM] v. NLRC, G.R.
No. 91980, June 27, 1991)
 Chapter XI
ADMINISTRATION AND ENFORCEMENT

1. What are the powers of the Secretary of Labor and

Employment/duly authorized representative under
Article 128 of the Labor Code?

ph
This provision provides for the powers of the

u.
ed
Secretary of Labor and Employment or his duly authorized
representative (Regional Director) such as the Visitorial

n.
power in Article 128(a), Enforcement power (Enforcement
ai
m
power on health and safety of workers) in Article 128(b)
su
and (c) and Power of appellate review in Article 128(b).
m

The authorized representative referred by Article 128 is the

s.

Regional Director.
@
91

2. What are those included in the visitorial power under

cx

Article 128 of the Labor Code?

o.

The visitorial power of the Secretary of Labor and

er

Employment or his duly authorized representatives,

sp

including Labor Regulations Officers or Industrial Safety

o

Engineers, includes the following:

pr

1. access to employer's records and premises at any

time of the day or night whenever work is being undertaken
therein, and right to copy therefrom;
2.
to question any employee; and
3. to investigate any fact, condition or matter
relevant to the enforcement of any provision of the Code
and of any labor law, wage order or rules and regulations
issued pursuant thereto. (Article 128(a), Labor Code and
Section 1, Rule Book III, Rules to Implement the Labor Code)

350
 LABOR STANDARDS 351

Administration and Enforcement

3. The Secretary of Labor and Employment or his duly

authorized representative, including labor regulations
officers, shall have access to employer's records and
premises during work hours. Why is this statement an
inaccurate statement of the law?

(A) Because the power to inspect applies only to

employer records, not to the premises.
(B) Because only the Secretary of Labor and
Employment has the power to inspect, and such
power cannot be delegated.

ph
(C) Because the law allows inspection anytime of

u.
the day or night, not only during work hours.

ed
(D) Because the power to inspect is already delegated

n.
to the DOLE regional directors, not to labor
ai
m
regulations officers. (2011 BAR Q. No. 48)
su

(C) Because the law allows inspection anytime of the

m

day or night, not only during work hours.

s.
@

See answer in Question No. 2.

91

What are those included in the enforcement power under

cx

4.

Article 128 of the Labor Code?

o.
er

The enforcement power includes the following:

sp

1. To issue compliance order - Notwithstanding the

o
pr

provisions of Articles 129 and 217 of this Code to the contrary,

and in cases where the relationship of employer-employee
still exists, the Secretary of Labor and Employment or his
duly authorized representatives shall have the power to
issue compliance orders to give effect to the labor standards
provisions of this Code and other labor legislation based
on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course
of inspection. (Article 128[b], Labor Code, as amended by RA
7730, June 2, 1994 and Section 2[a], Rule X, Book III, Rules to
Implement the Labor Code)
2. To issue writs of execution The Secretary or
-

his duly authorized representatives shall issue writs of

352 LABOR LAW REVIEWER

qlab execution to the appropriate authority for the enforcement

of their orders, except in cases where the employer contests
the findings of the labor employment and enforcement
officer and raises issues supported by documentary proofs
which were not considered in the course of inspection.
(Article 128(b), Labor Code, as amended by RA 7730, June 2,
1994, and Section 2[b], Rule X, Book III, Rules to Implement the
Labor Code)

5. What are those included in the enforcement power on

health and safety of workers under Article 128 of the

ph
Labor Code?

u.
Enforcement power on health and safety of workers

ed
which includes the following:

n.
ai
1. To issue order of stoppage of work or suspension
m
of operations - The Secretary of Labor and Employment
su
may likewise order stoppage of work or suspension of
m

operations of any unit or department of an establishment

s.

when non-compliance with the law or implementing rules

@

and regulations pose grave and imminent danger to the

91

health and safety of workers in the workplace. (Article

cx

128[c], Labor Code and Section 3[a], Rule X, Book III, Rules to
o.

Implement the Labor Code)

er

2. Lifting of order of stoppage of work or suspension

sp

of operations - Within twenty-four hours, a hearing shall be

o

conducted to determine whether an order for the stoppage

pr

of work or suspension of operations shall be lifted or not. In

case the violation is attributable to the fault of the employer,
he shall pay the employees concerned their salaries or wages
during the period of such stoppage of work or suspension
of operation. (Article 128[c], Labor Code and Section 3[b], Rule
X, Book III, Rules to Implement the Labor Code)

6. What is the power of appellate review of the Secretary

of Labor and Employment under Article 128 of the Labor
Code?

The Secretary of Labor and Employment, at his own

initiative or upon request of the employer and/or employee,
 LABOR STANDARDS 353

Administration and Enforcement

may review the order of the Regional Director. The order

of the Regional Director shall be immediately final and
executory unless stayed by the Secretary of Labor and
Employment upon posting by the employer of a reasonable
cash or surety bond as fixed by the Regional Director. (Last
paragraph of Article 128[b], Labor Code, as amended by RA 7730,
June 2, 1994,Section 4[a], Rule X, Book III, Rules to Implement
the Labor Code)

7. What is the rule in case there is a contest on the findings

of Labor Standards and Welfare Officers under Article 128

ph
of the Labor Code?

u.
ed
According to the implementing rules, in line with

n.
the provisions of Article 128 in relation to Articles 289

ai
and 290 of the Labor Code as amended in cases, however,
m
where the employer contests the findings of the Labor
su

Standards and Welfare Officers and raises issues which

m

cannot be resolved without considering evidentiary matters

s.

that are not verifiable in the normal course of inspection,

@

the Regional Director concerned shall indorse the case to

91

the appropriate arbitration branch of the National Labor

cx

Relations Commission for adjudication. (Section 2[a], Rule

o.

X, Book III, Rules to Implement the Labor Code)

er
sp

8. Savoy Department Store (SDS) adopted a policy of

o
pr

hiring salesladies on five-month cycles. At the end of a

saleslady's five-month term, another person is hired as
replacement. Salesladies attend to store customers, wear
SDS uniforms, report at specified hours, and are subject to
SDS workplace rules and regulations. Those who refuse
the 5-month employment contract are not hired. The day
after expiration of her 5-month engagement, Lina wore
her SDS white and blue uniform and reported for work
but was denied entry into the store premises. Agitated,
she went on a hunger strike and stationed herself in
front of one of the gates of SDS. Soon thereafter, other
employees whose 5-month term had also elapsed, joined
Lina's hunger strike.
354 LABOR LAW REVIEWER

Assume that no fixed-term worker complained, yet in

a routine inspection a labor inspector of the Regional
Office of the DOLE found the 5-month term policy of SDS
violative of the Labor Code's security of tenure provisions
and recommended to the Regional Director the issuance
a compliance order. The Regional Director adopted the
recommendation and issued a compliance order. Is the
compliance order valid? Explain your answer. (2008 BAR
Q. No. III[c])

No, the compliance order is not valid.

ph
The jurisdictional authority of the Regional Director as

u.
ed
the authorized representative of the Secretary of Labor and
Employment to issue compliance orders to give effect to

n.
ai
the labor standards provisions of this Code and other labor
m
legislation based on the findings of labor employment and
su
enforcement officers or industrial safety engineers made
m

in the course of inspection is limited to the existence of

s.

employer-employee relationship. (Article 128[b], Labor Code,

@

as amended by RA 7730, June 2, 1994, and Section 2[a], Rule X,

91

Book III, Rules to Implement the Labor Code)

cx

In this case, the sales ladies' five-month term already

o.
er

ended. Thus, the employer-employee relationship has

sp

already ceased. The Regional Director can no longer assume

jurisdiction over the issue.
o
pr

Further, while the practice of hiring workers for five

months is a scheme to avoid acquisition of tenurial security
and therefore contrary to the provisions of the Labor Code,
however, this issue is beyond the jurisdictional authority
of the Regional Director. Moreover, the issue is a clear case
of termination dispute within the jurisdiction of the Labor
Arbiters.

9.
The Bantay-Salakay Security Agency (BSSA) employed
ten (10) security guards and assigned them to Surot
Theater which contracted BSSA for its security needs. On
November 3, 1998, the ten (10) security guards of BSSA
 LABOR STANDARDS 355

Administration and Enforcement

addressed to the Office of the President, a letter-complaint

against their employer for non-compliance with R.A. 6640
providing for an increase in the statutory the statutory
minimum wage and salary rates of employees and
workers in the private sector. The letter was endorsed to
the Secretary of Labor who, in turn, referred the matter
to the Regional Director of Makunat City in Region XII
where the ten (10) security guards reside and where their
employer conducts business. The Office of the Regional
Director conducted an investigation and called for the

ph
hearing with all the parties present. Therefrom, the
Regional director found that there were indeed violations

u.
ed
committed by BSSA against the ten (10) security guards
such as underpayment of wages, non-integration of cost

n.
ai
of living allowance, underpayment of 13th month pay and
m
underpayment of five (5) days incentive pay BSSA and
su
Surot Theater were directed to comply with the labor
m

standards and ordered BSSA and Surot Theater to pay

s.

jointly and severally to the ten (10) security guards their

@

respective claim of P10,000.00 each or an aggregate amount

91

of P100,000.00. BSSA and Surot Theater filed a Petition for

cx

Certiorari before the Supreme Court seeking to annul the

o.

decision of the Regional Director on the ground of grave

er

abuse of discretion in assuming jurisdiction over the

sp

case. Will the Petition for Certiorari proper? Decide with

o
pr

reason. (1993 BAR Q. No. IV)

The petition will not prosper.

The Secretary of Labor and Employment, at his own
initiative or upon request of the employer and/or employee,
may review the order of the Regional Director. The order
of the Regional Director shall be immediately final and
executory unless stayed by the Secretary of Labor and
Employment upon posting by the employer of a reasonable
cash or surety bond as fixed by the Regional Director. (Last
paragraph of Article 128[b], Labor Code, as amended by RA 7730,
June 2, 1994, Section 4[a], Rule X, Book III, Rules to Implement
the Labor Code)
356 LABOR LAW REVIEWER

Thus, applying the law the remedy to assail the

decision of the Regional Director is to file an appeal before
the Secretary of Labor and Employment.

10. What is the significance of the phrase "in cases of employer

employee relationship still exists" stated in Article 128(b)
of the Labor Code?

The provision is quite explicit that the visitorial and

enforcement power of the DOLE comes into play only "in
cases when the relationship of employer-employee still

ph
exists." It also underscores the avowed objective underlying

u.
the grant of power to the DOLE which is "to give effect to

ed
the labor standard provision of this Code and other labor

n.
legislation." Of course, a person's entitlement to labor

ai
standard benefits under the labor laws presupposes the
m
existence of employer-employee relationship in the first
su

place.
m
s.

The clause "in cases where the relationship of employer

@

employee still exists" signifies that the employer-employee

91

relationship must have existed even before the emergence

cx

of the controversy. Necessarily, the DOLE's power does not

o.

apply in two instances, namely: (a) where the employer

er

employee relationship has ceased; and (b) where no such

sp

relationship has ever existed. (Peoples Broadcasting [Bombo

o

Radyo Phils., Inc.] v. Secretary of the Department of Labor and

pr

Employment, G.R. No. 179652, May 8, 2009, 587 SCRA 724)

11. What are the elements of "exception clause" in the last

sentence of Article 128(b) of the Labor Code?

Under prevailing jurisprudence, the so-called

"exception clause" has the following elements, all of which
must concur:

(a) that the employer contests the findings of the

labor regulations officer and raises issues thereon;

(b) that in order to resolve such issues, there is a need

to examine evidentiary matters; and
 LABOR STANDARDS 357

Administration and Enforcement

(c) that such matters are not verifiable in the normal

o course of inspection." (Meteoro v. Creative Creatures, Inc.,
G.R. No. 171275, July 13, 2009 citing Bay Haven, Inc., et al. v.
Abuan, et al., supra; Ex-Bataan Veterans Security Agency, Inc.
v. Laguesma, supra, at p. 663; Batong Buhay Gold Mines, Inc.
v. Sec. Dela Serna, 370 Phil. 872, 887; 312 SCRA 22, 33 [1999];
SSK Parts Corporation v. Camas, G.R. No. 85934, January 30,
1990, 181 SCRA 675, 678 [1990])

12. The Regional Director or his representative may be

divested of his enforcement and visitorial powers under

ph
the exception clause of Article 128 of the Labor Code

u.
and, resultantly, jurisdiction may be vested on the labor

ed
arbiter when three (3) elements are present. Which of the

n.
following is not one of the three (3) elements?

ai
Employer contests the findings of the labor
a.
m
su
regulations officers and raises issues thereon;
m

b. In order to resolve any issues raised, there is a

s.

need to examine evidentiary matters;

@
91

C. The issues raised should have been verifiable

during the inspection;

cx
o.

d. The evidentiary matters are not verifiable in the

er

normal course of inspection. (2012 BAR Q. No.

sp

52)
o
pr

C. The issues raised should have been verifiable

during the inspection

See answer in Question No. 11.

13. Is the authority of DOLE under Article 128(b) of the Labor

Code subject to the limitations of jurisdictional amount
under Articles 129 and 224 of the Labor Code?

Then the By the nature of the complaint and from the result of
the inspection, the authority of the DOLE, under Article
128, came into play regardless of the monetary value of the
claims involved. The extent of this authority and the powers
flowing therefrom are defined and set forth in Article 128 of
358 LABOR LAW REVIEWER

the Labor Code, as amended by RA 7730, (Cirineo Bowling

Plaza, Inc. v. Sensing, January 14, 2005, 448 SCRA 175, 186)
This Court has held in a plethora of cases (Bay Haven,
Inc. v. Abuan, G.R. No. 160859, July 30, 2008, 560 SCRA457; V.L.
Enterprises v. Court of Appeals, supra; EJR Crafts Corporation v.
Court of Appeals, G.R. No. 154101, March 10, 2006, 484 SCRA
340; Cirineo Bowling Plaza, Inc. v. Sensing, supra; Batong
Buhay Gold Mines, Inc. v. Dela Serna, G.R. No. 86963, August
6, 1999, 312 SCRA 22) that reliance on the Servando ruling
is no longer tenable in view of the enactment of RA 7730,

ph
amending Article 128(b) of the Labor Code. The Secretary

u.
of Labor or his duly authorized representatives are now

ed
empowered to hear and decide, in a summary proceeding,

n.
any matter involving the recovery of any amount of

ai
wages and other monetary claims arising out of employer
m
employee relations at the time of the inspection, even if the
su

amount of the money claim exceeds P5,000.00. (Balladares v.

m

Peak Ventures Corporation, G.R. No. 161794, June 16, 2009)

s.
@

14. Kevin, an employee of House of Sports, filed a complaint

91

with the DOLE requesting the investigation and inspection

cx

of the said establishment for labor law violations such

o.

as underpayment of wages, non-payment of 13th month

er

pay, non-payment of rest day pay, overtime pay, holiday

sp

pay, and service incentive leave pay. House of Sports

o
pr

alleges that DOLE has no jurisdiction over the employee

claims where the aggregate amount of the claims of each
employee exceeds P5,000.00, whether or not accompanied
with a claim for reinstatement. Is the argument of House
of Sports tenable?

a.
Yes, Article 129 of the Labor Code shall apply,
and thus, the Labor Arbiter has jurisdiction;
b.
No, Article 128(b) of the Labor Code shall apply,
and thus, the DOLE Regional Director has
jurisdiction;
 LABOR STANDARDS 359

Administration and Enforcement

C. Yes, if the claim exceeds P5,000.00, the DOLE

Secretary loses jurisdiction;
d. No, a voluntarily arbitrator has jurisdiction
because the matter involved is a grievable issue.
(2012 BAR Q. No. 48)

b. No, Article 128(b) of the Labor Code shall apply,

and thus, the DOLE Regional Director has jurisdiction

The statutory prerequisite to and a limitation on the

enforcement power of the Secretary of Labor or his duly
authorized representatives under the Labor Code is the

ph
existence of an employer-employee relationship. (Article

u.
128[b] and Peoples Broadcasting [Bombo Radyo Phils.], Inc. v.

ed
Secretary of the Department of Labor and Employment, G.R.

n.
No. 179652, May 8, 2009) The Secretary of Labor or his duly
ai
authorized representatives is now empowered to hear and
m
decide, in a summary proceeding, any matter involving the
su

recovery of any amount of wages and other monetary claims

m

arising out of employer-employee relations at the time of the

s.
@

inspection, even if the amount of the money claim exceeds

91

P5,000.00. (Balladares v. Peak Ventures Corporation, G.R. No.

161794, June 16, 2009)
cx
o.

15. True or False. Answer True if the statement is True, or

er

False if the statement is false. Explain your answer in

sp

not more than two (2) sentences: e) The visitorial and

o
pr

enforcement powers of the DOLE Regional Director to

order and enforce compliance with labor standard laws
can be exercised even when the individual claim exceeds
P5,000.00. (2009 BAR Q. No. I[e])
True.

The statutory prerequisite to and a limitation on the

enforcement power of the Secretary of Labor or his duly
authorized representatives under the Labor Code is the
existence of an employer-employee relationship. (Article
128[b] and Peoples Broadcasting [Bombo Radyo Phils.], Inc. v.
Secretary of the Department of Labor and Employment, G.R.
No. 179652, May 8, 2009) The Secretary of Labor or his duly
360 LABOR LAW REVIEWER

authorized representatives is now empowered to hear and

decide, in a summary proceeding, any matter involving the
recovery of any amount of wages and other monetary claims
arising out of employer-employee relations at the time of the
inspection, even if the amount of the money claim exceeds
P5,000.00. (Balladares v. Peak Ventures Corporation, G.R. No.
161794, June 16, 2009)

Clearly, the enforcement power of the Secretary of Labor

or his duly authorized representatives (Regional Director)
under the Labor Code is not subject to the jurisdictional
amount of the Regional Director on recovery of wages,

ph
simple money claims, and other benefits under Article 129

u.
and Labor Arbiters on money claims under Article 224 of

ed
the Labor Code.

n.
ai
16.
m
In a letter to the Regional Director of Region VII of
su
the Department of Labor and Employment, employee
m

Ricardo Malalang claims that his employer, the Visayan

s.

Sea Products Corp., has not compensated him for various

@

legal benefits, including overtime pay, holiday pay, 13th

91

month pay and other monetary benefits totaling P6,000.00.

cx

Despite the fact that the amount claimed exceeds P5,000.00,

o.

how may the Regional Director exercise jurisdiction over

er

the case? Why? (1991 BAR Q. No. VIII)

sp

The Regional Director as the authorized representative

o
pr

of the Secretary of Labor is now empowered to hear and

decide, in a summary proceeding, any matter involving the
recovery of any amount of wages and other monetary claims
arising out of employer-employee relations at the time
of the inspection, even if the amount of the money claim
exceeds P5,000.00. This no longer subject to the restrictive
jurisdictional amount involving jurisdiction of the Regional
Director under Article 129 and the Labor Arbiters under
Article 224[a][6] of the Labor Code. (Balladares v. Peak
Ventures Corporation, G.R. No. 161794, June 16, 2009)
The statutory prerequisite to and a limitation on the
enforcement power of the Secretary of Labor or his duly
 LABOR STANDARDS 361

Administration and Enforcement

authorized representatives under the Labor Code is the

existence of an employer-employee relationship. (Article
128[b] and Peoples Broadcasting Bombo Radyo Phils., Inc. v.
Secretary of the Department of Labor and Employment, G.R. No.
179652, May 8, 2009)

The Regional Director can, therefore, exercise

jurisdiction over the case.

17. Can the DOLE make a determination of whether or not an

employer-employee relationship exists in the exercise of

ph
its visitorial and enforcement power under Article 128 of

u.
the Labor Code?

ed
Yes, the DOLE can determine the existence of an

n.
employer-employee relationship.

ai
m
No limitation in the law was placed upon the power
su
of the DOLE to determine the existence of an employer
m

employee relationship. No procedure was laid down where

s.

the DOLE would only make a preliminary finding, that the

@

power was primarily held by the NLRC. The law did not say
91

that the DOLE would first seek the NLRC's determination

cx

of the existence of an employer-employee relationship,

o.

or that should the existence of the employer-employee

er

relationship be disputed, the DOLE would refer the matter

sp

to the NLRC. The DOLE must have the power to determine

o

whether or not an employer-employee relationship exists,

pr

and from there to decide whether or not to issue compliance

orders in accordance with Article 128(b) of the Labor Code,
as amended by RA 7730. The determination of the existence
of an employer-employee relationship by the DOLE must
be respected. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be rendered
nugatory if the alleged employer could, by the simple
expedient of disputing the employer-employee relationship,
force the referral of the matter to the NLRC.

Under Article 128(b) of the Labor Code, as amended

by RA 7730, the DOLE is fully empowered to make a
determination as to the existence of an employer-employee
362 LABOR LAW REVIEWER

relationship in the exercise of its visitorial and enforcement

power, subject to judicial review, not review by the NLRC.
(People's Broadcasting Service [Bombo Radyo Phils., Inc.] v.
The Secretary of the Department of Labor and Employment, the
Regional Director, DOLE Region VII, and Jandeleon Juezan, G.R.
No. 179652, March 6, 2012)

18. Inggo is a drama talent hired on a per drama “participation

basis" by DJN Radio Company. He worked from 8:00
a.m. until 5:00 p.m., six days a week, on a gross rate of
P80.00 per script, earning an average of P20,000.00 per

ph
month. Inggo filed a complaint before the Department of

u.
Labor and Employment (DOLE) against DJN Radio for

ed
illegal deduction, non-payment of service incentive leave,

n.
and 13th month pay, among others. On the basis of the

ai
complaint, the DOLE conducted a plant level inspection.
m
The DOLE Regional Director issued an order ruling that
su

Inggo is an employee of DJN Radio, and that Inggo is

m

entitled to his monetary claims in the total amount of

s.
@

P30,000.00. DJN Radio elevated the case to the Secretary of

Labor who affirmed the order. The case was brought to the
91

Court of Appeals. The radio station contended that there

cx

is no employer-employee relationship because it was the

o.

drama directors and producers who paid, supervised, and

er

disciplined him. Moreover, it argued that the case falls

sp

under the jurisdiction of the NLRC and not the DOLE

o
pr

because Inggo's claim exceeded P5,000.00.

May DOLE make a prima facie determination of the

existence of an employer-employee relationship in the
exercise of its visitorial and enforcement powers? (2016
BAR Q. No. X[a])

Yes, the DOLE can determine the existence of an

employer-employee relationship in the exercise of its
visitorial and enforcement powers.

No limitation in the law was placed upon the power

of the DOLE to determine the existence of an employer
employee relationship. No procedure was laid down where
the DOLE would only make a preliminary finding, that the
 LABOR STANDARDS 363

Administration and Enforcement

power was primarily held by the NLRC. The law did not say
that the DOLE would first seek the NLRC's determination of

the existence of an employer-employee relationship, or that

should the existence of the employer-employee relationship
be disputed, the DOLE would refer the matter to the NLRC.
The DOLE must have the power to determine whether or
not an employer-employee relationship exists, and from
there to decide whether or not to issue compliance orders
in accordance with Article 128(b) of the Labor Code, as
amended by RA 7730. (People's Broadcasting [Bombo Radyo,
Phils., Inc.] v. The Secretary of Labor and Employment, et al.,

ph
G.R. No. 179652, March 6, 2012)

u.
Thus, according to the above doctrinal rule the DOLE's

ed
power to determine existence of an employer-employee

n.
relationship is now co-extensive with the exercise of its

ai
visitorial and enforcement powers under the Labor Code.
m
(Article 128[b])
su
m

If the DOLE finds that there is an employee-employer

s.

relationship, does the case fall under the jurisdiction of

@

the Labor Arbiter considering that the claim of Inggo is

91

more than P5,000.00? Explain. (2016 BAR Q. No. X[b])

cx

No, it does not fall under the jurisdiction of the Labor

o.
er

Arbiter even if the claim of Inggo is more than P5,000.00.

sp

The statutory prerequisite to and a limitation on the

o

bnp enforcement power of the Secretary of Labor or his duly

pr

authorized representatives under the Labor Code is the

existence of an employer-employee relationship. (Article
128[b] and Peoples Broadcasting [Bombo Radyo Phils., Inc.] v.
Secretary of the Department of Labor and Employment, G.R.
No. 179652, May 8, 2009) The Secretary of Labor or his duly
authorized representatives are now empowered to hear and
decide, in a summary proceeding, any matter involving the
recovery of any amount of wages and other monetary claims
arising out of employer-employee relations at the time of the
inspection, even if the amount of the money claim exceeds
P5,000.00. (Balladares v. Peak Ventures Corporation, G.R. No.
161794, June 16, 2009)
364
LABOR LAW REVIEWER

Clearly, the enforcement power of the Secretary of

Labor or his duly authorized representatives (Regional
Director) under the Labor Code is not subject to any
jurisdictional amount of the Labor Arbiter or the Regional
Director in recovery of wages, simple money claims and
other benefits.

19. What is the nature of the visitorial and enforcement power

of the DOLE Secretary under Article 128 of the Labor
Code?

The visitorial and enforcement power granted to the

DOLE Secretary is in the nature of a quasi-judicial power.

ph
(Dole Philippines v. Esteva, G.R. No. 161115, November 30,

u.
2006)

ed
n.
20. What are the adjudicatory powers of the Regional Director

ai
under Article 129 of the Labor Code?
m
su
Article 129 of the Labor Code provides for the
m

adjudicatory powers of the Regional Director or any duly

s.

authorized Hearing Officer of the Department of Labor and

@

Employment through summary proceedings and after due

91

notice to hear and decide involving recovery of wages and

cx

other monetary claims arising from employer-employee

o.

relationship presented by an employee or person employed

er

in domestic/household service, or househelper and the

sp

aggregate money claim, including legal interest, of each

o

employee or househelper does not exceed Five Thousand

pr

Pesos (P5,000.00).

21. What are the requisites for the exercise of the adjudicatory
powers of the Regional Director under Article 129 of the
Labor Code?

The following are the requisites:

1. The claim is presented by an employee or person

employed in domestic or household service, or househelper
under the code;

2. The claimant, no longer being employed, does not

seek reinstatement; and
 365
LABOR STANDARDS
Administration and Enforcement

3. The aggregate money claim of the employee

or housekeeper does not exceed five thousand pesos
(P5,000.00). (Rajah Humabon Hotel, Inc. v. Trajano, G.R. Nos.
100222-23, September 14, 1993)

22. A neighbor's gardener comes to you and asks for help

because his employer withheld his salary for two (2)
months amounting to P4,000.00. Where will you advise
him to file his complaint? a. Labor Arbiter; b. DOLE
Regional Director; c. Conciliator/Mediator; d. MTC Judge.
(2012 BAR Q. No. 24)

ph
b. DOLE Regional Director

u.
ed
The regional directors can try money claims only if the

n.
following requisites concur:

ai
1.
m
The claim is presented by an employee or person
su
employed in domestic or household service, or househelper
m

under the code;

s.

2. The claimant, no longer being employed, does not

@
91

seek reinstatement; and

cx

3. The aggregate money claim of the employee

o.

or housekeeper does not exceed five thousand pesos

er

(P5,000.00). (Rajah Humabon Hotel, Inc. v. Trajano, G.R. Nos.

sp

100222-23, September 14, 1993)

o
pr

23. Sara has been working as housemaid for the Bojilov

spouses for three (3) years. In the early morning of July
28, the spouses and Sara were watching the live coverage
of the finals of an Olympic boxing match between a
Bulgarian and a Filipino which the foreign fighter won on
points. Peeved by Sara's angry remarks that the scoring
was unfair, the Bojilov spouses fired her on the spot. Sara
thereafter filed a complaint with the Regional Director
of the DOLE for unpaid salaries totaling P5,500.00. The
Bojilov spouses moved to dismiss the complaint on the
belief that Sara's claim falls within the jurisdiction of the
Labor Arbiter. Sara, however, claimed that the Regional
366 LABOR LAW REVIEWER

Director can decide on her claim by virtue of his plenary

visitorial powers under Art. 128 and of Art. 129 of the
Labor Code, as amended, which empowers the Regional
Director to hear and decide, among others, matters
involving recovery of wages:
Whose position will you sustain? Explain. (1996 BAR Q.
No. XV[1])

I will sustain the motion to dismiss filed by Bojilov

spouses.

The Labor Arbiters' jurisdiction includes all other

ph
claims arising from employer-employee relations,

u.
including those of persons in domestic or household

ed
service, involving an amount exceeding five thousand

n.
pesos (P5,000.00) regardless of whether accompanied with

ai
a claim for reinstatement. (Article 224[a][6], Labor Code) On
m
the other hand, the Regional Director's jurisdiction can
su

only be invoked if it involves the exercise of its visitorial

m

and enforcement powers in cases where the relationship of

s.
@

employer-employee still exists (Article 128[b], Labor Code)

91

and the recovery of wages, simple money claims and other

benefits which do not include a claim for reinstatement
cx

and the aggregate money claims of each of the employee or

o.
er

housekeeper do not exceed five thousand pesos (P5,000.00)

sp

under the Labor Code (Article 129, Labor Code)

o

Applying the above provisions of law, since Sara's

pr

claim exceeded P5,000.00 the Bojilov spouses are correct

that the jurisdiction of the claim is with the Labor Arbiter.

Will your answer be the same if Sara's claim is P4,500.00

with reinstatement? Explain. (1996 BAR Q. No. XV[2])
Yes, the answer is the same.

Under the Labor Code, the Labor Arbiter's original

and exclusive jurisdiction includes those cases that workers
may file involving wages, rates of pay, hours of work and
other terms and conditions of employment if accompanied
with a claim for reinstatement. (Article 224 [a][3], Labor Code)
 LABOR STANDARDS 367

Administration and Enforcement

Applying the law, since Sara is claiming reinstatement

with the money claim of P4,500.00 the jurisdiction is with
the Labor Arbiter.

24. What is the rule on appeal involving the decision of the

Regional Director/ hearing officer under Article 129 of the
Labor Code?

Any decision or resolution of the Regional Director or

hearing officer pursuant to this provision may be appealed
on the same grounds provided in Article 229[223] of this
Code, within five (5) calendar days from receipt of a copy of

ph
said decision or resolution, to the National Labor Relations

u.
Commission which shall resolve the appeal within ten (10)

ed
calendar days from the submission of the last pleading

n.
required or allowed under its rules. (Article 129, Labor Code)
ai
m
su
25. What are the grounds to appeal the decision of the
m

Regional Director/hearing officer under Article 129 of the

s.

Labor Code?
@

The grounds for appeal are those stated in Article

91

229 [223] similar to the grounds for appeals involving the

cx

decisions, awards, or orders of the Labor Arbiter as follows:

o.
er

1. If there is prima facie evidence of abuse of discretion

sp

on the part of the Labor Arbiter;

o

2. If the decision, order or award was secured

pr

through fraud or coercion, including graft and corruption;

3. If made purely on questions of law; and
4. If serious errors in the findings of facts are raised
which would cause grave or irreparable damage or injury to
the appellant.
 Chapter XII
EMPLOYMENT OF WOMEN

1. What are the corrective labor and social laws on gender

inequality under the Labor Code?
The following are the corrective labor and social laws

ph
on gender inequality under the Labor Code:

u.
1. Article 130 ensures the right of women to be

ed
provided with facilities and standards which the Secretary

n.
of Labor may establish to ensure their health and safety;

ai
m
2. Article 132 provides for family planning services;
su
incentives for family planning;
m

3. Article 133 recognizes a woman's right against

s.
@

discrimination with respect to terms and conditions of

91

employment on account simply of sex;

cx

4. Article 134 explicitly prohibits discrimination

o.

merely by reason of the marriage of a female employee;

er

5. Article 136 provides that for purposes of labor and

sp

social legislation, a woman working in a nightclub, cocktail

o
pr

lounge, massage clinic, bar or other similar establishments

shall be considered as an employee.

2. An airline which flies both the international and domestic

routes requested the Secretary of Labor and Employment
to approve the policy that all female flight attendants
upon reaching age forty (40) with at least fifteen (15) years
of service shall be compulsorily retired; however, flight
attendants who have reached age forty (40) but have not
worked for fifteen (15) years will be allowed to continue
working in order to qualify for retirement benefits, but in

368
 LABOR STANDARDS 369

Employment of Women

no case will the extension exceed four (4) years. Does the
Secretary of Labor and Employment have the authority to
approve the policy? (1998 BAR Q. No. VIII)
Yes, the Secretary of Labor and Employment has the
authority to approve the policy.
Under the Labor Code, the Secretary of Labor and
Employment shall establish standards that will ensure the
safety and health of women employees. In appropriate
cases, he shall, by regulations, require any employer: To
determine appropriate minimum age and other standards
for retirement or termination in special occupations such as

ph
those of flight attendants and the like. (Article 130[d], Labor

u.
Code)

ed
n.
3. What are the prohibited discriminations against any

ai
women employee? m
su
The prohibited discriminations are as follows:
m

1. It shall be unlawful for any employer to

s.

discriminate against any woman employee with respect to

@

terms and conditions of employment solely on account of

91

her sex. (Article 133, Labor Code)

cx

2. The following are acts of discrimination:

o.
er

(a) Payment of a lesser compensation, including

sp

wage, salary or other form of remuneration and fringe

o

benefits, to a female employee as against a male employee,

pr

for work of equal value; and

(b) Favoring a male employee over a female employee

with respect to promotion, training opportunities, study and
scholarship grants solely on account of their sexes. (Article
133, Labor Code)

4. What is the effect of willful commission of any unlawful

acts under Article 133?

Criminal liability for the willful commission of any

unlawful act as provided in this Article or any violation of
the rules and regulations issued pursuant to Section 2 hereof
370 LABOR LAW REVIEWER

shall be penalized as provided in Articles 303 [288] and 304

[289] of this Code.

The institution of any criminal action under this

provision shall not bar the aggrieved employee from
filing an entirely separate and distinct action for money
claims, which may include claims for damages and other
affirmative reliefs. The actions hereby authorized shall
proceed independently of each other. (Article 133, Labor
Code)

5. What is sexual harassment under RA 7877?

ph
Work, education or training-related sexual harassment

u.
is committed by an employer, employee, manager,

ed
supervisor, agent of the employer, teacher, instructor,

n.
professor, coach, trainor, or any other person who, having
ai
authority, influence or moral ascendancy over another in
m
a work or training or education environment, demands,
su

requests or otherwise requires any sexual favor from

m

the other, regardless of whether the demand, request or

s.

requirement for submission is accepted by the object of said

@

Act. (Section 3, RA 7877)

91
cx

6. What are the environments where sexual harassment can

o.

be committed under RA 7877?

er
sp

Sexual harassment is committed in the following

environments:
o
pr

1. Work-related or employment environment;

2. Education-related environment; or

3. Training-related environment (Section 3, RA 7877)

7. How is sexual harassment committed in a work-related

environment under RA 7877?

In a work-related or employment environment, sexual

harassment is committed when:

(1) The sexual favor is made as a condition in the

hiring or in the employment, re-employment or continued
 LABOR STANDARDS 371

Employment of Women

employment of said individual, or in granting said

individual favorable compensation, terms of conditions,
promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the
employee which in any way would discriminate, deprive or
diminish employment opportunities or otherwise adversely
affect said employee;

(2) The above acts would impair the employee's

rights or privileges under existing labor laws; or
(3) The above acts would result in an intimidating,

ph
hostile, or offensive environment for the employee. (Section
3, RA 7877)

u.
ed
8. How is sexual harassment committed in an education or

n.
training related environment under RA 7877?
ai
m
In an education or training environment, sexual
su

harassment is committed:
m
s.

(1) Against one who is under the care, custody or

@

supervision of the offender;

91

(2) Against one whose education, training,

cx

apprenticeship or tutorship is entrusted to the offender;

o.
er

(3) When the sexual favor is made a condition to the

sp

giving of a passing grade, or the granting of honors and

o

scholarships, or the payment of a stipend, allowance or

pr

other benefits, privileges, or consideration; or

(4) When the sexual advances result in an

intimidating, hostile or offensive environment for the
student, trainee or apprentice. (Section 3, RA 7877)

9. Who are liable for sexual harassment under RA 7877?

Any person who directs or induces another to commit

any act of sexual harassment as herein defined, or who
cooperates in the commission thereof by another without
which it would not have been committed, shall also be held
liable under this Act. (Section 3, RA 7877)
372 LABOR LAW REVIEWER

10. What is the duty of the employer/head of office in a work

related, education or training environment under RA
7877?

It shall be the duty of the employer or the head of

the work-related, educational or training environment
or institution, to prevent or deter the commission of acts
of sexual harassment and to provide the procedures for
the resolution, settlement, or prosecution of acts of sexual
harassment. Towards this end, the employer or head of
office shall:

ph
(a) Promulgate appropriate rules and regulations

u.
in consultation with and jointly approved by the

ed
employees or students or trainees, through their duly

n.
designated representatives, prescribing the procedure

ai
for the investigation of sexual harassment cases and the
m
administrative sanctions therefor.
su
m

Administrative sanctions shall not be a bar to

s.

prosecution in the proper courts for unlawful acts of sexual

@

harassment.
91

The said rules and regulations issued pursuant to

cx

this subsection (a) shall include, among others, guidelines

o.

on proper decorum in the workplace and educational or

er

training institutions.
sp
o

(b) Create a committee on decorum and investigation

pr

of cases on sexual harassment. The committee shall conduct

meetings, as the case may be, with officers and employees,

teachers, instructors, professors, coaches, trainors, and
students or trainees to increase understanding and prevent
incidents of sexual harassment. It shall also conduct

the investigation of alleged cases constituting sexual

harassment.

In the case of a work-related environment, the committee

shall be composed of at least one (1) representative each
from the management, the union, if any, the employees from
the supervisory rank, and from the rank and file employees.
 LABOR STANDARDS 373

Employment of Women

In the case of the educational or training institution, the

committee shall be composed of at least one (1) representative
from the administration, the trainors, instructors, professors
or coaches and students or trainees, as the case may be.
The employer or head of office, educational or training
institution shall disseminate or post a copy of this Act for
the information of all concerned. (Section 4, RA 7877)

11. What circumstance can the employer, head of office,

educational, or training institution be held liable under
RA 7877?

ph
The employer or head of office, educational or training

u.
ed
institution shall be solidarily liable for damages arising from
the acts of sexual harassment committed in the employment,

n.
ai
education or training environment if the employer or head
m
of office, educational or training institution is informed of
su
such acts by the offended party and no immediate action is
m

taken. (Section 5, RA 7877)

s.
@

12. What is the rule on the filing of an independent action for

91

damages under RA 7877?

cx

Nothing in this Act shall preclude the victim of work,

o.

education or training-related sexual harassment from

er

instituting a separate and independent action for damages

sp

and other affirmative relief. (Section 6, RA 7877)

o
pr

13. What are the penalties and prescriptive period under RA

7877?

Any person who violates the provisions of this Act

shall, upon conviction, be penalized by imprisonment of
not less than one (1) month nor more than six (6) months,
or a fine of not less than Ten thousand pesos (P10,000) nor
more than Twenty thousand pesos (P20,000), or both such
fine and imprisonment at the discretion of the court.

Any action arising from the violation of the provisions

of this Act shall prescribe in three (3) years. (Section 7, RA
7877)
374 LABOR LAW REVIEWER

14. What is the gravamen of the offense in sexual harassment?

This Court has held that "[t]he gravamen of the offense
in sexual harassment is not the violation of the employee's
sexuality but the abuse of power by the employer." (LBC
Express-Vis Inc. v. Palco, G.R. No. 217101, February 12, 2020
citing Philippine Aeolus Automotive United Corporation v.
Chua, G.R. No. 124617, April 28, 2000)

15. What is the effect of the employer's insensibility to the

employee's sexual harassment case?

ph
In explaining that the employer's insensibility to
its employee's sexual harassment case is a ground for

u.
ed
constructive dismissal, the High Court in LBC Express-Vis,
Inc. v. Palco, G.R. No. 217101, February 12, 2020, said:

n.
ai
One of the ways by which a hostile or
m
offensive work environment is created is through
su

the sexual harassment of an employee.

m
s.

Workplace sexual harassment occurs when

@

a supervisor, or agent of an employer, or any

91

other person who has authority over another in

cx

a work environment, imposes sexual favors on

o.

another, which creates in an intimidating, hostile,

er

or offensive environment for the latter. Section 3

sp

of Republic Act No. 7877, otherwise known as the

o

Anti-Sexual Harassment Act, states:

pr

XXX

Given these circumstances, the delay in

acting on respondent's case showed petitioner's
insensibility, indifference, and disregard for its
employees' security and welfare. In failing to act
on respondent's complaint with prompt and in
choosing to let the resolution of the complaint
hang in the air for a long period of time, it had
shown that it did not accord her claims the

necessary degree of importance, and at best

considered it a minor infraction that could wait.

Petitioner, it appears, belittled her allegations.

 LABOR STANDARDS 375

Employment of Women

XXX

Petitioner's insensibility to respondent's

sexual harassment case is a ground for
constructive dismissal. In this instance, it cannot

be denied that respondent was compelled to

leave her employment because of the hostile
and offensive work environment created and
reinforced by petitioner's Branch's Team Leader
and Officer-in-Charge and petitioner. She was
thus clearly constructively dismissed.

ph
16. Is there a categorical oral or written statement for a

u.
demand, request, or requirement of a sexual favor under

ed
RA 7877?

n.
ai
The law penalizing sexualm harassment in our
jurisdiction is RA 7877. Section 3 thereof defines work
su

related sexual harassment in this wise: xxx

m
s.

Yet, even if we were to test Rayala's acts strictly by

@

the standards set in Section 3, RA 7877, he would still be

91

administratively liable. It is true that this provision calls for

a "demand, request or requirement of a sexual favor." But it
cx
o.

is not necessary that the demand, request or requirement of

er

a sexual favor be articulated in a categorical oral or written

sp

statement. It may be discerned, with equal certitude, from

o

the acts of the offender. Holding and squeezing Domingo's

pr

shoulders, running his fingers across her neck and tickling

her ear, having inappropriate conversations with her, giving
her money allegedly for school expenses with a promise of
future privileges, and making statements with unmistakable
sexual overtones all these acts of Rayala resound with
-

deafening clarity the unspoken request for a sexual favor.

Likewise, contrary to Rayala's claim, it is not essential
that the demand, request or requirement be made as a
condition for continued employment or for promotion to a
higher position. It is enough that the respondent's acts result
in creating an intimidating, hostile or offensive environment
for the employee. (RA 7877, Section 3[a][3]; AO 250, Rule III,
376 LABOR LAW REVIEWER

Section 3[d]) That the acts of Rayala generated an intimidating

and hostile environment for Domingo is clearly shown by
the common factual finding of the Investigating Committee,
the OP and the CA that Domingo reported the matter to an
officemate and, after the last incident, filed for a leave of
absence and requested transfer to another unit. (Domingo v.
Rayala, G.R. No. 155831, February 18, 2008; Rayala v. Office of
the President, G.R. No. 155840, February 18, 2008; Republic of
the Philippines v. Rayala, G.R. No. 158700, February 18, 2008)

17. Nena worked as an Executive Assistant for Nesting, CEO

ph
of Nordic Corporation. One day, Nesting called Nena

u.
into his office and showed her lewd pictures of women

ed
in seductive poses which Nena found offensive. Nena

n.
complained before the General Manager who, in turn,

ai
investigated the matter and recommended the dismissal
m
of Nesting to the Board of Directors. Before the Board
su

of Directors, Nesting argued, that since the Anti-Sexual

m

Harassment Law requires the existence of "sexual favors,"

s.
@

he should not be dismissed from the service since he did

91

not ask for any sexual favor from Nena. Is Nesting correct?
(2018 BAR Q. No. XII)
cx
o.

No, Nesting is not correct.

er
sp

In a work-related or employment environment, sexual

harassment is committed when the sexual harassment would
o
pr

result in an intimidatin hostile, or offensive environment

for the employee. (Section 3[a][3], RA 7877)
It is true that the Anti-Sexual Harassment of 1995

calls for a "demand, request or requirement of a "sexual

favor." But it is not necessary that the demand, request or
requirement of a sexual favor be articulated in a categorical
oral or written statement. It may be discerned, with equal
certitude, from the acts of the offender. It is enough that the
offender's acts result in creating an intimidating, hostile or
offensive environment for the employee. (RA 7877, Section
3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.
No. 155831, February 18, 2008; Rayala v. Office of the President,
 LABOR STANDARDS 377

Employment of Women

G.R. No. 155840, February 18, 2008; Republic of the Philippines

v. Rayala, G.R. No. 158700, February 18, 2008)
The facts clearly stated that when the lewd pictures of
women in seductive poses were shown to Nena, she found
it offensive. Consequently, the acts of Nesting generated an
intimidating, hostile, or offensive environment for Nena.
Nesting had therefore committed sexual harassment against
Nena.

18. In a work-related environment, sexual harassment is

committed when

ph
(A) the offender has authority, influence, or moral

u.
ascendancy over his subordinate victim.

ed
n.
(B) the victim's continued employment is

ai
conditioned on sexual favor from her.
m
su
(C) the female victim grants the demand for sexual
favor against her will.
m
s.

(D) the victim is not hired because she turned down

@

the demand for sexual favor. (2011 BAR Q. No.

91

29)
cx

(C) the female victim grants the demand for sexual

o.

favor against her will.

er
sp

In a work-related or employment environment, sexual

o

harassment is committed when:

pr

(1) The sexual favor is made as a condition in the

hiring or in the employment, re-employment or continued
employment of said individual, or in granting said
individual favorable compensation, terms of conditions,
promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the
employee which in any way would discriminate, deprive or
diminish employment opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the employee's
rights or privileges under existing labor laws; or
378 LABOR LAW REVIEWER

(3) The above acts would result in an intimidating,

hostile, or offensive environment for the employee. (Section
3, RA 7877)

19. Atty. Renan, a CPA-lawyer and Managing Partner of an

accounting firm, conducted the orientation seminar for
newly-hired employees of the firm, among them, Miss
Maganda. After the seminar, Renan requested Maganda
to stay, purportedly to discuss some work assignment.
Left alone in the training room, Renan asked Maganda
to go out with him for dinner and ballroom dancing.

ph
Thereafter, he persuaded her to accompany him to the

u.
mountain highway in Antipolo for sight-seeing. During

ed
all these, Renan told Maganda that most, if not all, of the

n.
lady supervisors in the firm are where they are now, in very

ai
productive and lucrative posts, because of his favorable
m
endorsement.
su

Did Renan commit acts of sexual harassment in a work

m

related or employment environment? Reasons. (2009 BAR

s.
@

Q. No. XIII[a])
91

Yes, Renan committed acts of sexual harassment in a

cx

work-related or employment environment.

o.

It is true that the Anti-Sexual Harassment of 1995

er
sp

calls for a "demand, request or requirement" of a "sexual

favor." But it is not necessary that the demand, request or
o
pr

requirement of a sexual favor be articulated in a categorical

oral or written statement. It may be discerned, with equal
certitude, from the acts of the offender. It is enough that the
offender's acts result in creating an intimidating, hostile or
offensive environment for the employee. (RA 7877, Section
3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.
No. 155831, February 18, 2008; Rayala v. Office of the President,
G.R. No. 155840, February 18, 2008; Republic of the Philippines
v. Rayala, G.R. No. 158700, February 18, 2008)

Applying the doctrinal rule, the sexual favor can

be discerned from Renan's actuations of informing Ms.
Maganda "that most, if not all, of the lady supervisors in
 LABOR STANDARDS 379

Employment of Women

as the firm, are where they are now, in very productive and
lucrative posts, because of his favorable endorsement."
Thus, Renan had committed sexual harassment against Ms.
Maganda.

The lady supervisors in the firm, slighted by Renan's

revelations about them, succeeded in having him expelled
from the firm. Renan then filed with the Arbitration Branch

of the NLRC an illegal dismissal case with claims for

damages against the firm. Will the case prosper? Reasons.

ph
(2009 BAR Q. No. XIII[b])

u.
No, the case will not prosper because Renan was

ed
dismissed on the ground of serious misconduct.

n.
Misconduct is defined as an improper or wrong
ai
m
conduct. It is a transgression of some established and
su
definite rule of action, a forbidden act, a dereliction of duty,
m

willful in character, and implies wrongful intent and not

s.

mere error in judgment. To summarize, for misconduct

@

or improper behavior to be a just cause for dismissal, the

91

following elements must concur: (a) the misconduct must

cx

be serious; (b) it must relate to the performance of the

o.

employee's duties showing that the employee has become

er

unfit to continue working for the employer; and (c) it

sp

must have been performed with wrongful intent. (Imasen

o

Philippine Manufacturing Corp. v. Alcon, G.R. No. 194884,

pr

October 22, 2014,739 SCRA 186,196-197)

The sexual harassment committed by Renan is a form

of serious misconduct. Thus, a just cause for his termination.

20. As a condition for her employment, Josephine signed

an agreement with her employer that she will not get
married, otherwise, she will be considered resigned or
separated from the service. Josephine got married. She
asked Owen, the personnel manager, if the company can
reconsider the agreement. He told Josephine he can do
something about it, insinuating some sexual favors. She
complained to higher authorities but to no avail. She hires
380 LABOR LAW REVIEWER

you as her counsel. What action or actions will you take?

Explain. (2006 BAR Q. No. XV)

I will advise Josephine to take the following actions:

1. File an independent action for damages against
Owen and the company. The basis of the liability of the
company is the provision of the Anti-Sexual Harassment
Act of 1995 which provides that the employer or head of
office shall be solidarily liable for damages arising from the
acts of sexual harassment committed in the employment
if the employer or head of office is informed of such acts

ph
by the offended party and no immediate action is taken.

u.
(Section 5, RA 7877)

ed
n.
2. To request assistance under the single entry

ai
approach (SENA) for the 30-day mandatory conciliation
m
mediation involving issues on labor and employment.
su

(Article 234, Labor Code). In case the parties failed to settle,

m

to ask that her case be endorsed for filing of a complaint for

s.

constructive dismissal against the company. The employer's

@

insensibility to Josephine's sexual harassment case is a

91

ground for constructive dismissal. (LBC Express-Vis, Inc. v.

cx

Paco, G.R. No. 217101, February 12, 2020)

o.
er

3. File a criminal case for sexual harassment against

sp

Owen. In a work-related or employment environment,

o

sexual harassment is committed when the sexual favor is

pr

made as a condition in the hiring or in the employment, re

employment or continued employment of said individual.
(Section 3, RA 7877) In this case, the sexual harassment of
Owen is evident when he told Josephine that he can do
something about it, insinuating some sexual favors. Thus,
the sexual favors was made as a condition for Josephine's
continued employment.

21. Carissa, a comely bank teller, was due for her performance
evaluation which is conducted every six months. A rating
of "outstanding" is rewarded with a merit increase.
She was given a "below average" rating in the last two
periods. According to the bank's personnel policy, a third
 LABOR STANDARDS 381

Employment of Women

rating of "below average" will result in termination. Mr.

Perry Winkle called Carissa into his office a few days
before submitting her performance ratings. He invited
her to spend the night with him in his rest house. She
politely declined. Undaunted, Mr. Winkle renewed his
invitation, and Carissa again declined. He then warned
her to "watch out" because she might regret it later on.
A few days later, Carissa found that her third and last
rating was again "below average." Carissa then filed
a complaint for sexual harassment against Mr. Winkle

ph
with the Department of Labor and Employment. In his
counter-affidavit, he claimed that he was enamored with

u.
ed
Carissa. He denied having demanded, much less received
any sexual favors from her in consideration of giving

n.
ai
her an "outstanding" rating. He also alleged that the
m
complaint was premature because Carissa failed to refer
su
the matter to the Committee on Decorum and Discipline
m

for investigation and resolution before the case against

s.

him was filed. In her reply affidavit, Carissa claimed that

@

there was no need for a prior referral to the Committee

91

on Decorum and Discipline of her complaint. Resolve the

cx

case with reasons. (2005 BAR Q. No. VII[2])

o.
er

I will resolve the complaint for sexual harassment in

sp

favor of Carissa.
o

It is provided that nothing in the Anti-Sexual

pr

Harassment Act of 1995 shall preclude the victim of work,

education or training-related sexual harassment from
instituting a separate and independent action for damages
and other affirmative relief. (Section 6, RA 7877)
Mr. Perry Winkle is guilty of sexual harassment.
It is true that the Anti-Sexual Harassment of 1995
calls for a "demand, request or requirement" of a "sexual
favor." But it is not necessary that the demand, request or
requirement of a sexual favor be articulated in a categorical
or or written statement. It may be discerned, with equal
certitude, from the acts of the offender. It is enough that the
382 LABOR LAW REVIEWER

offender's acts result in creating an intimidating, hostile or

offensive environment for the employee. (RA 7877, Section
3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.
No. 155831, February 18, 2008; Rayala v. Office of the President,
G.R. No. 155840, February 18, 2008; Republic of the Philippines
v. Rayala, G.R. No. 158700, February 18, 2008)
Applying the doctrinal rule, the sexual favor can be
discerned from Mr. Perry Winkle's actuations of inviting
Carissa to spend the night with him in his rest house,
warning her to "watch out" and the ratings of "below

ph
average." Thus, Mr. Perry Winkle had committed sexual

u.
harassment against Carissa.

ed
n.
22. Pedrito Masculado, a college graduate from the province,

ai
tried his luck in the city and landed a job as utility/
m
maintenance man at the warehouse of a big shopping
su

mall. After working as a casual employee for six months,

m

he signed a contract for probationary employment for six

s.
@

months. Being well-built and physically attractive, his

91

supervisor, Mr. Hercules Barak, took special interest to

befriend him. When his probationary period was about to
cx

expire, he was surprised when one afternoon after working

o.

hours, Mr. Barak followed him to the men's comfort room.

er
sp

After seeing that no one else was around, Mr. Barak placed
his arm over Pedrito's shoulder and softly said: "You have
o
pr

great potential to become regular employee and I think I

can give you a favorable recommendation. Can you come
over to my condo unit on Saturday evening so we can have
a little drink? I'm alone, and I'm sure you want to stay
longer with the company." Is Mr. Barak liable for sexual
harassment committed in a work-related or employment
environment? (2004 BAR Q. No. IV[B])

Yes, Mr. Barak is liable for sexual harassment.

It is true that the Anti-Sexual Harassment of 1995

calls for a "demand, request or requirement" of a "sexual

favor." But it is not necessary that the demand, request or
requirement of a sexual favor be articulated in a categorical
 LABOR STANDARDS 383

Employment of Women

oral or written statement. It may be discerned, with equal

certitude, from the acts of the offender. It is enough that the
offender's acts result in creating an intimidating, hostile or
offensive environment for the employee. (RA 7877, Section
3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.
No. 155831, February 18, 2008; Rayala v. Office of the President,
G.R. No. 155840, February 18, 2008; Republic of the Philippines
v. Rayala, G.R. No. 158700, February 18, 2008)
Applying the doctrinal rule and given the situation
that Pedrito Masculado's probationary period was about to

ph
expire, the sexual favor can be discerned from Mr. Barak's

u.
actuations of following Pedrito Masculado to the men's

ed
comfort room, placing his arm over Pedrito's shoulder and

n.
his statements with unmistakable sexual overtones. Thus,

ai
Mr. Barak had committed sexual harassment against Mr.
m
Pedrito Masculado.
su
m

23. Can an individual, the sole proprietor of a business

s.

enterprise, be said to have violated the Anti-Sexual

@

Harassment Act of 1995 if he clearly discriminates

91

against women in the adoption of policy standards for

cx

employment and promotions in the enterprise? Explain.

o.

(2003 BAR Q. No. XV)

er
sp

No, the act of the sole proprietor is not a violation of

o

the Anti-Sexual Harassment Act of 1995.

pr

The sole proprietor had committed an unlawful act

of discrimination. The Labor Code provides that it shall
be unlawful for any employer to discriminate against any
woman employee with respect to terms and conditions of
employment solely on account of her sex. (Article 133, Labor
Code) Thus, the discrimination is not a violation of the Anti
Sexual Harassment Act of 1995.

24. A Personnel Manager, while interviewing an attractive

female applicant for employment, stared directly at her for
prolonged periods, albeit in a friendly manner. After the
interview, the manager accompanied the applicant to the
384 LABOR LAW REVIEWER

door, shook her hand and patted her on the shoulder. He

also asked the applicant if he could invite her for dinner
and dancing at some future time. Did the Personnel
Manager, by the above acts, commit sexual harassment?
Reason. (2000 BAR Q. No. XI[a])

Yes, the Personnel Manger committed sexual

harassment.

It is true that the Anti-Sexual Harassment of 1995

calls for a "demand, request or requirement" of a "sexual

favor." But it is not necessary that the demand, request or

ph
requirement of a sexual favor be articulated in a categorical

u.
oral or written statement. It may be discerned, with equal

ed
certitude, from the acts of the offender. It is enough that the

n.
offender's acts result in creating an intimidating, hostile or

ai
offensive environment for the employee. (RA 7877, Section
m
su
3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.
No. 155831, February 18, 2008; Rayala v. Office of the President,
m
s.

G.R. No. 155840, February 18, 2008; Republic of the Philippines

@

v. Rayala, G.R. No. 158700, February 18, 2008)

91

Applying the doctrinal rule, the sexual favor can be

cx

in discerned from the actuations of the Personnel Manager

o.

such as after the interview he accompanied the applicant

er

to the door, shook her hand and patted her on the shoulder,
sp

and also asked the applicant if he could invite her for dinner
o
pr

and dancing at some future time.

Alternative answer:

No, the Personnel Manger did not commit sexual

harassment.

In a work-related or employment environment, sexual

harassment is committed when the sexual favor is made

as a condition in the hiring or in the employment or in

granting said individual favorable compensation, terms of
conditions, promotions, or privileges. (Section 3, RA 7877)

The facts do not show that the Personnel Manager

had made the demand, request, or requirement for a sexual
 LABOR STANDARDS 385

Employment of Women

favor as a condition in hiring or employment or in granting

favorable compensation and terms of conditions of the
female applicant.
In the course of an interview, another female applicant
inquired from the same Personnel Manager if she had the
physical attributes required for the position she applied
for. The Personnel Manager replied: "You will be more
attractive if you will wear micro-mini dresses without
the undergarments that ladies normally wear." Did the
Personnel Manager, by the above reply, commit an act of

ph
sexual harassment? Reason. (2000 BAR Q. No. XI[b])

u.
ed
Yes, the Personnel Manger committed sexual harass

n.
ment.

ai
It is true that the Anti-Sexual
m Harassment of 1995

calls for a “demand, request or requirement of a “sexual

su

favor." But it is not necessary that the demand, request or

m

requirement of a sexual favor be articulated in a categorical

s.
@

oral or written statement. It may be discerned, with equal

91

certitude, from the acts of the offender. It is enough that the

offender's acts result in creating an intimidating, hostile or
cx

offensive environment for the employee. (RA 7877, Section

o.
er

3[a][3]; AO 250, Rule III, Section 3[d]; Domingo v. Rayala, G.R.

sp

No. 155831, February 18, 2008; Rayala v. Office of the President,

o

G.R. No. 155840, February 18, 2008; Republic of the Philippines

pr

v. Rayala, G.R. No. 158700, February 18, 2008)

Applying the doctrinal rule, the sexual favor can be
discerned from the actuations of the Personnel Manager
such as when he replied to the applicant's query that "You
will be more attractive if you will wear micro-mini dresses
without the undergarments that ladies normally wear.

Alternative answer:

No, the Personnel Manger did not commit sexual

harassment.

In a work-related or employment environment, sexual

harassment is committed when the sexual favor is made
386 LABOR LAW REVIEWER

as a condition in the hiring or in the employment or in

granting said individual favorable compensation, terms of
conditions, promotions, or privileges. (Section 3, RA 7877)
The facts do not show that the Personnel Manager
had made the demand, request, or requirement for a sexual
favor as a condition in hiring or employment or in granting
favorable compensation and terms of conditions of the
female applicant.

25. What is RA 11313, known as Safe Spaces Act?

ph
RA 11313 defined and prescribed penalties on gender

u.
based sexual harassment in the workplace and in educational

ed
and training institutions.

n.
26.
ai
What are the provisions of RA 11313, known as Safe
m
su
Spaces Act which defined and prescribed penalties on
gender-based sexual harassment in the workplace?
m
s.

1. The crime of gender-based sexual harassment in

@

the workplace includes the following:

91

(a) An act or series of acts involving any unwelcome

cx

sexual advances, requests or demand for sexual favors or

o.

any act of sexual nature, whether done verbally, physically

er
sp

or through the use of technology such as text messaging or

electronic mail or through any other forms of information
o
pr

and communication systems, that has or could have a

detrimental effect on the conditions of an individual's

employment or education, job performance or opportunities;

(b) A conduct of sexual nature and other conduct

based on sex affecting the dignity of a person, which is
unwelcome, unreasonable, and offensive to the recipient,
whether done verbally, physically or through the use of
technology such as text messaging or electronic mail or
through any other forms of information and communication
systems;

(c) A conduct that is unwelcome and pervasive and

creates an intimidating, hostile or humiliating environment
 LABOR STANDARDS 387

Employment of Women

for the recipient: Provided, That the crime of gender-based

sexual harassment may also be committed between peers
and those committed to a superior officer by a subordinate,
or to a teacher by a student, or to a trainer by a trainee; and
(d) Information and communication system refers
to a system for generating, sending, receiving, storing or
otherwise processing electronic data messages or electronic
documents and includes the computer system or other
similar devices by or in which data are recorded or stored
and any procedure related to the recording or storage of

ph
electronic data messages or electronic documents. (Section
16, RA 11313)

u.
ed
n.
27. What are the duties of the employers under RA 11313,

ai
known as Safe Spaces Act? m
su
Employers or other persons of authority, influence or
moral ascendancy in a workplace shall have the duty to
m
s.

prevent, deter, or punish the performance of acts of gender

@

based sexual harassment in the workplace. Towards this

91

end, the employer or person of authority, influence or moral

cx

ascendancy shall:
o.

(a) Disseminate or post in a conspicuous place a copy

er

of this Act to all persons in the workplace;

o sp

(b) Provide measures to prevent gender-based sexual

pr

harassment in the workplace, such as the conduct of anti

sexual harassment seminars;

(c) Create an independent internal mechanism or

a committee on decorum and investigation to investigate
and address complaints of gender-based sexual harassment
which shall;

(1) Adequately represent the management, the

employees from the supervisory rank, the rank-and
file employees, and the union, if any;
(2) Designate a woman as its head and not less
than half of its members should be women;
 LABOR LAW REVIEWER
388

(3) Be composed of members who should be

impartial and not connected or related to the alleged
perpetrator;

(4) Investigate and decide on the complaints

within ten (10) days or less upon receipt thereof;
(5) Observe due process;
(6) Protect the complainant from retaliation; and
(7) Guarantee confidentiality to the greatest
extent possible;

ph
(d) Provide and disseminate, in consultation with all

u.
persons in the workplace, a code of conduct or workplace

ed
policy which shall:

n.
ai
(1) Expressly reiterate the prohibition on gender
m
based sexual harassment;
su

(2) Describe the procedures of the internal

m
s.

mechanism created under Section 17(c) of this Act; and

@

(3) Set administrative penalties. (Section 17, RA

91

11313)
cx
o.

28. What are the duties of the employees and co-workers

er

under RA 11313, known as Safe Spaces Act?

osp

The employees and co-workers shall have the duty to:

pr

(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. (Section 18, RA 11313)
 LABOR STANDARDS 389

Employment of Women

29. What are the liabilities of the employers under RA 11313,

known as Safe Spaces Act?

In addition to liabilities for committing acts of gender

based sexual harassment, employers may also be held
responsible for:

(a) Non-implementation of their duties under Section

17 of this Act, as provided in the penal provisions; or
(b) Not taking action on reported acts of gender
based sexual harassment committed in the workplace.

ph
Any person who violates subsection (a) of this section,

u.
shall upon conviction, be penalized with a fine of not less

ed
than Five thousand pesos (P5,000.00) nor more than Ten

n.
thousand pesos (P10,000.00).

ai
m
Any person who violates subsection (b) of this section,
su

shall upon conviction, be penalized with a fine of not less

m

than Ten thousand pesos (P10,000.00) nor more than Fifteen

s.

thousand pesos (P15,000.00). (Section 19, RA 11313)

@
91

30. What are the stipulations against marriage under the

cx

Labor Code?
o.
er

The following are the stipulations against marriage

sp

declared as unlawful:
o
pr

1. To require as a condition of employment or

continuation of employment that a woman employee shall
not get married; or

2. To stipulate expressly or tacitly that upon getting

married, a woman employee shall be deemed resigned or
separated; or

3. To actually dismiss, discharge, discriminate or

otherwise prejudice a woman employee merely by reason
of her marriage. (Article 134, Labor Code)
390 LABOR LAW REVIEWER

31. Is the condition of the employer for the female employee

to subsequently contract marriage with her boyfriend
before she can be reinstated to her employment valid?

Statutory law is replete with legislation protecting

labor and promoting equal opportunity in employment.
No less than the 1987 Constitution mandates that the "State
shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment
and equality of employment opportunities for all." The
Labor Code of the Philippines, meanwhile, provides:

ph
Art. 136. Stipulation against marriage. It

u.
shall be unlawful for an employer to require as

ed
a condition of employment or continuation of

n.
employment that a woman employee shall not get
ai
married, or to stipulate expressly or tacitly that
m
upon getting married, a woman employee shall
su

be deemed resigned or separated, or to actually

m

dismiss, discharge, discriminate or otherwise

s.
@

prejudice a woman employee merely by reason of

91

her marriage.
cx

With particular regard to women, RA 9710 or

o.

the Magna Carta of Women protects women against

er

discrimination in all matters relating to marriage and family

sp

relations, including the right to choose freely a spouse and

o
pr

to enter into marriage only with their free and full consent.

Weighed against these safeguards, it becomes

apparent that Brent's condition is coercive, oppressive, and
discriminatory. There is no rhyme or reason for it. It forces
Cadiz to marry for economic reasons and deprives her of
the freedom to choose her status, which is a privilege that
is inherent in her as an intangible and inalienable right.
While a marriage or no-marriage qualification may be
justified as a "bona fide occupational qualification," Brent
must prove two factors necessitating its imposition, viz.:
(1) that the employment qualification is reasonably related
to the essential operation of the job involved; and (2) that
 LABOR STANDARDS 391
Employment of Women

there is a factual basis for believing that all or substantially

all persons meeting the qualification would be unable to
properly perform the duties of the job. Brent has not shown
the presence of neither of these factors. Perforce, the Court
cannot uphold the validity of said condition. (Cadiz v. Brent
Hospital and Colleges, Inc. G. R. No. 187417, February 24, 2016)

32. One Pacific Airline's policy was to hire only single

applicants as flight attendants, and considered as
automatically resigned the flight attendants at the moment
they got married. Is the policy valid? Explain your answer.

ph
(2017 BAR Q. No. VI[A])

u.
ed
The policy is not valid.

n.
The Labor Code declared the following stipulations as
ai
unlawful:
m
su

1. To require as a condition of employment or

m

continuation of employment that a woman employee shall

s.

not get married; or

@
91

2. To stipulate expressly or tacitly that upon getting

cx

married, a woman employee shall be deemed resigned or

o.

separated; or
er

3. To actually dismiss, discharge, discriminate or

sp

otherwise prejudice a woman employee merely by reason

o
pr

of her marriage. (Article 134, Labor Code)

One Pacific Airline's policy of hiring only single

applicants as flight attendants, and consider flight attendants
automatically resigned upon getting married is a violation
of stipulation against marriage.

33. Mam-manu Aviation Company (Mam-manu) is a new

airline company recruiting flight attendants for its
domestic flights. It requires that the applicant be single, not
more than 24 years old, attractive, and familiar with three
(3) dialects, viz.: Ilonggo, Cebuano and Kapampangan.
Ingga, 23 years old, was accepted as she possesses all the
392 LABOR LAW REVIEWER

qualifications. After passing the probationary period,

Ingga disclosed that she got married when she was 18
years old but the marriage was already in the process
of being annulled on the ground that her husband was
afflicted with a sexually transmissible disease at the time
of the celebration of their marriage. As a result of this
revelation, Ingga was not hired as a regular flight attendant.
Consequently, she filed a complaint against Mam-manu
alleging that the pre-employment qualifications violate
relevant provisions of the Labor Code and are against
public policy. Is the contention of Ingga tenable? Why?

ph
(2012 BAR Q. No. VI[b])

u.
ed
Yes, the contention of Ingga is tenable.

n.
The Labor Code declared the following stipulations as
ai
unlawful:
m
su

1. To require as a condition of employment or

m

continuation of employment that a woman employee shall

s.
@

not get married; or

91

2. To stipulate expressly or tacitly that upon getting

cx

married, a woman employee shall be deemed resigned or

o.

separated; or
er

3. To actually dismiss, discharge, discriminate or

sp

otherwise prejudice a woman employee merely by reason

o
pr

of her marriage. (Article 134, Labor Code)

The pre-employment qualifications of Mam-manu

Aviation Company are a violation of stipulation against
marriage under the Labor Code.

34. Fil-Aire Aviation Company (FIL-AIRE) is a new airline

company recruiting flight attendants for its domestic
flights. It requires that the applicant be single, not more
than 24 years old, attractive, and familiar with three (3)
major Visayan dialects, viz.: Ilonggo, Cebuano and Waray.
Lourdes, 23 years old, was accepted as she possessed all
the qualifications. After passing the probationary period,
 LABOR STANDARDS 393
Employment of Women

Lourdes disclosed that she got married when she was

the 18 years old but the marriage was already in the process
of being annulled on the ground that her husband was
afflicted with a sexually transmissible disease at the
time of the celebration of their marriage. As a result of
this revelation, Lourdes was not hired as a regular flight
attendant. Consequently, she filed a complaint against
FIL-AIRE alleging that the pre-employment qualifications
violate relevant provisions of the Labor Code and are
against public policy. Is the contention of Lourdes tenable?
Discuss fully. (1995 BAR Q. No. XV)

ph
u.
Yes, the contention of Lourdes is tenable.

ed
The Labor Code declared the following stipulations as

n.
unlawful:

ai
m
1. To require as a condition of employment or
su

continuation of employment that a woman employee shall

m

not get married; or

s.
@

2. To stipulate expressly or tacitly that upon getting

91

married, a woman employee shall be deemed resigned or

cx

separated; or
o.

3. To actually dismiss, discharge, discriminate or

er

otherwise prejudice a woman employee merely by reason

sp

of her marriage. (Article 134, Labor Code)

o
pr

The pre-employment qualifications of Fil-Aire Aviation

Company are a violation of stipulation against marriage
under the Labor Code.

35. A was working as a medical representative of RX

pharmaceutical company when he met and fell in
love with B, a marketing strategist for Delta Drug
Company, a competitor of RX. On several occasions, the
management of RX called A's attention to the stipulation
in his employment contract that requires him to disclose
any relationship by consanguinity or affinity with co
employees or employees of competing companies in light
394 LABOR LAW REVIEWER

of a possible conflict of interest. A seeks your advice on

the validity of the company policy. What would be your
advice? (2010 BAR Q. No. IX)

I will advise A that the company policy is valid.

The prohibition against personal or marital

bundsrelationships with employees of competitor companies is
reasonable under the circumstances because relationships of
that nature might compromise the interests of the company.
In laying down the assailed company policy, the company
only aims to protect its interests against the possibility that

ph
a competitor company will gain access to its secrets and

u.
procedures. (Duncan Association of Detailman-PTGWO v.

ed
Glaxo Wellcome Philippines, Inc., G.R. No. 162994, September

n.
17, 2004)

ai
m
Applying the above ruling, to qualify as a valid exercise
su

of management prerogative it is required that a company

m

policy must be reasonable under the circumstances.

s.
@

RX pharmaceutical company has a right to guard its

91

trade secrets, manufacturing formulas, marketing strategies

cx

and other confidential programs and information from

competitors. Thus, the policy is reasonable under the
o.
er

circumstances.
o sp

36. What are the prohibited acts under Article 135 of the Labor
pr

Code?

It shall be unlawful for any employer:

(1) To deny any woman employee the benefits
XX provided for in this Chapter; or

(2) To discharge any woman employed by him for the

purpose of preventing her from enjoying any of the benefits
provided under this Code;

(3) To discharge such woman on account of her

pregnancy, or while on leave or in confinement due to her
pregnancy; and
 LABOR STANDARDS 395

Employment of Women

(4) To discharge or refuse the admission of such

woman upon returning to her work for fear that she may
again be pregnant. (Article 135, Labor Code)

37. An exclusive school for girls, run by a religious order, has

a policy of not employing unwed mothers, women with
live-in partners, and lesbians. The same school dismissed
two female faculty members on account of pregnancy out
of wedlock. Did the school violate any provision of the
Labor Code on employment of women? (2000 BAR Q. No.
X [b])

ph
Yes, the school's policy violated the provisions of the

u.
ed
Labor Code on corrective labor and social laws on gender
inequality or on employment of women, specifically stating

n.
ai
that it shall be unlawful for any employer to discharge such
m
woman employee on account of her pregnancy, or while
su
on leave or in confinement due to her pregnancy. (Article
m

135[3], Labor Code, Section 13[b], Rule XII, Book III, Rules to
s.

Implement the Labor Code)

@

Since the discharge is on account of pregnancy, the

91

dismissal is, therefore, illegal.

cx
o.

38. State the status of women in certain work places under

er

Article 136 of the Labor Code.

sp

Any woman who is permitted or suffered to work with

o
pr

or without compensation, in any night club, cocktail lounge,

beer house, massage clinic, bar or similar establishments
under the effective control or supervision of the employer
for a substantial period of time as determined by the
Secretary of Labor and Employment, shall be considered as
an employee of such establishments for purposes of labor
and social legislation. (Article 136, Labor Code)

39. Complainants had worked five (5) years as waitresses in

a cocktail lounge owned by the respondent. They did not
receive any salary directly from the respondent but shared
in all service charges collected for food and drinks to the
extent of 75%. With respondent's prior permission, they
396 LABOR LAW REVIEWER

could sit with and entertain guest inside the establishment

and appropriate for themselves the tips given by guests.
After five (5) years, the complainants' individual shares in
the collected service charges dipped to below minimum
wage level as a consequence of the lounge's marked
business decline. Thereupon, complainants asked
hope respondent to increase their share in the collected service
charges to 85% or the minimum wage level, whichever
is higher. Respondent terminated the services of the
complainants who countered by filing a consolidated
complaint for unlawful dismissal, with prayer for 85%

ph
of the collected services or the minimum wage for the

u.
appropriate periods, whichever is higher. Decide. (2008

ed
BAR Q. No. XI)

n.
I will decide in favor of the complainants.

ai
m
Under the Labor Code, any woman who is permitted
su
or suffered to work with or without compensation, in any
m

night club, cocktail lounge, beer house, massage clinic, bar

s.

or similar establishments under the effective control or

@

supervision of the employer for a substantial period of time

91

shall be considered as an employee of such establishments

cx

for purposes of labor and social legislation. (Article 136,

o.

Labor Code)
er

In this case, this complainants were permitted or

sp

suffered to work in the cocktail lounge under the effective

o
pr

control or supervision of the respondent, as the owner of

the cocktail lounge for a substantial period of time.

Applying the law, the complainants are therefore, the

employees of the cocktail lounge for purposes of labor and
social legislation.

40. Juicy Bar and Night Club allowed by tolerance fifty

(50) Guest Relations Officers (GROs) to work without

compensation in its establishment under the direct

supervision of its Manager from 8:00 P.M. To 4:00 A.M.
everyday, including Sundays and holidays. The GROS,
however, were free to ply their trade elsewhere at
anytime, but once they enter the premises of the night
 LABOR STANDARDS 397

Employment of Women

club, they were required to stay up to closing time. The

GROs earned their keep exclusively from commissions
for food and drinks, and tips from generous customers.
In time, the GROs formed the Solar Ugnayan ng mga
Kababaihang Inaapi (SUKI), a labor union duly registered
with DOLE. Subsequently, SUKI filed a petition for
Certification Election in order to be recognized as the
exclusive bargaining agent of its members. Juicy Bar and
Night Club opposed the petition for Certification Election
on the singular ground of absence of employer-employee
relationship between the GROs on one hand and the night

ph
club on the other hand. May the GROS form SUKI as a

u.
labor organization for purposes of collective bargaining?

ed
Explain briefly. (2012 BAR Q. No. IV)

n.
Yes, the GROS may form SUKI as a labor organization
ai
m
for purposes of collective bargaining.
su

Under the Labor Code, any woman who is permitted

m

or suffered to work with or without compensation, in any

s.
@

night club, cocktail lounge, beer house, massage clinic, bar

or similar establishments under the effective control or
91

supervision of the employer for a substantial period of time

cx

shall be considered as an employee of such establishments

o.

for purposes of labor and social legislation. (Article 136,

er

Labor Code)
sp
o

In this case, this GROs were permitted or suffered

pr

to work in the night club under the effective control or

supervision of the Juicy Bar and Night Club for a substantial
period of time.

Applying the law, the GROs are therefore, the

employees of Juicy Bar and Night Club for purposes of
labor and social legislation.

41. FACTS: Solar Plexus Bar and Night Club allowed by

tolerance fifty (50) Guest Relations Officers (GRO) to
work without compensation in its establishment under
the direct supervision of its Manager from 8:00 p.m. to
4:00 a.m. everyday, including Sundays and holidays. The
398 LABOR LAW REVIEWER

GROS, however, are free to ply their trade elsewhere at

anytime but once they enter the premises of the night club,
they are required to stay up to closing time. The GROS
et earned their keep exclusively from commissions for food
and drinks, and tips from generous customers. In time, the
GROs formed the Solar Ugnayan ng mga Kababaihang
Inaapi (SUKI); a labor union duly registered with DOLE.
Subsequently, SUKI filed a petition for certification
election in order to be recognized as the exclusive
bargaining agent of its members. Solar Plexus opposed the
petition for certification election on the singular ground

ph
of absence of employer-employee relationship between

u.
the GROs on one hand and the night club on the other

ed
hand. May the GROS form SUKI as a labor organization

n.
for purposes of collective bargaining? Explain briefly.

ai
(1999 BAR Q. No. III) m
su
Yes, the GROS may form SUKI as a labor organization
m

for purposes of collective bargaining.

s.

Under the Labor Code, any woman who is permitted

@

or suffered to work with or without compensation, in any

91

night club, cocktail lounge, beer house, massage clinic, bar

cx

or similar establishments under the effective control or

o.

supervision of the employer for a substantial period of time

er

shall be considered as an employee of such establishments

sp

for purposes of labor and social legislation. (Article 136,

o
pr

Labor Code)

In this case, this GROS were permitted or suffered

to work in the night club under the effective control or
supervision of the Solar Plexus Bar and Night Club for a
substantial period of time.
Applying the law, the GROS are therefore, the
employees of Solar Plexus Bar and Night Club for purposes
of labor and social legislation.

42. Dinna Ignacio was hired by Stag Karaoke Club as a guest

relations officer. Dinna was also required to sing and dance
with guests of the club. In Dinna Ignacio's employment
 LABOR STANDARDS 399

Employment of Women

contract, which she signed, the following stipulations

appeared:

Compensation: Tips and commissions coming from guests

shall be subjected to 15% deduction.

Hours of work: 5 P.M. up to 2 A.M. dairy including

Sundays and Holidays
Other conditions: Must maintain a body weight
of 95 lbs., remain single. Marriage or pregnancy will
be considered as a valid ground for a termination of
employment.

ph
A year later, Dinna Ignacio requested to go on leave

u.
ed
because she would be getting married to one of the club's
regular guests. The management of the club dismissed her.

n.
ai
Dinna filed a complaint for illegal dismissal, night shift
m
differential pay, backwages, overtime pay and holiday
su
pay. Discuss the merits of Dinna's complaint. (1997 BAR
m

Q. No. XIX)
s.
@

Dinna's complaint is meritorious.

91

Under the Labor Code, any woman who is permitted

cx

or suffered to work with or without compensation, in any

o.

night club, cocktail lounge, beer house, massage clinic, bar

er

or similar establishments under the effective control or

sp

supervision of the employer for a substantial period of time

o

shall be considered as an employee of such establishments

pr

for purposes of labor and social legislation. (Article 136,

Labor Code)

In this case, Dinna was permitted or suffered to work

in the night club under the effective control or supervision
of Stag Karaoke Club for a substantial period of time.

Applying the law, Dinna is therefore, an employee

of Stag Karaoke Club for purposes of labor and social
legislation.
400 LABOR LAW REVIEWER

43. Distinguished sexual harassment under Safe Spaces Act

(RA 11313) from sexual harassment under Anti-Sexual
Harassment Act of 1995 (RA 7877)

Sexual Harassment Sexual Harassment under

under the the ANTI-SEXUAL

SAFE SPACES ACT HARASSMENT

(RA 11313) ACT OF 1995 (RA 7877)

As to the The act of sexually The abuse of one's

gravamen harassing a person authority, influence or moral
of the on the basis of his/ ascendancy so as to enable
offenses her sexual orientation, the sexual harassment of

ph
punished gender identity and/or a subordinate. (Escandor v.
People, G.R. No. 211962, July

u.
expression. (Escandor v.
People, G.R. No. 211962, 6, 2020)

ed
July 6, 2020)

n.
Acts
ai
There is demand, request or
m
penalized
Theual
gender-basedharassment
- , sexand otherwise requires any sexual
su

in general is founded on, among favor from the other in a

m

others, the recogni work-related or employment

s.

tion that "both men environment, regardless

@

and women must have of whether the demand,

91

equality, security and request or requirement for

safety not only in pri submission is accepted by
cx

vate, but also on the the object of said act. (Section

o.

workplaces. (Escandor v. 3, RA 7877)

er

People, G.R. No. 211962,

sp

July 6, 2020)
o

How The crime of gender- The offender demands,

pr

committed based sexual harass- requests or otherwise

ment in the workplace requires any sexual favor:

includes the following:
(a) An act or series (1) As a condition in the

of acts involving any hiring or in the employment,

unwelcome sexual re-employment or continued
advances, requests employment of said indi
or demand for sexual vidual, or in granting said in
favors or any act of dividual favorable compen
sexual nature, whether sation, terms of conditions,
done verbally, physically promotions, or privileges; or
or through the use of the refusal to grant the sexual
technology such as text favor results in limiting, seg
messaging or electronic regating or classifying the
 LABOR STANDARDS 401

Employment of Women

employee which in any would discriminate, deprive

way mail or through or diminish employment
any other forms of infor- opportunities or otherwise
mation and communica- adversely affect said em
tion systems, that has or ployee;
could have a detrimen

tal effect on the condi

tions of an individual's

employment or educa
tion, job performance or
opportunities;

(b) A conduct of (2) The above acts would

ph
sexual nature and other impair the employee's rights
conduct-based on sex or privileges under existing

u.
affecting the dignity labor laws; or

ed
of a person, which is

n.
unwelcome, unreason

ai
able, and offensive to m
the recipient, whether
su
done verbally, physical
ly or through the use of
m

technology such as text

s.

messaging or electronic
@

mail or through any

91

other forms of informa

cx

tion and communication

o.

systems;
er

(c) A conduct that (3) The above acts would

sp

is unwelcome and per result in an intimidating,

vasive and creates an hostile, or offensive environ
o
pr

intimidating, hostile or ment for the employee. (Sec

humiliating environ tion 3[a], RA 7877)
ment for the recipient.
(Section 16, RA 11313)

Committed The crime of gender- The employer, employee,

by whom based sexual harassment manager, supervisor, agent
can be committed of the employer, teacher,
between peers and those instructor, professor, coach,
committed to a superior trainor, or any other person
officer by a subordinate, who has the authority,
or to a teacher by a influence, or moral

student, or to a trainer ascendancy over another.

by a trainee. (Section 16 (Section 3, RA 7877)

(c) RA 11313)
402 LABOR LAW REVIEWER

As to The crime of gender- The offense may be

setting based sexual harassment committed in a work-related
is committed in the environment. (Section 3, RA
workplace. (Section 16, 7877)
RA 11313)

Duties of To prevent, deter, or To prevent or deter the

of acts of
employers punish the performance commission
of acts of gender-based sexual harassment and to
sexual in provide the procedures for
harassment
the workplace. Towards the resolution, settlement or
this end, the employer prosecution of acts of sexual
or person of authority, harassment. Towards this

ph
influence or moral end, the employer or head of
ascendancy shall: office shall:

u.
ed
(a) Disseminate or (a) Promulgate appropri
post in a conspicuous ate rules and regulations

n.
place a copy of this Act prescribing the procedure
to all persons in the
ai
for the investigation of sex
m
workplace; ual harassment cases and
su
the a dministrative sanctions
m

therefor.
s.

(b) Provide measures (b) Create a committee on

@

to prevent gender-based decorum and investigation of

91

sexual harassment in the cases on sexual harassment.

cx

workplace, such as the

conduct of anti-sexual
o.

harassment seminars;
er
sp

(c) Create an inde

pendent internal mecha
o
pr

nism or a committee on

decorum and investiga

tion to investigate and
address complaints of
gender-based sexual ha
rassment. (Section 17, RA
11313)

Employees and CO
workers shall have the
duty to:
(a) Refrain from com
mitting acts of gender
based sexual harass

ment;
 LABOR STANDARDS 403

Employment of Women

(b) Discourage the The employer or head of

conduct of gander-based office, educational or training
sexual harassment in the institution shall be solidarily
workplace; liable for damages arising
from the acts of sexual
(c) Provide emotional
harassment committed in the
or social support to
employment, education or
fellow employees, co
training environment if the
workers, colleagues or
employer or head of office,
peers who are victims educational or training
of gender-based sexual institution is informed of
harassment; and
such acts by the offended
(d) Report acts of party and no immediate

ph
gender-based sexual action is taken. (Section 5, RA

u.
harassment witnessed in 7877)

ed
the workplace. (Section
18, RA 11313)

n.
In addition to liabilities

ai
Liability of
Employers for committing acts of
m
gender-based sexual
su

harassment, employers
m

also be held
may
s.

responsible for:
@

(a) Non-implemen
91

tation of their duties

cx

under Section 17 of this

o.

Act, as provided in the

er

penal provisions; or
sp

(b) Not taking action

o

on reported acts of gen

pr

der-based sexual harass

ment committed in the
workplace. (Section 19,
RA 11313)

Prescriptive Five (5) years (Section 36 Three

7877)
(3) years (Section 7, RA
period [e]), RA 11313)
Penalties The penalty of prision Any person who violates
correccional in its the provisions of this Act
medium period or a shall, upon conviction, be
fine of not less than penalized by imprisonment
One hundred thousand of not less than one (1) month
pesos (P100,000.00) but nor more than six (6) months,
not more than Five or a fine of not less than Ten

hundred thousand pesos thousand pesos (P10,000)

404 LABOR LAW REVIEWER

(P500,000.00), or both, nor more than Twenty thou

at the discretion of the sand pesos (P20,000), or
court shall be imposed both such fine and imprison
upon any person found ment at the discretion of the
guilty of any gender court. (Section 7, RA 7877)
based online sexual
harassment.

If the perpetrator is
a juridical person, its
license or franchise

shall be automatically
deemed revoked, and
the persons liable shall

ph
be the officers thereof,

u.
including the editor or

ed
reporter in the case of
print media, and the

n.
station manager, editor

ai
and broadcaster in the
m
case of broadcast media.
su
An alien who commits
m

gender-based online
s.

sexual harassment
@

shall be subject to
deportation proceedings
91

after serving sentence

cx

and payment of fines.

o.

(Section 14, RA 11313)

er

Any person who

sp

violates subsection (a) of

this section, shall upon
o
pr

conviction, be penalized
with a fine of not less
than Five thousand
pesos (P5,000.00) nor
more than Ten thousand
pesos (P10,000.00).
Any person who
violates subsection (b) of
this section, shall upon
conviction, be penalized
with a fine of not less

than Ten thousand pesos

(P10,000.00) nor more
than Fifteen thousand

pesos (P15,000.00).
(Section 19, RA 11313)
 1

Chapter XIII
EMPLOYMENT OF MINORS

1. Define the following: (a) "Child," (b) "Child labor," and

(c) "Working Child."
(a) "Child" refers to any person under 18 years of
age.

ph
(b) “Child labor" refers to any work or economic

u.
ed
activity performed by a child that subjects him/her to any
form of exploitation or is harmful to his/her health and

n.
safety or physical, mental or psychosocial development.
ai
m
(c) "Working Child" refers to any child engaged as
su

follows:
m
s.

i. when the child is below eighteen (18) years

@

of age, in work or economic activity that is not child

91

labor as defined in the immediately preceding sub

cx

paragraph, and
o.

ii. when the child below fifteen (15) years of

er

age, (i) in work where he/she is directly under the

sp

responsibility of his/her parents or legal guardian and

o

where only members of the child's family are employed;

pr

or (ii) in public entertainment or information. (Section

3, D.O. No. 65-04, Rules and Regulations Implementing
RA 9231, Amending RA 7610, as amended)

2. What are the prohibitions or statutory restrictions on

employment of a child?
The following are the prohibitions:

1. Prohibition as to the age;

2. Prohibition as to worst forms of child labor;

405
406 LABOR LAW REVIEWER

3. Prohibition as to the hours of work; and

4. Prohibition as to on certain
labor appearance
advertisements and mine labor.

3. What is the minimum employable age?

Except as otherwise provided in these Rules, no child

below 15 years of age shall be employed, permitted or
suffered to work, in any public or private establishment.
(Section 4, D.O. No. 65-04, Rules and Regulations Implementing
RA 9231, Amending RA 7610, as amended)

ph
4. What are the worst forms of child Labor?

u.
ed
No child shall be engaged in the worst forms of child

n.
labor. The phrase "worst forms of child labor" shall refer to

ai
any of the following: m
(a) All forms of slavery, as defined under the "Anti
su

trafficking in Persons Act of 2003", or practices similar to

m
s.

slavery such as sale and trafficking of children, debt bondage

@

and serfdom and forced or compulsory labor, including

91

recruitment children for use in armed conflict;

cx

(b) The use, procuring, offering or exposing of a child

o.

for prostitution, for the production of pornography or for

er

pornographic performances;
sp

(c) The use, procuring or offering of a child for illegal

o
pr

or illicit activities, including the production or trafficking

of dangerous drugs or volatile substances prohibited under
existing laws; or

(d) Work which, by its nature or the circumstances in

which it is carried out, is hazardous or likely to be harmful
to the health, safety or morals of children, such that it:

i. Debases, degrades or demeans the intrinsic

worth and dignity of a child as a human being; or

ii. Exposes the child to physical, emotional

or sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; or
 LABOR STANDARDS 407

Employment of Minors

iii. Is performed underground, underwater or at

dangerous heights; or

iv. Involves the use of dangerous machinery,

equipment and tools such as power-driven or explosive
power-actuated tools; or

V. Exposes the child to physical danger such

as, but not limited to the dangerous feats of balancing,
physical strength or contortion, or which requires the
manual transport of heavy loads; or

vi. Is performed in an unhealthy environment

ph
exposing the child to hazardous working conditions,

u.
elements, substances, co-agents or processes involving

ed
ionizing, radiation, fire, flammable substances, noxious

n.
components and the like, or to extreme temperatures,
noise levels or vibrations; or
ai
m
su

vii. Is performed under particularly difficult

m

conditions; or
s.
@

viii. Exposes the child to biological agents such

91

as bacteria, fungi, viruses, protozoa, nematodes and

cx

other parasites; or
o.

ix. Involves the manufacture or handling of

er

explosives and other pyrotechnic products. (Section 5,

sp

D.O. No. 65-04, Rules and Regulations Implementing RA

o

9231, Amending RA 7610, as Amended)

pr

5. What are the hours of work of a working child?

The following hours of work shall be observed for any
child allowed to work under RA 9231 and these Rules:

(a) For a child below 15 years of age, the hours of

work shall not be more than twenty (20) hours a week,
provided that the work shall not be more than four hours at
any given day;
(b) For a child 15 years of age, but below 18, the hours
of work shall not be more than eight hours a day, and in no
case beyond 40 hours a week; and
408 LABOR LAW REVIEWER

(c) No child below 15 years of age shall be allowed to

work between eight o'clock in the evening and six o'clock
in the morning of the following day and no child 15 years
of age but below 18 shall be allowed to work between ten
o'clock in the evening and six o'clock in the morning of the
following day. Sleeping time as well as travel time of a child
engaged in public entertainment or information from his/
her residence to his/her workplace shall not be included
as hours worked without prejudice to the application of
existing rules on employees compensation. (Section 15,
D.O. No. 65-04, Rules and Regulations Implementing RA 9231,

ph
Amending RA 7610, as Amended)

u.
ed
6. What is the prohibition on the employment of children in
certain advertisements and in mine labor?

n.
ai
No child below 18 years of age shall be employed
m
as a model in any advertisement directly or indirectly
su

promoting alcoholic beverages, intoxicating drinks, tobacco

m

and its byproducts, gambling or any form of violence or

s.
@

pornography. (Section 6, D.O. No. 65-04, Rules and Regulations

91

Implementing RA 9231, Amending RA 7610, as Amended)

cx

No person under sixteen (16) years of age shall be

o.

employed in any phase of mining operations and no

er

person under eighteen (18) years of age shall be employed

sp

underground in a mine. (Section 64 RA 7942, known as the

o

Philippine Mining Act of 1995)

pr

7.
What are the exceptions and conditions on employment of
a child below 15 years of age?

The following shall be the only exceptions to the

prohibition on the employment of a child below 15 years of
age:

(a) When the child works under the sole responsibility

of his/her parents or guardian, provided that only members
of the child's family are employed.
(b) When the child's employment or participation in
public entertainment or information is essential, regardless
 LABOR STANDARDS 409

Employment of Minors

of the extent of the child's role. Such employment shall be

strictly under the following conditions:
i. The total number of hours worked shall be in
accordance with Section 15 of these Rules;

ii. The employment does not endanger the

child's life, safety, health and morals, nor impair the
child's normal development;

iii. The child is provided with at least the

mandatory elementary or secondary education; and

ph
iv. The employer secures a work permit for

u.
the child in accordance with Sections 8-12 of these

ed
Rules. (Section 7, D.O. No. 65-04, Rules and Regulations

n.
Implementing RA 9231, Amending RA 7610, as Amended)

ai
m
8. Soledad, a widowed school teacher, takes under her wing
su

one of her students, Kiko, 13 years old, who was abandoned

m

by his parents and has to do odd jobs in order to study.

s.
@

She allows Kiko to live in her house, provides him with

91

clean clothes, food, and a daily allowance of 200 pesos.

In exchange, Kiko does routine housework, consisting of
cx

cleaning the house and doing errands for Soledad. One

o.

day, a representative of the DOLE and the DSWD came to

er
sp

Soledad's house and charged her with violating the law

that prohibits work by minors. Soledad objects and offers
o
pr

as a defense that she was not requiring Kiko to work as

the chores were not hazardous. Further, she did not give
him chores regularly but only intermittently as the need
may arise. Is Soledad's defense meritorious? (2015 BAR Q.
No. V)

No, Soledad's defense is not meritorious.

No child below 15 years of age shall be employed,

permitted or suffered to work, in any public or private
establishment. (Section 4, D.O. No. 65-04, Rules and
Regulations Implementing RA 9231, amending RA 7610)
410 LABOR LAW REVIEWER

The following shall be the only exceptions to the

prohibition on the employment of a child below 15 years of
age:

(a) When the child works under the sole responsibility

of his/her parents or guardian, provided that only members
of the child's family are employed.
(b) When the child's employment or participation in
public entertainment or information is essential, regardless
of the extent of the child's role.

Applying the above provisions of law, since Kiko

ph
is only 13 years old he is not allowed to be employed.

u.
Moreover, the case of Kiko did not fall on the exceptions

ed
where a minor below 15 years old may be employed. Thus,

n.
Soledad violated the law that prohibits the employment of

ai
minors below 15 years old. m
su
9. Iya, 15 years old, signed up to model a clothing brand. She
m

worked from 9am to 4pm on weekdays and 1pm to 6pm

s.

on Saturdays for two (2) weeks. She was issued a child

@

working permit under RA 9231. Which of the following

91

statements is the most accurate?

cx

Working permit for Iya's employment is not

o.

a.
er

required because the job is not hazardous;

sp

b.
Her work period exceeds the required working
o

hours for children aged 15 years old;

pr

C. To require a 15-year old to work without

obtaining the requisite working permit is a form
of child labor;

d. Iya, who was engaged in a work that is not child

labor, is a working child. (2012 BAR Q. No. 14)
d. Iya, who was engaged in a work that is not child
labor, is a working child.

Working Child refers to any child engaged as follows:

i. when the child is below eighteen (18) years of
age, in work or economic activity that is not child labor as
defined in the immediately preceding sub-paragraph, and
 LABOR STANDARDS 411

Employment of Minors

pozicii. when the child below fifteen (15) years of age, (i)
in work where he/she is directly under the responsibility
of his/her parents or legal guardian and where only
members of the child's family are employed; or (ii) in public
entertainment or information. (Section 3[c], D.O. No. 65-04,
Rules and Regulations Implementing RA 9231, Amending RA
7610, as Amended)

10. Discuss the statutory restrictions on the employment of

minors. (2007 BAR Q. No. II[2a])

The following are the statutory restrictions on the

ph
employment of minors:

u.
ed
1. General prohibition - No child below 15 years of
age shall be employed, permitted or suffered to work, in

n.
ai
any public or private establishment. (Section 4, D.O. No. 65
m
04, Rules and Regulations Implementing RA 9231, amending RA
su
7610);
m

2. Prohibition on the Employment of Children in

s.
@

Worst Forms of Child Labor - No child shall be engaged in

the worst forms of child labor. The phrase "worst forms of
91

child labor" shall refer to any of the following:

cx
o.

(a) All forms of slavery, as defined under the

er

"Anti-trafficking in Persons Act of 2003," or practices

sp

similar to slavery such as sale and trafficking of

o

children, debt bondage and serfdom and forced or

pr

compulsory labor, including recruitment children for

use in armed conflict.

(b) The use, procuring, offering or exposing

of a child for prostitution, for the production of
pornography or for pornographic performances;
(c) The use, procuring or offering of a child for
illegal or illicit activities, including the production or
trafficking of dangerous drugs or volatile substances
prohibited under existing laws; or
(d) Work which, by its nature or the
circumstances in which it is carried out, is hazardous
412 LABOR LAW REVIEWER

or likely to be harmful to the health, safety or morals of

children, such that it:

i. Debases, degrades or demeans the

intrinsic worth and dignity of a child as a human
being; or

ii. Exposes the child to physical, emotional

or sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; or
iii. Is performed underground, underwater
or at dangerous heights; or

ph
iv. Involves the use of dangerous

u.
machinery, equipment and tools such as power

ed
driven or explosive power-actuated tools; or

n.
ai
V. Exposes the child to physical danger
m
such as, but not limited to the dangerous feats
su

of balancing, physical strength or contortion, or

m

which requires the manual transport of heavy

s.

loads; or
@
91

vi. Is performed in an unhealthy

cx

environment exposing the child to hazardous

o.

working conditions, elements, substances, co

er

agents or processes involving ionizing, radiation,

sp

fire, flammable substances, noxious components

o

and the like, or to extreme temperatures, noise

pr

levels or vibrations; or

vii. Is performed under particularly difficult

conditions; or

viii. Exposes the child to biological agents

such as bacteria, fungi, viruses, protozoa,
nematodes and other parasites; or
ix. Involves the manufacture or handling
of explosives and other pyrotechnic products.
(Section 5, D.O. No. 65-04, Rules and Regulations
Implementing RA 9231, amending RA 7610)
 LABOR STANDARDS 413

Employment of Minors

3. Prohibition on the Employment of Children in

Certain Advertisements No child below 18 years of age
-

shall be employed as a model in any advertisement directly

or indirectly promoting alcoholic beverages, intoxicating
drinks, tobacco and its byproducts, gambling or any form
of violence or pornography. (Section 6, D.O. No. 65-04, Rules
and Regulations Implementing RA 9231, amending RA 7610)
4. Hours of Work of a Working Child - The following
hours of work shall be observed for any child allowed to
work under RA 9231 and these Rules:

ph
(a) For a child below 15 years of age, the hours

u.
of work shall not be more than twenty (20) hours a

ed
week, provided that the work shall not be more than

n.
four hours at any given day;
ai
m
(b) For a child 15 years of age, but below 18, the
su

hours of work shall not be more than eight hours a day,

m

and in no case beyond 40 hours a week; and

s.
@

(c) No child below 15 years of age shall be

91

allowed to work between eight o'clock in the evening

cx

and six o'clock in the morning of the following day

and no child 15 years of age but below 18 shall be
o.
er

allowed to work between ten o'clock in the evening

sp

and six o'clock in the morning of the following day.

o

Sleeping time as well as travel time of a child engaged

pr

in public entertainment or information from his/her

residence to his/her workplace shall not be included
as hours worked without prejudice to the application
of existing rules on employees compensation. (Section
15, D.O. No. 65-04, Rules and Regulations Implementing
RA 9231, amending RA 7610)

11. In what situation is an employer permitted to employ a

minor?

a. 16-year old child actor as a cast member in soap

N
opera working 8 hours a day, 6 days a eek;
414 LABOR LAW REVIEWER

b. A 17-year old in deep sea-fishing;

C. A 17-year old construction worker;
d. A 17-year old assistant cook in a family
restaurant. (2012 BAR Q. No. 22)

A
a and d.

Working Child refers to any child engaged as follows:

i. when the child is below eighteen (18) years
of age, in work or economic activity that is not child
labor as defined in the immediately preceding sub

ph
paragraph, and

u.
ii. when the child below fifteen (15) years of

ed
age, (i) in work where he/she is directly under the

n.
responsibility of his/her parents or legal guardian and

ai
where only members of the child's family are employed;
m
or (ii) in public entertainment or information. (Section
su

3[c], D.O. No. 65-04, Rules and Regulations Implementing

m

RA 9231, Amending RA 7610, as Amended)

s.
@

12. A sprinter school teacher took pity on one of her pupils, a

91

robust and precocious 12-year old boy whose poor family

cx

could barely afford the cost of his schooling. She lives

o.

alone at her house near the school after her housemaid had
er

left. In the afternoon, she lets the boy do various chores

sp

as cleaning, fetching water and all kinds of errands after

o
pr

school hours. She gives him rice and P100.00 before the
boy goes home at 7:00 every night. The school principal
learned about it and charged her with violating the law
which prohibits the employment of children below 15
years of age. In her defense, the teacher stated that the
work performed by her pupil is not hazardous. Is her
defense tenable? Why? (2012 BAR Q. No. IV[B])
No, the teacher's defense is not meritorious.

No child below 15 years of age shall be employed,

permitted or suffered to work, in any public or private
establishment. (Section 4, D.O. No. 65-04, Rules and
Regulations Implementing RA 9231, amending RA 7610)
 LABOR STANDARDS 415

Employment of Minors

The following shall be the only exceptions to the

prohibition on the employment of a child below 15 years of
age:

(a) When the child works under the sole responsibility

of his/her parents or guardian, provided that only members
of the child's family are employed.
(b) When the child's employment or participation in
public entertainment or information is essential, regardless
of the extent of the child's role.

Applying the above provisions of law, since the pupil

ph
is only 12 years old he is not allowed to be employed.

u.
Moreover, the case of the pupil did not fall on any of the

ed
exceptions where a minor below 15 years old may be

n.
employed. Thus, the teacher violated the law that prohibits
ai
m
the employment of minors below 15 years old.
su

13. Determine whether the following minors should be

m

prohibited from being hired and from performing their

s.
@

respective duties indicated hereunder:

91

1. A 17-year old boy working as miner at the Walwadi

cx

Mining Corporation.
o.

To work as a miner is the "worst form of child

er
sp

labor." This is a type of work which, by its nature or the

circumstances in which it is carried out, is hazardous or likely
o
pr

to be harmful to the health, safety, or morals of children,

such that it: iii. Is performed underground, underwater or
at dangerous heights. (Section 5, D.O. No. 65-04, Rules and
Regulations Implementing RA. 9231, amending RA 7610)
2. An 11-year old boy who is an accomplished singer
and performer in different parts of the country.
This is allowed as an exception to the prohibition on
the employment of a child below 15 years of age: When the
child's employment or participation in public entertainment
or information is essential, regardless of the extent of the
416 LABOR LAW REVIEWER

child's role. (Section 7, D.O. No. 65-04, Rules and Regulations

Implementing RA 9231, Amending RA 7610, as amended)

3. A 15-year old girl working as a library assistant in a

girls' high school.
Working as a library assistant is allowed as this is not
a "worst forms of child labor" or the work is not hazardous
or deleterious. (Article 137 [c]; Section 7, D.O. No. 65-04, Rules
and Regulations Implementing RA 9231, Amending RA 7610,
as amended) Student assistants are working scholars of the
school. (Section 14, Rule X, Book III, Rules to Implement the

ph
Labor Code)

u.
ed
4. A 16-year old girl working as model promoting

n.
alcoholic beverages.

ai
m
No child below 18 years of age shall be employed
su
as a model in any advertisement directly or indirectly
m

promoting alcoholic beverages, intoxicating drinks, tobacco

s.

and its byproducts, gambling or any form of violence or

@

pornography. (Section 6, D.O. No. 65-04, Rules and Regulations

91

Implementing RA 9231, amending RA 7610)

cx
o.

5. A 17-year old boy working as a dealer in a casino.

er

(2006 BAR Q. No. XIV)

sp

To work as a dealer in a casino is the "worst form of

o
pr

child labor." This is a type of work which, by its nature or

the circumstances in which it is carried out, is hazardous
or likely to be harmful to the health, safety, or morals of
children, such that it: vii. Is performed under particularly
difficult conditions.

14. A spinster school teacher took pity on one of the pupils, a

robust and precocious 12-year old boy whose poor family
could barely afford the cost of his schooling. She lives
alone at her house near the school after her housemaid

left. In the afternoon, she lets the boy do various chores

as cleaning, fetching water and all kinds of errands after
school hours. She gives him rice and P30.00 before the
 LABOR STANDARDS 417

Employment of Minors

boy goes home at 7:00 every night. The school principal

learned about it and charged her with violating the law
which prohibits the employment of children below 15
years of age. In her defense, the teacher stated that the
work performed by her pupil is not hazardous, and she
invoked the exception provided in the Department Order
of DOLE for the engagement of persons in domestic and
household service. (2004 BAR Q. No. I[B])

No, the teacher's defense is not meritorious.

No child below 15 years of age shall be employed,

ph
permitted or suffered to work, in any public or private
establishment. (Section 4, D.O. No. 65-04, Rules and

u.
ed
Regulations Implementing RA 9231, amending RA 7610)

n.
The following shall be the only exceptions to the

ai
prohibition on the employment of a child below 15 years of
m
su
age:
m

(a) When the child works under the sole responsibility

s.

of his/her parents or guardian, provided that only members

@

of the child's family are employed.

91

(b) When the child's employment or participation in

cx

public entertainment or information is essential, regardless

o.

of the extent of the child's role.

er
sp

Applying the above provisions of law, since the pupil

o

is only 12 years old he is not allowed to be employed.

pr

Moreover, the case of the pupil did not fall on any of the
exceptions where a minor below 15 years old may be
employed. Thus, the teacher violated the law that prohibits
the employment of minors below 15 years old.

15. You were asked by a paint manufacturing company

regarding the possible employment as a mixer of a person,
aged seventeen (17), who shall be directly under the care
of the section supervisor. What advice would you give?
Explain briefly. (2002 BAR Q. No. XVII[B])
I will advise that to work as mixer in a paint
manufacturing company is one of the "worst forms of child
418 LABOR LAW REVIEWER

labor." This is a type of work which, by its nature or the

circumstances in which it is carried out, is hazardous or
likely to be harmful to the health, safety, or morals of children,
such that it: vi. Is performed in an unhealthy environment
exposing the child to hazardous working conditions,
elements, substances, co-agents or processes involving
h

ionizing, radiation, fire, flammable substances, noxious

components and the like, or to extreme temperatures, noise
levels or vibrations. (Section 12-D[f], RA 9231; Section 5[iv],
D.O. No. 65-04, IRR of RA 9231)

ph
16. What is the prohibition against child discrimination?

u.
No employer shall discriminate against any person in

ed
respect to terms and conditions of employment on account

n.
of his age. (Article 138, Labor Code)

ai
m
17. What is RA 10911, the Anti-Age Discrimination in
su

Employment Act?
m
s.

RA 10911, known as the Anti-Age Discrimination

@

in Employment Act, lapsed into law on July 21, 2016.

91

It provides for the Prohibition of Discrimination in

cx

Employment on Account of Age. Thus:

o.

(a) It shall be unlawful for an employer to:

er
sp

(1) Print or publish, or cause to be printed or

o

published, in any form of media, including the internet,

pr

any notice of advertisement relating to employment

suggesting preferences, limitations, specifications, and
discrimination based on age;

(2) Require the declaration of age or birth date

during the application process;
(3) Decline any employment application
because of the individual's age;

(4) Discriminate against an individual in terms

of compensation, terms and conditions or privileges of
employment on account of such individual's age;
 LABOR STANDARDS 419

Employment of Minors

(5) Deny any employee's or worker's promotion

or opportunity for training because of age;

(6) Forcibly lay off an employee or worker

because of old age; or
(7) Impose early retirement on the basis of such
employee's or worker's age.

(b) It shall be unlawful for a labor contractor or

subcontractor, if any, to refuse to refer for employment or
otherwise discriminate against any individual because of

ph
such person's age.

u.
(c) It shall be unlawful for a labor organization to:

ed
(1) Deny membership to any individual because

n.
of such individual's age;
ai
m
(2) Exclude from its membership any individual
su

because of such individual's age; or

m
s.

(3) Cause or attempt to cause an employer to

@

discriminate against an individual in violation of this

91

Act.
cx

(d) It shall be unlawful for a publisher to print or

o.

publish any notice of advertisement relating to employment

er

suggesting preferences, limitations, specifications, and

sp

discrimination based on age. (Section 5, RA 10911)

o
pr

18. What are the exceptions under RA 10911, the Anti-Age

Discrimination in Employment Act?

The following are the exceptions:

It shall not be unlawful for an employer, to set age

limitations in employment if:

(a) Age is a bona fide occupational qualification

reasonably necessary in the normal operation of a particular
business or where the differentiation is based on reasonable
factors other than age;
420 LABOR LAW REVIEWER

(b) The intent is to observe the terms of a bona fide

seniority system that is not intended to evade the purpose
of this Act;

(c) The intent is to observe the terms of a bona fide

employee retirement or a voluntary early retirement plan
consistent with the purpose of this Act: Provided, That such
retirement or voluntary retirement plan is in accordance
with the Labor Code, as amended, and other related laws;
or

(d) The action is duly certified by the Secretary of

ph
Labor and Employment in accordance with the purpose of

u.
this Act. (Section 6, RA 10911)

ed
n.
19. What is the reportorial requirement for employers

ai
invoking the age qualifications under RA 10911, Anti-Age
m
Discrimination in Employment Act?
su

For purposes of the exceptions the employer who

m
s.

invokes the qualifications shall submit a report prior to

@

its implementation to the DOLE Regional Office having

91

jurisdiction over the workplace. The submission of the

cx

report shall be a presumption that the age limitation is in

o.

accordance with the IRR unless proven otherwise by the

er

court. Failure to submit the report shall give rise to the

sp

presumption that the employer is not allowed to set age

o

limitation. (Section 5, D. O. No. 170, Series of 2017, IRR of RA

pr

10911)

20. What is the penalty for violation of RA 10911?

The penalty for violation of RA 10911, as provided

under Section 7, is a fine of not less than fifty thousand
pesos (P50,000.00) but not more than five hundred thousand
pesos (P500,000.00), or imprisonment of not less than three
(3) months but not more than two (2) years, or both, at the
discretion of the court. If the offense is committed by a
corporation, trust, firm, partnership or association or other
entity, the penalty shall be imposed upon the guilty officer
or officers of such corporation, trust, firm, partnership or
 LABOR STANDARDS 421

Employment of Minors

association or entity, the penalty shall be imposed upon the

guilty officers of such corporation, trust, firm, partnership
or association or entity. (Section 7, RA 10911)

21. At any given time, approximately ninety percent (90%) of

the production workforce of a semi-conductor company are
females. Seventy-five percent (75%) of the female workers
are married and of child-bearing years. It is imperative that
the Company must operate with a minimum number of
absences to meet strict delivery schedules. In view of the
very high number of lost working hours due to absences

ph
for family reasons and maternity leaves, the Company

u.
adopted a policy that will employ married woman as

ed
production workers if they are at least thirty-five (35) year

n.
of age. Is the policy violative of any law? (1998 BAR Q.
No. VII)
ai
m
su
No, the policy did not violate any law.
m

It shall not be unlawful for an employer, to set age

s.
@

limitations in employment if age is a bona fide occupational

qualification reasonably necessary in the normal operation
91

of a particular business or where the differentiation is based

cx

on reasonable factors other than age. (Section 6, RA 10911)

o.
er

Applying the above provision of law, age in this case

sp

is a bona fide occupational qualification. Thus, the policy is

o

not violative of any law.

pr
 Chapter XIV
EMPLOYMENT OF DOMESTIC WORKERS/
KASAMBAHAY

1. Define the following: 1. Domestic work, 2. Domestic

worker or "Kasambahay" and 3. Household.

ph
1. Domestic work refers to work performed in or for

u.
ed
a household or households. (Section 4[d], Article I, RA 10361)

n.
2. Domestic worker or "Kasambahay" refers to any

ai
person engaged in domestic work within an employment
m
relationship such as, but not limited to, the following:
su

general househelp, nursemaid or "yaya," cook, gardener, or

m

laundry person, but shall exclude any person who performs

s.
@

domestic work only occasionally or sporadically and not on

91

an occupational basis. (Section 4[e], Article I, RA 10361)

cx

3. Household refers to the immediate members of

o.

the family or the occupants of the house that are directly

er

provided services by the domestic worker. (Section 4[g],

sp

Article I, RA 10361)
o
pr

2. Who are covered within the definition of Domestic worker

or "Kasambahay" under RA 10361?
Apply to all parties to an employment contract for the
services of the following Kasambahay, whether on a live-in
or live-out arrangement, such as, but not limited to:
(a) General househelp;

(b) Yaya;

(c) Cook;

422
 LABOR STANDARDS 423

Employment of Domestic Workers/Kasambahay

(d) Gardener;

(e) Laundry person; or

(f) Any person who regularly performs domestic
work in one household on an occupational basis. (Section 2,
Rule I, Implementing Rules and Regulations of RA 10361)

3.
Albert, a 40-year old employer, asked his domestic helper,
Inday, to give him a private massage. When Inday refused,
Albert showed her Article 141 of the Labor Code, which
says that one of the duties of a domestic helper is to minister

ph
to the employer's personal comfort and convenience.

u.
ed
Is Inday's refusal tenable? Explain. (2009 BAR Q. No.
VI[a])

n.
Yes, Inday's refusal is tenable.
ai
m
su
Domestic worker or "Kasambahay" refers to any
m

person engaged in domestic work within an employment

s.

relationship such as, but not limited to, the following:

@

general househelp, nursemaid or "yaya," cook, gardener, or

91

laundry person, but shall exclude any person who performs

cx

domestic work only occasionally or sporadically and not

o.

on an occupational basis. (Section 4[d], RA 10361) Domestic

er

work refers to work performed in or for a household or

sp

households. (Section 4[c], RA 1036)

o
pr

The foregoing definition described the nature of work

of a domestic worker or a kasambahay. Private massage is
not among them.

4. Nova Banking Corporation has a rest house and

recreational facility in the highlands of Tagaytay City
for the use of its top executives and corporate clients.
The rest house staff includes a caretaker, two cooks and
a laundrywoman. All of them are reported to the Social
Security System as domestic or household employees
of the rest house and recreational facility and not of the
bank. Can the bank legally consider the caretaker, cooks
424 LABOR LAW REVIEWER

and laundrywoman as domestic employees of the rest

house and not of the bank? (2000 BAR Q. No. IX[a])
No, the bank cannot legally consider the caretaker,
cooks, and laundrywoman as domestic employees of the
rest house.

Domestic worker or "Kasambahay" refers to any

person engaged in domestic work within an employment
relationship such as, but not limited to, the following:
general househelp, nursemaid or "yaya," cook, gardener, or
laundry person, but shall exclude any person who performs

ph
domestic work only occasionally or sporadically and not

u.
on an occupational basis. (Section 4[d], RA 10361) Domestic

ed
work refers to work performed in or for a household or
households. (Section 4[c], RA 10361) Household means the

n.
ai
immediate members of the family or the occupants of the
m
house that are directly provided services by the domestic
su
worker. (Section 4[g], Article I, RA 10361)
m

In this case the caretaker, two cooks, and a

s.

laundrywoman render service to the top executives and

@

corporate clients availing the rest house and recreational

91

facility in the highlands of Tagaytay City and not in or for

cx

a household or households. Applying the law, the work is

o.

not a domestic work. Thus, they not cannot be considered

er

as domestic workers or kasambahay.

osp

What are the specific acts declared "unlawful" under RA

pr

5.

10361?

The following are declared unlawful by RA 10361:

a. Requiring kasambahay to make deposits for loss or
damage (Section 14, RA 10361);
b. Placing the kasambahay under debt bondage
(Section 15, RA 10361);

C. Employment of children below 15 years of age

(Section 16, RA 10361);

d. Charging another household for temporarily

performed tasks (Section 23, RA 10361);
 LABOR STANDARDS 425

Employment of Domestic Workers/Kasambahay

e.
Interference in the disposal of the kasambahay's
wages (Section 27, RA 10361);

f. Withholding of the kasambahay's wages (Section

28, RA 10361)

Who are those not covered by RA 10361?

The following are not covered:

(a) Service providers;

(b) Family drivers;

ph
(c) Children under foster family arrangement; and

u.
ed
(d) Any other person who performs work occasionally

n.
or sporadically and not on an occupational basis. (Section 2,

ai
Rule I, Implementing Rules and Regulations of RA 10361)
m
su
What are the rights and privileges of a domestic worker or
m

kasambahay under RA 10361?

s.
@

The rights and privileges of the Kasambahay are as

91

follows:
cx

(a) Minimum wage;

o.
er

(b) Other mandatory benefits, such as the daily and

sp

weekly rest periods, service incentive leave, and 13th month

o

pay;
pr

(c) Freedom from employers' interference in the

disposal of wages;

(d) Coverage under the SSS, PhilHealth, and Pag

IBIG laws;

(e) Standard of treatment;

(f) Board, lodging, and medical attendance;

(g) Right to privacy;

(h) Access to outside communication;

(i) Access to education and training;

426 LABOR LAW REVIEWER

(j) Right to form, join, or assist labor organization;

(k) Right to be provided a copy of the employment
contract as required under Section 7, Rule II of this IRR;
(1) Right to certificate of employment as required
under Section 6, Rule VII of this IRR;

(m) Right to terminate the employment as provided

under Section 2, Rule VII of this IRR; and

(n) Right to exercise their own religious beliefs and

cultural practices. (Section 1, Rule IV, Implementing Rules and

ph
Regulations of RA 10361)

u.
ed
8. What is the standard of treatment of a domestic worker or

n.
kasambahay under RA 10361?

ai
m
The Kasambahay shall be treated with respect by the
su
employer or any member of the household. He/She shall
m

not be subjected to any kind of abuse, including repeated

s.

verbal or psychological, nor be inflicted with any form

@

of physical violence or harassment or any act tending to

91

degrade his/her dignity, as defined under the Revised

cx

Penal Code, Violence Against Women and their Children

o.

Law (RA 9262), Special Protection of Children Against Child

er

Abuse, Exploitation and Discrimination Act (RA 7610) as

sp

amended by RA 9231, Anti-Trafficking in Persons Act of

o

2003 (RA 9208), and other applicable laws. (Section 12, Rule
pr

IV, Implementing Rules and Regulations of RA 10361)

9. What board, lodging, and medical attendance of

kasambahay are included under RA 10361?
The employer shall provide for the basic necessities of
the Kasambahay, to include the following:

(a) At least three (3) adequate meals a day, taking

into consideration the Kasambahay's religious beliefs and
cultural practices;

(b) Humane sleeping condition that respects the

person's privacy for live-in arrangement; and
 LABOR STANDARDS 427

Employment of Domestic Workers/Kasambahay

(c) Appropriate rest and medical assistance in the

form of first-aid medicines, in case of illnesses and injuries
sustained during service without loss of benefits.

For the Kasambahay under live-out arrangement, he/

she shall be provided space for rest and access to sanitary
facility.

At no instance shall the employer withdraw or

hold in abeyance the provision of these basic necessities
as punishment to, or disciplinary action against the
Kasambahay. (Section 13, Rule IV, Implementing Rules and

ph
Regulations of RA 10361)

u.
ed
10. What is the guarantee of privacy of a domestic worker or

n.
kasambahay under RA 10361?

ai
Respect for the privacy of the domestic worker shall
m
be guaranteed at all times and shall extend to all forms
su

of communication and personal effects. This guarantee

m

equally recognizes that the domestic worker is obliged to

s.
@

render satisfactory service at all times. (Section 8, Article II,

RA 10361)
91
cx

11. What is the right to access to outside communication of a

o.

domestic worker or kasambahay under RA 10361?

er
sp

During free time, the Kasambahay shall be granted

o

access to outside communication. In case of emergency,

pr

access to communication shall be granted even during work

time. Should the Kasambahay use the employer's telephone
or other communication facilities, the costs shall be borne

by the Kasambahay, unless waived by the employer. (Section

15, Rule IV, Implementing Rules and Regulations of RA 10361)

12. What is the right to education and training of a domestic

worker or kasambahay under RA 10361?

The employer shall afford the domestic worker the

opportunity to finish basic education and may allow access
to alternative learning systems and, as far as practicable,
higher education or technical and vocational training. The
428 LABOR LAW REVIEWER

employer shall adjust the work schedule of the domestic

worker to allow such access to education or training without
hampering the services required by the employer. (Section 9,
Article II, RA 10361)

13. What is the rule on the prohibition against privileged

information? State the exceptions, if any.

All communication and information pertaining

to the employer or members of the household shall be
treated as privileged and confidential, and shall not be

ph
publicly disclosed by the domestic worker during and

u.
after employment. Such privileged information shall be

ed
inadmissible in evidence except when the suit involves

n.
the employer or any member of the household in a crime
ai
against persons, property, personal liberty and security, and
m
chastity. (Section 10, Article II, RA 10361)
su
m

14. What are the rights and privileges of the employer under
s.
@

RA 10361?
91

The employer enjoys the following rights:

cx

(a) To require submission of pre-employment

o.
er

documents by the Kasambahay (Section 4, Rule II of this IRR);

sp

(b) To recover deployment expenses (Section 3, Rule II

o
pr

of this IRR);

(c) To demand replacement (Section 4, Rule III of this

IRR); and

(d) To terminate employment (Section 3, Rule VII ofthis

IRR). (Section 1, Rule V, Implementing Rules and Regulations of
RA 10361)

15. What is the daily rest period of a domestic worker or

kasambahay under RA 10361?
The domestic worker shall be entitled to an aggregate
daily rest period of eight (8) hours per day. (Section 20,
Article IV, RA 10361)
 LABOR STANDARDS 429

Employment of Domestic Workers/Kasambahay

16. What is the weekly rest period of a domestic worker or

kasambahay under RA 10361?

The domestic worker shall be entitled to at least

twenty-four (24) consecutive hours of rest in a week. The
employer and the domestic worker shall agree in writing on
the schedule of the weekly rest day of the domestic worker:
Provided, That the employer shall respect the preference of
the domestic worker as to the weekly rest day when such
preference is based on religious grounds.

ph
17. What are the stipulations that a domestic worker and
employer are allowed to agree on under RA 10361?

u.
ed
Nothing in this provision shall deprive the domestic

n.
worker and the employer from agreeing to the following:

ai
(a)
m
Offsetting a day of absence with a particular rest
su
day;
m

(b) Waiving a particular rest day in return for an

s.

equivalent daily rate of pay;

@
91

(c) Accumulating rest days not exceeding five (5)

days; or
cx
o.

(d) Other similar arrangements. (Section 21, Article IV,

er

RA 10361)
o sp

18. What is the rule on assignment to non-household work of

pr

a domestic worker or kasambahay under RA 10361?

No domestic worker shall be assigned to work in

a commercial, industrial or agricultural enterprise at a
wage rate lower than that provided for agricultural or
nonagricultural workers. In such cases, the domestic worker
shall be paid the applicable minimum wage. (Section 22,
Article IV, RA 10361)

19. What are the conditions for temporary task of a domestic

worker or kasambahay under RA 10361?

The Kasambahay and the employer may mutually

agree for the Kasambahay to temporarily perform a task
430 LABOR LAW REVIEWER

for the benefit of another household under the following

conditions:

(a) There is an agreement between the Kasambahay

and the employer for the purpose, particularly on the task/s
to be performed;
(b) The Kasambahay is entitled to additional payment
of not less than the applicable minimum wage rate;

(c) The original employer shall be responsible for

any liability incurred by the Kasambahay on account of such
arrangement; and

ph
(d) The original employer is not charging any amount

u.
from the other household for the arrangement.

ed
n.
The temporary performance of work shall not exceed

ai
thirty (30) days per assignment.
m
The other household where the Kasambahay is
su

temporarily assigned is solidarily liable with the original

m

employer for any nonpayment of wages during such

s.
@

temporary assignment.
91

It shall be unlawful for the original employer to charge

cx

any amount from the said household where the service of

o.

the Kasambahay was temporarily performed. (Section 11,

er

Rule V, Implementing Rules and Regulations of RA 10361)

osp

20. What is the mode of payment of wages of a domestic

pr

worker or a kasambahay under RA 10361?

The wages of a Kasambahay shall be paid in cash.

No payment by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other than cash
shall be allowed. (Section 3, Rule IV, Implementing Rules and
Regulations of RA 10361)

21. What is the frequency of payment of wages of a domestic

worker or a kasambahay under RA 10361?
The wages of a Kasambahay shall be paid at least once a
month. (Section 4, Rule IV, Implementing Rules and Regulations
of RA 10361)
 LABOR STANDARDS 431

Employment of Domestic Workers/Kasambahay

22. When is a domestic worker or a kasambahay entitled to

leave benefits under RA 10361?

A domestic worker who has rendered at least one

(1) year of service shall be entitled to an annual service
incentive leave of five (5) days with pay: Provided, That any
unused portion of said annual leave shall not be cumulative
or carried over to the succeeding years. Unused leaves shall
not be convertible to cash. (Section 29, Article IV, RA 10361)

23. What are the social and other benefits of a domestic worker

ph
or a kasambahay under RA 10361?

u.
A domestic worker who has rendered at least one (1)

ed
month of service shall be covered by the Social Security

n.
System (SSS), the Philippine Health Insurance Corporation
ai
m
(PhilHealth), and the Home Development Mutual Fund
su
or Pag-IBIG, and shall be entitled to all the benefits in
m

accordance with the pertinent provisions provided by law.

s.

Premium payments or contributions shall be

@

shouldered by the employer. However, if the domestic

91

worker is receiving a wage of Five thousand pesos

cx

(P5,000.00) and above per month, the domestic worker shall

o.

pay the proportionate share in the premium payments or

er

contributions, as provided by law.

osp

The domestic worker shall be entitled to all other

pr

benefits under existing laws. (Section 30, Article IV, RA 10361)

In effect, the requirement that the domestic helpers

monthly income shall not be less than P1,000.00 a month to
be covered by the SSS under Section 9 of RA 8282 has been
amended by the Kasambahay Law.

24. When is a domestic worker or a kasambahay entitled to

13th month pay under RA 10361?

The Kasambahay who has rendered at least one (1)

month of service is entitled to a thirteenth-month pay which
shall not be less than one-twelfth (1/12) of his/her total
 LABOR LAW REVIEWER

basic salary earned in a calendar year. The thirteenth-month

pay shall be paid not later than December 24 of every year
or upon separation from employment. (Section 8, Rule IV,
Implementing Rules and Regulations of RA 10361)

25. What is the rule on termination of service of a domestic

worker or a kasambahay under RA 10361?

Neither the domestic worker nor the employer may

terminate the contract before the expiration of the term,
except for grounds provided for in Sections 33 and 34 of

ph
this Act. If the domestic worker is unjustly dismissed, the

u.
domestic worker shall be paid the compensation already

ed
earned plus the equivalent of fifteen (15) days work by
way of indemnity. If the domestic worker leaves without

n.
ai
justifiable reason, any unpaid salary due not exceeding
m
the equivalent fifteen (15) days work shall be forfeited.
su

In addition, the employer may recover from the domestic

m

worker costs incurred related to the deployment expenses,

s.

if any: Provided, That the service has been terminated within

@

six (6) months from the domestic worker's employment.

91

(Section 32, Article V, RA 10361)

cx
o.

26. What are the rules on pre-termination of service of a

er

domestic worker or kasambahay under RA 10361?

o sp

The rules on pre-termination of employment are as

pr

follows:

(a) In case the duration of employment is specified

in the contract, the Kasambahay and the employer may
mutually agree upon notice to terminate the contract of
employment before the expiration of its term.
(b) In case the duration is not determined by
stipulation or by nature of service, the employer or the
Kasambahay may give notice to end the employment
relationship five (5) days before the intended termination
of employment. (Section 1, Rule VII, Implementing Rules and
Regulations of RA 10361)
 LABOR STANDARDS 433

Employment of Domestic Workers/Kasambahay

27. What are the grounds for termination initiated by the

domestic worker under RA 10361?

The domestic worker may terminate the employment

relationship at any time before the expiration of the contract
for any of the following causes:

(a) Verbal or emotional abuse of the domestic worker

by the employer or any member of the household;

(b) Inhuman treatment including physical abuse of

the domestic worker by the employer or any member of the

ph
household;

u.
(c) Commission of a crime or offense against the

ed
domestic worker by the employer or any member of the

n.
household;

ai
m
(d) Violation by the employer of the terms and
su

conditions of the employment contract and other standards

m

set forth under this law;

s.
@

(e) Any disease prejudicial to the health of the

91

domestic worker, the employer, or member/s of the

cx

household; and
o.

(f) Other causes analogous to the foregoing. (Section

er

33, Article V, RA 10361)

o sp

28. What are the effects if a domestic worker or a kasambahay

pr

leaves without cause under RA 10361?

If the Kasambahay leaves without cause, any unpaid

salary due, not exceeding the equivalent of fifteen (15)
days work, shall be forfeited. In addition, the employer
may recover from the Kasambahay deployment expenses,
if
any, if the services have been terminated within six (6)
months from employment. (Last paragraph, Section 2, Rule
VII, Implementing Rules and Regulations of RA 10361)
434 LABOR LAW REVIEWER

29. What are the grounds for termination initiated by the

employer under RA 10361?

An employer may terminate the services of the

domestic worker at any time before the expiration of the
contract, for any of the following causes:

(a) Misconduct or willful disobedience by the

domestic worker of the lawful order of the employer in
connection with the former's work;

(b) Gross or habitual neglect or inefficiency by the

domestic worker in the performance of duties;

ph
u.
(c) Fraud or willful breach of the trust reposed by the

ed
employer on the domestic worker;

n.
(d) Commission of a crime or offense by the domestic
ai
m
worker against the person of the employer or any immediate
su
member of the employer's family;
m

(e) Violation by the domestic worker of the terms and

s.

conditions of the employment contract and other standards

@

set forth under this law;

91
cx

(f) Any disease prejudicial to the health of the

o.

domestic worker, the employer, or member/s of the

er

household; and
sp

(g) Other causes analogous to the foregoing. (Section

o
pr

34, Article V, RA 10361)

30. What is the effect if the employer dismissed the domestic

worker or kasambahay without cause?

If the employer dismissed the Kasambahay for reasons

other than the above, he/she shall pay the Kasambahay
the earned compensation plus indemnity in the amount
equivalent to fifteen (15) days work. (Last paragraph, Section
3, Rule VII, Implementing Rules and Regulations of RA 10361)
 LABOR STANDARDS 435

Employment of Domestic Workers/Kasambahay

31. What is the invalid ground for termination under RA

10361?

Pregnancy and marriage of the Kasambahay are not

valid grounds for termination of employment. (Section 4,
Rule VII, Implementing Rules and Regulations of RA 10361)

32. Who has the jurisdiction over the settlement of disputes

involving a domestic worker or kasambahay under RA
10361?

All labor-related disputes shall be elevated to the DOLE

ph
Regional Office having jurisdiction over the workplace
without prejudice to the filing of a civil or criminal action in

u.
appropriate cases. The DOLE Regional Office shall exhaust

ed
all conciliation and mediation efforts before a decision shall

n.
be rendered.

ai
m
Ordinary crimes or offenses committed under the
su

Revised Penal Code and other special penal laws by either

m

party shall be filed with the regular courts. (Section 37,

s.

Article VII, RA 10361)

@
91

33. Discuss the mechanism for settlement of disputes

cx

involving a domestic worker or kasambahay under RA

o.

10361.
er
sp

1. All labor-related disputes shall be filed before the

o

DOLE Field/Provincial/Regional Office having jurisdiction

pr

over the workplace and shall go through the thirty-day

(30) mandatory conciliation under the DOLE Single Entry
Approach (SEnA) program to exhaust all efforts for the
settlement of the dispute. (Section 1, Rule XI, Implementing
Rules and Regulations of RA 10361)
2. In case the parties fail to reach a settlement, a
mandatory conference not exceeding thirty (30) days shall
be conducted by the DOLE Field/Provincial Regional Office
from referral of the unsettled dispute. The DOLE-Regional
Director shall issue a Compliance Order within ten (10)
days from the submission of the case for resolution. (Section
2, Rule XI, Implementing Rules and Regulations of RA 10361)
436 LABOR LAW REVIEWER

3. Any aggrieved party may file a motion for

reconsideration from the Compliance Order within ten (10)
days from receipt thereof. (Section 3, Rule XI, Implementing
Rules and Regulations of RA 10361)
4. The Resolution on the Motion for Reconsideration

of the DOLE-Regional Director may be appealed to the

Secretary of Labor and Employment within ten (10) days
from receipt thereof. Thereafter, the Order of the Secretary
of Labor and Employment shall be final and executory.
(Section 4, Rule XI, Implementing Rules and Regulations of RA
10361)

ph
u.
34. Your favorite relative, Tita Nilda, approaches you and

ed
seeks your advice on her treatment of her kasambahay,

n.
Noray. Tita Nilda shows you a document called a "Contract

ai
of Engagement" for your review. Under the Contract of
m
Engagement, Noray shall be entitled to a rest day every
su

week, provided that she may be requested to work on a

m

rest day if Tita Nilda should need her services that day.
s.

Tita Nilda also claims that this Contract of Engagement

@

should embody all terms and conditions of Noray's work

91

as the engagement of a kasambahay is a private matter

cx

and should not be regulated by the State.

o.
er

Are stay-in family drivers included under the Kasambahay

sp

Law? (2018 BAR Q. No. XI[c])

o

No, the stay-in family drivers are not included in the

pr

definition of Domestic Worker or Kasambahay under the

Kasambahay Law.

The following are not covered in the definition of

Domestic worker or Kasambahay:
(a) Service providers;

(b) Family drivers;

(c) Children under foster family arrangement; and

(d) Any other person who performs work occasionally
or sporadically and not on an occupational basis. (Section 2,
Rule I, Implementing Rules and Regulations of RA 10361)
 LABOR STANDARDS 437

Employment of Domestic Workers/Kasambahay

35. The weekly work schedule of a driver is as follows:

Monday, Wednesday, Friday drive the family car to
-

bring and fetch the children to and from school. Tuesday,

Thursday, Saturday drive the family van to fetch
-

merchandise from suppliers and deliver the same to a

boutique in a mall owned by the family.
Is the driver a house helper? (2012 BAR Q. No. V[a])

No, the family driver is not a house helper.

The following are not covered in the definition of

Domestic worker or Kasambahay:

ph
(a) Service providers;

u.
ed
(b) Family drivers;

n.
(c) Children under foster family arrangement; and

ai
m
(d) Any other person who performs work occasionally
su

or sporadically and not on an occupational basis. (Section 2,

m

Rule I, Implementing Rules and Regulations of RA 10361)

s.
@

The same driver claims that for work performed on

91

Tuesday, Thursday and Saturday, he should be paid

the minimum daily wage of a driver of a commercial
cx

establishment. Is the claim of the driver valid? (2012 BAR

o.

Q. No. V[b])
er
sp

Yes, the claim of the driver is valid. This is because

o

he is not covered in the definition of Domestic Worker or

pr

Kasambahay under the Kasambahay Law.

36. The weekly work schedule of a driver is as follows:

Monday, Wednesday, Friday Drive the family car to
bring and fetch the children to and from school.
Tuesday, Thursday, Saturday Drive the family van to
-

fetch merchandise from suppliers and deliver the same to

a boutique in a mall owned by the family. Is the driver a
househelper? (1998 BAR Q. No. IX)
No, the family driver is not included under the
Kasambahay Law.
 438 LABOR LAW REVIEWER

The following are not covered in the definition of

Domestic worker or Kasambahay:
(a) Service providers;
(b) Family drivers;
1

(c) Children under foster family arrangement; and

(d) Any other person who performs work occasionally
or sporadically and not on an occupational basis. (Section 2,
Rule I, Implementing Rules and Regulations of RA 10361)

The same driver claims that for work performed on

ph
Tuesday, Thursday and Saturday, he should be paid

u.
the minimum daily wage of a driver of a commercial

ed
establishment. Is the claim of the driver valid? (1998 BAR

n.
Q. No. IX)

ai
m
Yes, the claim of the driver is valid. This is because
su

he is not covered in the definition of Domestic Worker or

m

Kasambahay under the Kasambahay Law.

s.
@

37. Your favorite relative, Tita Nilda, approaches you and

91

seeks your advice on her treatment of her kasambahay,

cx

Noray. Tita Nilda shows you a document called a "Contract

o.

of Engagement" for your review. Under the Contract of

er

Engagement, Noray shall be entitled to a rest day every

sp

week, provided that she may be requested to work on a

o
pr

rest day if Tita Nilda should need her services that day.
Tita Nilda also claims that this Contract of Engagement
should embody all terms and conditions of Noray's work
as the engagement of a kasambahay is a private matter
ols and should not be regulated by the State.

Is the stipulation that she may be requested to work on a

rest day legal? (2018 BAR Q. No. XI[b])

Yes, the stipulation that Noray may be requested to

work on a rest day is legal.

Nothing in this provision shall deprive the domestic

worker and the employer from agreeing to the following:
 LABOR STANDARDS 439

Employment of Domestic Workers/Kasambahay

(a) Offsetting a day of absence with a particular rest

day;

(b) Waiving a particular rest day in return for an

equivalent daily rate of pay;
(c) Accumulating rest days not exceeding five (5)
days; or
(d) Other similar arrangements. (Section 21, Article IV,
RA 10361)

The stipulation is, therefore, legal.

ph
38. Under the Labor Code, its provisions on working

u.
conditions, including the eight-hour work day rule, do

ed
not apply to domestic helpers. Does it follow from this

n.
that a domestic helper's workday is not limited by law?

ai
m
(A) No, since a domestic helper cannot be required
su
to work more than ten hours a day.
m

(B) Yes, since a domestic helper's hours of work

s.

depend on the need of the household he or she

@

works for.
91

(C) No, because a domestic helper is legally entitled

cx

to overtime pay after ten hours of work.

o.
er

(D) Yes, a domestic helper may be required to work

sp

twelve hours a day or beyond. (2011 BAR Q. No.

11)
o
pr

(A) No, since a domestic helper cannot be required to

work more than ten hours a day.

The Kasambahay Law requires that a domestic worker

shall be entitled to an aggregate daily rest period of eight
(8) hours per day and at least twenty-four (24) consecutive
hours of rest in a week. (Sections 20 and 21, Article IV, RA
10361)

39. May a househelp be assigned to non-household work?

(2007 BAR Q. No. II[b])

Yes, a househelp can be assigned to non-household

work.
440 LABOR LAW REVIEWER

The law provides that no domestic worker shall be

assigned to work in a commercial, industrial or agricultural
enterprise at a wage rate lower than that provided for
agricultural or nonagricultural workers. In such cases, the
domestic worker shall be paid the applicable minimum
wage. (Section 22, Article IV, RA 10361)

40. Mrs. B, the personal cook in the household of X, filed a

monetary claim against her employer, X, for denying
her service incentive leave pay. X argued that Mrs. B did
not avail of any service incentive leave at the end of her

ph
one (1) year of service and hence, not entitled to the said

u.
monetary claim.

ed
Is the contention of X tenable? Explain. (2019 Part I BAR

n.
ai
Q. No. A.4[a])
m
Yes, X's contention is tenable.
su
m

A domestic worker or a kasambahay is engaged in

s.

domestic work. On the other hand, domestic work refers

@

to work performed in or for a household or households.

91

(Section 4[c], RA 10361) As clearly stated in the facts, Mrs. B

cx

is the personal cook in the household of X. Thus, Mrs. B is a

o.

domestic worker or a kasambahay.

er

As to Mrs. B's claim for service incentive leave, the

sp

applicable law is the Kasambahay Law and not the Labor

o
pr

Code. The Kasambahay Law (RA 10361) provides that a

domestic worker who has rendered at least one (1) year of
service shall be entitled to an annual service incentive leave
of five (5) days with pay: Provided, that any unused portion
of said annual leave shall not be cumulative or carried
over to the succeeding years. Unused leaves shall not be
convertible to cash. (Section 29, Article IV, RA 10361)

Applying the above provision of law, Mrs. B's unused

leaves shall not be comulative and convertible to cash.
 LABOR STANDARDS 441

Employment of Domestic Workers/Kasambahay

Assuming that Mrs. B is instead a clerk in X's company

with at least 30 regular employees, will her monetary
claim prosper? Explain. (2019 Part I BAR Q. No. A.4[b])

Yes, Mrs. B's monetary claim will prosper.

The Rules to Implement the Labor Code are very clear
that the service incentive leave shall be commutable to its

money equivalent if not used or exhausted at the end of

the year. This is the distinction with respect to the service
incentive leave (SIL) of a domestic worker or a kasambahay
under RA 10361. Moreover, the establishment is not

ph
excluded from paying the SIL as it was regularly employing

u.
more than nine (9) employees.

ed
n.
41. Which of the following statements is the most accurate?

ai
m of at
a. Domestic helpers with monthly inco
su

least P3,000.00 are compulsory members of the

m

SSS Law;
s.
@

b. House helpers with monthly income of at least

91

P2,000.00 are compulsory members of the SSS

cx

Law;
o.

C. Domestic helpers, 55 years of age and who

er

worked for at least five (5) years, are covered

sp

by the Retirement Pay Law under optional

o
pr

retirement, in the absence of a CBA;

d. Domestic helpers in the personal service of

another are not entitled to 13th month pay. (2012
BAR Q. No. 64)

Under the current law, none of them is most accurate.

42. Is it correct to say that under Philippine law a househelper

has no right to security of tenure?
(A) No, since a househelper can be dismissed only
for just cause or when his agreed period of
employment ends.
442 LABOR LAW REVIEWER

(B) Yes, since it is the employer who determines the

period of his service.

(C) Yes, since a househelper can be dismissed with

or without just cause.

(D) No, since a househelper can be dismissed

only for just cause, except when he has been
employed for a definite period not exceeding
one year. (2011 BAR Q. No. 20)

(A) No, since a househelper can be dismissed only for

just cause or when his agreed period of employment ends

ph
Neither the domestic worker nor the employer may

u.
ed
terminate the contract before the expiration of the term,
except for grounds provided for in Sections 33 and 34 of

n.
this Act. (Section 32, RA 10361)
ai
m
su
43. In the case of a househelper, reinstatement is not a statutory
m

relief for unjust dismissal because of the confidentiality

s.

of his or her job. Instead, the househelper shall be paid:

@

(A) an indemnity equivalent to 15 days' pay plus

91

compensation already earned.

cx
o.

(B) a separation pay equivalent to one month's pay

er

per year of service.

sp

(C) a separation pay equivalent to one-half month's

o
pr

pay per year of service.

(D) 15 days' pay as indemnity plus wages lost from
dismissal to finality of decision. (2011 BAR Q.
No. 23)

A) an indemnity equivalent to 15 days' pay plus

compensation already earned.
If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the compensation already
earned plus the equivalent of fifteen (15) days work by way
of indemnity. (Section 32, RA 10361)
 Chapter XV
EMPLOYMENT OF HOMEWORKERS

1. Define the following: (a) "Industrial Homework," (b)

"Industrial Homeworker," and (c) "Home."

(a) "Industrial Homework" is a system of production

ph
under which work for an employer or contractor is carried

u.
out by a homework at his/her home. Materials may or may

ed
not be furnished by the employer or contractor. It differs

n.
from regular factory production principally in that, it is a
ai
m
decentralized form of production where there is ordinarily
su
very little supervision or regulation of methods of work.
m

(b) "Industrial Homeworker" means a worker who is

s.

engaged in industrial homework.

@
91

(c) "Home" means any room, house, apartment

cx

or other premises used regularly, in whole or in part, as

dwelling place, except those situated within the premises or
o.
er

compound of an employer, contractor or subcontractor and

sp

the work performed therein is under the active or personal

o

supervision by or for the latter. (Section 2, Rule XIV, Book II,

pr

Rules to Implement the Labor Code)

2. What are the rules on deductions involving homeworkers?

No employer, contractor, or subcontractor shall make

any deduction from the homeworker's earnings for the
value of materials which have been lost, destroyed, soiled
or otherwise damaged unless the following conditions are
met:

(a) the homeworker concerned is clearly shown to be

responsible for the loss or damage;

443
444 LABOR LAW REVIEWER

(b) the homeworker is given reasonable opportunity

to show cause why deductions should not be made;
(c) the amount of such deduction is fair and
reasonable and shall not exceed the actual loss or damage;
and

(d) the deduction is made at such rate that the amount

deducted does not exceed 20% of the homeworker's earnings
in a week. (Section 8, Rule XIV, Book II, Rules to Implement the
Labor Code)

ph
3. What is the enforcement power involving homeworkers?

u.
The Regional Director shall have the power to order

ed
and administer compliance with the provisions of the

n.
law and regulations affecting the terms and conditions of

ai
employment of homeworkers and shall have the jurisdiction
m
in cases involving violations of this Rule.
su
m

Complaints for violations of labor standards and the

s.

terms and conditions of employment involving money

@

claims of homeworkers in an amount of not more than

91

P5,000 per homeworker shall be heard and decided by the

cx

Regional Director. He shall have the power to order and

administer, after due notice and hearing, compliance with
o.
er

the provisions of this Rule.

sp

In cases where the findings of the Regional Office show

o

that the money claims due a homeworker exceed P5,000,

pr

the same shall be endorsed to the appropriate Regional

Arbitration Branch of the National Labor Relations
Commission.

Non-compliance with the order issued by the Regional

Director can be the subject of prosecution in accordance
with the penal provisions of the Labor Code.

In cases of disagreement between the homeworker

and the employer, contractor, or subcontractor on a matter
falling under this Rule, either party may refer the case to the
Regional Office having jurisdiction over the workplace of
the homeworker. The Regional Office shall decide the case
 LABOR STANDARDS 445

Employment of Homeworkers

within ten (10) working days from receipt of the case. Its
decision shall be final and executory. (Section 10, Rule XIV,
Book II, Rules to Implement the Labor Code)

4. What is the rule on employment of minor as homeworkers?

The provisions governing the employment of minors.
under this Code as well as the provisions on working
children under the Child and Youth Welfare Code shall
govern the employment of minors as homeworkers. (Section
12, Rule XIV, Book II, Rules to Implement the Labor Code) The
provisions of RA 7610 as amended by 7658 and 9231 and

ph
D.O. No. 65-04 (the IRR of RA 9231) are likewise applicable.

u.
ed
5. What are the prohibitions for homework?

n.
ai
No homework shall be performed on the following: (1)
m
explosives, fireworks and articles of like character; (2) drugs
su

and poisons; and (3) other articles, the processing of which

m

requires exposure to toxic substances. (Section 13, Rule XIV,

s.

Book II, Rules to Implement the Labor Code)

@
91

6. Are there differences between a househelper and a

cx

homeworker? Explain your answer. (2017 BAR Q. No.

o.

V[C])
er

Yes, there are differences between a househelper and a

sp

homeworker.
o
pr

Domestic worker or "Kasambahay" refers to any

person engaged in domestic work within an employment
relationship such as, but not limited to, the following:
general househelp, nursemaid or "yaya", cook, gardener, or
laundry person, but shall exclude any person who performs
domestic work only occasionally or sporadically and not on
an occupational basis. (Section 4[d], RA 10361)
On the other hand, a homeworker or industrial
homeworker is a worker who is engaged in industrial
homework. (Section 2 [b], Rule XIV, Book III, Rules to Implement
the Labor Code) An industrial homework is a system of
production under which work for an employer or contractor
 446 LABOR LAW REVIEWER

is carried out by a homework at his/her home. Materials

may or may not be furnished by the employer or contractor.
It differs from regular factory production principally in
that, it is a decentralized form of production where there is
ordinarily very little supervision or regulation of methods
of work. (Section 2[a], Rule XIV, Book III, Rules to Implement
the Labor Code)

7. Mrs. Josie Juan is the confidential secretary of the

Chairman of the Board of the bank. She is presently on
maternity leave. In an arrangement where the Chairman

ph
of the Board can still have access to her services, the bank

u.
allows her to work in her residence during her leave.

ed
For this purpose, the bank installed a fax machine in her

n.
residence, and gave her a cellphone and a beeper. Is Mrs.

ai
Juan a homeworker under the law? Explain. (2000 BAR Q.
m
No. IX[b])
su
m

No, Mrs. Juan is not a homeworker under the law.

s.

A homeworker or "industrial homeworker" means a

@

worker who is engaged in industrial homework. (Section

91

2[b], Rule XIV, Book III, Rules to Implement the Labor Code)
cx

On the other hand, an industrial homework is a system of

o.

production under which work for an employer or contractor

er

is carried out by a homework at his/her home. Materials

sp

may or may not be furnished by the employer or contractor.

o
pr

It differs from regular factory production principally in

that, it is a decentralized form of production where there is
ordinarily very little supervision or regulation of methods
of work. (Section 2[a], Rule XIV, Book III, Rules to Implement
the Labor Code)

Applying the rules, Mrs. Juan although working at her

home is not engaged in industrial homework. Thus, she is
not a homeworker.

8.
What is RA 11165, known as the "Telecommuting Act"?
This is the law that provides for a "work arrangement
which allows an employee in the private sector to work from
 447
LABOR STANDARDS
Employment of Homeworkers

an alternative workplace with the use of telecommunication

and/or computer technologies." The alternative workplace
refers to a location other than the regular.

9. How did RA 11165, known as the "Telecommuting Act"

define the following:
( (

a) Alternative workplace
b
)

Telecommuting

(c) Telecommuting agreement

(d) Telecommuting employee

ph
u.
(e) Telecommuting program

ed
As used in this Rule, the following terms shall mean:

n.
ai
(a) Alternative workplace refers to a location other than
m
the regular workplace;
su

(b) Telecommuting refers to a work arrangement that

m

allows an employee in the private sector to work from an

s.
@

alternative workplace with the use of telecommunication

91

and/or computer technologies;

cx

(c) Telecommuting agreement refers to the mutual

o.

consent of the employer and the employee in the

er

implementation of a telecommuting work arrangement

sp

based on the telecommuting program of the company,

o

Collective Bargaining Agreement (CBA), if any, and other

pr

company rules and regulations;

(d) Telecommuting employee refers to a person who is
on a telecommuting work arrangement; and
(e) Telecommuting program refers to a set of guidelines
and rules governing the implementation of a telecommuting
work arrangement. (Section 2, IRR of RA 11165)

10. What is telecommuting program under RA 11165?

An employer in the private sector may offer a

telecommuting program to its employees on a voluntary
basis or as a result of collective bargaining, if any, and upon
448 LABOR LAW REVIEWER

such terms and conditions as they may mutually agree

upon: Provided, That such terms and conditions shall not
be less than the minimum labor standards set by law, and
shall include compensable work hours, minimum number
of work hours, overtime, rest days, entitlement to leave
benefits, social welfare benefits, and security of tenure. In
all cases, the employer shall provide the telecommuting
employee with relevant written information in order to
adequately apprise the individual employee of the terms
and conditions of the telecommuting program, including the
duration of the program, rights, duties, and responsibilities

ph
of the employee. (Section 3, IRR of RA 11165)

u.
ed
11. What are the stipulations that should be included in the

n.
telecommuting program under RA 11165?

ai
To effectively implement the telecommuting program,
m
su
the employer and employees shall adhere to and be guided
m

by the mutually agreed policy or telecommuting agreement

s.

which stipulates for the following provisions, including,

@

but not limited to:

91

(a) Eligibility;
cx

(b) Applicable code of conduct and performance

o.

evaluation and assessment;

er
sp

(c) Appropriate alternative workplace/s;

o
pr

(d) Use and cost of equipment;

(e) Work days and/or hours;

(f) Conditions of employment, compensation,

and benefits particularly those unique to telecommuting
employees;

(g) Non-diminution of benefits;

(h) Occupational safety and health;

(i) Observance of data privacy policy;

(j) Dispute settlement; and

(k) Termination or change of work arrangement.

 LABOR STANDARDS 449

Employment of Homeworkers

The employer or employee may terminate or change

the telecommuting work arrangement, in accordance with
the telecommuting policy or agreement, without prejudice
to employment relationship and working conditions of the
employee, at no cost to the latter. (Section 3, IRR of RA 11165)

12. What is the fair treatment under RA 11165?

The employer shall ensure that telecommuting

employees are given the same treatment as that of
comparable employees working at the employer's premises.
All telecommuting employees shall be covered by the same

ph
set of applicable rules and existing CBA, if any. They shall

u.
also:

ed
(a) Receive a rate of pay, including overtime and

n.
night shift differential, and other similar monetary benefits
ai
m
not lower than those provided in applicable laws, and/or
su
CBA;
m

(b) Have the right to rest days, regular holidays, and

s.

special non-working days;

@
91

(c) Have the same or equivalent workload and

cx

performance standards as those of comparable workers at

o.

the employer's premises; provided that the parties may

er

mutually agree to different performance standards that may

sp

be more appropriate given the location of the employee is

o

not at the premises of the employer;

pr

(d) Without additional cost, have the same access to

training and career development opportunities as those of
comparable workers at the employer's premises, and be
subject to the same appraisal policies covering these workers,
including the qualification provided on the preceding item;

(e) Without additional cost, receive appropriate

training on the technical equipment at their disposal, and
the characteristics and conditions of telecommuting; and

(f) Have the same collective rights as the workers

at the employer's premises, including access to safety and
health services when necessary as required by RA 11058 and
450 LABOR LAW REVIEWER

D.O. No. 198, Series of 2018, and shall not be barred from
communicating with worker's representatives.

The employer shall also ensure that measures are taken

to prevent the telecommuting employee from being isolated
from the rest of the working community in the company
by giving the telecommuting employee the opportunity
to meet with colleagues on a regular basis and allowing
access to the regular workplace and company information.
(Section 4, IRR of RA 11165) 1

13. How is data protection applicable in RA 11165?

ph
u.
The employer and the employee shall agree on

ed
minimum standards that will protect personal information

n.
and shall utilize available technologies that promote security

ai
and privacy. m
su
The employer shall be responsible for strictly taking
the appropriate measures to ensure the protection of data
m
s.

used and processed by the telecommuting employee for

@

professional purposes. The employer shall inform the

91

telecommuting employee of all relevant laws and company

cx

rules concerning data protection. Measures such as, but

o.

not limited to, disabling of hardware, Universal Serial Bus

er

(USB) access, and external cloud-based storage can be taken

sp

by the employer.
o
pr

The employee shall commit to the company's data

privacy policy and ensure that confidential and proprietary
information are protected at all times and utilized only in
accordance with the requirements of the employer.
For this purpose, the provisions of the Data Privacy
Act of 2012 shall have suppletory effect. (Section 5, IRR of
RA 11165)

14. Who is in charge of the administration of telecommuting

work arrangements under RA 11165?

The parties to a telecommuting work arrangement

shall be primarily responsible for its administration. In case
 LABOR STANDARDS 451

Employment of Homeworkers

of differences in interpretation, the following guidelines

shall be observed:

(a) The differences in interpretation and implemen

tation shall be treated as grievances to be resolved under
the applicable grievance mechanism of the company. Unre
solved grievances shall be treated in accordance with exist
ing rules and regulations;

(b) If there is no grievance mechanism or if the

mechanism is inadequate, the grievance shall be referred
for conciliation and mediation to the regional office or field

ph
office of the Department of Labor and Employment (DOLE)

u.
which has jurisdiction over the workplace. If the grievance

ed
remains unresolved after conciliation and mediation, it shall

n.
be referred to the appropriate branch of the National Labor

ai
Relations Commission (NLRC), in accordance with Article
m
su
224 of the Labor Code, as renumbered.
m

(c) To facilitate the resolution of grievances,

s.

employers shall keep and maintain, as part of their records,

@

the documents proving that the telecommuting work

91

arrangement was voluntarily adopted by the parties.

cx

(Section 6, IRR of RA 11165)

o.
er
o sp
pr

11
1
 Chapter XVI
EMPLOYMENT OF NIGHT WORKERS

1. Who is a night worker?

Night worker means any employed person whose

work requires performance of a substantial number of

ph
hours of night work which exceeds a specified limit. (Article

u.
154, Labor Code) According to Section 2, Rule XV, Book III,

ed
Omnibus Rules Implementing the Labor Code, as per D.O.

n.
No. 112-12 Series of 2012, as used herein, "night worker"
ai
means any employed person whose work covers the period
m
su
from 10 o'clock in the evening to 6 o'clock the following
m

morning provided that the worker performs no less than

s.

seven (7) consecutive hours of work.

@
91

2. Who are not covered on night work under the Labor Code?
cx

Except those employed in agriculture, stock raising,

o.

fishing, maritime transport and inland navigation, during

er

a period of not less than seven (7) consecutive hours,

sp

including the interval from midnight to five o'clock in the

o

morning. (Article 154, Labor Code)

pr

3. What are the alternative measures to night work for

pregnant and nursing employees?
Employers shall ensure that measures shall be
undertaken to provide an alternative to night work for
pregnant and nursing employees who would otherwise
be called upon to perform such work. Such measures may
include the transfer to day work, where it is possible, as well
as the provision of social security benefits or an extension of
maternity leave.
452
 LABOR STANDARDS 453

Employment of Night Workers

(a) Transfer to day work. As far as practicable,

pregnant or nursing employees shall be assigned to day
work, before and after childbirth for a period of at least
sixteen (16) weeks which shall be divided between the time
before and after childbirth.

Medical certificate issued by competent physician (i.e.,

Obstetrician/Gynecologist, Pediatrician, etc.) necessary
for the grant of:

i.
additional periods of assignment to day
work during pregnancy or after childbirth other than

ph
the period mentioned in the foregoing paragraph,

u.
provided that the length of additional period should

ed
not be more than four (4) weeks or for a longer period

n.
as may be agreed upon by the employer and the

ai
worker; m
ii.
extension of maternity leave; and
su
m

iii. clearance to render night work.

s.
@

(b) Provision of social security benefits. -

Social
91

security benefits, such as paid maternity leave shall be

provided to women workers in accordance with the
cx

provisions of RA 8282 (Social Security Act of 1997) and other

o.

existing company policy or collective bargaining agreement.

er
sp

(c) Extension of maternity leave. - Where transfer

o

to day work is not possible, a woman employee may

pr

be allowed to extend, as recommended by a competent

physician, her maternity leave without pay or using earned
leave credits of the worker, if any. (Section 6, Rule XV, Book
III, Omnibus Rules Implementing the Labor Code, as per D.O.
No. 112-12 Series of 2012)

4. What is the protection against dismissal and loss of

benefits of night workers?

Where no alternative work can be provided to a woman

employee who is not in a position to render night work, she
shall be allowed to go on ve or on extended maternity
leave, using her earned leave credits.
454 LABOR LAW REVIEWER

A woman employee shall not be dismissed for reasons

of pregnancy, childbirth, and childcare responsibilities
as defined under this Rule. She shall not lose the benefits
regarding her employment status, seniority, and access to
promotion which may attach to her regular night work
position. (Section 8, Rule XV, Book III, Rules to Implement the
Labor Code, as per D.O. No. 112-12 Series of2012)

ph
u.
ed
n.
ai
m
su
m
s.
@
91
cx
o.
er
o sp
pr
 BOOK FOUR

Chapter I

HEALTH, SAFETY, AND SOCIAL

WELFARE BENEFITS

ph
1.
What is an Employees' Compensation Program?

u.
This is a comprehensive program designed to provide

ed
compensation benefit package to public and private

n.
employees or their dependents in the event of work-related
sickness, injury, or death.
ai
m
su
2.
Who are the dependents under the Employees'
m

Compensation Program?
s.
@

The dependents are the children and the spouse.

91

(Article 173[i], Labor Code)

cx

What is the meaning of dependent child or children under

o.

3.
er

the Employees' Compensation Program?

sp

Dependent children means the legitimate, legitimated

o

or legally adopted or xxx who is unmarried, not gainfully

pr

employed, and not over twenty-one (21) years of age or over

twenty-one (21) years of age provided he is incapacitated
and incapable of self-support due to a physical or mental
defect which is congenital or acquired during minority.
(Article 173[i], Labor Code)

4. What is the meaning of dependent spouse under the

Employees' Compensation Program?
Dependent spouse is the legitimate spouse living with
the employee and the parents of said employee wholly
455
 LABOR LAW REVIEWER
456

dependent upon him for regular support. (Article 173[i],

Labor Code)

5. Who are the beneficiaries under the Employees'

Compensation Program?
"Beneficiaries" means the dependent spouse until he/
she remarries and dependent children, who are the primary
beneficiaries. In their absence, the dependent parents and
subject to the restrictions imposed on dependent children,
the illegitimate children and legitimate descendants,
who are the secondary beneficiaries: Provided, That the

ph
dependent acknowledged natural child shall be considered

u.
as a primary beneficiary when there are no other dependent

ed
children who are qualified and eligible for monthly income

n.
benefit. (Article 173[j], Labor Code)

ai
m
6. What is the meaning of injury under the Employees'
su

Compensation Program?
m
s.

"Injury" means any harmful change in the human

@

organism from any accident arising out of and in the course

91

of the employment. (Article 173[k], Labor Code)

cx

What is the meaning of sickness under the Employees'

o.

7.
er

Compensation Program?
sp

"Sickness" means any illness definitely accepted as

o

an occupational disease listed by the Commission, or any

pr

illness caused by employment subject to proof that the risk

of contracting the same is increased by working conditions.
For this purpose, the Commission is empowered to
determine and approve occupational diseases and work
related illnesses that may be considered compensable based
on peculiar hazards of employment. (Article 173[k], Labor
Code)

8. Is COVID-19 a compensable illness under Employees'

Compensation Program?
Yes, the compensability of COVID-19 is provided in
the Board Resolution No. 21-04-14 issued on April 6, 2021
 LABOR STANDARDS 457

Health, Safety, and Social Welfare Benefits

by the Board of Employees Compensation Commission,

specifying the conditions for the compensability of
COVID-19 under Annex A of the Amended Rules on

Employees' Compensation. In Annex A, PD No. 626, as

amended as follows:

Coronavirus disease 2019 (COVID-19),

clinically diagnosed and consistent with the
history, and signs and symptoms of COVID-19
supported by diagnostic proof to include reverse
transcriptase polymerase chain reaction (RT-PCR)

ph
is compensable in any of the following conditions:

u.
a) There must be a direct connection

ed
between the offending agent or event and the

n.
worker based on epidemiologic criteria and

ai
occupational risk (e.g., healthcare
m workers,
screening and contact teams tracing team);
su
m

b) The tasks assigned to the worker would

s.

require frequent face-to-face and close proximity

@

interactions with the public or with confirmed

91

cases for health care workers;

cx

c) Transmission occurred in the workplace;

o.

or
er
sp

d) Transmission occurred while commut

ing to and from work.
o
pr

9. Sgt. Nemesis was a detachment non-commissioned officer

of the Armed Forces of the Philippines in Nueva Ecija.
He and some other members of his detachment sought
permission from their Company Commander for an
overnight pass to Nueva Vizcaya to settle some important
matters. The Company Commander orally approved
their request and allowed them to carry their firearms as
the place they were going to was classified as a “critical
place." They arrived at the place past midnight; and as
they were alighting from a tricycle, one of his companions
accidentally dropped his rifle, which fired a single shot,
and in the process hit Sgt. Nemesis fatally. The shooting
458 LABOR LAW REVIEWER

was purely accidental. At the time of his death, he was

still legally married to Nelda, but had been separated
de facto from her for 17 years. For the last 15 years of his
life, he was living in with Narda, with whom he has two
minor children. Since Narda works as a kasambahay, the
two children lived with their grandparents, who provided
their daily support. Sgt. Nemesis and Narda only sent
money to them every year to pay for their school tuition.
Nelda and Narda, both for themselves and the latter, also
on behalf of her minor children, separately filed claims for
compensation as a result of the death of Sgt. Nemesis. The

ph
Line of Duty Board of the AFP declared Sgt. Nemesis' death

u.
to have been "in line of duty", and recommended that all

ed
benefits due to Sgt. Nemesis be given to his dependents.

n.
However, the claims were denied by GSIS because Sgt.

ai
Nemesis was not in his workplace nor performing his
m
duty as a soldier of the Philippine Army when he died.
su
m

Are the dependents of Sgt. Nemesis entitled to

s.

compensation as a result of his death? (2018 BAR Q. No.

@

IX[a])
91

Yes, the dependents of Sgt. Nemesis are entitled to

cx

compensation as a result of his death.

o.
er

Jurisprudence espoused the position that the concept of

sp

"work place" cannot always be literally applied to a soldier

o

on active duty status who, to all intents and purposes is on

pr

a 24-hour official duty status, subject to military discipline

and law and at the beck and call of his superior officers at all
times, except when he is on vacation leave status. Further, it
was ruled that "a place [where] soldiers have secured lawful
permission cannot be very different, legally speaking, from
a place where they are required to go by their commanding
officer" and hence, the deceased is to be considered as still
in the performance of his official functions. (Valeriano v.
Employees' Compensation Commission, G.R. No. 136200, June
8, 2000 citing Hinoguin v. ECC, 172 SCRA 350, April 17, 1989)

In this case, the connection of the absence of Sgt.

Nemesis from his assigned place of work and the incident
 LABOR STANDARDS 459

Health, Safety, and Social Welfare Benefits

causing his death was the permission given by the Company

Commander to go on overnight pass and hence, he is
to be considered as still in the performance of his official
functions.

Applying the doctrinal rule, the death of Sgt. Nemesis

is compensable. Therefore, his dependents are entitled to
the compensation benefits.
As between Nelda and Narda, who should be entitled to
the benefits? (2018 BAR Q. No. IX[b])

ph
Neither Nelda nor Narda is entitled to the benefits.

u.
Under the Labor Code, dependent spouse means the

ed
legitimate spouse living with the employee. (Article 173[i])

n.
ai
Applying the law, although Nelda is the legitimate
m
spouse, she is disqualified because she is not living with
su

Sgt. Nemesis. As for Narda, while she is living with Sgt.

m

Nemesis she is not the legitimate spouse. Thus, Nelda and

s.

Narda are not entitled to the compensation benefits.

@
91

Are the minor children entitled to the benefits considering

cx

that they were not fully dependent on Sgt. Nemesis for

o.

support? (2018 BAR Q. No. IX[c])

er
sp

Yes, the minor children are entitled to the benefits.

o

The Labor Code defined dependent as the legitimate,

pr

legitimated, legally adopted or xxx, who is unmarried, not

gainfully employed, not over 21 years of age or over 21
years of age provided that he is incapacitated and incapable
of self-support due to physical or mental defect which is
congenital or acquired during minority.

Applying the above definition, the fact that the two

minor children were not fully dependent on Sgt. Nemesis
for support is not the restriction provided by law to qualify
as dependent children. Therefore, the two minor children
are entitled to the compensation benefits.
460 LABOR LAW REVIEWER

10. Odeck, a policeman, was on leave for a month. While

resting in their house, he heard two of his neighbors
fighting with each other. Odeck rushed to the scene
intending to pacify the protagonists. However, he was shot
to death by one of the protagonists. Zhop, a housemaid,
was Odeck's surviving spouse whom he had abandoned
for another woman years back. When she learned of
Odeck's death, Zhop filed a claim with the GSIS for death
benefits. However, her claim was denied because she
was not the dependent spouse of Odeck when he died.
Resolve with reasons whether GSIS is correct in denying

ph
the claim. (2005 BAR Q. No. VIII[1b])

u.
GSIS is correct that Zhop is not Odeck's dependent

ed
spouse.

n.
ai
Under the Labor Code, dependent spouse means the
m
legitimate spouse living with the employee. (Article 173[i])
su

In this case, the facts clearly stated that Zhop was not
m
s.

living with Odeck because the latter abandoned her for

@

another woman.
91

Applying the law, although Zhop is the legitimate

cx

spouse of Odeck, she is not living with him. Thus, the denial
o.

of her claim by the GSIS is correct.

er
sp

11. FACTS: Pitoy Mondero was employed as a public school

o

teacher at the Marinduque High School from July 1, 1983

pr

until his untimely demise on May 27, 1997. On April 27,

1997, a memorandum was issued by the school principal,
which reads: "You are hereby designated to prepare the
MODEL DAM project, which will be the official entry of or
school the forthcoming Division Search for Outstanding
Improvised Secondary Science Equipment for Teachers
to be held in Manila on June 4, 1997. You are hereby
instructed to complete this MODEL DAM on or before the
scheduled date of the contest." Mordero complied with
his superior's instruction and constructed an improvised
electric microdam, which he took home to enable him

to finish it before the deadline. On May 27, 1997, while

 LABOR STANDARDS 461

Health, Safety, and Social Welfare Benefits

working on the MODEL DAM Project in his house, he came

to contact with a live wire and was electrocuted. He was

immediately brought to a clinic for emergency treatment

but was pronounced dead on arrival. The death certificate
showed that he died of cardiac arrest due to accidental

electrocution. Pepay Palaypay (Pitoy Mondero's common

law wife for more than twenty years) and a Pitoy Mordero
Jr. (his only son) filed a claim for death benefits with the
Government Service Insurance System (GSIS), which
was denied on the ground that Pitoy Mordeno's death
did not arise out of and in the course of employment and

ph
therefore not compensable because the accident occurred

u.
in his house and not in the school premises.

ed
n.
Is Pepay palaypay entitled to file a claim for death benefits

ai
with the GSIS? Why? (1999 BAR Q. No. XX[1]) m
su
No, Pepay is not entitled to file the claim.
m

Under the Labor Code, dependent spouse means the

s.

legitimate spouse living with the employee. (Article 173[i])

@
91

In this case, although Pepay Palaypay is living with

cx

Pitoy the facts clearly stated that she is the common-law

o.

wife of Pitoy.
er

Applying the law, since Pepay Palaypay is a common

sp

law spouse she is therefore not entitled to claim the death

o
pr

benefits.

12. State the respective coverages of: the Employees

Compensation Act. (1997 BAR Q. No. XX[c])

Coverage shall be compulsory. (Section 1, Rule I,

Amended Rules on Employees' Compensation, which took effect
on June 1, 1987)

13. When is the effectivity date of coverage under Employees'

Compensation Program?

(a) Coverage of employers shall take effect on the

first day of operation but not earlier than January 1, 1975.
462 LABOR LAW REVIEWER

(b) Coverage of employees shall take effect on the

first day of employment. (Section 6, Rule I, Amended Rules on
Employees' Compensation, which took effect on June 1, 1987)

14. What is the jurisdictional foundation for compensation

under Employees' Compensation Program?

There is no question that employer-employee

relationship is the jurisdictional foundation without which
no claim for compensation could possibly prosper (Vda. de
Eustaquio v. Workmen's Compensation Commission, G.R. No.

ph
L-42371, February 12, 1980).

u.
ed
15. What are the grounds for compensability under Employees'
Compensation Program?

n.
The following are the grounds:
ai
m
su
(a) For the injury and the resulting disability or death
m

to be compensable, the injury must be the result of accident

s.

arising out of and in the course of the employment. (ECC

@

Resolution No. 2799, July 25, 1984)

91

(b) For the sickness and the resulting disability or

cx

death to be compensable, the sickness must be the result

o.
er

of an occupational disease listed under Annex "A" of these

sp

Rules with the conditions set therein satisfied, otherwise,

proof must be shown that the risk of contracting the disease
o
pr

is increased by the working conditions.

(c) Only injury or sickness that occurred on or after

January 1, 1975 and the resulting disability or death shall be
compensable under these Rules. (Section 1, Rule III, Amended
Rules on Employees' Compensation, which took effect on June 1,
1987)

16. Which of the following injuries/death is not compensable?

a. Injuries sustained by a technician while at a
field trip initiated by the Union and sponsored
by the Company;
 LABOR STANDARDS 463

Health, Safety, and Social Welfare Benefits

b. Injuries received by a janitor at a Union election

meeting;

C. Death of a bank teller because of a bank robbery;

d. Death of a professor who was hit by a van on his

way home from work. (2012 BAR Q. No. 16)

b. Injuries received by a janitor at a Union election

meeting;

For the injury and the resulting disability or death to

be compensable, the injury must be the result of accident

ph
arising out of and in the course of the employment. (ECC

u.
Resolution No. 2799, July 25, 1984)

ed
n.
Jurisprudence provides that as a matter of general

ai
proposition, an injury or accident is said to arise "in the
m
course of employment" when it takes place within the
su

period of the employment, at a place where the employee

m

may reasonably be, and while he is fulfilling his duties

s.

or is engaged in doing something incidental thereto."

@

Thus, for injury to be compensable, the standard of "work

91

connection" must be substantially satisfied. The injury and

cx

the resulting disability sustained by reason of employment

o.

are compensable regardless of the place where the injured

er

occurred, if it can be proven that at the time of the injury,

sp

the employee was acting within the purview of his or her

o
pr

employment and performing an act reasonably necessary

or incidental thereto. (Valeriano v. Employees Compensation
Commission, G.R. No. 136200, June 8, 2000)

17. What is the test of proof in compensation proceedings

covered by Employees' Compensation Program?
Jurisprudence provides that to establish compensability
of a non-occupational disease, reasonable proof of work
connection and not direct causal relation is required.
Probability, not the ultimate degree of certainty, is the test of
proof in compensation proceedings. (Leonis Navigation Co.,
Inc. v. Villamater, G.R. No. 179169, March 3, 2010)
464 LABOR LAW REVIEWER

18. What is the increased risk theory?

Under the increased risk theory, there must be a

reasonable proof that the employee's working condition
increased his risk of contracting the disease, or that there is
a connection between his work and the cause of the disease.
(Government Service Insurance System v. Besitan, G.R. No.
178901, November 23, 2011)

19. Rosa was granted vacation leave by her employer to

spend three weeks in Africa with her family. Prior to her
departure, the General Manager of the company requested

ph
her to visit the plant of the company in Zimbabwe in

u.
order to derive best manufacturing practices useful to the

ed
company. She accepted the request because the errand

n.
would be important to the company and Zimbabwe was

ai
anyway in her itinerary. It appears that she contracted
m
su
a serious disease during the trip. Upon her return, she
m

filed a claim for compensation, insisting that she had

s.

contracted the disease while serving the interest of her

@

employer. Under the Labor Code, the sickness or death of

91

an employee, to be compensable, must have resulted from

cx

an illness either definitely, accepted as an occupational

o.

disease by the Employee's Compensation Commission, or

er

caused by employment subject to proof that the risk of

sp

contracting the same is increased by working conditions.

o

Is the serious disease Rosa contracted during her trip to

pr

Africa compensable? Explain your answer. (2017 BAR Q.

No. XII[C])

Rosa's serious disease is not compensable.

Under the increased risk theory, there must be a
reasonable proof that the employee's working condition
increased his risk of contracting the disease, or that there is
a connection between his work and the cause of the disease.
(Castor-Garupa v. Employees' Compensation Commission, G.R.
No. 158268, April 12, 2006, 487 SCRA 171, 180)

In this case, the acts stated that Rosa contracted a

serious disease during the trip and she claimed that she
 LABOR STANDARDS 465

Health, Safety, and Social Welfare Benefits

had contracted the disease while serving the interest of her

employer.

Applying the increased risk theory, Rosa should present

reasonable proof that her working condition had increased
her risk of contracting the disease or the connection between
her work and the cause of the disease, otherwise, the illness
is not compensable.

20. Under employee's compensation, the so-called "Theory of

Increased Risks" is relevant when:

ph
a. There is a need to categorize a disability as

u.
permanent and total;

ed
b. It is not clear as to how an injury was sustained;

n.
C.

ai
The ailment or sickness is not classified as an
m
su
occupational disease;
m

d. There is a prima facie finding that the employee

s.

had willful intention to hurt himself. (2012 BAR

@

Q. No. 15)
91
cx

C. The ailment or sickness is not classified as an

o.

occupational disease
er

Under the increased risk theory, there must be a

sp

reasonable proof that the employee's working condition

o
pr

increased his risk of contracting the disease, or that there is

a connection between his work and the cause of the disease.
(Castor-Garupa v. Employees' Compensation Commission, G.R.
No. 158268, April 12, 2006, 487 SCRA 171, 180)

21. What is the interpretation of the phrase "arising out of

and in the course of employment" used in Article 173 (k)
defining an injury?

The words "arising out of" refer to the origin or

cause of the accident, and are descriptive of its character,
while the words "in the course of" refer to the time, place
and circumstances under which the accident takes place.
466 LABOR LAW REVIEWER

(Valeriano v. Employees Compensation Commission, G.R. No.

136200, June 8, 2000)

22. When is an injury or accident said to arise "in the course

of employment"?

"As a matter of general proposition, an injury or

accident is said to arise "in the course of employment" when
it takes place within the period of the employment, at a place
where the employee may reasonably x x x be, and while
he is fulfilling his duties or is engaged in doing something
incidental thereto." Thus, for injury to be compensable,

ph
the standard of "work connection" must be substantially

u.
satisfied. The injury and the resulting disability sustained

ed
by reason of employment are compensable regardless of the

n.
place where the injured occurred, if it can be proven that

ai
at the time of the injury, the employee was acting within
m
the purview of his or her employment and performing an
su

act reasonably necessary or incidental thereto. (Valeriano v.

m

Employees Compensation Commission, G.R. No. 136200, June 8,

s.

2000)
@
91

23. FACTS: Pitoy Mondero was employed as a public school

cx

teacher at the Marinduque High School from July 1, 1983

o.

until his untimely demise on May 27, 1997. On April 27,

er

1997, a memorandum was issued by the school principal,

sp

which reads: "You are hereby designated to prepare the

o
pr

MODEL DAM project, which will be the official entry of or

school the forthcoming Division Search for Outstanding
Improvised Secondary Science Equipment for Teachers
to be held in Manila on June 4, 1997. You are hereby
instructed to complete this MODEL DAM on or before the
scheduled date of the contest." Mordero complied with
his superior's instruction and constructed an improvised
electric microdam, which he took home to enable him

to finish it before the deadline. On May 27, 1997, while

working on the MODEL DAM Project in his house, he came
to contact with a live wire and was electrocuted. He was
immediately brought to a clinic for emergency treatment
but was pronounced dead on arrival. The death certificate
 LABOR STANDARDS 467

Health, Safety, and Social Welfare Benefits

showed that he died of cardiac arrest due to accidental

electrocution. Pepay Palaypay (Pitoy Mondero's common
law wife for more than twenty years) and a Pitoy Mordero
Jr. (his only son) filed a claim for death benefits with the
Government Service Insurance System (GSIS), which
was denied on the ground that Pitoy Mordeno's death
did not arise out of and in the course of employment and
therefore not compensable because the accident occurred
in his house and not in the school premises.

Is the cause of death of Pitoy Mordeno (cardiac arrest due

to accidental electrocution in his house) compensable?

ph
Why? (1999 BAR Q. No. XX[2])

u.
Yes, the cause of death of Pitoy Mordeno is

ed
compensable.

n.
Jurisprudence provides that as a matter of general
ai
proposition, an injury or accident is said to arise "in the
m
su
course of employment" when it takes place within the
period of the employment, at a place where the employee
m
s.

may reasonably ... be, and while he is fulfilling his duties

@

or is engaged in doing something incidental thereto.

91

Thus, for injury to be compensable, the standard of "work

connection" must be substantially satisfied. The injury and
cx

the resulting disability sustained by reason of employment

o.

are compensable regardless of the place where the injured

er

occurred, if it can be proven that at the time of the injury,

sp

the employee was acting within the purview of his or her

o
pr

employment and performing an act reasonably necessary

or incidental thereto. (Valeriano v. Employees Compensation
Commission, G.R. No. 136200, June 8, 2000)

In this case, it appears that the school principal had

issued a memorandum designating Pitoy Mondero to
accomplish a project. However, while carrying out the said
directive Pitoy Mondero was accidentally electrocuted and
died. Consequently, Pitoy Mordeno was in the performance
of his official function or was carrying out an order from a
superior when the accident occurred.
Applying the doctrinal rule, his death is, therefore, not
compensable.
468 LABOR LAW REVIEWER

24. Efrenia Reyes was a classroom teacher assigned by the

Department of Education, Culture and Sports (DECS) in
Panitan, Capiz. She has been in the government service
since 1951 up to November, 1985 when she retired at 55 due
to poor health. In March, 1982, while she was teaching her
Grade 1 pupils the proper way of scrubbing and sweeping
the floor, she accidentally slipped. Her back hit the edge
of a desk. She later complained of weak lower extremities
and difficulty in walking. After an X-ray examination, she
was found to be suffering from Pott's disease and was
advised to undergo an operation. In 1985, she filed with
the GSIS a claim for disability benefits under Presidential

ph
Decree No. 626, as amended. The GSIS granted the

u.
claim and awarded Efrenia permanent partial disability

ed
benefits. After she underwent a surgical operation on

n.
her spine in November, 1985, her condition worsened. In

ai
1990, Efrenia filed with the GSIS a petition for conversion
m
of her disability status to permanent total disabilities
su

with corresponding adjustment of benefits. GSIS denied

m

the claim stating that after Efrenia's retirement, any

s.
@

progression of her ailment is no longer compensable. Is

the GSIS correct in denying the claim. Explain. (1996 BAR
91

Q. No. XIV)
cx
o.

No, the GSIS is not correct.

er

Jurisprudence provides that as a matter of general

sp

proposition, an injury or accident is said to arise "in the

o
pr

course of employment" when it takes place within the

period of the employment, at a place where the employee
may reasonably x x x be, and while he is fulfilling his
duties or is engaged in doing something incidental thereto.
Thus, for injury to be compensable, the standard of "work
connection" must be substantially satisfied. The injury and
the resulting disability sustained by reason of employment
are compensable regardless of the place where the injured
occurred, if it can be proven that at the time of the injury,
the employee was acting within the purview of his or her
employment and performing an act reasonably necessary
or incidental thereto. (Valeriano v. Employees Compensation
Commission, G.R. No. 136200, June 8, 2000)
 LABOR STANDARDS 469

Health, Safety, and Social Welfare Benefits

In this case, the facts show that while Efrenia Reyes was
teaching her Grade 1 pupils the proper way of scrubbing
and sweeping the floor, she accidentally slipped and her
back hit the edge of a desk. Consequently, Efrenia Reyes
was acting within the purview of her employment.

Applying the doctrinal rule, her injury is, therefore,

compensable.

25. What is the 24-hour duty doctrine?

The 24-hour duty doctrine, as applied to policemen and

soldiers, serves more as an after-the-fact validation of their

ph
acts to place them within the scope of the guidelines rather

u.
than [as] a blanket license to benefit them in all situations

ed
that may give rise to their deaths. In other words, the 24

n.
hour duty doctrine should not be sweepingly applied to all
ai
acts and circumstances causing the death of a police officer
m
su
but only to those which, although not on official line of
duty, are nonetheless basically police service in character.
m
s.

(Valeriano v. Employees Compensation Commission, G.R. No.

@

136200, June 8, 2000)

91

26. Odeck, a policeman, was on leave for a month. While resting

cx

in their house, he heard two of his neighbors fighting

o.

with each other. Odeck rushed to the scene intending to

er

pacify the protagonists. However, he was shot to death by

sp

one of the protagonists. Zhop, a housemaid, was Odeck's

o
pr

surviving spouse whom he had abandoned for another

woman years back. When she learned of Odeck's death,
Zhop filed a claim with the GSIS for death benefits.
hot However, her claim was denied because (a) when Odeck
was killed, he was on leave; xxx. Resolve with reasons
whether GSIS is correct in denying the claim. (2005 BAR
Q. No. VIII[1][a])

GSIS is not correct.

Jurisprudence provides that as a matter of general

proposition, an injury or accident is said to arise "in the
course of employment" when it takes place withi the
period of the employment, at a place where the employee
470 LABOR LAW REVIEWER

may reasonably x x x be, and while he is fulfilling his

duties or is engaged in doing something incidental thereto.
Thus, for injury to be compensable, the standard of "work
connection" must be substantially satisfied. The injury and
the resulting disability sustained by reason of employment
are compensable regardless of the place where the injured
occurred, if it can be proven that at the time of the injury,
the employee was acting within the purview of his or her
employment and performing an act reasonably necessary
or incidental thereto. (Valeriano v. Employees Compensation
Commission, G.R. No. 136200, June 8, 2000)

ph
In this case, the peacekeeping nature that Odeck was

u.
attending to at the time he was shot to death, that is to pacify

ed
the fighting neighbors, a basic duty which any policeman is

n.
expected and ought to perform, Odeck was acting within
ai
m
the purview of his employment at the time of his death.
su

Applying the above ruling, Odeck's death is, therefore,

m

compensable.
s.
@

27. What is going to and from work rule?

91

Going to and from work rule means when an employee

cx

is accidentally injured at a point reasonably proximate to the

o.
er

place of work, while he is going to and from his work, such

sp

injury is deemed to have arisen out of and in the course of

o

his employment. (Vda. de Torbela v. Employees' Compensation

pr

19 Commission, G.R. No. L-42627 February 21, 1980)

28. Carol de la Cruz is the secretary of the proprietor of an

auto dealership in Quezon City. She resides in Caloocan
City. Her office hours start at 8 a.m. and end at 5 p.m. On
July 30, 2008, at 7 a.m. while waiting for public transport
at Rizal Avenue Extension as has been her routine, she
was sideswiped by a speeding taxicab resulting in her
death. The father of Carol filed a claim for employee's
compensation with the Social Security System. Will the
claim prosper? Why? (2008 BAR Q. No. VIII)

Yes, the claim will prosper.

 LABOR STANDARDS 471

Health, Safety, and Social Welfare Benefits

When an employee is accidentally injured at a point

reasonably proximate to the place of work, while he is going
to and from his work, such injury is deemed to have arisen
out of and in the course of his employment. (Vda. de Torbela
v. Employees' Compensation Commission, G.R. No. L-42627
February 21, 1980) This known as the going to and from
work rule.

Applying the going to and from work rule, the death is

therefore compensable.

ph
29. What are the limitations on compensation in case of injury,
sickness, disability or death?

u.
ed
No compensation shall be allowed to the employee

n.
or his dependents when the injury, sickness, disability, or
death was occasioned by any of the following:
ai
m
su
(1) his intoxication;
m

(2) his willful intention to injure or kill himself or

s.

another; or
@
91

(3) his notorious negligence. (Article 178, Labor Code,

cx

Section 1, Rule IV, Amended Rules on Employees' Compensation,

o.

which took effect on June 1, 1987)

er
sp

30. What is notorious negligence?

o
pr

Notorious negligence has been defined as something

more than mere or simple negligence or contributory
negligence; it signifies a deliberate act of the employee to
disregard his own personal safety. Disobedience to rules,
orders, and/or prohibition does not in itself constitute
notorious negligence, if no intention can be attributed to the
injured to end his life. (Government Service Insurance System
v. Macayer, G.R. No. 156182, April 13, 2007)

31. Jerome Marcelo was hired as a 4th Engineer by Masipag

Shipping Services, Inc. for and in behalf of Captains
Maritime Co. Ltd., to work abroad the M/V White Cloud

for a period of one year. Marcelo reported for duty abroad

472 LABOR LAW REVIEWER

the vessel on July 13, 1987. On January 16, 1988 at about

3:00 p.m. while the vessel was docked alongside Pier
39, San Francisco, U. S. A., Marcelo arrived and boarded
the ship from shore visibly drunk. He went to the mess
hall and took fire axe challenged those eating therein. He
was pacified by his shipmates who led him to his cabin.
However, later he went out of his cabin and proceeded to
the mess hall. He became violent. He smashed and threw
a cup at the head of an oiler Renato Pobre. Pobre touched
his head and noticed blood. This infuriated Pobre which
led to a fight between the two. After the shipmates broke
the fight, Marcelo was taken to the hospital where he

ph
passed away on January 17, 1988. Pobre was arrested by

u.
the American authorities and jailed in San Francisco. On

ed
October 26, 1988, the wife of Marcelo filed a complaint

n.
against Masipag and Captains with POEA for payment
ai
m
of death benefits, burial expenses, unpaid salaries on
su
board and overtime pay with damages. Are Masipag and
Captains liable for the death benefits of seaman Marcelo?
m
s.

(1993 BAR Q. No. XX)

@

No, Masipag and Captains are not liable for the death
91

benefits of seaman Marcelo.

cx

No compensation shall be allowed to the employee

o.
er

or his dependents when the injury, sickness, disability, or

sp

death was occasioned by any of the following:

o

(1) his intoxication;

pr

(2) his willful intention to injure or kill himself or

another; or

(3) his notorious negligence. (Article 178, Labor Code,

Section 1, Rule IV, Amended Rules on Employees' Compensation,
which took effect on June 1, 1987)

In this case, the facts clearly show that the death of

seafarer Marcelo was occasioned by his intoxication and
willful intention to injure or kill another.

Applying the above provision, the death of seafarer

Marcelo is, therefore, not compensable.
 LABOR STANDARDS 473

Health, Safety, and Social Welfare Benefits

32. What is disability?

Disability means loss or impairment of a physical

or mental function resulting from injury or sickness.
(Article 173[m]) "Disability" is generally defined as "loss
or impairment of a physical or mental function resulting
from injury or sickness." (Article 167[n], Labor Code) Clearly,
"disability" is not synonymous with "sickness" or "illness,"
the former being a potential effect of the latter. (Remigio v.
NLRC, C.F. Sharp Crew Management, Inc. & New Commodore
Cruise Line, Inc., G.R. No. 159887, April 12, 2006)

ph
33. What are the three kinds of disability benefits under the

u.
Labor Code?

ed
n.
There are three kinds of disability benefits under the

ai
Labor Code, as amended by PD 626: (1) temporary total
m
disability, (2) permanent total disability, and (3) permanent
su

partial disability. (Bernardo Remigio v. NLRC, C.F. Sharp Crew

m

Management, Inc. & New Commodore Cruise Line, Inc., G.R.

s.

No. 159887, April 12, 2006)

@
91

While Section 2, Rule VII of the Implementing Rules

of Book V of the Labor Code differentiates the disabilities
cx

as follows:
o.
er

(a) A total disability is temporary if as a result of the

sp

injury or sickness the employee is unable to perform any

o

gainful occupation for a continuous period not exceeding

pr

120 days, except as otherwise provided for in Rule X of

these Rules. (Article 197, Labor Code)

(b) A disability is total and permanent if as a result

of the injury or sickness the employee is unable to perform
any gainful occupation for a continuous period exceeding
120 days, except as otherwise provided for in Rule X (Rule
X, Temporary Total Disability, Section 2, Period of entitlement
[to Temporary Total Disability Benefit]) of these Rules. (Article
198, Labor Code)

(c) A disability is partial and permanent if as a result

of the injury or sickness the employee suffers a permanent
474 LABOR LAW REVIEWER

partial loss of the use of any part of his body. (Article 199,
Labor Code)

34. What is the meaning of permanent disability?

Permanent disability is the inability of a worker to
perform his job for more than 120 days, regardless of whether
or not he loses the use of any part of his body. (Government
Service Insurance System v. Cadiz, G.R. No. 154093, July 8,
2003, 405 SCRA 450, 454; Ijares v. Court of Appeals, G.R. No.
105854, August 26, 1999, 313 SCRA 141, 149-150)

ph
35. What is total disability?

u.
ed
Total disability, on the other hand, means the

n.
disablement of an employee to earn wages in the same

ai
kind of work of similar nature that he was trained for, or
m
accustomed to perform, or any kind of work which a person
su

of his mentality and attainments could do. (Philippine

m

Transmarine Carriers, Inc. v. NLRC, G.R. No. 123891, February

s.

28, 2001, 353 SCRA 47, 53) It does not mean absolute
@

helplessness. In disability compensation, it is not the injury

91

which is compensated, but rather it is the incapacity to work

cx

resulting in the impairment of ones earning capacity. (Ibid.,

o.

citing Bejerano v. Employees Compensation Commission, G.R.

er

No. 84777, January 30, 1992, 205 SCRA 598, 602)

o sp
pr

36. What is the nature of the injury in total disability?

A total disability does not require that the employee be

absolutely disabled or totally paralyzed. What is necessary
is that the injury must be such that the employee cannot
pursue her usual work and earn therefrom. (Remigio v.
NLRC, C.F. Sharp Crew Management, Inc. & New Commodore
Cruise Line, Inc., G.R. No. 159887, April 12, 2006 citing Austria
v. CA, G.R. No. 146636, August 12, 2002, 387 SCRA 216, 221,
citing Gonzaga v. ECC, No. L-62287, January 31, 1984, 127
SCRA 443)
 LABOR STANDARDS 475

Health, Safety, and Social Welfare Benefits

37. What are the compensation and benefits of seafarers for

injuries or illness under the POEA-Standard Employment
Contract?

The liabilities of the employer when the seafarer suffers

work-related injury or illness during the term of his contract
are as follows:
1. The employer shall continue to pay the seafarer
his wages during the time he is on board the ship;
2. If the injury or illness requires medical and/
or dental treatment in a foreign port, the employer shall

ph
be liable for the full cost of such medical, serious dental,

u.
surgical and hospital treatment as well as board and lodging

ed
until the seafarer is declared fit to work or to be repatriated.

n.
However, if after repatriation, the seafarer still requires

ai
m
medical attention arising from said injury or illness, he
su
shall be so provided at cost to the employer until such time
m

he is declared fit or the degree of his disability has been

s.

established by the company-designated physician.

@

3. In addition to the above obligation of the

91

employer to provide medical attention, the seafarer shall

cx

also receive sickness allowance from his employer in an

o.

amount equivalent to his basic wage computed from the

er

time he signed off until he is declared fit to work or the

sp

degree of disability has been assessed by the company

o

designated physician. The period within which the seafarer

pr

shall be entitled to his sickness allowance shall not exceed

120 days. Payment of the sickness allowance shall be made
on a regular basis, but not less than once a month.
The seafarer shall be entitled to reimbursement of the

cost of medicines prescribed by the company-designated

physician. In case treatment of the seafarer is on an out
patient basis as determined by the company-designated
physician, the company shall approve the appropriate mode
of transportation and accommodation. The reasonable cost
of actual traveling expenses and/or accommodation shall
be paid subject to liquidation and submission of official
receipts and/or proof of expenses.
476 LABOR LAW REVIEWER

For this purpose, the seafarer shall submit himself to

a post-employment medical examination by a company
designated physician within three working days upon his
return except when he is physically incapacitated to do
so, in which case, a written notice to the agency within the
same period is deemed as compliance. In the course of the
treatment, the seafarer shall also report regularly to the
company-designated physician specifically on the dates
as prescribed by the company-designated physician and
agreed to by the seafarer. Failure of the seafarer to comply
with the mandatory reporting requirement shall result in

ph
his forfeiture of the right to claim the above benefits.

u.
ed
If a doctor appointed by the seafarer disagrees with the

n.
assessment, a third doctor may be agreed jointly between

ai
the Employer and the seafarer. The third doctor's decision
m
shall be final and binding on both parties.
su

4. Those illnesses not listed in Section 32 of this

m
s.

Contract are disputably presumed as work-related.

@

5. In case a seafarer is disembarked from the ship

91

for medical reasons, the employer shall bear the full cost of
cx

repatriation in the event the seafarer is declared (1) fit for

o.

repatriation; or (2) fit to work but the employer is unable to

er

find employment for the seafarer on board his former ship

sp

or another ship of the employer.

o
pr

6. In case of permanent total or partial disability of the

seafarer caused by either injury or illness the seafarer shall
be compensated in accordance with the schedule of benefits
enumerated in Section 32 of his Contract. Computation of his
benefits arising from an illness or disease shall be governed
by the rates and the rules of compensation applicable at the
time the illness or disease was contracted.

The disability shall be based solely on the disability

gradings provided under Section 32 of this Contract, and
shall not be measured or determined by the number of days
a seafarer is under treatment or the number of days in which
sickness allowance is paid.
 LABOR STANDARDS 477

Health, Safety, and Social Welfare Benefits

Earleto 7. It is understood and agreed that the benefits

mentioned above shall be separate and distinct from, and
will be in addition to whatever benefits which the seafarer
is entitled to under Philippine laws such as from the Social
Security System, Overseas Workers Welfare Administration,
Employees' Compensation Commission, Philippine Health
Insurance Corporation and Home Development Mutual
Fund (Pag-IBIG Fund). (Section 20[A], Amended Standard
Terms and Conditions Governing the Overseas Employment of
Filipino Seafarers On-Board Ocean-Going Ships, Memorandum
Circular No. 10 Series of 2010)

ph
u.
38. What is the post-employment medical examination or

ed
3-day reportorial requirement under the POEA-Standard

n.
Employment Contract?

ai
The procedure for
m
post-employment medical
su
examination or 3-day reportorial requirement is provided
m

in Section 20[A][3] of the Amended Standard Terms and

s.

Conditions Governing the Overseas Employment of Filipino

@

Seafarers On-Board Ocean-Going Ships, Memorandum

91

Circular No. 10 Series of 2010, as follows:

cx

3. In addition to the above obligation of the

o.

employer to provide medical attention, the seafarer shall

er

also receive sickness allowance from his employer in an

sp

amount equivalent to his basic wage computed from the

o
pr

time he signed off until he is declared fit to work or the

degree of disability has been assessed by the company
designated physician. The period within which the seafarer
shall be entitled to his sickness allowance shall not exceed

120 days. Payment of the sickness allowance shall be made

on a regular basis, but not less than once a month.
The seafarer shall be entitled to reimbursement of the

cost of medicines prescribed by the company-designated

physician. In case treatment of the seafarer is on an out
patient basis as determined by the company-designated
physician, the company shall approve the appropriate mode
of transportation and accommodation. The reasonable cost
478 LABOR LAW REVIEWER

of actual traveling expenses and/or accommodation shall

be paid subject to liquidation and submission of official
receipts and/or proof of expenses.
For this purpose, the seafarer shall submit himself to
a post-employment medical examination by a company
designated physician within three working days upon his
return except when he is physically incapacitated to do
so, in which case, a written notice to the agency within the
same period is deemed as compliance. In the course of the
treatment, the seafarer shall also report regularly to the
company-designated physician specifically on the dates

ph
as prescribed by the company-designated physician and

u.
agreed to by the seafarer. Failure of the seafarer to comply

ed
with the mandatory reporting requirement shall result

n.
in his forfeiture of the right to claim the above benefits.
(Underscore supplied)
ai
m
su

39. What is the reason for the strict compliance with the three
m
s.

(3)-day period for the post-employment examination by

@

the company-designated physician?

91

Ebuega v. Southfield Agencies, Inc. v. Wilhemsen Ship

cx

Management Holding Ltd., G.R. No. 208396, March 14, 2018

o.

ruled:
er
sp

Manota v. Avantgarde Shipping Corporation,

715 Phil. 54 (2013) [Per J. Peralta, Third Division],
o
pr

explained why the requisite three (3)-day period

for examination by the company-designated
physician "must be strictly observed":

The 3-day mandatory reporting

requirement must be strictly observed since
within 3 days from repatriation, it would be
fairly manageable for the physician to identify
whether the disease ... was contracted
during the term of his employment or that
his working conditions increased the risk of
contracting the ailment.
 LABOR STANDARDS 479

Health, Safety, and Social Welfare Benefits

Moreover, the post-employment

medical examination within 3 days from
. . . arrival is required in order to ascertain
[the seafarer's] physical condition, since to
ignore the rule would set a precedent with
negative repercussions because it would
open the floodgates to a limitless number
of seafarers claiming disability benefits. It
would certainly be unfair to the employer
who would have difficulty determining the
cause of a claimant's illness considering the

ph
passage of time. In such a case, the employers

u.
would have no protection against unrelated

ed
disability claims. (Id. at 64-65 citing Crew and

n.
Ship Management International, Inc. and Salena,

ai
Inc. v. Jina T. Soria, G.R. No. 175491, December
m
su
10, 2012; Jebsens Maritime, Inc. v. Undag, G.R.
m

No. 191491, December 14, 2011, 662 SCRA 670,

s.

681)
@
91

40. What is the third-doctor conflict resolution procedure

cx

under the 2010 POEA-SEC?

o.

The POEA Standard Employment Contract clearly

er

provides that when a seafarer sustains a work-related

sp

illness or injury while on board the vessel, his fitness or

o
pr

unfitness for work shall be determined by the company

designated physician. If the physician appointed by the
seafarer disagrees with the company-designated physician's
assessment, the opinion of a third doctor may be agreed
jointly between the employer and the seafarer to be the
decision final and binding on them. (Hernandez v. Magsaysay
Maritime Corporation, G.R. No. 226103, January 24, 2018)

Alternative answer:

The procedure for third-doctor conflict resolution is

specifically provided in Section 20[A][3] of the Amended
Standard Terms and Conditions Governing the Overseas
Employment of Filipino Seafarers On-Board Ocean-Going
480 LABOR LAW REVIEWER

Ships, Memorandum Circular No. 10 Series of 2010, as

follows:

3. XXX

For this purpose, the seafarer shall submit himself

to a post-employment medical examination by a
company-designated physician within three working
days upon his return except when he is physically
incapacitated to do so, in which case, a written notice
to the agency within the same period is deemed as
compliance. In the course of the treatment, the seafarer

ph
shall also report regularly to the company-designated

u.
physician specifically on the dates as prescribed by

ed
the company-designated physician and agreed to by

n.
the seafarer. Failure of the seafarer to comply with the

ai
mandatory reporting requirement shall result in his
m
forfeiture of the right to claim the above benefits.
su
m

If a doctor appointed by the seafarer disagrees

s.

with the assessment, a third doctor may be agreed

@

jointly between the employer and the seafarer. The

91

third doctor's decision shall be final and binding on

cx

both parties.
o.
er

41. W Ship Management, Inc. hired Seafarer G as bosun in

sp

its vessel under the terms of the 2010 Philippine Overseas

o

Employment Administration Standard Employment

pr

Contract (POEA-SEC). On his sixth (6th) month on

board, Seafarer G fell ill while working. In particular, he
complained of stomach pain, general weakness, and fresh
blood in his stool. When his illness persisted, he was
medically repatriated on January 15, 2018. On the same
day, Seafarer G submitted himself to a post-employment
medical examination, wherein he was referred for further

treatment. As of September 30, 2018, Seafarer G has yet

to be issued any fit-to-work certification by the company
designated physician, much less a final and definite
assessment of his actual condition. Since Seafarer G

still felt unwell, he sought an opinion from a doctor of

 LABOR STANDARDS 481

Health, Safety, and Social Welfare Benefits

his choice who later issued an independent assessment

stating that he was totally and permanently disabled due
to his illness sustained during work. Seafarer G then
proceeded to file a claim for total and permanent disability
compensation. The company asserts that the claim should
be dismissed due to prematurity since Seafarer G failed
to first settle the matter through the third-doctor conflict
resolution procedure as provided under the 2010 POEA
SEC.

What is the third-doctor conflict resolution procedure

ph
under the 2010 POEA-SEC? Explain. (2019 Part II BAR Q.
No. B.16[a])

u.
ed
The procedure for third-doctor conflict resolution

n.
is provided in Section 20[A][3] of the Amended Standard

ai
Terms and Conditions Governing the Overseas Employment
m
of Filipino Seafarers On-Board Ocean-Going Ships,
su

Memorandum Circular No. 10 Series of 2010, as follows:

m
s.

3. XXX
@

For this purpose, the seafarer shall

91

submit himself to a post-employment medical

cx

examination by a company-designated physician

o.

within three working days upon his return except

er
sp

when he is physically incapacitated to do so, in

which case, a written notice to the agency within
o
pr

the same period is deemed as compliance. In

the course of the treatment, the seafarer shall
also report regularly to the company-designated
physician specifically on the dates as prescribed
by the company-designated physician and agreed
to by the seafarer. Failure of the seafarer to comply
with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the
above benefits.

If a doctor appointed by the seafarer

disagrees with the assessment, a third doctor may
be agreed jointly between the employer and the
482 LABOR LAW REVIEWER

seafarer. The third doctor's decision shall be final

and binding on both parties.

Alternative answer:

Jurisprudence explained that the POEA Standard

Employment Contract clearly provides that when a seafarer
sustains a work-related illness or injury while on board the
vessel, his fitness or unfitness for work shall be determined
by the company-designated physician. If the physician
appointed by the seafarer disagrees with the company
designated physician's assessment, the opinion of a third

ph
doctor may be agreed jointly between the employer and

u.
the seafarer to be the decision final and binding on them.

ed
(Hernandez v. Magsaysay Maritime Corporation, G.R. No.

n.
226103, January 24, 2018)

ai
m
Will Seafarer G's claim for total and permanent disability
su

benefits prosper despite his failure to first settle the matter

m
s.

through the third-doctor conflict resolution procedure?

@

Explain. (2019 Part II BAR Q. No. B.16[b])

91

No, Seafarer G's claim for total and permanent

cx

disability benefits will not prosper.

o.
er

To reiterate what has already been settled, the referral

sp

to a third physician is mandatory and non-compliance with

o

the procedure may militate against the claim for permanent

pr

total disability in cases where the company-designated

doctor declared otherwise. This is especially so if the seafarer
failed to explain why recourse to the said remedy was not
made. (Hernandez v. Magsaysay Maritime Corporation, G.R.
No. 226103, January 24, 2018)

In this case, Seafarer G failed to settle the matter

through the third doctor conflict resolution procedure.
Applying the doctrinal rule, since the third-doctor
conflict resolution procedure is mandatory Seafarer G's
claim will not prosper.
 LABOR STANDARDS 483

Health, Safety, and Social Welfare Benefits

Assuming that Seafarer G failed to submit himself to a

post-employment medical examination within three (3)
working days from his return, what is the consequence
thereof to his claim? Explain. (2019 Part II BAR Q. No.
B.16[c])

The failure of a seafarer to submit himself/herself to

a postemployment medical examination by a company
designated physician within three working days upon his
return to the Philippines shall result in the forfeiture of his/
her right to claim disability benefits. (Manila Shipmanagement

ph
& Manning, Inc. v. Aninang, G.R. No. 217135, January 31, 2018)

u.
42. What are the basis to pursue an action for total and

ed
permanent disability benefits?

n.
ai
In Torillos v. Eastgate Maritime Corp., G.R. No. 215904,
m
January 10, 2019, citing C.F Sharp Crew Management, Inc.
su

v. Taok, G.R. No. 193679, July 18, 2012, 691 Phil. 521 (2012)
m

that a seafarer may have basis to pursue an action for total

s.

and permanent disability benefits in any of the following

@

conditions:
91
cx

(a) The company-designated physician failed to

o.

issue a declaration as to his fitness to engage in sea duty

er

or disability even after the lapse of the 120-day period and

sp

there is no indication that further medical treatment would

o

address his temporary total disability, hence, justify an

pr

extension of the period to 240 days;

(b) 240 days had lapsed without any certification

issued by the company designated physician;

(c) The company-designated physician declared that

he is fit for sea duty within the 120-day or 240-day period,
as the case may be, but his physician of choice and the
doctor chosen under Section 20-B(3) of the POEA-SEC are
of a contrary opinion;

(d) The company-designated physician acknowl

edged that he is partially permanently disabled but other
doctors who he consulted, on his own and jointly with his
484 LABOR LAW REVIEWER

employer, believed that his disability is not only permanent

but total as well;

(e) The company-designated physician recognized

that he is totally and permanently disabled but there is a
dispute on the disability grading;
(f) The company-designated physician determined
that his medical condition is not compensable or work
related under the POEA-SEC but his doctor-of-choice and
the third doctor selected under Section 20-B(3) of the POEA
SEC found otherwise and declared him unfit to work;

ph
(g) The company-designated physician declared him

u.
totally and permanently disabled but the employer refuses

ed
to pay him the corresponding benefits; and

n.
(h) The company-designated physician declared him
ai
m
partiall and permanently disabled within the 120-day or
su
240-day period but he remains incapacitated to perform his
m

usual sea duties after the lapse of said periods.

s.
@

43. What are the guidelines on company-designated physician

91

to assess the seafarer?

cx

In Cutanda v. Marlow Navigation Phils., Inc. G.R. No.

o.

219123, September 11, 2017, the High Court explained that

er

the seafarer's disability should not be simply determined

sp

by the number of days that he could not work and the

o
pr

determination of the fitness of a seafarer by the company

designated physician should be subject to the periods
prescribed by law. Thus, the Court said:
Finally, in Elburg Shipmanagement Phils.,
Inc. v. Quiogue, Jr, (Elburg), it was affirmed
that the Crystal Shipping doctrine was not
binding because a seafarer's disability should
not be simply determined by the number of
days that he could not work. Nevertheless, the
pronouncement in Carcedo was reiterated that
the determination of the fitness of seafarer by
the company-designated physician should be
 LABOR STANDARDS 485

Health, Safety, and Social Welfare Benefits

subject to the periods prescribed by law. Elburg

provided a summation of periods when the
company-designated physician must assess the
seafarer, to wit:

1. The company-designated physician

must issue final medical assessment on the
seafarer's disability grading within a period of
120 days from the time the seafarer reported to
him;

2. If the company-designated physician

ph
fails to give his assessment within the period of

u.
120 days, without any justifiable reason, then

ed
the seafarer's disability becomes permanent and
total;

n.
3. If the company-designated physician
ai
m
fails to give his assessment within the period
su

of 120 days with a sufficient justification (e.g.,

m

seafarer required further medical treatment or

s.
@

seafarer was uncooperative), then the period of

diagnosis and treatment shall be extended to 240
91

days. The employer has the burden to prove that

cx

the company-designated physician has sufficient

o.

justification to extend the period; and

er
sp

4. If the company-designated physician

o

still fails to give his assessment within the extended

pr

period of 240 days, then the seafarer's disability

becomes permanent and total, regardless of any
justification.

44. What is a work-related illness under the Amended

Standards Terms and Conditions Governing the Overseas

Employment of Filipino Seafarers On-Board Ocean-Going
Ships (MC No. 10-2010)?

Work-related illness means any sickness as a result of

an occupational disease listed under Section 32-A of this
Contract with the conditions set therein satisfied. (No. 16,
Definitions of Term, MC-10-2010)
486 LABOR LAW REVIEWER

45. What are the conditions for an occupational disease

and the resulting disability or death to be compensable
under Section 32-A of the Amended Standards Terms
and Conditions Governing the Overseas Employment of
Filipino Seafarers On-Board Ocean-Going Ships (MC No.
10-2010)?

For an occupational disease and the resulting disability

or death to be compensable, all of the following conditions
must be satisfied:

1. The seafarer's work must involve the risks

ph
described herein;

u.
2. The disease was contracted as a result of the

ed
seafarer's exposure to the describe[d] risks;

n.
ai
3. The disease was contracted within a period of
m
exposure and under such other factors necessary to contract
su

it;
m
s.

4. There was no notorious negligence on the part of

@

the seafarer. (Section 32-A POEA-SEC)

91
cx

46. What is a work-related injury under the Amended

o.

Standards Terms and Conditions Governing the Overseas

er

Employment of Filipino Seafarers On-Board Ocean-Going

sp

Ships (MC No. 10-2010)?

o
pr

Work-related injury means injury arising out of and in

the course of employment. (No. 17, Definitions of Term, MC
10-2010)

47. Nonato had been continuously employed and deployed

as a seaman who performed services that were necessary
and desirable to the business of N-Train Shipping,
through its local agent, Narita Maritime Services
(Agency), in accordance with the 2010 Philippine Overseas
Employment Administration Standard Employment
Contract (2010 POEA-SEC). Nonato's last contract (for five

months) expired on November 15, 2016. Nonato was then

repatriated due to a "finished contract." He immediately
 LABOR STANDARDS 487

Health, Safety, and Social Welfare Benefits

reported to the Agency and complained that he had

been experiencing dizziness, weakness, and difficulty
in breathing. The Agency referred him to Dr. Neri, who
examined, treated, and prescribed him with medications.
After a few months of treatment and consultations, Nonato
was declared fit to resume work as a seaman. Nonato
went back to the Agency to ask for re-deployment but the
Agency rejected his application. Nonato filed an illegal
dismissal case against the Agency and its principal, with
a claim for total disability benefits based on the ailments
that he developed on board N-Train Shipping vessels. The

ph
claim was based on the certification of his own physician,

u.
Dr. Nunez, that he was unfit for sea duties because of his

ed
hypertension and diabetes.

n.
ai
Can Nonato successfully claim disability benefits against
m
N-Train Shipping and its agent Narita Maritime Services?
su
(2018 BAR Q. No. X[b])
m

No, Nonato cannot successfully claim disability

s.
@

benefits.
91

A disability is compensable under the POEA Standard

cx

Employment Contract if two (2) elements are present: (1) the

o.

injury or illness must be work-related; and (2) the injury or

er

illness must have existed during the term of the seafarer's

sp

employment contract. Hence, a claimant must establish

o

the causal connection between the work and the illness or

pr

injury sustained. (Tagle v. Anglo-Eastern Crew Management,

Philippines, Inc., 738 Phil. 871 (2014) [Per J. Mendoza, Third
Division].) The 2010 POEA Standard Employment Contract
defines "work-related injury" as injury "arising out of and
in the course of employment." Thus, a seafarer has to prove
that his injury was linked to his work and was acquired
during the term of employment to support his claim for
sickness allowance and disability benefits. (Ebuenga v.
Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018)

Moreover, Section 32-A of the POEA-SEC

acknowledges the possibility of "compensation for the death
of the seafarer occurring after the employment contract on
488 LABOR LAW REVIEWER

account of a work-related illness" as long as the following

conditions are met (1) The seafarer's work must involve
the risks described herein; (2) The disease was contracted
as a result of the seafarer's exposure to the described risks;
(3) The disease was contracted within a period of exposure
and under such other factors necessary to contract it; and
(4) There was no notorious negligence on the part of the
seafarer. (Magsaysay Maritime Corporation v. De Jesus, G.R.
No. 203943, August 30, 2017)

Thus, to be entitled to the claim for disability benefit,

Nonato must prove the foregoing elements or conditions,

ph
otherwise he cannot successfully claim the compensation

u.
for his total disability.

ed
n.
48. Victor was hired by a local manning agency as a seafarer

ai
m
cook on board a luxury vessel for an eight-month cruise.
su
While on board, Victor complained of chronic coughing,
m

intermittent fever, and joint pains. He was advised by the

s.

ship's doctor to take complete bed rest but was not given
@

any other medication. His condition persisted but the

91

degree varied from day to day. At the end of the cruise,

cx

Victor went home to Iloilo and there had himself examined.

o.

The examination revealed that he had tuberculosis.

er

Victor sued for medical reimbursement, damages

sp

and attorney's fees, claiming that tuberculosis was a

o
pr

compensable illness. Do you agree with Victor? Why or

why not? (2015 BAR Q. No. XV[a])

I do not agree with Victor.

The legal bases are the following:

1.
For a seaman's claim for disability to prosper, it
is mandatory that within three days from his repatriation,
he is examined by a company-designated physician. Non
compliance with this mandatory requirement results in
the forfeiture of the right to claim for compensation and
disability benefits. (Interorient Maritime Enterprises, Inc. v.
Creer III, G.R. No. 181921, September 17, 2014)
 LABOR STANDARDS 489

Health, Safety, and Social Welfare Benefits

Victor failed to comply with the above requirement

because he went home to Iloilo and there had himself
examined.

2. For an illness to be compensable, the Amended

Standard Terms and Conditions Governing the Employment
of Filipino Seafarers on Board Ocean-Going Vessels (2000
Amended Standard Terms and Conditions), deemed
incorporated in the POEA Contract, requires the concurrence
of two elements: first, that the illness must be work-related;
and second, that the work-related illness must have existed

ph
during the term of the seafarer's employment contract.

u.
(Interorient Maritime Enterprises, Inc. v. Creer III, G.R. No.

ed
181921, September 17, 2014)

n.
Victor failed to prove that his illness existed during the
terms of his contract and that it is work-related.
ai
m
su
3. There is no question that Pulmonary Tuberculosis
m

is listed as an occupational disease. However, for the

s.

disability caused by this occupational disease to be

@

compensable, the POEA Contract provides conditions that

91

must be satisfied, viz.:

cx

For an occupational disease and the resulting disability

o.
er

or death to be compensable, all of the following conditions

sp

must be satisfied:
o

1. The seafarer's work must involve the risks

pr

described herein;

2. The disease was contracted as a result of the

seafarer's exposure to the describe[d] risks;

3. The disease was contracted within a period

of exposure and under such other factors necessary to
contract it;

4. There was no notorious negligence on the

part of the seafarer. (Section 32-A POEA-SEC)

Victor failed to comply with the foregoing conditions.

490 LABOR LAW REVIEWER

Due to his prolonged illness, Victor was unable to work

for more than 120 days. Will this entitle him to claim total
permanent disability benefits? (2015 BAR Q. NO. XV[b])
No, because Victor failed to report to his manning agent
within three days from his arrival as required by the POEA
SEC and the elements or conditions for compensability of a
work-related illness or occupational disease are not present.

49. For ten (10) separate but consecutive yearly contracts, Cesar
has been deployed as an able-bodied seaman by Meritt
Shipping, through its local agent, Ace Maritime Services

ph
(agency), in accordance with the 2000 Philippine Overseas

u.
Employment Administration Standard Employment

ed
Contract (2000 POEA-SEC). Cesar's employment was also

n.
covered by a CBA between the union, [Link], and
ai
m
Meritt Shipping. Both the 2000 POEA-SEC and the CBA
su
commonly provide the same mode and procedures for
m

claiming disability benefits. Cesar's last contract (for nine

s.

months) expired on July 15, 2013. Cesar disembarked from

@

the vessel M/V Seven Seas on July 16, 2013 as a seaman on

91

"finished contract". He immediately reported to the agency

cx

and complained that he had been experiencing spells of

o.

dizziness, nausea, general weakness, and difficulty in

er

breathing. The agency referred him to Dr. Sales, a cardio

sp

pulmonary specialist, who examined and treated him;

o

advised him to take a complete rest for a while; gave him

pr

medications; and declared him fit to resume work as a

seaman. After a month, Cesar went back to the agency to
ask for re-deployment. The agency rejected his application.
Cesar responded by demanding total disability benefits
based on the ailments that he developed and suffered
while on board Meritt Shipping vessels. The claim was
based on the certification of his physician (internist Dr.
Reyes) that he could no longer undertake sea duties
because of the hypertension and diabetes that afflicted
him while serving on Meritt Shipping vessels in the last
10 years. Rejected once again, Cesar filed a complaint
for illegal dismissal and the payment of total permanent
 491
LABOR STANDARDS

Health, Safety, and Social Welfare Benefits

disability benefits against the agency and its principal.

Assume that you are the Labor Arbiter deciding the case.
Identify the facts and issues you would consider material
in resolving the illegal dismissal and disability complaint.
Explain your choices and their materiality, and resolve the
case. (2013 BAR Q. No. X)

The facts and the issues are:

1. Whether or not Cesar was illegally dismissed

This issue is material because Cesar's complaint is for
illegal dismissal. [I]t is clear that seafarers are considered

ph
contractual employees. They cannot be considered as

u.
regular employees under Article 280 (now 2904) of the Labor

ed
Code. Their employment is governed by the contracts they

n.
sign every time they are rehired and their employment is
ai
terminated when the contract expires. (Petroleum Shipping
m
su
Limited (formerly Esso International Shipping [Bahamas] Co.,
Ltd. v. NLRC, G.R. No. 148130, June 16, 2006)
m
s.

In this case there was no illegal dismissal but expiration

@

of Cesar's contract.
91

2. Whether or not Cesar is entitled to disability

cx

compensation
o.
er

3. Whether the illness is work-related and existed

sp

during the term of Cesar's employment contract

o
pr

The second and third issues are interrelated.

A disability is compensable under the POEA Standard

Employment Contract if two (2) elements are present: (1) the
injury or illness must be work-related; and (2) the injury or
illness must have existed during the term of the seafarer's
employment contract. Hence, a claimant must establish
the causal connection between the work and the illness or

injury sustained. (Tagle v. Anglo-Eastern Crew Management,

Philippines, Inc., 738 Phil. 871 (2014) [Per J. Mendoza, Third
Division].)

The 2010 POEA Standard Employment Contract

defines "work-related injury" as injury "arising out of and
492 LABOR LAW REVIEWER

in the course of employment." Thus, a seafarer has to prove

that his injury was linked to his work and was acquired
during the term of employment to support his claim for
sickness allowance and disability benefits. (Ebuenga v.
Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018)
Moreover, Section 32-A of the POEA-SEC acknowledges
the possibility of "compensation for the death of the seafarer
occurring after the employment contract on account of a
work-related illness" as long as the following conditions
are met: (1) The seafarer's work must involve the risks
described herein; (2) The disease was contracted as a result

ph
of the seafarer's exposure to the described risks; (3) The

u.
disease was contracted within a period of exposure and

ed
under such other factors necessary to contract it; (4) There

n.
was no notorious negligence on the part of the seafarer.
ai
m
(Magsaysay Maritime Corporation v. De Jesus, G.R. No. 203943,
su
August 30, 2017)
m

To be entitled to the claim for disability benefit, Cesar

s.

must prove the foregoing elements.

@
91
cx
o.
er
osp
pr
 Chapter II
SOCIAL SECURITY ACT OF 2018

1.
Who is an employer under the SSS Law (RA 11199)?

Any person, natural or juridical, domestic or foreign

ph
who carries on in the Philippines any trade, business,

u.
industry, undertaking, or activity of any kind and uses

ed
the services of another person who is under his/her

n.
orders as regards the employment, except the Philippine
ai
m
Government and any of its political subdivisions, branches
su
or instrumentalities, including corporations owned or
m

controlled by the Philippine Government, provided that a

s.

self-employed person shall be both employee and employer

@

at the same time. (Section 8[c], RA 11199, Rule 12, Section 3,

91

IRR of RA 11199)
cx
o.

2. Which of the following is not considered an employer by

er

the terms of the Social Security Act?

sp

a.
A self-employed person;
o
pr

b. The government and any of its political

subdivisions, branches or instrumentalities,

including corporations owned or controlled by

the government;
C. A natural person, domestic or foreign, who
carries on in the Philippines, any trade, business,
industry, undertaking or activity of any kind
and uses the services of another person who is
under his orders as regards the employment;

493
494 LABOR LAW REVIEWER

d. A foreign corporation. (2012 BAR Q. No. 36)

b. The government and any of its political
subdivisions, branches or instrumentalities, including
corporations owned or controlled by the government
3. Who is an employee under the SSS Law (RA 11199)?
Any person who performs services for an employer in
which either or both mental or physical efforts are used and
who receives compensation for such services, where there
is an employer-employee relationship, provided that a self

ph
employed person shall be both employee and employer at

u.
the same time. (Section 8[d], RA 11199, Rule 12, Section 1, IRR

ed
ofRA 11199)

n.
ai
As a general rule, the determination of the existence
m
or non-existence of an employer-employee relationship for
su

the purpose of determining the coverage in the SSS shall be

m

within the sole jurisdiction of the Commission. (SSS Office

s.

Order 2017-032 [May 29, å2017])

@
91

4. Can a member of a cooperative be deemed an employee

cx

for purposes of compulsory coverage under the Social

o.

Security Act? Explain. (2009 BAR Q. No. X[b])

er
sp

Yes. The term employee under the Social Security Act

o

means any person who performs services for an employer

pr

in which either or both mental or physical efforts are used

and who receives compensation for such services, where
there is an employer-employee relationship, provided that a
self-employed person shall be both employee and employer
at the same time. (Section 8[d], RA 11199, Rule 12, Section 1,
IRR of RA 11199)

As a general rule, the determination of the existence

or non-existence of an employer-employee relationship for
the purpose of determining the coverage in the SSS shall be
within the sole jurisdiction of the Commission. (SSS Office
Order 2017-032 [May 29, 2017])
 LABOR STANDARDS 495

Social Security Act of 2018

5. Marvin Patrimonio is a caddy rendering caddying services

for the members and guests of the Barili Golf & Country
Club. As such caddy, he is subject to Barili golfs rules and
regulations governing Caddies regarding conduct, dress,
language, etc. However, he does not have to observe any
working hours, he is free leave anytime he pleases; and
he can stay away for as long as he likes. Nonetheless, if he
is found remiss in the observance of club rules, he can be
disciplined by being barred from the premises of Barili
Golf. Is Marvin within the compulsory coverage of the
Social Security System? Why? (1999 BAR Q. No. VII)

ph
u.
No, Marvin Patrimonio is not within the compulsory

ed
coverage of the Social Security System.

n.
The SSS Law provides that coverage in the SSS shall

ai
m
be compulsory upon all employees not over sixty (60)
su
years of age. (Section 9, RA 11199) Thus, the compulsory
m

coverage for SSS requires the existence of employer

s.

employee relationship. On the other hand, the elements to

@

establish employer-employee relationship are selection and

91

engagement, payment of wages, power of dismissal, and

cx

power of control. The said elements are lacking.

o.

In this case, the facts clearly show that Marvin

er

Patrimonio does not have to observe any working hours,

sp

he is free to leave anytime he pleases, and he can stay

o
pr

away for as long as he likes. Moreover, while he is subject

to certain rules and can be disciplined by barring his entry,
the said rules are mere guidelines to achieve the desired
result and does not fix the methodology and manner of the
performance of his work. Thus, based on the elements there
is no employer-employee relationship between Marvin
Patrimonio and Barili Golf & Country Club.

Applying the law, Marvin Patrimonio is not covered

by the SSS.
496 LABOR LAW REVIEWER

6. Who are the dependents under the SSS Law (RA 11199)?
The dependents shall refer to the following:
i. The legal spouse entitled by law to receive support
from the member; (Section 8[e][1], RA 11199, Rule 12, Section
5, IRR of RA 11199)

ii. The legitimate, legitimated or legally adopted

and illegitimate child who is:
a) Unmarried,

b) Not gainfully employed, and

ph
u.
c) Has not reached twenty-one (21) years of

ed
age, or if over 21 years of age, he/she is congenitally or

n.
while still a minor has been permanently incapacitated

ai
and incapable of self-support, physically or mentally.
m
(Section 8[e][2], RA 11199, Rule 12, Section 1, IRR of RA
su

11199)
m
s.

A child who has entered in a common-law relationship

@

and has not reached the age of eighteen (18) is still a

91

dependent. However, upon reaching the age of 18, the child

cx

is no longer qualified as a dependent.

o.

iii. The parent who is receiving regular support from

er
sp

the member. (Section 8[e][3], RA 11199, Rule 12, Section 1, IRR

of RA 11199)
o
pr

7. Gene is a married regular employee of Matibay

Corporation. The employee and Matibay Corporation had
an existing CBA that provided for funeral or bereavement
aid of P15,000.00 in case of the death of a legal dependent
of a regular employee. His widowed mother, who had
been living with him and his family for many years, died;
hence, he claimed the funeral aid. Matibay Corporation
denied the claim on the basis that she had not been his
legal dependents as the term legal dependent was defined
by the Social Security Law.
 LABOR STANDARDS 497

Social Security Act of 2018

Who may be the legal dependents of Gene under the

Social Security Law? (2017 BAR Q. No. XII[a])

The dependents under the SSS Law shall refer to the

following:

The legal spouse entitled by law to receive support

from the member; (Section 8[e][1], RA 11199, Rule 12, Section
5, IRR of RA 11199)

ii. The legitimate, legitimated or legally adopted

and illegitimate child who is:

ph
a) Unmarried,

u.
b) Not gainfully employed, and

ed
n.
c) Has not reached twenty-one (21) years of

ai
age, or if over 21 years of age, he/she is congenitally or
m
while still a minor has been permanently incapacitated
su

and incapable of self-support, physically or mentally.

m

(Section 8[e][2], RA 11199, Rule 12, Section 5, IRR of RA

s.

11199)
@
91

iii The parents who are receiving regular support

cx

from the member. (Section 8[e][3], RA 11199, Rule 12, Section

o.

5, IRR of RA 11199)
er

Based on the foregoing rule, Gene's dependents are his

sp

legal spouse, children, and parents.

o
pr

8. What is the employment or service covered under the SSS

Law (RA 11199)? State the exceptions, if any.
Any service performed by an employee for his/her
employer, except the following:
i. Services where there is no employer-employee
relationship in accordance with existing labor laws, rules,
regulations and jurisprudence; (Section 8[j][1], RA 11199,
Rule 12, Section 10, IRR of RA 11199)

ii. Service performed in the employ of the Philippine

Government or instrumentality or agency thereof; (Section
8[j][2], RA 11199, Rule 12, Section 10, IRR of RA 11199)
498 LABOR LAW REVIEWER

iii. Service performed in the employ of a foreign

government or international organization, or their wholly
owned instrumentality. This exemption notwithstanding,
any foreign government, international organization or
their wholly-owned instrumentality employing workers
in the Philippines or employing Filipinos outside of the
Philippines, may enter into an agreement with the Philippine
Government for the inclusion of such employees in the SSS
except those already covered by their respective civil service
retirement systems. The terms of such agreement shall
conform with the provisions of the Social Security Act of

ph
2018 on coverage and amount of payment of contributions

u.
and benefits and the provisions of the Social Security Act

ed
of 2018 Act shall be supplementary to any such agreement;
(Section 8[j][3], RA 11199, Rule 12, Section 10, IRR of RA 11199)

n.
iv.
ai
Such other services performed by temporary and
m
other employees which may be excluded by regulation of
su

the Commission; and (Section 8[j][4], RA 11199, Rule 12,

m

Section 10, IRR of RA 11199)

s.
@

V. Employees of bona fide independent contractors

91

shall not be deemed employees of the employer engaging

cx

the service of said contractors. (Section 8[j][4], RA 11199,

o.

Rule 12, Section 10, IRR of RA 11199)

er
sp

9. Ador is a student working on his master's degree in

o

horticulture. To make ends meet, he takes on jobs to come

pr

up with flower arrangements for friends. His neighbor,

Nico, is about to get married to Lucia and needs a floral
arranger. Ador offers his services and Nico agrees. They
portyshake hands on it, agreeing that Nico will pay Ador
P20,000.00 for his services but that Ador will take care

of everything. As Ador sets about to decorate the venue,

Nico changes all of Ador's plans and ends up designing
the arrangements himself with Ador simply executing
Nico's instructions.

Will Nico need to register Ador with the Social Security

System (SSS)? (2015 BAR Q. No. VI[b])
No, Nico does not need to register Ador with the SSS.
 499
LABOR STANDARDS
Social Security Act of 2018

The employment excluded from SSS coverage refers to

such services performed by temporary employees. (Section
8[j][3], RA 11199, Rule 12, Section 10, IRR of RA 11199) Thus,
Ador being a temporary employee is not subject to Social
Security System coverage.

Applying the law, Nico need not register Ador for SSS
coverage.

10. Don Luis, a widower, lived alone in a house with a large

garden. One day, he noticed that the plants in his garden
needed trimming. He remembered that Lando, a 17-year

ph
old out-of-school youth, had contacted him in church

u.
the other day looking for work. He contacted Lando who

ed
immediately attended to Don Luis's garden and finished

n.
the job in three days.

ai
m
Does Don Luis need to register Lando with the Social
su

Security System (SSS)? (2014 BAR Q. No. XIII[B])

m
s.

No, Don Luis does not need to register Lando with the
@

SSS.
91

The employment excluded from SSS coverage refers to

cx

such services performed by temporary employees. (Section

o.

8[j][3], RA 11199, Rule 12, Section 10, IRR of RA 11199) Thus,

er

Lando being a temporary employee is not subject to Social

sp

Security System coverage.

o
pr

Applying the law, Don Luis need not register Lando

for SSS coverage.

11. The owners of FALCON Factory, a company engaged

in the assembling of automotive components, decided
to have their building renovated. Fifty (50) persons,
composed of engineers, architects and other construction
workers, were hired by the company for this purpose. The
work was estimated to be completed in three (3) years.
The employees contended that since the work would be
completed after more than one (1) year, they should be
subject to compulsory coverage under the Social Security
500 LABOR LAW REVIEWER

Law. Do you agree with their contention? Explain your

answer fully. (2002 BAR Q. No. XII)

No, I do not agree. The employment excluded from SSS

coverage refers to such services performed by temporary
employees. (Section 8[j][3], RA 11199, Rule 12, Section 10,
IRR of RA 11199) Thus, as temporary employees the fifty
(50) persons, composed of engineers, architects, and other
construction workers, are not subject to Social Security
System coverage.

12. Who are the primary and secondary beneficiaries under

ph
the SSS Law (RA 11199)?

u.
ed
The following are considered primary beneficiaries:

n.
i. The dependent spouse who has not re-married
ai
(Section 8[k], RA 11199, Rule 12; Section 12, IRR of RA 11199),
m
su
cohabited or entered in a "live-in" relationship before or
after the death of the member, and
m
s.

ii. The dependent legitimate, legitimated or legally

@

adopted and illegitimate children.

91

Where there are legitimate or illegitimate children,

cx

the former shall be preferred. The dependent illegitimate

o.

children shall be entitled to fifty percent (50%) of the share

er
sp

of the legitimate, legitimated or legally adopted children.

In the absence of the dependent legitimate, legitimated or
o
pr

legally adopted children of member, his/her dependent

illegitimate children shall be entitled to one hundred
percent (100%) of the benefits. (Section 8[k], RA 11199; Rule
12, Section 12, IRR of RA 11199)

In the absence of primary beneficiaries, the secondary

beneficiaries are as follows:

The dependent parents of the deceased member; and

ii. In the absence of dependent parents, any other
person/s designated and reported by the member to the
SSS (Section 8[k], RA 11199, Rule 12, Section 13, IRR of RA
11199). The person designated by the member shall be
 LABOR STANDARDS 501

Social Security Act of 2018

someone who has a right to claim for support from the

deceased member under the Family Code of the Philippines,
including dependent children who have reached the age of
majority.

13. X is member of the Social Security System (SSS). In

2015, he died without any spouse or children. Prior to the
semester of his death, X had paid 36 monthly contributions.
His mother, M, who had previously been receiving regular
support from X, filed a claim for the latter's death benefits.

ph
Is M entitled to claim death benefits from the SSS?

u.
Explain. (2019 Part I BAR Q. No. A.2[a])

ed
Yes, M is entitled to claim the death benefits. According

n.
to the SSS Law (Section 8[k], RA 11199), in the absence of the

ai
dependent spouse and children, as the primary beneficiaries,
m
the dependent parents shall be the secondary beneficiaries
su

of the member.
m
s.

In this case, since X died without any spouse or children

@

his mother M can therefore claim the death benefits as the

91

secondary beneficiary.
cx
o.

Assuming that X got married to his girlfriend a few days

er

before his death, is M entitled to claim death benefits from

sp

the SSS? Explain. (2019 Part I BAR Q. No. A.2[b])

o
pr

No, M is no longer entitled to claim the death benefits

of X.

According to the SSS Law (Section 8[k], RA 11199) one

of the primary beneficiaries is the dependent spouse while
dependent parents are only secondary beneficiaries of the
member. M as the secondary beneficiary can only be entitled
to the benefits in the absence of the primary beneficiaries,
such as the dependent spouse and children.

In this case when X got married to his girlfriend a few

days before his death, she became his dependent spouse
and primary beneficiary M is, therefore, no longer entitled
to claim her son's death benefits from the SSS.
502 LABOR LAW REVIEWER

14. Gene is a married regular employee of Matibay

Corporation. The employee and Matibay Corporation had
an existing CBA that provided for funeral or bereavement
aid of P15,000.00 in case of the death of a legal dependent
of a regular employee. His widowed mother, who had been
living with him and his family for many years, died; hence,
stiche claimed the funeral aid. Matibay Corporation denied
the claim on the basis that she had not been his legal
independents as the term legal dependent was defined by the
Social Security Law.

Is Gene entitled to the funeral aid for the death of his

ph
widowed mother? Explain your answer. (2017 BAR Q. No.

u.
XII[b])

ed
Yes, Gene is entitled to funeral aid.

n.
ai
The existing laws are always forming part of any
m
contract and are deemed incorporated in each and every
su

contract. (Sulo sa Nayon, Inc. v. Nayong Pilipino Foundation,

m

G.R. No. 170923, January 20, 2009) Thus, the meaning of legal
s.
@

dependent in the CBA should be the same as what the SSS

91

Law provides which refers to the parent who is receiving

support from the member. (Section 8[e], RA 11199, Rule 12,
cx

Section 1, IRR of RA 11199)

o.
er

In this case, if Gene's deceased mother is receiving

sp

support from him then his mother is a dependent.

o

Consequently, since the existing CBA provided for a funeral

pr

or bereavement aid of P15,000.00 in case of the death of a

legal dependent of a regular employee Gene can, therefore,
to claim the said benefit.

Alternative answer:

No, Gene is not entitled to funeral aid.

The existing laws are always forming part of any

contract and are deemed incorporated in each and every
contract. (Sulo sa Nayon, Inc. v. Nayong Pilipino Foundation,
G.R. No. 170923, January 20, 2009) Thus, the meaning of legal
dependent in the CBA should be the same as what the SSS
Law provides which refers to the parent who is receiving
 LABOR STANDARDS 503

Social Security Act of 2018

support from the member. (Section 8[e], RA 11199, Rule 12,

Section 1, IRR of RA 11199)

In this case, while Gene's mother was living with him

the facts do not show that his mother was receiving support
from him.

Applying the law, since Gene's mother is not within

the scope of legal dependent as defined by law Gene cannot,
therefore, claim the said funeral benefit.

15. Baldo, a farm worker on pakyaw basis, had been working

ph
on Dencio's land by harvesting abaca and coconut,

u.
processing copra, and clearing weeds from year to year

ed
starting January 1993 up to his death in 2007. He worked

n.
continuously in the sense that it was done for more than
one harvesting season.
ai
m
su
Was Dencio required to report Baldo for compulsory
m

social security coverage under the SSS law? Explain. (2016

s.

BAR Q. No. XVII[a])

@

Yes, because Baldo is an employee, specifically

91

categorized as a regular seasonal employee.

cx
o.

The coverage in the SSS shall be compulsory upon all

er

employees including domestic workers or "kasambahays"

sp

not over sixty (60) years of age (up to the day of his/her
o

60th birthday) and their employers. (Section 9[a], RA 11199,

pr

Rule 13, Section 1, IRR of RA 11199) Thus, Dencio is required

to report Baldo, being an employee, for social security
Jan coverage under the SSS law.
16. State the respective coverages of the Social Security Law.
(1997 BAR Q. No. XX[a])

The following are the coverages under SSS Law:

1. Compulsory coverage of employees and their
employers

Coverage in the SSS shall be compulsory upon all

employees including domestic workers or "kasambahays"
not over sixty (60) years of age (up to the day of his/her
504 LABOR LAW REVIEWER

60th birthday) and their employers. (Section 9[a], RA 11199,

Rule 13, Section 1, IRR of RA 11199)

Covered employees with private benefit plans

The benefit already earned by the employees under

private benefit plans existing at the time of the approval of
the Social Security Act of 2018 shall not be discontinued,
reduced or otherwise impaired. (Section 9[a], RA 11199, Rule
13, Section 2, IRR of RA 11199)

Compulsory coverage of the self-employed

ph
Coverage in the SSS shall be compulsory upon self

u.
employed persons as may be determined by the Commission

ed
under such rules and regulations it may prescribe. (Section

n.
9-A, first paragraph, RA 11199, Rule 13, Section 3, IRR of RA

ai
11199) m
su
Compulsory OFW coverage
m

Coverage in the SSS shall be compulsory upon all sea

s.

based and land-based OFWs as defined under RA 8042 or

@

the Migrant Workers and Overseas Filipinos Act of 1995 as

91

amended [by RA 10022], provided they are not over sixty

cx

(60) years of age. (Section 9-B,[a], first paragraph, RA 11199,

o.

Rule 14, Section 1, IRR of RA 11199)

er
sp

The following may be covered by the SSS on a voluntary

o

basis:
pr

i. A spouse of a member who devotes full time to

managing the household and family affairs, but does not
engage in other vocation or employment which is subject to
compulsory or mandatory coverage; (Section 9[b], RA 11199,
Rule 13, Section 4, IRR of RA 11199)

ii. An OFW upon the termination of his/her

employment overseas; (Section 9-B[f], RA 11199, Rule 13,
Section 4, IRR of RA 11199)

iii. A covered employee who was separated from

employment who continues to pay his/her contributions;
and (Section 11, RA 11199, Rule 13, Section 4, IRR of RA 11199)
 LABOR STANDARDS 505

Social Security Act of 2018

iv. A self-employed member who realizes no

income in any given month who continues to pay his/her
contributions. (Section 11-A, RA 11199, Rule 13, Section 4, IRR
of RA 11199)

17. The Collective Bargaining Agreement of the Golden

Corporation Inc. and the Golden Corporation Workers
Union provides a package of welfare benefits far superior
in comparison with those provided for in the Social
Security Act of 1997. The welfare plan of the company is
funded solely by the employer with no contributions from

ph
the employees. Admittedly, it is the best welfare plan in

u.
the Philippines. The company and the union jointly filed

ed
a petition with the Social Security System for exemption

n.
from coverage. Will the petition for exemption from
ai
m
coverage prosper? Reason. (2000 BAR Q. No. II)
su

No, the petition will not prosper.

m
s.

The following rules shall govern the covered

@

employees with private benefit plans:

91

i. The benefit already earned by the employees

cx

under private benefit plans existing at the time of the

o.

approval of the Social Security Act of 2018 shall not be

er

discontinued, reduced or otherwise impaired; (Section 9[a],

sp

RA 11199, Rule 13, Section 2, IRR of RA 11199)

o
pr

ii. Private benefit plans which are existing and in

force at the time of compulsory coverage shall be integrated
with the plan of the SSS. If the employer's contribution to
his/her private plan is more than that required of him/her
in the Social Security Act of 2018, he/she shall pay to the
SSS only the contribution required of him/her and he/she
shall continue his/her contribution to such private plan less
his/her contribution to the SSS so that the employer's total
contribution to his/her benefit plan and to the SSS shall be
the same as his/her contribution to his/her private benefit
plan before the compulsory coverage; (Section 9[a], RA
11199, Rule 13, Section 2, IRR of RA 11199)
506 LABOR LAW REVIEWER

iii. Any changes, adjustments, modifications,

eliminations or improvements in the benefits to be available

under the remaining private plan, which may be necessary
to adopt by reason of the reduced contributions thereto as
a result of the integration, shall be subject to agreements
between the employers and employees concerned; (Section
9[a], RA 11199, Rule 13, Section 2, IRR of RA 11199)

iv. The private benefit plan which the employer

shall continue for his/her employees shall remain under
the employer's management and control unless there is an
existing agreement to the contrary; (Section 9[a], RA 11199,

ph
Rule 13, Section 2, IRR of RA 11199)

u.
ed
V. Nothing in the Social Security Act of 2018 shall

n.
be construed as a limitation to the right of employers and

ai
employees to agree on and adopt benefits which are over
m
and above those provided under the Social Security Act of
su

2018; and (Section 9[a], RA 11199, Rule 13, Section 2, IRR of RA

m

11199)
s.
@

vi. The guidelines on the single employer

91

registration process shall continue to apply, subject to

cx

Section 33 of the Social Security Act of 2018. (SSC Circular

No. 2009-004 [March 29, 2009], Rule 12, Section 2, IRR of RA
o.
er

11199)
sp

18. What are the effective dates for SSS coverage of the
o
pr

employer, employee, self-employed, and OFW?

1. Compulsory coverage of the employer shall take
effect on the first day of his/her operation. (Section 10, RA
11199, Rule 15, Section 1, IRR of RA 11199)

2. Compulsory coverage of the employee shall take

effect on the first day of his/her employment. (Section 10,
RA 11199, Rule 15, Section 2, IRR of RA 11199)

3. Compulsory coverage of the self-employed

person shall take effect upon his/her registration with the
SSS. Registration shall mean payment of first contribution.
(Section 10, proviso, RA 11199, Rule 15, Section 3, IRR of RA
11199)
 507
LABOR STANDARDS
Social Security Act of 2018

4. The effective date of coverage of the OFW shall be

as follows:

i. Compulsory coverage of a sea-based OFW

shall take effect on the first day of his/her employment;

ii. Compulsory coverage of a land-based OFW

covered under BLAs shall take effect based on the
provisions of the Agreement and its implementing
arrangement;

iii. Compulsory coverage of a land-based

OFW not covered under BLAs shall take effect on the

ph
applicable month and year of the first contribution

u.
payment; and

ed
n.
iv. Voluntary coverage of land-based overseas

ai
Filipinos shall take effect on the applicable month and
m
year of the first contribution payment. (RA 11199, Rule
su

15, Section 4, IRR of RA 11199)

m
s.

19. Big Foot Company of Paete, Laguna, has been in the

@

business of manufacturing wooden sandals for export

91

since 5 November 1980. On 5 January 1994 it employed

cx

an additional labor complement of thirty workers, two

o.

supervisors and two department managers. On 5 February

er

1994 it hired five carpenters to fix the roof and walls of

sp

its factory which were destroyed by typhoon "Huaning."

o
pr

Who among the aforementioned persons are compulsorily

covered by the Social Security Law and when should they
be considered effectively covered? Discuss fully. (1995
BAR Q. No. XVI)

The coverage in the SSS shall be compulsory upon all

employees including domestic workers or "kasambahays"
not over sixty (60) years of age (up to the day of his/her
60th birthday) and their employers. (Section 9[a], RA 11199,
Rule 13, Section 1, IRR of RA 11199) While the compulsory
coverage of the employee shall take effect on the first day
of his/her employment. (Section 10, RA 11199, Rule 15,
Section 2, IRR of RA 11199)
508 LABOR LAW REVIEWER

Applying the law, the labor complement of thirty

workers, two supervisors, and two department managers
as employees, who were not over sixty (60) years of age is
subject to SSS compulsory coverage. The effectivity date is
on the first day of their employment.

As to the five carpenters, the law provides that the

employment excluded from SSS coverage refers to such
services performed by temporary employees. (Section 8[j]
[3], RA 11199, Rule 12, Section 10, IRR of RA 11199)
Applying the law, the five carpenters are not covered

ph
because they are mere temporary employees.

u.
ed
20. What is the jurisdiction of the Social Security Commission?

n.
Any dispute arising under the Social Security Act of
ai
2018 with respect to coverage, benefits, contributions and
m
penalties thereon or any other matter related thereto, shall
su

be cognizable by the Commission. (Section 5[a], RA 11199,

m
s.

Rule 6, Section 1, IRR of RA 11199)

@
91

21. To whom is the decision of the Social Security Commission

appealable? State the mode of appeal.
cx
o.

The decision of the Commission may be reviewed both

er

upon the law and the facts by the Court of Appeals except
sp

that in appeals involving purely questions of law, it shall be

o

reviewed by the Supreme Court, unless otherwise provided

pr

under the Rules of Court. (Section 5[c], RA 11199, Rule 7,

Section 3, IRR of RA 11199)

The mode of appeal is by petition for review before the

Court of Appeals under Rule 43 of the Rules of Court.

22. What is the reportorial duty of an employer under the SSS

Law?

It is the duty of the employer to report its employees for

SSS coverage and it is liable for its failure to do so. (Section
24[a], RA 11199, Rule 39, Section 1, IRR of RA 11199) Each
employer shall immediately report to the SSS the names,
 509
LABOR STANDARDS
Social Security Act of 2018

ages, civil status, occupations, salaries and dependents of

all his/her employees who are subject to compulsory SSS
coverage. (Section 24[a], RA 11199, Rule 39, Section 1, IRR of
RA 11199)

23. What are the benefits under RA 11199, the Social Security
Act of 2018?

The following are the benefits: 1. Monthly pension

benefits (additional benefit allowance and dependent's
pension); 2. Retirement benefits (monthly pension, advance
pension, 13th month pension, and lump sum); 3. Death

ph
benefits (monthly pension, lump sum, and 13th month

u.
pension); 4. Disability benefits (permanent total and

ed
permanent partial disability); 5. Death benefits; 6. Funeral

n.
benefit; and 7. Maternity leave benefit and Unemployment
ai
m
Insurance or involuntary separation benefits.
su

24. What is a monthly pension benefit?

m
s.

The Monthly Pension is a monthly specified cash

@

amount that a qualified member or a qualified beneficiary

91

will receive on account of permanent total disability,

cx

retirement or death. (Rule 18, Section 1, IRR of RA 11199)

o.
er

25. What are those included in the monthly pension benefits?

sp

Additional benefit allowance. An additional

o
pr

monthly benefit allowance amounting to One Thousand

Pesos (P1,000.00) is granted to all retirement, death and
disability pensioners receiving monthly pensions on or
after January 2017 pursuant to the Memorandum from the
Executive Secretary dated 22 February 2017, by authority of
the President of the Republic of the Philippines. It shall be
separate and distinct from the monthly pension. (Rule 19,
Section 1, IRR of RA 11199)

Dependent's pension not covered. The additional -

monthly benefit allowance shall not cover the dependent's

pension. (Rule 19, Section 2, IRR of RA 11199)
510 LABOR LAW REVIEWER

Further grant of additional benefit allowance. - The

Commission may determine the grant of further additional
benefit allowance/s, aside from the benefit hereinbefore
mentioned, provided, that the actuarial soundness of the
Reserve Fund shall be guaranteed. (Rule 19, Section 3, IRR
of RA 11199)

Dependent's pension. - Where monthly pension is

payable on account of death, permanent total disability or
retirement, dependents' pension equivalent to ten percent
(10%) of the monthly pension or two hundred fifty pesos

ph
(P250.00), whichever is higher, shall also be paid for each

u.
dependent child conceived or legally adopted on or before

ed
the date of the contingency. (Section 12-A in relation to Section

n.
8[e][2], Rule 20, Section 1, IRR of RA 11199)

i.
ai
The dependent's pension shall be paid to
m
dependent children, not exceeding five (5), beginning from
su

the youngest and without substitution. (Section 12-A)

m
s.

ii. Where there are legitimate and illegitimate

@

children, the former shall be preferred. (Section 12-A, proviso)

91
cx

26. What is a retirement benefit?

o.

The Retirement Benefit is a monthly pension or lump

er

sum granted to a member who can no longer work due to

sp

old age. (Rule 21, Section 1, IRR of RA 11199)

o
pr

27. What are the types of retirement benefits? Explain.

The types of retirement benefits are as follows:
1. Monthly pension
2.
Advance pension
3.
13th month pension
4. Lump sum

1. Monthly pension. - A member must have at least

one hundred twenty (120) monthly contributions prior to
semester of retirement; and
 LABOR STANDARDS 511

Social Security Act of 2018

Has reached sixty (60) years old and is

separated from employment or has ceased to be self
employed, except:
a) In the case of an underground
mineworker (RA 8558), at least 55 years old
effective 13 March 1998; and

b) In the case of an underground or a

surface mineworker (RA 10757), at least fifty (50)
years old effective 27 April 2016; or
ii. Is at least sixty-five (65) years old, except:

ph
u.
a) In the case of an underground mine

ed
worker effective 13 March 1998 (RA 8558) or a

n.
surface mineworker effective 27 April 2016 (RA

ai
10757), at least sixty (60) years old, and
m
su
b) In the case of a racehorse jockey (RA
10789), at least 55 years old effective 24 May 2016.
m
s.

(Rule 21, Section 2, IRR of RA 11199)

@

2. Advance pension. - An applicant for retirement

91

benefit has the option to receive the first eighteen (18)

cx

months pension and additional benefit allowance, in lump

o.

sum, discounted at a preferential rate of interest as may

er

be determined by the SSS and subject to the following

sp

conditions:
o
pr

i. The option can only be exercised upon filing

of initial retirement claim;

ii. The dependent's pension and thirteenth

(13th) month pension shall not be included in the
advance 18-month pension; and

iii. Should there be an increase in the monthly

pension within the 18-month period, the same shall
also be subject to a discounted interest rate.

The payment of the regular monthly pension shall

commence on the nineteenth (19th) month. (Rule 21, Section
3, IRR of RA 11199)
512 LABOR LAW REVIEWER

3. 13th month pension. A retired member is

entitled to a thirteenth (13th) month pension equivalent
to the amount of the monthly pension due and additional
benefit allowance, payable every month of December of the
applicable year. (Rule 21, Section 4, IRR of RÁ 11199)
4. Lump sum benefit. - A lump sum benefit is a one
time payment granted to a covered member who has reached
the required retirement age and who does not qualify for
full pension benefit under the Social Security Act of 2018,
provided, that he/she is separated from employment and
is not continuing payment of contributions to the SSS on

ph
his/her own. The amount of benefit is equivalent to the

u.
total contributions paid by the member and/or on his/her

ed
behalf. (Section 12-B[b], Rule 21, Section 5, IRR of RA 11199)

n.
ai
28. What is a death benefit? m
su
The Death Benefit is a cash benefit either in monthly
pension or lump sum paid to the beneficiaries of a deceased
m
s.

member. (Rule 22, Section 1, IRR of RA 11199)

@
91

29. What are the types of death benefits? Explain.

cx

The types of death benefits are as follows:

o.

1. Monthly pension
er
sp

2. Lump sum
o

3. 13th month pension

pr

1. Monthly pension. - Upon the death of a member

who has paid at least thirty-six (36) monthly contributions
before the semester of death, his/her primary beneficiaries
shall be entitled to a monthly pension. (Section 13, Rule 22,
Section 2, IRR of RA 11199)

2. Lump sum benefit. - Lump sum benefit is a one

time cash benefit paid as follows: (Section 13, Rule 22, Section
3, IRR of RA 11199):
i.
the deceased member has paid at least
thirty-six (36) monthly contributions before the
semester of death and has no primary beneficiaries,
 513
LABOR STANDARDS

Social Security Act of 2018

his/her secondary beneficiaries shall be entitled to a

lump sum benefit equivalent to 36 times the monthly
pension.

ii. If the deceased member has paid less than

36 monthly contributions before the semester of death,
his/her primary beneficiaries or in the absence thereof,
the secondary beneficiaries shall be entitled to a lump
sum amount equivalent to the higher of the following:
a) The monthly pension times the number
of monthly contributions paid prior to the
semester of death, or

ph
u.
b) Twelve (12) times the monthly pension.

ed
3. 13th month pension. - Primary beneficiaries are

n.
entitled to a thirteenth (13th) month pension equivalent

ai
to the amount of the monthly pension due and additional
m
benefit allowance, payable every month of December of the
su

applicable year. (Rule 22, Section 4, IRR of RA 11199)

m
s.
@

30. What is a permanent disability benefit?

91

The Permanent Disability Benefit is a cash benefit

cx

granted to a member who becomes permanently disabled

o.

either partially or totally. (Rule 23, Section 1, IRR of RA 11199)

er
sp

31. What are the types of permanent disability benefits?

o

Explain.
pr

The types of disability benefits are as follows:

1. Monthly pension;
2. Lump sum benefit;
3. Supplemental disability allowance; and
4. 13th month pension.
1. Monthly pension. The disabled member is
entitled to a monthly pension if he/she has paid at least
thirty-six (36) monthly contributions prior to the semester
of disability. (Section 13-A(a), Rule 23, Section 5, IRR of RA
11199)
514 LABOR LAW REVIEWER

In case of permanent partial disability, the monthly

pension benefit shall be given in lump sum if it is payable
for less than twelve (12) months. (Section 13-A(h), Rule 23,
Section 5, IRR of RA 11199)
2. Lump sum benefit. - For members who have not
met the required thirty-six (36) monthly contributions prior
to the semester of disability, a lump sum disability benefit is
granted. [Section 13-A, (a), Rule 23, Section 6, IRR ofRA 11199]
i. For permanent total disability, the lump sum
disability benefit shall be the higher of:

ph
a) The monthly pension times the number

u.
of monthly contributions paid to the SSS, or

ed
(Section 13-A[a])

n.
b) Twelve (12) times the monthly pension.
(Section 13-A[a])
ai
m
su
ii.
For permanent partial disability, the benefit
m

shall be the percentage of the lump sum benefit

s.

described in the Social Security Act of 2018, with due

@

regard to the degree of disability as the Commission

91

may determine. (Section 13-A[e])

cx

3. Supplemental disability allowance. - In addition

o.

to the monthly pension, a Supplemental Disability

er

Allowance is paid to the partial or total disability pensioners

sp

to provide additional financial assistance to meet the extra

o
pr

needs arising from such disability. (Rule 23, Section 7, IRR of

RA 11199)

4. 13th month pension. A permanent disability

pensioner is entitled to a thirteenth (13th) month pension
equivalent to the amount of the monthly pension due and
additional benefit allowance, which is payable every month
of December of the applicable year. (Rule 23, Section 8, IRR
of RA 11199)

32. What is a funeral benefit?

The Funeral Benefit is intended to help defray the cost

of funeral expenses upon the death of a member, including
 LABOR STANDARDS 515

Social Security Act of 2018

permanently totally disabled or retired member. (Section 13

B, Rule 24, Section 1, IRR of RA 11199)

33. What is the amount of funeral benefit?

The funeral benefit is equivalent to the following

amounts paid either in cash or in kind, depending on the date
of contingency and may be adjusted as may be determined
by the Commission: (Section 13-B, Rule 24, Section 2, IRR of
RA 11199)

i. Twelve thousand pesos (P12,000.00), effective

ph
May 24, 1997;

u.
ii. Fifteen thousand pesos (P15,000.00), effective

ed
September 1, 1998;

n.
iii. Twenty thousand pesos (P20,000.00), effective
ai
September 1, 2000; or
m
su

iv. A variable amount ranging from a minimum of

m

twenty thousand pesos (P20,000.00) to a maximum of forty

s.

thousand pesos (P40,000.00), depending on the member's

@

number of contributions and AMSC, effective August 1,

91

2015.
cx
o.

34. What is a sickness benefit?

er

The Sickness Benefit is a daily cash allowance paid by

sp

the employer to the member who is unable to work due to

o
pr

sickness or injury for each day of compensable confinement

or a fraction thereof, or by the SSS, if such person is
unemployed or is SE, OFW, VM who have been previously
covered either as employed/SE/OFW and NW spouse.
(Rule 25, Section 1, IRR of RA 11199)

35. What are the requirements to qualify for the grant of the
sickness benefit?

To qualify for the grant of the sickness benefit, the

member must meet the following requirements:
i.
Has paid at least three (3) monthly contributions
within the twelve-month (12) period immediately before
the semester of sickness or injury; (Section 14[a])
516 LABOR LAW REVIEWER

No contributions paid retroactively by SE/VM/OFWs

shall be used in determining his/her eligibility to sickness
benefit wherein the date of payment is within or after the
semester of contingency;

ii. Was confined for at least four (4) days either in a

hospital or elsewhere as defined by the SSS; (Section 14[a])
iii. Has notified the employer, if employed, or the
SSS, if unemployed or SE/VM of the sickness or injury;
(Section 14[a], [3]) and

iv. Has used up all current company sick leave with

ph
pay for the current year, if employed, except sea-based

u.
OFWs. (Section 14[b], Rule 25, Section 1, IRR of RA 11199)

ed
n.
36. What are the rules on sickness notification requirement
by the employee?
ai
m
su
The rules on notification in the grant of sickness benefit
m

are as follows:
s.
@

i. For hospital confinement, notification to employer

is not necessary, however, the employer shall inform the SSS
91
cx

of such confinement in the prescribed manner within one

(1) year from date of discharge; (Section 14[c])
o.
er

ii. For confinement elsewhere, as may be defined

sp

by the SSS, the employee shall notify the employer of the

o

sickness or injury in the prescribed manner within five (5)

pr

calendar days after the start of confinement. The employer

shall in turn notify the SSS within five (5) calendar days
after receipt from employee; (Section 14[a][3])

iii. For sickness/injury that occurred while working

or within premises of the employer, notification by employee
to employer is not necessary. However, the employer shall
notify the SSS of such sickness/injury in the prescribed
manner within five (5) calendar days after onset of sickness /
injury; (Section 14[a][3])
iv. The unemployed or SE member, land-based
OFWs, or VM including NW spouse, shall directly notify
 LABOR STANDARDS 517

Social Security Act of 2018

topper the SSS of the confinement in the prescribed manner within

five (5) calendar days after the start of confinement, except
when such confinement is in a hospital, notification to the
SSS in the prescribed manner shall be within one (1) year
from date of discharge; (Section 14[a][3]) and

V. OFWs are given thirty-five (35) calendar days in

filing sickness benefits. This applies only for confinement
elsewhere as defined by the SSS. (Rule 25, Section 3, IRR of
RA 11199)

37. What are the rules on sickness notification by the

ph
employer?

u.
ed
The rules on notification in the grant of sickness benefit
are as follows:

n.
ai
i. For hospital confinement, the employer shall
m
notify the SSS in the prescribed manner within one (1) year
su

from date of discharge; (Section 14[c])

m
s.

ii. For confinement elsewhere as defined by the SSS,

@

the employer shall notify the SSS in the prescribed manner

91

within five (5) calendar days after receipt of notification

cx

from the employee; (Section 14[c]) and

o.

iii. For sickness/injury that occurred while working

er

or within company's premises, the employer shall notify the

sp

SSS of such sickness/injury/confinement in the prescribed

o

manner within five (5) calendar days after onset of sickness/

pr

injury. (Section 14[a][3], Rule 25, Section 4, IRR of RA 11199)

38. What is the amount of sickness benefit?

The daily sickness allowance shall be equivalent to

ninety-percent (90%) of the member's average daily salary
credit. (Section 14[a], Rule 25, Section 5, IRR of RA 11199)

39. What is the rule on maternity benefit?

See discussions on RA 11210, An Act Increasing the

Maternity Leave Period to One Hundred Five (105) Days for
Female Workers With an Option to Extend for an Additional
518 LABOR LAW REVIEWER

Thirty (30) Days Without Pay, and Granting an Additional

Fifteen (15) Days for Solo Mothers, and for Other Purposes.
It should be noted that the repealing clause in Section 21
of RA 11210 provides that all laws, decrees, orders, rules,
and regulations or parts thereof inconsistent with this Act
are hereby repealed or modified accordingly. Thus, only
the provisions of the SSS Law that were inconsistent with
Republic Act 11201 were repealed.

40. What is unemployment insurance or involuntary

separation benefit?

ph
The unemployment insurance or involuntary

u.
separation benefit is a monthly cash payment equivalent

ed
to fifty percent (50%) of the AMSC for a maximum of two

n.
(2) months, subject to the rules and regulations that the
ai
m
Commission may prescribe. (Section 14-B, Rule 27, Section 1,
su
IRR of RA 11199)
m
s.

41. What are the conditions for eligibility of the unemploy

@

ment insurance or involuntary separation benefit?

91

The grant of unemployment insurance or involuntary

cx

separation benefit may be availed by members subject to

o.

the following conditions (Section 14-B, Rule 27, Section 2, IRR

er

of RA 11199):
o sp

i. Not over sixty (60) years old at the time of

pr

involuntary separation, except:

a) In the case of underground mineworker or

surface mineworker (RA 10757), not over fifty (50)
years old; or

b) In the case of racehorse jockey (RA 10789),

not over fifty-five (55) years old.

ii. Has paid at least thirty-six (36) monthly

contributions, twelve (12) months of which should be in
the eighteen (18) month period immediately preceding the
unemployment or involuntary separation;
 LABOR STANDARDS 519

Social Security Act of 2018

iii. Involuntarily separated from employment

provided that such separation did not arise from fault or
negligence of the employee and which may be attributed to
any of, but not limited to, the following:
a) Installation of labor-saving devices;
b) Redundancy;
c) Retrenchment to prevent loss;
degan
Closure or cessation of operation; or
e) Disease/illness.

ph
42. What is the rule on limitation of unemployment insurance

u.
or involuntary separation benefit?

ed
n.
A covered employee who is involuntarily unemployed

ai
can only claim unemployment benefits once every three (3)
m
years starting from the date of involuntary separation or
su

unemployment. (Section 14-B, 1st proviso, Rule 27, Section 3,

m

IRR of RA 11199)
s.
@

43. What is the rule on overlapping benefits?

91
cx

In case of concurrence of two (2) or more contingencies

within the same compensable period, only the highest
o.
er

benefit shall be paid. (Section 14-B, 2nd proviso, Rule 27,

sp

Section 4, IRR of RA 11199)

o
pr

44. What is the prescriptive period for filing of unemploy

ment insurance or involuntary separation benefit claims?
A claim for unemployment insurance or involuntary
separation benefits shall be filed within one (1) year from
the date of separation or unemployment. (Rule 27, Section 5,
IRR of RA 11199)

45. What is the employer's liability for failure to report an

employee/s on time?

If the employee subject to compulsory coverage dies

or becomes sick or disab or reaches the age of sixty (60),
without the SSS having previously received any report
520 LABOR LAW REVIEWER

or written communication about him/her from his/her

employer, the said employer shall pay to the SSS damages
which are equivalent to the benefits to which said employee
member would have been entitled had his/her name been
reported on time by the employer to the SSS. (Section 24[a],
RA 11199, Rule 39, Section 1, IRR of RA 11199)

46. What is the measure of damages as a result of the

employer's liability for failure to report the employee/s
on time?

In case of pension benefits, the employer shall be liable

ph
to pay the SSS damages equivalent to the accumulated

u.
pension due as of the date of settlement of the claim or to

ed
the five (5) years' pension, whichever is higher, including

n.
dependents' pension. (Section 24[a], RA 11199, Rule 39,
Section 1, IRR of RA 11199)
ai
m
su
If the contingency occurs within thirty (30) days from
m

the date of employment, the employer shall be relieved of

s.

his/her liability for damages. (Section 24[a], RA 11199, Rule

@

39, Section 1, IRR of RA 11199)

91

Any person or entity engaging the services of an

cx

independent contractor shall be subsidiarily liable with such

o.

contractor for any civil liability incurred by the latter under

er
sp

the Social Security Act of 2018. The same person or entity

engaging the services of an independent contractor shall
o
pr

equire such contractor to post a surety bond to guarantee

the payment of the worker's benefits. (Section 24[a], RA
11199, Rule 39, Section 1, IRR of RA 11199)

47. What is the employer's liability for misrepresenting the

true date of employment or remitting contributions which
are less than those required?

Should the employer misrepresent the true date

of employment of the employee member or remit the
contributions which are less than those required in the
Social Security Act of 2018 or fail to remit any contribution
due prior to the date of contingency, resulting in a reduction
 LABOR STANDARDS 521

Social Security Act of 2018

of benefits, such employer shall pay to the SSS damages

equivalent to the difference between the amount of benefit
to which the employee member or his/her beneficiary is
entitled had the proper contributions been remitted to the
SSS and the amount payable on the basis of the contributions
actually remitted. (Section 24[b], RA 11199, Rule 39, Section 2,
IRR of RA 11199)

48. What is the measure of damages as a result of the

employer's liability for misrepresenting the true date of

ph
employment or remitting contributions which are less

u.
than those required?

ed
If the employee member or his/her beneficiary is

n.
entitled to pension benefits, the damages shall be equivalent

ai
to the accumulated pension due as of the date of settlement
m
of the claim or to the five (5) years' pension, whichever is
su

higher, including dependents' pension. (Section 24[b], RA

m
s.

11199, Rule 39, Section 2, IRR of RA 11199)

@

In addition to the liability to pay damages, the employer

91

shall also be liable for the payment of the corresponding

cx

unremitted contributions and penalties thereon. (Section

o.

24[b], last paragraph, RA 11199, Rule 39, Section 2, IRR of RA

er

11199)
o sp

49. What are the guidelines for determination of the

pr

employer's liability for damages?

The guidelines on the determination of employer

liability shall continue to apply, subject to Section 33 of the
Social Security Act of 2018, as follows:
The employer is declared liable for damages if the
employer:

a) Fails to report the member for SSS coverage prior

Ap to date of contingency;

b) Misrepresents the true date of employment of the

employee;
522 LABOR LAW REVIEWER

c) Remits contributions lesser than those required

under the law; or

d) Fails to remit any contributions due prior to the

date of contingency resulting in a reduction of benefits.
(SSC Resolution No. 401-s.2016 (22 June 2016) and Office Order
No. 2016-048)

50. What is the effect on the benefits of the employee in case

of the employer's failure or refusal of the employer to pay
or remit the contributions?

ph
The failure or refusal of the employer to pay or remit

u.
the contributions herein prescribed shall not prejudice the

ed
right of the covered employee to the benefits of his/her SSS

n.
coverage. (Section 22[b], RA 11199, Rule 36, Section 5, IRR of
RA 11199)
ai
m
su

51. What is the prescriptive period of the necessary action

m

against the employer?

s.
@

The right to institute the necessary action against the

91

employer may be commenced within twenty (20) years

cx

from the time the delinquency is known or the assessment

o.

is made by the SSS, or from the time the benefit accrues, as

er

the case may be. (Section 22[b], RA 11199, Rule 36, Section 6,
sp

IRR of RA 1119)
o
pr

52. What are the offenses punishable under the SSS Law?

The following are the offenses:

On false statement or representation, affidavit or

document the penalties provided for Falsification by Private
Individual and Use of Falsified Document under Article
one hundred seventy-two (172) of the Revised Penal Code.
(Section 28[a] RA 11199, Rule 46, Section 1, IRR of RA 11199)

Fraudulent acquisition or receipt of money or check

fined not less than five thousand pesos (P5,000.00) nor more
than twenty thousand pesos (P20,000.00) and imprisoned
for not less than six (6) years and one (1) day nor more than
 LABOR STANDARDS 523

Social Security Act of 2018

twelve (12) years. (Section 28[b] RA 11199, Rule 46, Section 2,

IRR of RA 11199)

Unauthorized purchase, sale, use, transfer, exchange

or pledge of stamps, coupons, etc. - shall be fined not less
than five thousand pesos (P5,000.00) nor more than twenty
thousand pesos (P20,000.00), or imprisoned for not less
than six (6) years and one (1) day nor more than twelve (12)
years, or both, at the discretion of the Court. (Section 28[c],
RA 11199, Rule 46, Section 3, IRR of RA 11199)

Fraudulent alteration, forgery or counterfeiting of

ph
stamps, coupons, etc. - be fined not less than five thousand

u.
pesos (P5,000.00) nor more than twenty thousand pesos

ed
(P20,000.00) or imprisoned for not less than six years (6)

n.
and one (1) day nor more than twelve (12) years, or both, at
ai
the discretion of the Court. (Section 28[d], RA 11199, Rule 46,
m
su
Section 4, IRR of RA 11199)
m

Non-compliance with the social security act of 2018,

s.

this IRR and other regulations. - shall be punished by a fine

@

of not less than five thousand pesos (P5,000.00) nor more

91

than twenty thousand pesos (P20,000.00), or imprisonment

cx

for not less than six (6) years and one (1) day nor more than
o.

twelve (12) years, or both, at the discretion of the Court.

er

(Section 28[e], first sentence, RA 11199, Rule 46, Section 5, IRR

sp

ofRA 11199)
o
pr

Failure or refusal to register employees or self

employed individuals. – be punished by a fine of not less
-

than five thousand pesos (P5,000.00) nor more than twenty

thousand pesos (P20,000.00) and imprisonment for not less
than six (6) years and one (1) day nor more than twelve
(12) years. (Section 28[e], second sentence, RA 11199, Rule 46,
Section 6, IRR of RA 11199)
Failure or refusal to deduct and remit contributions.
be punished by a fine of not less than five thousand
pesos (P5,000.00) nor more than twenty thousand pesos
(P20,000.00) and imprisonment for not less than six (6) years
and one (1) day nor more than twelve (12) years. (Section
524 LABOR LAW REVIEWER

28[e], second sentence, RA 11199, Rule 46, Section 7, IRR of RA

11199)

Liability of managing head, directors or partners, shall

be criminally liable for any act or omission penalized under
the Social Security Act of 2018 (Section 28[f]) in relation to
Section 9[b], RA 11199, Rule 46, Section 8, IRR of RA 11199)

SSS Employee's appropriation or misappropriation of

funds of SSS or its properties guilty of misappropriation of
such funds or property, shall suffer the penalties provided
for Malversation of Public Funds or Property under Article

ph
two hundred seventeen (217) of the Revised Penal Code.

u.
(Section 28[g], RA 11199, Rule 46, Section 9, IRR of RA 11199)

ed
Employer's misappropriation of contributions or loan

n.
amortizations of its employees. - Any employer who, after
ai
m
deducting the monthly contributions or loan amortizations
su
from his/her employee's compensation, fails to remit the
m

said deduction to the SSS within thirty (30) days from

s.

the date they became due, shall be presumed to have

@

misappropriated such contributions or loan amortizations

91

and shall suffer the penalties provided for Swindling or

cx

Estafa under Article three hundred fifteen (315) of the

o.

Revised Penal Code. (Section 28[h], RA 11199, Rule 46, Section

er

10, IRR of RA 11199)

o sp

53. Who may institute a criminal action?

pr

Criminal action arising from a violation of the

provisions of the Social Security Act of 2018 may be
commenced by the SSS or the employee concerned either
under the Social Security Act of 2018 or in appropriate cases
under the Revised Penal Code. (Section 28[i], first sentence,
RA 11199, Rule 46, Section 11, IRR of RA 11199)

54. What is the prescriptive period of the criminal action

punishable with imprisonment for six (6) years or more?

The right to institute the criminal action against

the employer for offenses made punishable herein by
 LABOR STANDARDS 525

Social Security Act of 2018

imprisonment for six (6) years or more shall prescribe after

twelve (12) years from the time of the commission of the
offense, if known, or from the time of the discovery thereof,
in accordance with Act No. 3326, as amended (An Act to
Establish Periods of Prescription for Violations Penalized
by Special Acts and Municipal Ordinances and to provide
When Prescription Shall Begin to Run) and G.R. No. 74689
Roberto Benedicto v. Hon. Abad Santos and SSS, 21 March 1990
cited in Rule 46, Section 11, IRR of RA 11199.

55. In 1960, Juan hired Pablo to drive for the former's lumber

ph
company. In 1970, Pablo got sick and was temporarily

u.
laid-off. In 1972, Pablo recovered and resumed working

ed
for the same lumber company, now run by Juan's wife

n.
since Juan had already passed away. In 1996, Pablo retired.
ai
m
When Pablo applied for retirement benefits with the SSS
su
that same year, he discovered that the lumber company
m

never enrolled him as an employee, much less remitted

s.

his contributions that were deducted from his salary. The

@

lumber company agreed to pay for Pablo's contributions

91

plus penalties but maintained that most of Pablo's claims

cx

had already prescribed under Art, 1150 of the Civil Code.

o.

(Art. 1150 provides "The time for prescription of all kinds

er

of actions, when there is no special provision which

sp

ordains otherwise, shall be counted from the day they

o

may be brought."). Is the Lumber company's contention

pr

correct? Why? (2001 BAR Q. No. XIII[b])

No, the Lumber company is not correct.

The right to institute the necessary action against the

employer may be commenced within twenty (20) years
from the time the delinquency is known or the assessment
is made by the SSS, or from the time the benefit accrues, as
the ease may be. (Section 22[b], RA 11199)
Applying the law, the twenty (20)-year prescriptive
period shall be counted from the time the delinquency is
known or the assessment is made by the SSS, or from the
time the benefit accrues.
526 LABOR LAW REVIEWER

56. What are the liabilities of the employer who fails to report
his employee for social security coverage? Explain. (2016
BAR Q. No. XVII[b])

If the employee subject to compulsory coverage dies

or becomes sick or disabled or reaches the age of sixty (60)
without the SSS having previously received any report
or written communication about him/her from his/her
employer, the said employer shall pay to the SSS damages
which are equivalent to the benefits to which said employee
member would have been entitled had his/her name been

ph
reported on time by the employer to the SSS. (Section 24[a],

u.
RA 11199, Rule 39, Section 1, IRR of RA 11199)

ed
The measure of damages is as follows:

n.
ai
a. Employer's liability to pay damages. - In
m
case of pension benefits, the employer shall be liable
su

to pay the SSS damages equivalent to the accumulated

m

pension due as of the date of settlement of the claim

s.

or to the five (5) years' pension, whichever is higher,

@

including dependents' pension. (Section 24[a], RA

91

11199, Rule 39, Section 1, IRR of RA 11199)

cx
o.

b. Employer relieved from liability to pay

er

damages. - If the contingency occurs within thirty (30)

sp

days from the date of employment, the employer shall

o

be relieved of his/her liability for damages. (Section

pr

24[a], RA 11199, Rule 39, Section 1, IRR of RA 11199)

The guidelines on the obligation to report all employees

for coverage (SSC Circular No. 60 [November 5, 1965]) and on
the liability of employee's initial and subsequent employers
(SSC Circular No. 62 [May 26, 1966]) shall continue to apply,
subject to Section 33 of the Social Security Act of 2018. (Rule
39, Section 1, IRR of RA 11199)
 Chapter III

GOVERNMENT SERVICE INSURANCE ACT

1. State the compulsory membership in the GSIS Law.

The following are compulsory members of the GSIS:
1. All government personnel, whether elective or

ph
appointive, irrespective of status of appointment, provided

u.
they are receiving fixed monthly compensation and

ed
have not reached the mandatory retirement age of 65 years,

n.
are compulsorily covered as members of the GSIS and shall
ai
be required to pay contributions.
m
su

2. However, employees who have reached the

m

retirement age of 65 or more shall also be covered, subject to

s.

the following rules:

@
91

An employee who is already beyond the mandatory

cx

retirement age of 65 shall be compulsorily covered and

be required to pay both the life and retirement premiums
o.
er

under the following situations:

sp

1. An elective official who at the time of election

o

to public office is below 65 years of age and will be 65

pr

years or more at the end of his term of office, including

the period/s of his re-election to public office thereafter
without interruption.
2. Appointive officials who, before reaching
the mandatory age of 65, are appointed to government
position by the President of the Republic of the
Philippines and shall remain in government service at
age beyond 65.
3. Contractual employees including casuals and
other employees with an employee-government agency
527
528 LABOR LAW REVIEWER

relationship are also compulsorily covered, provided they

are receiving fixed monthly compensation and rendering
the required number of working hours for the month.
(Sections 2, 2.1., 2.2, and 2.3, Rule II, IRR, RA 8291)

2. What are the classifications of membership in the GSIS

Law?

Membership in the GSIS is classified either by type or

status of membership.

1. As to type of members, there are regular and

ph
special members:

u.
a. Regular Members are those employed by

ed
the government of the Republic of the Philippines,

n.
national or local, legislative bodies, government-owned

ai
and controlled corporations (GOCC) with original
m
charters, government financial institutions (GFIS),
su

except uniformed personnel of the Armed Forces of

m

the Philippines, the Philippine National Police, Bureau

s.
@

of Jail Management and Penology (BJMP) and Bureau

91

of Fire Protection (BFP), who are required by law to

remit regular monthly contributions to the GSIS.
cx
o.

b. Special Members are constitutional

er

commissioners, members of the judiciary, including

sp

those with equivalent ranks, who are required by

o

law to remit regular monthly contributions for life

pr

insurance policies to the GSIS in order to answer for

their life insurance benefits defined under RA 8291.

2. As to status of membership, there are active and

inactive members.

a. Active member - refers to a member of the

GSIS, whether regular or special, who is still in the

government service and together with the government
agency to which he belongs, is required to pay the
monthly contribution.
b. Inactive member-a member who is separated
from the service either by resignation, retirement,
 LABOR STANDARDS 529

Government Service Insurance Act

disability, dismissal from the service, retrenchment or,

who is deemed retired from the service. (Sections 2.4,
2.4.1, and 2.4.2, Rule II, IRR, RA 8291)

3. Who are excluded from the compulsory coverage?

The following employees are excluded from compul
sory coverage:

1. Uniformed personnel of the Armed Forces of the

Philippines (AFP), Philippine National Police (PNP), Bureau
of Fire Protection (BFP) and Bureau of Jail Management and

ph
Penology (BJMP);

u.
2. Barangay and Sanggunian Officials who are not

ed
receiving fixed monthly compensation;

n.
ai
3. Contractual Employees who are not receiving
m
fixed monthly compensation; and
su

4. Employees who do not have monthly regular

m
s.

hours of work and are not receiving fixed monthly

@

compensation. (Sections 3, 3.1.1, 3.1.2, 3.1.3, and 3.1.4, Rule II,

91

IRR, RA 8291)
cx
o.

4. What is the effectivity date of GSIS membership?

er

The effective date of membership shall be the date of the

sp

member's assumption to duty on his original appointment

o

or election to public office. (Section 5, Rule II, IRR, RA 8291)

pr

5.
Define the following: 1. Employer, 2. Employee Member,
3. Active Member, 4. Dependents, 5. Primary beneficiaries,
and 6. Secondary beneficiaries.
1. Employer - The national government, its political
subdivisions, branches, agencies or instrumentalities,
including government-owned or controlled corporations,
and financial institutions with original charters, the
constitutional commissions and the judiciary;

2. Employee or Member Any person receiving

-

compensation while in the service of an employer as defined

530 LABOR LAW REVIEWER

herein, whether by election or appointment, irrespective of

status of appointment, including barangay and Sanggunian
officials;

3. Active Member – A member who is not separated

from the service;

4. Dependents - Dependents shall be the following:

(a) the legitimate spouse dependent for support upon
the member or pensioner; (b) the legitimate, legitimated,
legally adopted child, including the illegitimate child, who
is unmarried, not gainfully employed, not over the age of

ph
majority, or is over the age of majority but incapacitated

u.
and incapable of self-support due to a mental or physical

ed
defect acquired prior to age of majority; and (c) the parents

n.
dependent upon the member for support;

ai
5.
m
Primary beneficiaries The legal dependent
-
su
spouse until he/she remarries and the dependent children;
m

6. Secondary beneficiaries - The dependent parents

s.

and, subject to the restrictions on dependent children, the

@

legitimate descendants. (Section 2, RA 8291)

91
cx

6. What are the benefits under the GSIS Law?

o.
er

The following are the benefits:

sp

1. Compulsory Life Insurance Benefits under the

o

Life Endowment Policy (LEP) (Section 18, Rule IV, IRR, RA

pr

8291)

2. Compulsory Life Insurance Benefits under the

Enhanced Life Policy (ELP) (Section 19, Rule IV, IRR, RA
8291)

3. Retirement Benefits (Section 20, Rule IV, IRR, RA

8291)

4. Separation Benefits (Section 21, Rule IV, IRR, RA

8291)

5. Unemployment Benefits (Section 22, Rule IV, IRR,

RA 8291)
 531
LABOR STANDARDS
Government Service Insurance Act

6. Disability Benefits (Section 23, Rule IV, IRR, RA

8291)

7. Survivorship Benefits (Section 24, Rule IV, IRR, RA

8291)

8. Funeral Benefit (Section 25, Rule IV, IRR, RA 8291)

7. What is Compulsory Life Insurance Benefits under the

Life Endowment Policy (LEP)?

A member under this policy may be entitled to any of

the following benefits, depending on the circumstances:

ph
1. Maturity benefits, which is the face amount

u.
ed
payable to the member upon maturity of the policy.

n.
2. Cash Surrender Value, which are earned values

ai
during the term of the insurance payable to the member
m
when he is separated from the service before maturity
su

date of the policy or when he is considered as a case of PTD.

m
s.

3. Death Benefit, which is the face value of the

@

policy payable to designated beneficiary/beneficiaries or

91

legal heirs, in the absence of the former, upon the death of a

cx

member.
o.

4. Accidental Death Benefit (ADB) is an additional

er

benefit equivalent to the amount of Death Benefit when the

o sp

member dies by accident.

pr

In this connection, proof must be presented to

sufficiently establish that the cause of the member's death
is accidental.

The right to present sufficient proof to show that death

was accidental shall prescribe if the claim for ADB is filed
four (4) years after the death of the member,
5. Cash Dividend. A policyholder is entitled to
dividends subject to the guidelines as approved by the GSIS
Board. This is not a guaranteed benefit. (Sections 18, 18.1 to
18.5, Rule IV, IRR, RA 8291)
532 LABOR LAW REVIEWER

8. What is Compulsory Life Insurance Benefits under the

Enhanced Life Policy (ELP)?

A member under this policy may be entitled to any of

the following benefits, depending on the circumstances:
1. Death Benefit equivalent to the latest annual salary
multiplied by amount of insurance (AOI) factor which is 1.5
or 18 times the current monthly salary of the member or as
determined by the GSIS, payable to the legal heirs, less all
outstanding obligations of the member in accordance with
the CLIP.

ph
2. Termination Value. The policy earns a Termination

u.
Value during the life of the policy computed from the

ed
percentage of life insurance premiums actually remitted

n.
and paid to GSIS.

ai
m
2.1 Termination value is equivalent to a
su

percentage of monthly life insurance premiums as

m

determined by the GSIS, due and paid in full, either by

s.

direct remittance or through an APL facility.

@
91

2.2 The accumulated termination value will

cx

grow at such rate as determined by the Actuary.

o.

2.3 The termination value shall be paid to the

er

member upon his separation from the government

sp

service less all indebtedness of the member with the

o
pr

GSIS in accordance with CLIP.

3. Cash Dividend. A policyholder is entitled to

dividends, subject to the guidelines as approved by the
GSIS Board. This is not a guaranteed benefit. (Sections 19,
19.1, 19.2, 19.2.1 to 19.2.3, and 19.3, Rule IV, IRR, RA 8291)

9. What is a retirement benefit?

Under this Act, the retirement benefit consists of a

monthly pension which is computed based on years of
creditable service and AMC for the last 3 years. (Section 20,
Rule IV, IRR, RA 8291)
 LABOR STANDARDS 533

Government Service Insurance Act

10. What are the conditions for retirement eligibility?

The conditions for retirement are as follows:

1. has rendered at least Fifteen (15) years of service;

2. is at least Sixty (60) years of age; and
3. is not receiving a monthly pension benefit from
permanent total disability. (Sections 20.1, 20.1.1. 20.1.2, and
20.1.3, Rule IV, IRR, RA 8291)

11. What are the retirement benefit options?

ph
Retirement Benefit Options. A retiring member has the

u.
following options:

ed
n.
1. Five (5) year lump sum equivalent to sixty (60)

ai
months of the BMP, subject to qualification requirements,
m
less all outstanding obligations of the member in accordance
su

with the CLIP, plus an old-age pension benefit equal to the

m

BMP payable for life, starting on the first day of the month
s.

following the expiration of the five year guaranteed period;

@
91

or
cx

2. A cash payment benefit equivalent to eighteen

o.

(18) times of the BMP, subject to qualification requirements,

er

less all outstanding obligations of the member in accordance

sp

with the CLIP, plus monthly pension for life payable on the
o

first month following the date of retirement;

pr

3. Conversion in the Mode of Retirement.

Conversion in the mode of retirement from RA 8291 to any

other retirement laws and vice versa administered by the
GSIS shall not be allowed.

Those who became GSIS members prior to the

implementation of this Act shall have the option to retire
under PD 1146, RA 660, or RA 1616, subject to eligibility.
(Sections 20.2, 20.2.1, 20.2.2, and 20.2.3, Rule IV, IRR, RA 8291)
534 LABOR LAW REVIEWER

12. What is the rule on the change of Retirement Benefit

Option under RA 8291?

Change of retirement benefit option from eighteen (18)

months cash payment plus immediate pension to five (5)
year lump sum, or vice versa, shall not be allowed.
The GSIS shall process the claim for retirement benefits
de based on the member's records in the GSIS database.

Processing of Retirement Benefits of Members Who

Died While their Claims are Being Processed

ph
For those qualified for retirement benefits:

u.
a. If the deceased member opted for five year lump

ed
sum benefit as indicated in his/her claim for retirement

n.
application, his legal heirs shall be entitled to five-year lump
ai
m
sum benefit equivalent to sixty (60) months basic monthly
su
pension (BMP). However, the survivorship pension to
m

qualified primary beneficiaries, if any, shall be granted after

s.

the end of the 5-year guaranteed period, but filing of claim

@

for survivorship benefit should be done before the end of

91

the 4-year prescription period.

cx

b. If the deceased member opted for immediate

o.

pension as indicated in his/her claim for retirement benefit

er
sp

his legal heirs shall be entitled to retirement benefits

o

equivalent to eighteen (18) months of BMP, plus accrued

pr

pension, if any, up to the date of death of the retiree. The

corresponding survivorship pension shall be paid to
the qualified primary beneficiaries, if any, and shall be
computed from the date of death of the retiree, subject to
filing of claim.
C. In case the deceased member failed to indicate in
his/her retirement option, it shall be computed as if he/she
opted for immediate pension.

d. The proceeds of retirement benefits shall be paid

and distributed to the legal heirs in accordance with the law
on succession under the Civil Code of the Philippines.
 LABOR STANDARDS 535
Government Service Insurance Act

For those not qualified for retirement benefits, the GSIS

shall determine if he/she is qualified to other applicable
benefits under RA 8291 or such other laws administered by
the GSIS. (Sections 20.4, 20.5., 20.5.1, and 20.5.2, Rule IV, IRR,
RA 8291)

13. What is a separation benefit?

Separation Benefit. - Is either one of the following:

1. For those members who are separated from
service and who have at least 3 years of service but less

ph
than 15 years shall be entitled to cash payment equivalent

u.
ed
to 100% of the member's AMC for each year of creditable
service, but not less than P12,000.00, payable upon reaching

n.
ai
age 60, or upon his separation if he is already 60 years of age
m
at the time of separation.
su

2. A cash payment equivalent to eighteen (18) times

m
s.

the basic monthly pension payable at the time of resignation

@

or separation, provided the member resigns or separates

91

from the service after he has rendered at least 15 years of

cx

service and is below 60 years of age, plus an old-age pension

o.

benefit equal to the basic monthly pension payable monthly

er

for life upon reaching the age of sixty (60). (Sections 21, 21.1,
sp

and 21.2, Rule IV, IRR, RA 8291)

o
pr

14. What are the conditions for entitlement to unemployment

benefits?

A member shall be entitled to the unemployment

benefits if the following conditions are met:

1. he/she was a permanent employee at time of

separation;

2. his/her separation was involuntary due to

the abolition of his/her office or position resulting from
reorganization; and

3. he/she has been paying the required premium

contributions for at least one (1) year but less than 15 years
536 LABOR LAW REVIEWER

prior to separation. (Sections 22, 22.1.1, 22.1.2, and 22.1.3,

Rule IV, IRR, RA 8291)

15. What is a disability benefit?

Disability refers to any loss or impairment of the

normal functions of the physical and/or mental faculties
of a member, which permanently or temporarily prevents
him to continue with his work or engage in any other
gainful occupation resulting in the loss of income. The
corresponding disability benefits for each kind of disability

ph
shall be granted to a member based on the duration of

u.
incapacity to work and actual loss of income. (Sections 23

ed
and 23.1, Rule IV, IRR, RA 8291)

n.
ai
16. What are the three (3) kinds of disability?
m
su
There are three (3) kinds of disability which shall be
m

determined by the GSIS based on established medical

s.

standards:
@

Permanent Total Disability

91
cx

Permanent Partial Disability

o.

Temporary Total Disability

er
sp

17. What are the survivorship benefits?

o
pr

When a member or pensioner dies, the beneficiaries

shall be entitled to the following survivorship benefits,
whichever is applicable:
Survivorship pension consisting of:
a.
the basic survivorship pension which is fifty
percent (50%) of the BMP; and
b. the dependent children's pension equivalent to
10% of the BMP for each child but not to exceed fifty percent
(50%) of the BMP.

1. Cash payment equivalent to eighteen (18)

months BMP;
 LABOR STANDARDS 537

Government Service Insurance Act

2. Cash payment equivalent to one hundred

percent (100%) of the AMC for every year of service
with paid contributions but not less than Twelve
Thousand Pesos (P12,000.00). (Sections 24.1, 24.1.1,
24.1.2, and 24.1.3, Rule IV, IRR, RA 8291)

18. What are the survivorship benefits of members in active

service?

If at the time of death, a member was in the service and

has rendered at least fifteen (15) years of creditable service:

ph
a. his primary beneficiaries shall receive the

u.
survivorship pension and cash payment equivalent to 18 x

ed
the BMP; or

n.
b. in the absence of primary beneficiaries, his
ai
secondary beneficiaries shall receive the cash payment
m
su
equivalent to 18 x the BMP; or
m

C. in the absence of secondary beneficiaries, the legal

s.

heirs shall receive the cash payment equivalent to 18 x the

@

BMP.
91

If at the time of death, the member was in the service

cx

with less than fifteen (15) years of creditable service; his

o.

primary beneficiaries shall receive the cash payment

er

equivalent to 100% of the AMC for every year of creditable

sp

service. (Sections 24.2, 24.2.1, and 24.2.2, Rule IV, IRR, RA

o
pr

8291)

19. What are the survivorship benefits of inactive members?

Primary beneficiaries of inactive members who have

at least 15 years of creditable service shall receive the
survivorship pension only.

a. Primary beneficiaries of inactive members who

have at least 3 years but less than 15 years of creditable
service and were less than 60 years old at the time of death
shall receive the cash payment equivalent to 100% of the
AMC for every year of creditable service, but not less than
P12,000.00.
538 LABOR LAW REVIEWER

b. Primary beneficiaries of inactive members who

have less than 15 years of creditable service but were at least
60 years old at the time of separation and have received
the corresponding separation benefit, shall not be entitled
to survivorship benefits. However, if the member has not
received yet his separation benefit within four years after
his/her separation, the primary beneficiaries shall receive
the cash benefit equivalent to 100% of the inactive member's
AMC for every year of creditable service, but not less than
P12,000.00. (Sections 24.3 and 24.3.1, Rule IV, IRR, RA 8291)

ph
20. How are survivorship benefits being paid?

u.
The survivorship benefits shall be paid as follows:

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n.
a. When the dependent spouse is the only survivor,

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he shall receive the basic survivorship pension;
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b. When only the dependent children are the
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survivors, they shall be entitled only to the dependent

s.

children's pension equivalent to 10% of the BMP for every

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dependent child, not exceeding five (5), counted from the

91

youngest and without substitution;

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C.
When the survivors are the dependent spouse and
o.

the dependent children, the dependent spouse shall receive

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the basic survivorship pension for life or until he remarries

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or cohabits, and the dependent children shall receive the

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dependent children's pension.

d. When the dependent spouse and dependent

children are already receiving the basic survivorship
pension and dependent children's pension, respectively,
any subsequent death, emancipation or disqualification of
any one of them shall not entitle the other beneficiaries to
the forfeited share.

e.
In the absence of a natural guardian, the guardian
de facto of dependent children, as well as the physically
or mentally incapacitated dependent children, must file a
Petition for Guardianship to be able to claim the survivorship
benefits on behalf of the dependent children.
 LABOR STANDARDS 539

Government Service Insurance Act

eushoof. When the pensioner dies within the 5-year period

after receiving the five-year lump sum, the survivorship
pension shall be paid only after the end of the said five-year
period. However, filing of claim for survivorship benefit
should be done before the end of the 4-year prescription
period. (Sections 24.4 and 24.4.1, Rule IV, IRR, RA 8291)

21. What are the conditions for entitlement to survivorship

benefits?

The primary and secondary beneficiaries, except

dependent children, shall be entitled to applicable

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survivorship benefits, subject to the following:

u.
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a. not engaged in any gainful occupation as defined

n.
in Section 2 (p) of RA 8291;

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b.
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the surviving spouse and the deceased member
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were living together as husband and wife;
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C. not gainfully engaged in a business or economic

s.

activity (self-employed);
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91

d. employed/engaged in a business or economic

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activity but receiving income less than the minimum

o.

compensation of government employees;

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e. not receiving any other pension from the GSIS or

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another local or foreign institution or organization; and

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f. In the case of the dependent spouse, payment of

the basic survivorship pension shall discontinue when he
remarries, cohabits, or engages in common-law relationship.

The foregoing conditions, except the last one, must be

present immediately preceding the death of the member or
pensioner. (Section 24.5, Rule IV, IRR, RA 8291)

22. What is a funeral benefit?

Funeral benefit is intended to help defray the expenses

incident to the burial and funeral of the deceased member,
pensioner or retiree under RA 660, RA 1616, PD 1146, and RA
540 LABOR LAW REVIEWER

8291. It is payable to any qualified individual, in accordance

with the following order of priority:

a. Legitimate spouse,
b. Legitimate child who spent for the funeral
services,

C. Any other person who can show

incontrovertible proof that he shouldered the funeral
expenses of the deceased. (Section 25.1, Rule IV, IRR
8291)

ph
23. What is the amount of funeral benefits?

u.
ed
The amount of funeral benefits is as follows:

n.
ai
a. The prevailing amount approved by the Board of
m
Trustees at the time of death of the member or pensioner.
su

b. For uniformed members of the PNP, BJMP and

m

BFP, the amount of funeral benefit is fixed at P10,000.00.

s.
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(Section 25.2, Rule IV, IRR, RA 8291)

91

24. What are the conditions for entitlement to funeral benefits?

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o.

Funeral benefit shall be paid upon the death of:

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an active member; or
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a.
o

b. a member who has been separated from the

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service with more than 15 years of creditable service, but

entitled to future separation or retirement benefits; or

C. old age or disability pensioner; or

d. a retiree who at the time of his retirement is at
least 60 years of age and with at least 20 years of service but
who opts to retire under RA 1616 on or after June 24, 1997;
or

e. a member who retired under RA 1616 prior to June

24, 1997 with at least twenty (20) years of service, regardless
of age. (Section 25.3, Rule IV, IRR, RA 8291)
 LABOR STANDARDS 541

Government Service Insurance Act

25. What is the nature of the membership with GSIS?

State briefly the compulsory coverage of the Government

Service Insurance Act. (2009 BAR Q. No. X[a])

State the respective coverages of: the Revised Government

Service Insurance Act. (1997 BAR Q. No. XX[b])

Membership in the GSIS shall be compulsory for all

employees receiving compensation who have not reached
the compulsory retirement age, irrespective of employment
status. (Section 3, RA 8291)

ph
26. Atty. CLM, a dedicated and efficient public official, was

u.
the top executive of a government owned and controlled

ed
corporation (GOCC). While inspecting an ongoing project

n.
in a remote village in Mindanao, she suffered a stroke and
ai
m
since then had been confined to a wheelchair. At the time
su
she stopped working because of her illness in line of duty,
m

Atty. CLM was only sixty years old but she had been an
s.

active member of the GSIS for thirty years without any

@

break in her service record. What benefits could she claim

91

from the GSIS? Cite at least five benefits. (2004 BAR Q.

cx

No. VIII[B])
o.

The following are the benefits:

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1. Compulsory Life Insurance Benefits under the

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Life Endowment Policy (LEP) (Section 18, Rule IV, IRR, RA

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8291)

2. Compulsory Life Insurance Benefits under the

Enhanced Life Policy (ELP) (Section 19, Rule IV, IRR, RA
8291)

3. Retirement Benefits (Section 20, Rule IV, IRR, RA

8291)

4. Separation Benefits (Section 21, Rule IV, IRR, RA

8291)

5. Unemployment Benefits (Section 22, Rule IV, IRR,

RA 8291)
542 LABOR LAW REVIEWER

27. What is the prescriptive period for claim under the GSIS
Law?

Claims for benefits under this Act except for life and
retirement shall prescribe after four (4) years from the date
of contingency. (Section 28, RA 8291)

28. What is the jurisdiction of the GSIS?

The GSIS shall have original and exclusive jurisdiction
to settle any disputes arising under this Act and any other
laws administered by the GSIS. The Board may designate
any member of the Board, or official of the GSIS who is a

ph
lawyer, to act as hearing officer to receive evidence, make

u.
findings of fact and submit recommendations, together

ed
with all documentary and testimonial evidence to the Board

n.
within thirty (30) working days from the time the parties
ai
m
have closed their respective evidence and filed their last
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pleading. The Board shall decide the case within thirty (30)
m

days from the receipt of the hearing officer's findings and

s.

recommendations. The cases heard directly by the Board

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shall be decided within thirty (30) working days from the

91

time they are submitted by the parties for decision. (Section

cx

30, RA 8291)
o.
er

29. What are the rules governing appeals from the decision of
sp

the GSIS?
o
pr

Appeals from any decision or award of the Board shall

be governed by Rules 43 and 45 of the 1997 Rules of Civil
Procedure adopted by the Supreme Court on April 8, 1997
which will take effect on July 1, 1997: Provided, That pending
cases and those filed prior to July 1, 1997 shall be governed
by the applicable rules of procedure: Provided, further, That
the appeal shall take precedence over all other cases, except
criminal cases when the penalty of life imprisonment or
death or reclusion perpetua is imposable.

The appeal shall not stay the execution of the order or

award unless ordered by the Board, by the Court of Appeals
or by the Supreme Court and the appeal shall be without
 LABOR STANDARDS 543

Government Service Insurance Act

prejudice to the special civil action of certiorari when proper.

(Section 31, RA 8291)

30. Is it necessary for an employee to litigate in order to

establish and enforce his right to compensation? Explain.
(1995 BAR Q. No. XI[2])

No, the employee will simply file a claim with the SSS
if he is employed in the private sector and with the GSIS
in case of government employee. If the claim is denied
the employee can file a motion for reconsideration before
initiating an appeal with the Employees Compensation

ph
Commission (ECC).

u.
ed
n.
ai
m
su
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s.
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91
cx
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 Chapter IV
PORTABILITY LAW

1. Define the following under Portability Law: Contribu

tions, Portability, and Totalization.
"Contributions" shall refer to the contributions paid by
the employee or worker to either the Government Service

ph
Insurance System (GSIS) or the Social Security System (SSS)

u.
on account of the worker's membership;

ed
"Portability" shall refer to the transfer of funds for the

n.
account and benefit of a worker who transfers from one

ai
system to the other;
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"Totalization" shall refer to the process of adding up the

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periods of creditable services or contributions under each of

s.

the Systems, for purposes of eligibility and computation of

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benefits. (Section 2, RA 7699)

91
cx

2. What are the creditable services in the public sector under

o.

the Portability Law?

er
sp

For the public sector, the following shall be considered

o

creditable services:
pr

1.1. All previous services rendered by an official/

employee pursuant to an appointment whether permanent,
provisional or temporary;

1.2. All previous services rendered by an official/

employee pursuant to a duly approved appointment to a
position in the Civil Service with compensation or salary;
1.3. The period during which an official/employee
was on authorized sick leave of absence without pay not
exceeding one year;

544
 LABOR STANDARDS 545

Portability Law

1.4. The period during which an official or employee

was out of the service as a result of illegal termination of his
service as finally decided by the proper authorities; and
1.5. All previous services with compensation or salary
rendered by elective officials. (Section 1[f], Rule III, IRR, RA
7699)

3. What is the period of contribution in the private sector

under the Portability Law?

For the private sector, the periods of contribution shall

ph
refer to the periods during which a person renders services

u.
for an employer with compensation or salary and during

ed
which contributions were paid to SSS. For the purpose of

n.
this Section, a self-employed person shall be considered an
ai
employee and employer at the same time. (Section 1[g], Rule
m
su
III, IRR, RA 7699)
m

What is overlapping under Portability Law?

s.
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Overlapping of periods shall refer to the periods

91

during which a worker simultaneously contributes to both

cx

Systems. (Section 1[i], Rule III, IRR, RA 7699)

o.
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5. ?
sp

:
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pr

1.
Old-age benefit
2. Disability benefit
3. Survivorship benefit
4. Sickness benefit

5. Medicare benefit, provided that the member shall

claim said benefit from the System where he was last a
member, and

6. Such other benefits common to both System that

may be availed of through totalization. (Section 1[j], Rule III,
IRR, RA 7699)
546 LABOR LAW REVIEWER

6. What are the instances when totalization under the

Portability Law shall apply?

Totalization shall apply in the following instances:

a) If a worker is not qualified for any benefits
from both Systems;
b) If a worker in the public sector is not qualified
for any benefits in the GSIS; or

c) If a worker in the private sector is not

qualified for any benefits from the SSS.

ph
For the purpose of computation of benefits, totalization

u.
shall apply in all cases so that the contributions made by the

ed
worker-member in both Systems shall provide maximum

n.
benefits which otherwise will not be available. In no case

ai
shall the contribution be lost or forfeited. (Section 3, Rule V,
m
su
IRR, RA 7699)
m

What is the effect if after totalization under Portability Law

s.

7.
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the worker-members does not qualify in either system?

91

If after totalization the worker-member still does not

cx

qualify for any benefit listed in Rule III, Section 1(j), the
o.

member will then get whatever benefits correspond to his/

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her contributions in either or both Systems. (Section 4, Rule

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V, IRR, RA 7699)
o
pr

8. What is the instance when totalization under Portability

Law will not apply?

If a worker qualifies for benefits in both Systems,

totalization shall not apply. (Section 5, Rule V, IRR, RA 7699)

9. How many times shall overlapping periods of creditable

services or contributions be credited under the Portability
Law?

Overlapping periods of creditable services or

contributions in both Systems shall be credited only once
for purposes of totalization. (Section 7, Rule V, IRR, RÅ 7699)
 LABOR STANDARDS 547

Portability Law

10. Luisito has been working with Lima Land for 20 years.
Wanting to work in the public sector, Luisito applied with
and was offered a job at Livecor. Before accepting the
offer, he wanted to consult you whether the payments that
he and Lima Land had made to the Social Security System
(SSS) can be transferred or credited to the Government

Service Insurance System (GSIS). What would you advice?

(2014 BAR Q. No. XIV)

I will advise Luisito to apply the Portability Law. Under

this law, there could be transfer of funds for the account
and benefit of a worker who transfers from one system to

ph
the other. This is known as portability. Then there would

u.
be totalization which refers to the process of adding up the

ed
period of creditable services or contributions under each of

n.
the Systems, for purposes of eligibility and computation of
ai
benefits.
m
su

11. Under the Limited Portability law, funds from the GSIS
m
s.

and the SSS may be transferred for the benefit of a worker

@

who transfers from one system to the other. For this

91

purpose, overlapping periods of membership shall be

cx

(A) credited only once.

o.
er

(B) credited in full.

sp

(C) proportionately reduced.

o
pr

(D) equally divided for the purpose of totalization.

(2011 BAR Q. No. 54)

(A) credited only once.

Overlapping periods of creditable service or contri

butions in both Systems shall be credited only once for
purposes of totalization. (Section 7, Rule V, IRR, RA 7699)
12. How are the "portability" provisions of Republic Act No.
7699 beneficial or advantageous to SSS and GSIS members
in terms of their creditable employment services in the
private sector or the government, as the case may be, for
548 LABOR LAW REVIEWER

purposes of death, disability or retirement? Please explain

your answer briefly. (2005 BAR Q. No. II[c])
The advantage is for the purpose of computing the
benefits. The law allows totalization in all cases so that the
contributions made by the worker-member in both Systems
shall provide maximum benefits which otherwise will not
be available. In no case shall the contribution be lost or
forfeited.

ph
u.
ed
n.
ai
m
su
m
s.
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91
cx
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