ATTY. J. OSWALD B.

LORENZO

Former Labor Arbiter, NCR-NLRC; Professor of Law and Pre-Bar

Reviewer; President, The Center for Law Advocacy and Specialized
Studies (CLASS); former Assistant Secretary, DENR and POEA Director
for Licensing and Past President, National Association of Labor Arbiters
(NALA), Inc.
A- LABOR RULES AND
JURISPRUDENCE

A-I – LEGALLY ALLOWABLE

HIRING POLICIES AND
PRACTICES
REGULAR EMPLOYMENT

Regular employment is one where the

employee has been engaged to perform
activities which are necessary or
desirable in the usual business or trade
of the employer. (Art. 280, Labor Code)
CASUAL EMPLOYMENT
Casual employment is one where the work or
service to be performed by the employee is
merely incidental to the business of the
employer and such work or
Service is for a definite period made known
to the employee at the time of the engagement.
(Art. 280, Labor Code). A casual employee may
become a regular employee after one (1) year
of service. (Conti vs. NLRC, 271 SCRA 114)
PROBATIONARY EMPLOYMENT

Probationary employment is
one where the employee is on
trial by employer during which
the employer determines the
qualification of the employee
for regular employment.
 As a general rule, the probationary
period of employment should not exceed
six (6) months from the date of the
employee started working. Applying
Article 13 of the Civil Code, the
probationary period of six (6) months
consists of one hundred eighty (180)
days. (Mitsubishi Motors vs. Chrysler Phils.
Labor Union, G.R. No. 148738, June 29, 2004).
 The standards should be made known
to the employee at the start of
engagement. If standards are not made
known to the employee at start of
employment, he is deemed a regular
employee from day one.(Clarion Printing
House, Inc. vs. NLRC, G.R. No. 148372, June
27, 2005. If there is no stipulation on
probationary period, the employment is
deemed regular. (ATCI Overseas Corporation
vs. CA, G.R. No. 143949, August 9, 2001).

The permanent status of private school teachers may be

acquired if the following conditions are present:
 He is a full time teacher;
 He must have rendered three
consecutive years of service; and
 His service must have been
satisfactory.(UST vs. NLRC, 182 SCRA
371).
An employee who is allowed to
work after a probationary
period is considered a regular
employee. (Article 281, Labor
Code)
PROJECT EMPLOYMENT
Project employment is one where the
employment of an employee has been
fixed for a specific project or undertaking,
the completion or termination of which
has been determined at the time of the
engagement of the employee.(Article 280,
Labor Code).
SEASONAL EMPLOYMENT
 Seasonal employment is one where the work
or service to be performed by the employee
is seasonal in nature and the employment is
for the duration of the season. (Article 280,
Labor Code). Seasonal employee may become
regular employee after one (1) year of
service. Once he attained such regularity, he
is properly to be called “regular seasonal
employee”. (Abasolo vs. NLRC, G.R. No.
118475, 11/29/00).
FIXED-TERM EMPLOYMENT
 Fixed-term employment is one where the
employment of an employee is covered by
a fixed contract of employment.
 The two (2) criteria under which fixed
contracts of employment cannot be said
to be in circumvention of security of
tenure are:
 The fixed period of employment was
knowingly and voluntarily agreed upon
by the parties, without any force,
duress or improper pressure being
brought to bear upon the employee
and absent any other circumstance
vitiating his consent; or
 It satisfactorily appears that the
employer and employee dealt with
each other on more or less equal
terms with no moral dominance
whatever being exercised by the
former on the latter. (PNOC-EDC vs.
NLRC, G.R. No. 97747, 3/31/93).
The validity of fixed-period employment has
been consistently upheld by the Supreme Court
starting with Brent School vs. Zamora, G.R. No.
48494, 2/5/90.
While their employment as mixers, packers
and machine operators was necessarily and
desirable in the usual business of the company,
they were employed temporarily only, during
periods when there was heightened demand of
production.
Consequently, there could have been no
illegal dismissal when their services
were terminated on expiration of their
contracts. Contracts of employment for
a fixed period terminate on their own at
the end of such period. (Labayog vs. M.Y.
San Biscuits, Inc., G.R. No. 148102,
7/11/06).
While the employees’ employment as chicken
dressers is necessary and desirable in the
usual business of the employer, they were
employed on a mere temporary basis, since
their employment was limited to a fixed period.
Consequently, there was no illegal dismissal
when the employees’ services were
terminated by reason of the expiration of their
contracts. (Pangilinan vs. General Milling
Corporation, G.R. No. 149329,7/12/04).
A.II – LEGALLY ALLOWABLE
FIRING POLICIES AND
PRACTICES

JUST CAUSES OF
TERMINATION
Serious misconduct or willful disobedience by
the employee of the lawful orders of his
employer or representative in connection with
his work;
 Gross and habitual neglect of the
employee of his duty;

 Fraud or willful breach by the

employee of the trust reposed in him
by his employer or his duly
authorized representative;
Commission of a crime or offense by the
employee against his employer or any
immediate member of his family or his duly
authorized representative; (Article 282,
Labor Code).

Violation of the Anti-Sexual Harassment Law

(Sec. 3, Republic Act No. 7877);
 Violation of the Comprehensive Dangerous
Drug Law (Sec. 36 (d) Republic Act No. 9165);
 Dismissal of an employee pursuant to the
demand of the union from the management to
enforce the closed-shop provision of the CBA.
(Article 248 (e), Labor Code; Tanduay Labor
Union vs. NLRC, 149 SCRA 470; Del Monte
Phils., Inc. v. Saldivar, et.al., G.R. No. 158620,
October 11, 2006).
An employer can be adjudged guilty of unfair labor
practice for having dismissed its employees in line
with a closed-shop provision of the CBA if they
were not given a proper hearing or due process.
The discharge of an employee from his
employment is null and void where the employee
was not formally investigated and was not given
the opportunity to refute the alleged findings by
the company. (Tropical Hut Employees' Union vs.
Tropical Hut, Inc. G.R. L-43495-99, January 20,
1990);
 Dismissal or loss of employment status of union
officers and members who knowingly participates
in an illegal activity/strike by defying a Return-
To-Work Order (RTWO) of the Secretary of Labor
or of the Commission. (San Juan de Dios
Education Foundation Employees Union-Alliance of
Filipino Workers vs. San Juan de Dios Educational
Foundation, Inc., G.R. No. 143341, May 28, 2004,
430 SCRA 193; Manila Hotel Employees Assn. v.
Manila Hotel Corporation, G.R. no. 154591, March
5, 2007).
 Dismissal or loss of employment
status of union officer who knowingly
participates in an illegal strike. (Art.
264 (a), Labor Code; Gold City
Integrated Port Services, Inc. vs.
NLRC, G.R. No. 103560, July 6, 1995;
Pinero vs. NLRC, G.R. No. 149610,
August 20, 2004, 437 SCRA 112); and
 Dismissal or loss of employment status of
any worker or union officer who knowingly
participates in the commission of illegal
acts during strike. (Art. 264 (a), Labor
Code.
 Ex. - Infliction of physical injuries, assault,
breaking of truck windows and throwing
empty bottles to non-strikers.
(International Container Terminal
Services, Inc. vs. NLRC, 256 SCRA 124).
AUTHORIZED CAUSES OF
TERMINATION
Installation of labor-saving devices;
 Redundancy- It exists where the
services of an employee are in excess
of what is reasonably demanded by
the actual requirements of the
enterprises.
 A position is redundant where it is
superfluous and superfluity of a position
may be caused by over hiring of workers,
decreased volume of business or dropping
of a particular product line or service
activity previously manufactured or
undertaken by the enterprise. It is not
linked with losses. (De Ocampo vs. NLCR,
213 SCRA 652);
 Retrenchment to prevent losses - It is
resorted to by an employer primarily to
avoid or minimize losses;
 Closure or cessation of operation. (Art.
283, Labor Code); backwages up to the
closure of company only. (Retuya v.
Dumarpa, G.R. No. 148848, August 5,
2003).
 Notes: By jurisprudence, a closure of
establishment may include the following:

Transfer of a workplace to a very far location

beyond the control of an employer such as
but not limited to expiration of a lease
contract. (Chiniver Deco Print vs. NLRC 325
SCRA 758).
 Sale of company;
 Merger;
 Bankruptcy;
 Insolvency
Closure due to serious business losses or
financial reverses, the employer is not
obliged to pay separation pay to his
employees. (North Davao Mining Corporation
vs. NLRC, 254 SCRA 721; Galaxie Steel
Workers Union v. NLRC, G.R. No. 165757,
October 17, 2006).
Involuntary closure due to CARP Program of
DAR where the employees are the
beneficiaries, the employer is not obliged to
pay separation pay to his employees. (NFL vs.
NLRC/ Patalon Coconut Estate, 327 SCRA
158).
Disease (Article 284, Labor Code)
In the absence of the required certification by
a public health physician, the employee's
dismissal due to disease is invalid. (Crus vs.
NLRC, G.R. No. 116384, February 7, 2000).
A.III LABOR STANDARDS
BENEFITS
DEFINITION
Labor standards are defined as the
minimum requirements prescribed by
law relating to wages, hours of work,
cost-of-living allowance, and other
monetary and welfare benefits.
 LEAVES WITH PAY
 SERVICE INCENTIVE LEAVE

A.1 - MANDATORY – FIVE (5) DAYS SERVICE

INCENTIVE LEAVE WITH PAY (ART. 95)
A.2 – OPTIONAL – MORE THAN FIVE (5) DAYS
SUCH AS 15 DAYS SICK LEAVE AND 15 DAYS
VACATION LEAVE. ONCE GIVEN COULD NOT
BE UNILATERALLY WITHDRAWN NOR
DIMINISHED. (ART. 100)
• 3 – SERVICE REQUIREMENT – 1 YEAR
A.4 – EXEMPTIONS:
SECTION I, RULE V, BOOK III – RULES
IMPLEMENTING THE LABOR CODE
 GOVERNMENT EMPLOYEES
 DOMESTIC HELPERS
 MANAGERIAL EMPLOYEES
 FIELD PERSONNEL
 ESTABLISHMENTS EMPLOYING LESS THAN
TEN (10) WORKERS (MEANS 1-9)
 THOSE WHO ARE ALREADY ENJOYING
VACATION LEAVES FOR AT LEAST FIVE (5)
DAYS
MATERNITY LEAVE

B.1 – 60 DAYS FOR ORDINARY DELIVERY; 78

DAYS FOR CAESARIAN DELIVERY;
B.2 – FIRST FOUR (4) DELIVERIES EITHER
NORMAL, ABORTION OR MISCARRIAGE;
B.3 – LEGITIMATE OR ILLEGITIMATE
B.4 – Service requirement – the pregnant
woman must have rendered service of
at least 6 months for the last 12 months.

B.5 – The employer must have paid at

least 3 months of maternity
contributions within the 12-month period
immediately before the semester of
contingency. (R.A. NO. 8282; ART. 133)
PATERNITY LEAVE
C.1 – 7 days for married male employee, and
cohabiting or living together as husband
and wife.
C.2 – First four (4) deliveries either normal,
abortion or miscarriage (R.A. NO. 8187,
7/5/96)
SOLO PARENT LEAVE
D.1 – 7 DAYS FOR SOLO PARENT (MALE AND FEMALE)
D.2 – WHO IS A SOLO PARENT?
• A WOMAN WHO GIVES BIRTH AS A RESULT OF
RAPE;
• WIDOW OR WIDOWER;
• SPOUSE OF CONVICT IN JAIL;
• SPOUSE OF INSANE;
• SPOUSE AFTER LEGAL SEPARATION WITH
CUSTODY OF CHILDREN;
 SPOUSE AFTER DECLARATION OF NULLITY OF
MARRIAGE WITH CUSTODY OF CHILDREN;

 SPOUSE ABANDONED FOR AT LEAST ONE

YEAR;

 UNMARRIED MOTHER OR FATHER WITH

CUSTODY OF CHILDREN;
ANY PERSON WHO SOLELY PROVIDES
PASTORAL CARE AND SUPPORT TO A CHILD;
AND

ANY FAMILY MEMBER WHO ASSUMES

RESPONSIBILITY OF A PARENT WHO
ABANDONS. (R.A. NO. 8972, 11/7/2000)
BATTERED WOMAN LEAVE

E.1- 10 DAYS LEAVE WITH PAY IN

ADDITION TO OTHER PAID LEAVES UNDER
THE LABOR CODE, OTHER LAWS AND
COMPANY POLICIES.
BATTERED WOMAN Is one who is a victim of
any act or series of acts of violence
committed by any person which resulted to
her physical, sexual or psychological
suffering.
E.3. – TO APPLY FOR SUCH LEAVE, THE WOMAN
EMPLOYEE
Has to submit a certification
from the barangay captain or
kagawad or prosecutor or the
clerk of court that an action
under R.A. No. 9262 has been
filed and is pending.
– Usage of the 10-day leave is at the
option of the woman employee. It
shall cover the day or days when she
will have to attend to medical and
legal concerns.
LEAVES NOT AVAILED OF ARE NON-
CUMULATIVE AND NOT CONVERTIBLE TO
CASH (R.A. NO. 9262, THE ANTI-
VIOLENCE AGAINST WOMEN AND THEIR
CHILDREN ACT OF 2004; 3/8/04).
II – 13TH MONTH PAY
The purpose of 13th month pay is to help
the plight of the working masses to
properly celebrate Christmas and New
Year.
The employee must have rendered
service with the company for at least
one (1) month.
 The minimum 13th month pay
required by law shall not be less
than 1/12 of the total basic salary
earned by an employee within a
calendar year.
 The required 13th month pay shall be paid
not later than December 24 each year. An
employer, however, may give to his
employees one half (1/2) of the required
13th month pay before the opening of the
regular school year and the other half on
or before the 24th day of December of
every year. (Rules Implementing P.D. No.
851)
 An employee who has resigned, whose
services were terminated, and who has
retired at any time before the time of
payment of the 13th month pay is entitled
to this benefit in proportion to the length
of time he worked during the year.
(International School of Speech v. NLRC,
G.R. No. 112658, 3/16/95).
III – OVERTIME PAY
III.1 – Overtime work means work
performed beyond 8 hours. (In computing
overtime pay, a day is understood to be
24-hour period commences from the
time the employee regularly starts to
work);
COMPENSATION:
1. Overtime work during ordinary day =
regular hourly wage plus 25% premium
2. Overtime work during holiday or rest day
– an additional compensation equivalent to
the rate of first 8 hours on a holiday or
rest day plus 30% premium. (ART. 87)
Undertime work on any
particular day shall not be offset
by overtime work on any other
day. (Art. 88)
IV – REST DAY/SPECIAL DAY
PAY
IV.1 – THE SPECIAL DAYS ARE: NOVEMBER 1,
DECEMBER 31 (E.O. NO. 203, 6/30/87),
AUGUST 21 (R.A. NO. 9256), 2.25.04),
OTHER SPECIAL DAYS ENACTED BY
CONGRESS, AND PROCLAIMED BY THE
PRESIDENT FOR CERTAIN AREA IN THE
COUNTRY (EXAMPLE – CHARTER DAY).
IV.2 – Work performed on rest day –
regular wage plus 30% premium.
IV.3. – Work performed on special day –
regular wage plus 30% premium.
IV.4 – Work performed during rest day
falling on special day – regular wage plus
50% premium. (Art. 93).
IV.5 – EXEMPTIONS:
SECTION II, RULE I, BOOK III – RULES
IMPLEMENTING THE LABOR CODE
Government employees
 Domestic helpers
 Managerial employees
 Field personnel
 Workers paid by results
V. NIGHT SHIFT DIFFERENTIAL
PAY
V.1 – At least 10% premium of his regular wage
for each hour of work performed between
10:00 o’clock in the evening and 6:00 o’clock
in the morning of the following day. (Art.
86).

V.2 – EXEMPTIONS:
SECTION I, RULE II, BOOK III – RULES
IMPLEMENTING THE LABOR CODE
Government employees
 Domestic helpers
 Managerial employees
 Field personnel
 Retail and service establishments
employing not more than five (5)
workers (means 1-5)
VI. HOLIDAYS WITH PAY
VI.1 – Every worker shall be paid his regular
wage during regular holiday.

VI.2 – The eleven (11) regular holidays are

January 1, Holy Thursday, Good Friday, April
9, May 1, June 12, last Sunday of August,
November 30, December 25, December 30.
(E.O. NO. 203, 6/30/87) AND EIDUL FITR (R.A.
9177, 11/13/02).
VI.3 – The employer may require an
employee to work on regular holiday but
such employee shall be paid
compensation equivalent to twice or
200% of his regular rate (art. 94).
VI.4 – If the holiday work falls on the
scheduled rest day = 260% of his
regular wage
VI.5 – The employee shall be entitled to
holiday pay provided he works on the
day immediately preceding a regular
holiday or when he is on leave of
absence with pay, (SEC. 6, RULE IV,
BOOK III, IMPLEMENTING RULES)
VI.6 - EXEMPTIONS:
SECTION I, RULE IV, BOOK III – RULES IMPLEMENTING THE
LABOR CODE
GOVERNMENT EMPLOYEES
 DOMESTIC HELPERS
 MANAGERIAL EMPLOYEES
 FIELD PERSONNEL
 RETAIL AND SERVICE ESTABLISHMENTS EMPLOYING LESS
THAN TEN (10) WORKERS (MEANS 1-9)
VI.7 - DOUBLE HOLIDAY – if unworked – 200%
-
if worked - 400% (Asian Transmission
Corporation vs. CA, G.R. No. 144664,
3/15/04, 425 SCRA 478).
VII. RETIREMENT PAY
Retirement benefits are intended to
help the employee enjoy the remaining
years of his life, lessening the burden of
worrying his financial support, and are a
form of reward for his loyalty and
service to the employer. (Laginlin vs.
WCC, 159 SCRA 91)
VII.1 – In general – optional – 60 years old;
compulsory – 65 years old; (ART. 287,
R.A. NO. 7641)
VII.2 – Underground mining – optional – 50
years old; compulsory – 60 years old;
(ART. 287, R.A. NO. 8558)
VII.3 – Minimum length of service – AT LEAST 5
YEARS
VII.4 – Retirement benefit – ½ month pay for
every year of service a fraction of at least 6
months being considered as one (1) whole
year.

VII.5 – THE TERM “1/2 MONTH PAY” SHALL

MEAN:
15 DAYS SALARY
5 DAYS EQUIVALENT OF SERVICE INCENTIVE
LEAVE
1/12 OF THE 13TH MONTH PAY
(FACTORS IN OBTAINING 1/12 OF THE 13TH
MONTH PAY:
391.5/12/12 = 2.71 (EMPLOYEES WHO WORK
365 DAYS IN A YEAR)
365/12/12 = 2.53 (MONTHLY RATE
EMPLOYEES)
314/12/12 = 2.18 (DAILY RATE EMPLOYEES)
262/12/12 = 1.81 (EMPLOYEES WHO WORK FIVE
(5) DAYS PER WEEK)
MOST COMMON = 15 + 5 + 2.18 = 22.18 DAYS
FOR EVERY YEAR OF SERVICE.
VII.6 – EXEMPTIONS:
Section 2. Rule II – Rules implementing the New
Retirement Law (R.A. No. 7641)
GOVERNMENT EMPLOYEES
 DOMESTIC HELPERS
 RETAIL, SERVICE AND AGRICULTURAL
ESTABLISHMENTS EMPLOYING NOT MORE THAN TEN
(10) WORKERS (MEANS) (1-10)
VIII. SERVICE CHARGES
VIII.1 – Shall apply to hotels, restaurants
and similar establishments.
VIII.2 – DISTRIBUTION RATE:
85% FOR ALL COVERED EMPLOYEES.
15% FOR MANAGEMENT. (ART. 96).
IX.3 EXEMPTIONS: Barangay
Micro Business Enterprises whose total
assets exclusive of land shall not be
more than P3 M after issuance of
Certificate of Authority by the
City/Municipality Treasurer. Social
security and health care benefits are not
included. (Sec. 8, R.A. No. 9178, BMBE Act
of 2002, approved on November 13,
SEPARATION PAY
It is a statutory right designed to
provide the employee with the
wherewithal during the period he is
looking for another employment
(Santos vs. NLRC, 154 SCRA 166).
X.1 – An employee is entitled to separation
pay equivalent to his one (1) month pay
for every year of service. A fraction of at
least six (6) months being considered as
one whole year. If his separation from
service is due to any of the following:
INSTALLATION BY THE EMPLOYER OF LABOR-
SAVING DEVICES AND
REDUNDANCY, AS WHEN THE POSITION OF THE
EMPLOYEE HAS BEEN FOUND TO BE
SURPLUSAGE OR UNNECESSARY IN THE
OPERATION OF THE BUSINESS. (ART. 283)
X.2 – An employee is entitled to
separation pay equivalent to one (1)
month pay, or one-half (1/2) month pay
whichever is higher for every year of
service a fraction of at least six months
being considered as one whole year, if
his separation is due to any of the
following causes:
 RETRENCHMENT TO PREVENT
LOSSES, i.e. REDUCTION OF PERSONNEL;
 CLOSURE OR CESSATION OF
OPERATION OR UNDERATAKING OF
AN ESTABLISHMENT NOT DUE TO
SERIOUS LOSSES OR FINANCIAL
REVERSES (ART. 283); AND
When the employee is suffering from
a disease not curable within a period
of six (6) months and his continued
employment is prejudicial to his
health or to the health of his co-
employees (Art. 284).
X.3 – PROCEDURE – Serve a written
notice on the workers and the
regional director of the department of
labor and employment having
jurisdiction over the place of business
at least one (1) month before the
intended termination.
B- STEPS FOR DEALING A
PROBLEM EMPLOYEE
An ideal employee is one who will
help solve an existing problem and
will not add any problem to his
employer. Conversely, an employee
is a problem one.
B.1 - DISCIPLINARY PROCESS

Establish performance standards and work

rules;
 Communicate the rules to employees;
 Evaluate employee performance and identify
violations of the rules;
 Conduct investigation;
 Inform the union if company is unionized;
 Application of corrective action when
necessary.
B.2 – CIRCUMSTANCES AFFECTING
LIABILITY
Justifying;
Qualifying;
Exempting;
Mitigating;
Aggravating.
 Note: Good performance, long tenure, first offense
are mitigating factors while recidivism is an
aggravating factor.
B.3 – DISCIPLINARY ACTIONS
Oral or written warning;
 Reprimand
 Fines (economic sanctions);
 Demotion;
 Suspension;
 Dismissal
 STEPS TO TAKE BEFORE
FIRING AN EMPLOYEE
C.1 – The procedure for termination of
employment based on just causes as
defined in Article 282 of the Code:
1. A written notice served to the
employee specifying the ground or
grounds for termination, and giving
to said employee reasonable
opportunity within which to explain
his side;
2. A hearing or conference during
which the employee concerned, with
assistance of counsel if the employee
so desires, is given the opportunity
to respond to the charge, present his
evidence or rebut the evidence
presented against him; and
3. A written notice of termination served on
the employee indicating that upon due
consideration of all the circumstances,
grounds have been established to justify
his termination.
In case of termination, the foregoing
notices shall be served on the employee’s
last known address.
For termination of employment based on
authorized causes as defined in Article 283 of
the Code, the requirements of due process
shall be deemed complied with upon service of
a written notice to the employee and the
appropriate Regional Office of the Department
at

least thirty (30) days before the effectivity of

the termination, specifying the ground or
grounds for termination.
If the termination is brought by the
completion of the contract or phase
thereof, no prior notice is required. If the
termination is brought about by the
failure of an employee to meet the
standards of the employer in the case of
probationary employment, it shall be
sufficient that written notice is served to
the employee within a reasonable time
from the effective date of termination.
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 Commission.
During the hearing of the termination
cases based on just causes, the employer
may place the worker concerned under
preventive suspension if his continued
employment poses a serious and
imminent threat to the life and property
of the employer or of his co-worker. No
preventive suspension shall last longer
than thirty (30) days.
The law requires that the employer must furnish the worker sought
to be dismissed with two written notices before termination of
employment can be legally affected:

1. Notice which apprises the employee of the

particular acts or omissions for which his
dismissal is sought; and
2. Subsequent notice which informs the
employee of the employer’s decision to
dismiss him. Failure to comply with the
requirements taints the dismissal with
illegality. This procedure is mandatory, in
the absence of which, any judgment
reached by management is void and
inexistent. (Pepsi-Cola v. NLRC, 101900,
June 23, 1992).
C.2 – LEGAL IMPLICATION
IF THE TERMINATION OF
AN EMPLOYEE IS
WITHOUT COMPLIANCE
OF THE DUE PROCESS
REQUIREMENT
If the dismissal is based on a just cause
under Article 282 but the employer failed
to comply with the notice requirement,
the sanction to be imposed upon him
should be tempered (P30,000.00)
because the dismissal process was, in
effect, initiated by an act imputable to the
employee (AGABON CASE).
If the dismissal is based on an authorized
cause under Article 283 but the employer
failed to comply with the notice requirement,
the sanction should be stiffer (P50,000.00)
because the dismissal process was initiated
by the employer’s exercise of his
management prerogative. (Jaka Food
Processing Corporation vs. Darwin Pacot, G.R.
No. 151378, March 28, 2005).
D-I – WAGE ISSUES
Wage mean the remuneration
capable of being expressed in terms
of money which is payable by an
employer to an employee for
services rendered. (Article 97 (f),
Labor Code).
1.The minimum wage rates in every region of
the country shall be those prescribed by the
Regional Tripartite wages and Productivity
Board (RTWPB). (Art. 99, Labor Code)
2. The employer may not unilaterally withdraw,
eliminate or diminish wage, supplements or
other benefits being enjoyed by the
employees. (Art. 100, Labor Code).
3. An employer cannot be forced to
distribute bonuses which it can no longer
afford to pay. To hold otherwise would be
to penalize an employer for his past
generosity. Bonus is an act of grace and
cannot be demanded as a matter of right.
(Producers Bank vs. NLRC, G.R. 100701,
3/28/01).
4. The payment of wages by an employer to an
employee shall be in legal tender. (Art. 102,
Labor Code).

5. The wages shall be paid at least once every two (2)

weeks or twice a month at intervals not exceeding
sixteen (16) days. No employer shall make payment
with less frequency than once a month. (Art. 103,
Labor Code).
6. The payment of wages shall be made at or near
the place or undertaking. The payment o wages
through automated teller machines is allowed.
(Art. 104, Labor Code).

7. The wages shall be paid directly to the

workers to whom they are due except in cases
of force majeure or under special
circumstances. (Art. 105, Labor Code).
D-2 – WAGE DEDUCTIONS

No employer shall make any deduction from

the wages of his employees except:

1. In cases where the worker is insured with his

consent by the employer, and the deduction is to
recompense the employer for the amount paid by
him as premium on the insurance;
2. Union dues;
3. Value of meals and other facilities;
4. Debt of an employee to the employer where
such has become due and demandable;
5. Withholding tax;
6. SSS, Philhealth and Pag-Ibig Contributions;
7. Dues to a legally established cooperative;
8. Loss or damage; provided the
responsibility of an employee has been
clearly shown; with opportunity to be
heard; and the deduction is fair,
reasonable, does not exceed the actual
loss or damage and does not exceed 20%
of his wages in a week; and
9. Absences. (Arts. 113, 114 and 115, Labor
Code)
 SUPREME COURT DECISIONS ON LEGAL AND
ILLEGAL DISMISSAL AND OTHER ISSUES ON LABOR

1. ATTITUDE PROBLEM – A VALID GROUND FOR

TERMINATION.
An employee who cannot get along with
his co-employees is detrimental to the
company for he can upset and strain the
working environment. Without the
necessary teamwork and synergy, the
organization cannot function well. Thus,
management has the prerogative to take
the necessary action to correct the
situation and protect its organization.
When personal differences between employees
and management affect the work environment,
the peace of the company is affected. Thus, an
employee attitude problem is a valid ground for
his termination. It is a situation analogous to
loss of trust and confidence that must be duly
proved by the employer (Heavylift Manila, Inc.
v. CA, G.R. No. 154410, October 20, 2005).
2. SHOWING DISRESPECT AND MAKING
OFFENSIVE REMARKS AGAINST SUPERIOR
ARE GROUNDS FOR TERMINATION.
The showing of disrespect and
making offensive remarks against
his superior is a valid ground for
termination which is tantamount to
serious misconduct (Punzal v. ETSI
Technologies, Inc. G.R. Nos. 170384-
85, March 9, 2007).
In falsely accusing a superior for
robbery, the offense committed was
libel, not slander (Torreda v. Toshiba
Information Equipment, Inc., G.R. No.
165960, February 8, 2007).
The utterance of obscene, insulting
or offensive words against a
superior constitutes gross
misconduct, which is one of the
grounds to terminate the services of
an employee (Echevaria v. Venutek
Medika, Inc., G.R. No. 169231,
February 15, 2007).
3. POSTING NOTICE OF CLOSURE ON
BULLETIN BOARD IS NOT COMPLIANCE OF
DUE PROCESS.
- The mere posting on the company bulletin
board does not meet the requirement under
Article 283 of serving a written notice on the
workers. In order to meet the purpose of
informing the employees of the specific date of
termination or closure of business operations at
least one month before the date of effectivity,
service of written notice must be made
individually upon each and every employee of the
company (Galaxie Workers Union v. NLRC, G.R.
No. 165757, October 17, 2006).
4. Refusal to render overtime work to
meet the production deadline is
considered insubordination (R.B.
Michael Press v. Galit, G.R. No. 153510,
February 13, 2008).
5. The employer may be liable for damages
if he fails to report to the SSS within five
(5) days the entry in the logbook, the
sickness, injury or death he deems to be
work-connected under Articles 205 and
206 of the Labor Code (U-Bix
Corporation v. Bandiola, G.R. No. 157168,
June 26, 2007).