LABOR LAW REVIEW

ATTY. CHEMBEELYN A. BALUCAN

 LABOR LAW
• The law that defines State policies on labor and employment and governs
the rights and duties of the employer (Er) and the employees (Ee) with
respect to:
a. The terms and conditions of employment, and
b. Labor disputes arising from collective bargaining or other concerted
activity respecting such terms and conditions.
 MATTERS THAT MAY PROPERLY FALL
UNDER THE TERM “labor law”

The term “labor law” covers the following:

1. Statutes passed by the State to promote the welfare of the workers and Ees
and regulate their relations with their Ers.
2. Judicial decisions applying and interpreting the aforesaid statutes.
3. Rules and regulations issued by administrative agencies, within their legal
competence, to implement labor statutes.
 SOURCES OF LABOR LAW

• 1. Labor Code P.D. 442 and other related special legislation

including its respective IRR

• 2. Contracts

• 3. Collective Bargaining Agreement

• 4. Company practice

• 5. Company policies
 AIM AND BASIS OF LABOR LAW
• THE AIM OF LABOR LAW IS SOCIAL JUSTICE

• BASIS: POLICE POWER OF THE STATE

• Other Bases:
• Social Justice Clause, Protection to Labor Clause, Doctrine of Incorporation
Clause, Social Service Clause, Full Employment Clause, Freedom from
Poverty Clause, Freedom from Association Clause, Due Process and Equal
Protection clauses and etc.
 SOCIAL JUSTICE CLAUSE

• “THE STATE SHALL PROMOTE SOCIAL JUSTICE IN ALL

PHASES OF NATIONAL DEVELOPMENT”, SECTION 10, Art.
2 of the 1987 Constitution.
• JOSE LAUREL DEFINED SOCIAL JUSTICE IN THE CASE OF
CALALANG VS. WILLIAMS, AS:
• “Social Justice is neither communism, nor despotism, nor atomism,
nor anarchy, but the humanization of the laws and the equalization of
the social and economic forces by the state so that justice in its
rational and objectivity secular conception may at least be
approximated.
Social justice means the promotion of the welfare of the people,
the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society
through the maintenance of proper economic and social
equilibrium in the inter-relations of the members of the
community; constitutionally, through the adoption of measures
legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments, on the time-
honored principle of salus populi est suprema lex”
COMPASSIONATE JUSTICE
The social justice policy mandates a compassionate
attitude towards the working class in its relation to
management. It is disregarding rigid rules and giving due
weight to all equities of the case (Gandara Mill Supply
and Milagros Sy vs NLRC, G.R. 126703)

But, before there can be occasion for compassion, sympathy and

mercy, there must be justice for all. Otherwise, employees will be
encouraged to steal and misappropriate in the expectation that
eventually, in the name of social justice and compassion, they will
not be penalized but instead financially rewarded.
 CLASSIFICATION OF LABOR LAWS:

1. Labor Standards – That which sets out the minimum terms, conditions, and
benefits of employment that Ers must provide or comply with and to which
Ers are entitled as a matter of legal right
e.g. 13th Month Pay

2. Labor Relations – defines and regulates the status, rights and duties, and the
institutional mechanisms, that govern the individual and collective interactions
of Ers, Ees or their representatives. It is concerned with the stabilization of
relations of employers and employees and seeks to forestall and adjust the
differences between them by the encouragement of CB and the settlement of
labor disputes through conciliation, mediation and arbitration.
e.g. CBA
3. Social Legislation - All laws passed by the State to promote
public welfare. It includes statutes intended to enhance the
welfare of the people even when there is no Er-Ee
relationship.
e.g. GSIS Law, SSS Law, Agrarian Laws
Essential Characteristics of a Contract of Labor

1. Er freely enters into a contract with the Ee;

2. Er can select who his Ee will be;
3. Er can dismiss the Ee, the Ee in turn can quit his job;
4. Er must give remuneration; and
5. Er can control and supervise the conduct of the Ee.
LABOR LEGISLATION VS. SOCIAL LEGISLATION

Labor Legislation refers to labor statutes like Labor

Standards and Labor Relations laws that focuses
the rights of workers in the workplace while Social
Legislation refers to those laws that provide kinds
of particular protection or benefits to society or
segments thereof in furtherance of social justice.
RIGHT TO LABOR, A PROPERTY RIGHT

• Every man has a natural right to the fruits of his

own industry. A man who has been employed to
undertake certain labor and has put into it his
time and effort is entitled to be protected.
CONTRACT OF LABOR

A consensual, nominate, principal and commutative

contract whereby one person called Employer (Er)
compensates another called Employee (Ee) for the
latter’s service. It is a relationship impressed with
public interest in keeping with the constitutional policy
of social justice.
 ESSENTIAL CHARACTERISTICS OF A
CONTRACT OF LABOR
1. Er freely enters into a contract wit the Ee;

2. Er can select who his Ee will be;

3. Er can dismiss the Ee; the Ee in turn can quit his job;

4. Er must give remuneration; and

5. Er can control and supervise the conduct of the Ee.

 CONSTITUTIONAL RIGHTS OF
WORKERS
• Right to self-organization;
• Right to collective bargaining;
• Right to security of tenure;
• Right to just and humane conditions of work, to wit:
 The right to regular working hours;
 The right to regular working days;
 The right to overtime work;
 The right to weekly rest periods;
  The right to additional compensation on scheduled
rest day/ special holiday;
 The right to compensation for holiday work; and
 The right to hospitalization, etc.
 Right to collective negotiations;
 Right to peaceful concerted activities;
 Right to strike;

 Right to a living wage;

 The cost-of-living approach by the union in a
e.g.
period of rising prices has been formalized by the
incorporation of “escalator” clauses in collective
bargaining agreements.
 Escalator clause in the CBA;
 Under this clause, wage rates rise periodically usually with
specific rises in the consumer price index.
 Right to participate in policy and decision-making processes
“PRINCIPLE OF CODETERMINATION”;
 Right to just share in the fruits of production;
Sec. 3, Art. XIII
 LIMITATIONS ON THE ENACTMENT OF
LABOR LEGISLATION

• Observance on non-impairment of contracts;

• Observance of non-delegation of legislative power;
• Observance of the constitutional provision against involuntary servitude;
and
• Observance of the equal protection of the law
CONSTITUTIONAL AND STATUTORY
BASIS

• Promotion of the common good;

• Protective service clause;
• Freedom from poverty;
►Standard of living is defined as a social and economic concept which deals with
“what” facilities are needed by an employee necessary to assure himself and his
family a life worthy of human dignity.
 Promotion of human dignity;
 Principle of distributive justice;
 Freedom of initiative and self-reliance;
 Right to due process:
 “No person shall be deprived of life, liberty, or
property without due process of law, nor shall any
person be denied the equal protection of the laws.”
(Sec. 1, Art. III)
Due process of law:
(a) A law which hears before it condemns;
(b) Which proceeds upon inquiry; and
(c) Renders judgment only after trial. This definition is based on
the latin maxim, audie alteram partem; no man should be
condemned unheard.
DUE PROCESS CLAUSE (Sec. 1, Art. III)

Essential Elements:
a. Substantive Due Process – requires the intrinsic
validity of the law in interfering the with the rights of the
person to his life, liberty, or property.

b. Procedural due process – consists of the 2 basic rights

of notice and hearing, (2-notice rule), as well as the
guarantee of being heard by an impartial and competent
tribunal.
 Right to equal protection of the law
 Right to self organization
 Right to free access to the courts
 Right against involuntary servitude
 Most common form of involuntary servitude:
a. Servitude – voluntary or compulsory subjection of a
person to a master
b. Peonage – service of the peon to another on account of
enforced indebtedness
c. Padrone system – the worker agrees to serve the padroni
who advances transportation charges and food and
clothing for them.
LIMITATIONS IN INVOKING THE PRINCIPLE
SOCIAL JUSTICE

1. Not to undermine property rights resulting in confiscation

2. May only protect the laborers who come to court with clean hands
3. Never result to an injustice or oppression of the Er
4. If it used to shield wrongdoings.
 THE CBA OPERATING AS A SOURCE
OF LAW
• The CBA is the norm of conduct between Er and Ees and compliance
therewith is mandated by the express policy of the law (DOLE Philippines,
Inc., v. Pawis ng Makabayang Obrero (PAMAO-NFL), G.R. No. 146650,
January 13, 2003 in citing E. Razon, Inc. v. Secretary of Labor and
Employment, G.R. No. 85867, May 13, 1993).
 REQUISITES BEFORE PAST PRACTICES
WOULD BE CONSIDERED AS A SOURCE OF
LABOR LAW
• There must be:
1. Voluntarily institution by Er without any legal compulsion
2. A passage of time-should have been done over a long period of time, and
must be shown to have been consistent and deliberate (American Wire and
Cable Daily Rated Employees Union v. American Wire and Cable Co., Inc.,
G.R. No. 155059, April 29, 2005).

NOTE: No passage of time is required for a company policy to become a

source of labor law.
FUNDAMENTAL PRINCIPLES AND
POLICIES

CONSTITUTIONAL PROVISIONS
 CONSTITUTIONAL MANDATES ON LABOR
LAW
1. Sec. 3, Art. XIII – The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and quality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure humane conditions of work, and a
living wage. They shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in setting dispute, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right
of labor to its just share in the fruits of production and the right of enterprises to reasonable
returns to investments, and to expansion and growth.
2. Sec. 9, Art. II – The State shall promote a just and dynamic social order that
will ensure the prosperity and independence of the nation and free the people
from poverty through policies that provide adequate social services, promote
full employment, a rising standard of living, and an improved quality of life for
all.
3. Sec. 10, Art II – The State shall promote social justice in all phases of national
development
4. Sec. 11, Art II – The State values the dignity of every human person and
guarantees full respect for human rights.
5. Sec. 13, Art. II – 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. Sec. 14, Art. II – The State recognizes the role of women in nation-building,
and shall ensure the fundamental equality before the law of women and men.
7. Sec. 18, Art. II – The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
8. Sec. 20, Art. II – The State recognizes the indispensable role of the private sector,
encourages private enterprise and provide incentives to needed investments.
9. Sec. 1, Art. III – No person shall be deprived of life, liberty, or property without due process
of law, nor shall any person be denied the equal protection of the laws.
10. Sec. 4, Art. III – No law shall be passed abridging the freedom of speech, of expression, or
of the press, or the right of the people peaceably to assemble and petition the government
for redness of grievances.
11. Sec. 8, Art. III – 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 abridge.
12. Sec. 10, Art. III – No law impairing the obligation of contract shall be passed.
13. Sec. 16, Art. III – All persons shall have the right to a speedy disposition of their cases
before all judicial, quasi-judicial or administrative bodies.
14. Sec. 18 (2), Art. III – No involuntary servitude in any form shall exist except as a
punishment for a crime whereof the party shall have been duly convicted.
15. Sec. 1, Art. XIII – The congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human dignity,
reduce social. Economic, and political inequalities, and remove culture inequities
by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
16. Sec. 2, Art. XIII – The promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and self-reliance.
17. Sec. 13, Art. XIII – The State shall establish a special agency for disabled persons
for their rehabilitation, self-development and self-reliance and their integration
into the mainstream of society.
18. Sec. 14, Art. XIII – The State shall protect working women by providing safe and
healthful working conditions, taking into account their maternal functions, and
such facilities and opportunities that will enhance their welfare and enable them
to realize their full potential in the service of the nation.
 STATE POLICY ON LABOR AS FOUND
IN THE CONSTITUTION

1. Afford full protection to labor

2. Promote full employment
3. Ensure equal work opportunities regardless of sex, race, or creed
4. Assure the rights of workers to self-organization, security of tenure,
just and humane conditions or work, participate in policy and
decision-making processes affecting their right and benefits
5. Regulate the relations between Ers and workers (Sec. 3, Art. XIII)
BASIC RIGHTS OF WORKERS GUARANTEED
BY THE CONSTITUTION
1. Security of tenure
2. Living wage
3. Humane working conditions
4. Share in the fruits of production
5. Self-organization
6. Collective bargaining and negotiation
7. Engage in peaceful concerted activities, including the right to strike
8. Participate in policy and decision making processes (Sec. 3, Art. XIII)
 PRINCIPLE OF NON-OPPRESSION

The principle mandates capital and labor not to act oppressively

against each other or impair the interest and convenience of the
public. The protection to labor clause in the \constitution is not
designed to oppress or destroy capital (Capili v. NLRC, G.R. No.
117378, March 26, 1997).
 NEW CIVIL CODE
PROVISIONS AND OTHER
LAWS RELATING TO LABOR
1. New Civil Code (NCC)
a. Art.19 – Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.
b. Art.1700 – 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 contacts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, hours shop, wages, working conditions, hours
of labor and similar subjects.
c. Art.1701 – Neither capital or labor shall act oppressively against the other, or impair
the interest or convenience of the public.
d. Art.1702 – In case of doubt, all labor legislation in favor of the safety and decent
living for the laborer.
e. Art. 1703 – No contract which practically amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
f. Art.1704 – In collective bargaining, the labor union or members of the board, or
committee signing the contract shall be liable for non-fulfillment thereof.
 g. Art.1705 – The laborer’s wages shall be paid in legal currency.
h. Art.1706 – Withholding of wages, except for a debt due, shall not be made by the
employer.
i. Art.1707 – The laborer’s wages shall be a lien on the goods manufactured or the
work done.
j. Art.1708 – The laborer’s wages shall not be subject to execution or attachment,
except for debts incurred for foods, shelter, clothing and medical attendance.
k. Art.1709 – The employer shall neither seize nor retain any tool or other articles
belongings to the laborer.
l. Art.1710 – Dismissal of laborers shall be subject to the supervision of the
Government, under special laws.
2. Revised Penal Code (RPC)
Art.289 – Formation, maintenance and prohibition of combination of capital or labor
through violence or treats. Any person who, for the purpose of organizing, maintaining or
preventing coalitions or capital or labor, strike of laborers or lock-out of employees, shall
employ violence or threats in such a degree as to compel or force the laborers or
employers in the free and legal exercise of their industry or work, if the act shall not
constitute a more serious offense in accordance with the provisions of the RPC.
3. Special Laws
a. E.O. 180 – Providing guidelines for the exercise of the Right to Organize of
Government Employees, creating a Public Sector Labor-Management Council, and for
other purposes.
b. R.A. 8291 – Government Service Insurance Act of 1997
c. 13th month Pay Law
d. Retirement Pay Law
e. SSS Law
f. Paternity Leave Act
g. Anti – Child Labor Act
h. Anti – Sexual Harassment Act
i. Magna Carta for Public Health Workers
j. Solo Parents Welfare Act of 2000
k. National Health Insurance Act as amended by R.A. 9241
l. Migrant Workers and Overseas Filipinos Act of 1995 as amended by RA 10022
m. PERA Act of 2008
n. Home Development Mutual Fund Law of 2009
o. The Magna Carta of Women
p. Comprehensive Agrarian Reform Law as amended by R.A. 9700
q. Batas Kasambahay
r. R.A. 9262 – VAWC Law
s. R.A. 11210 Expanded Maternity Leave Law
LABOR CODE
Labor Code
Presidential Decree No. 442 other wise known as the Labor Code of the Philippines is a
decree instituting a labor Code, thereby revising and consolidating labor and social laws to
afford protection to labor, promote employment and human resources development and
ensure industrial peace based on social justice.
Effective date
Presidential Decree No. 422 was signed into law on May 1, 1974. Article 2 state that “the
Code was to take effect six months after its promulgation”. Therefore, the law took effect on
November 1, 1974.
APPLICABILITY OF THE LABOR CODE
GR: All rights and benefits granted to workers under the LC shall apply alike
to all workers, whether agricultural or non-agricultural.
XPNs:

1. Government Ees
2. Ees of government corporations created by special or original charter
3. Foreign governments
4. International agencies
5. Corporate officers/ intra-corporate disputes which fall under P.D. 902-A and now fall under
the jurisdiction of the regular courts pursuant to the Securities regulation Code.
6. Local water district except where NLRC’s jurisdiction is invoked.
7. As may otherwise be provided by the LC.
Agency that exercises the “rule-making
power” granted in the labor code

• The Department of Labor and Employment (DOLE) thru the Secretary of

Labor and Employment (SLE) and other Government agencies charged with
the administration and enforcement of the LC or any of its parts shall
promulgate the necessary IRRs.
Limitations to the “rule-making power” granted to the SLE
and other government agencies

1. It must be issued under the authority of law

2. It must not be contrary to law and the Constitution

Effectivity of rules and regulations

Such rules and regulations shall become effective 15 days after announcement of
their adoption in newspapers of general circulation
 Art. 3, Declaration of Basic Policy
It is the policy of the State to:
1. Afford full protection to labor
2. Promote full employment
3. Ensure equal work opportunities regardless of sex, race, or creed
4. Assure the rights of worker to self-organization, security of tenure, just and humane
conditions of work, participate in policy and decision-making processes affecting their right
and benefits
5. Regulate the relations between Ers and workers.
Art. 4, Construction in favor of Labor

Concept of liberal approach in interpreting the labor code and its IRR
The LC and its IRR, being remedial in character must be accorded the broadest scope
and most beneficial interpretation. It is only in this way that their purpose, which is
to remedy evils of exploitation, manipulation and oppression, may be achieved.
Strict adherence to the letter of labor law is not allowed; the spirit thereof prevails
and must be given effect. Under Art. 4 of the LC, all doubts in the implementation
and interpretation of the provisions thereof, including its IRR, are to be resolved in
favor of labor.
 Recognition of Management
Prerogative

The law also recognizes that management has rights which are also
entitled to respect and enforcement in the interest of fair play (St. Luke’s
medical Center Ees Ass’n v. NLRC, G.R. No. 162053, March 7, 2007)
 ART. 166, POLICY
Policy of the state in relation to Ee’s compensation and state insurance fund.
The State shall promote and develop a tax-exempt Ees’ compensation program
whereby Ees and their dependents, in the event of work-connected disability or
death, may promptly secure adequate income benefits and medical related benefits
(Art. 166, LC).
Purpose of Workmen’s Compensation Act
The primary purpose of a Workmen’s Compensation Act is to provide compensation
for disability or death resulting from occupational injuries or diseases, or accidental
injury to, or death of Ees.
 ART. 211, DECLARATION OF POLICY
The state aims to promote:
1. Free CB and negotiations, including voluntary arbitration, mediation and conciliation as modes of
settling labor or industrial disputes;
2. Free trade unionism
3. Free and voluntary organization of a strong and united labor movement
4. Enlightenment of workers concerning their rights and obligations as union members and Ees;
5. Adequate administrative machinery for the expeditious settlement of labor or industrial disputes;
6. Stable but dynamic and just industrial peace;
7. Participation of workers in the decision-making processes affecting their rights, duties and welfare;
8. Truly democratic method of regulating the relations between the Ers and Ees by means of
agreements freely entered into through CB, no court or administrative agency or official shall have
the power to set or other terms and conditions of employment, except as otherwise provided
under the LC.
• Employer
Any person acting in the interest of an Er, directly or indirectly. The term does not include a
labor organization or any or its officers and agents, except when acting as an Er. [Art.212 (e), LC].
An Er is defined as any person or entity that employs the services of others; one for whom work is done
and who pays their wages of salaries; any person acting in the interest of an Er; refers to the enterprise
where the labor organization operates or seek to operate [Sec.1(s), Rule I, Book V, IRR].
NOTE: The term “employer” is not restricted to business owners alone because it includes any person as
long as the acts in the interest of the Er.

• Instance when a labor organization is deemed an employer

When it is acting as such in relation to persons rendering services under hire, particularly in
connection with its activities for profit or gain.
NOTE: The mere fact that respondent is a labor union does not mean that it cannot be
considered an Er for persons who work for it. Much less should it be exempted from
labor laws (Bautista v. Inciong, G.R. No. L-52824, March 16, 1988).
• Employee
The terms “employee” covers:
1. Any person in the employ of the Er
2. Any individual whose work has cased as a result of or in connection with any current labor
dispute or because of any unfair labor practice if he has not obtained any other
substantially equivalent and regular employment
3. One who has been dismissed form work but the legality of dismissal is being contested in
forum of appropriate jurisdiction (D.O. No. 40-03).
NOTE: The term shall not be limited to the Ees of a particular Er unless the LC explicity states.
Any Ee, whether employed for a definite period or not, shall, beginning on the first day of
service, be considered an Ee for purposes of membership in any labor union [Art.227 (c),
LC]
• Managerial employee
The person who is vested with the powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline Ees.

• Supervisor employee
Those persons who effectively recommends such managerial actions if the exercise of such
authority is not merely routinely or clerical in nature but requires the use of independent
judgment.

• Rank-and-File employee
Those persons who are neither managerial nor supervisory Ees are considered rand-and file.
 EMPLOYER (Er)-EMPLOYEE(Ee) RELATIONSHIP
Er-Ee relationship is created by an employment contract, whether express or
implied. Such contract may be shown to exist by proof of hire by competent
person, either by the Er himself or trough an authorized representative or
agent.
Hiring by Competent Person if it is done by:

1. An agent with actual authority

2. An agent with apparent authority
3. Without authority but subsequently ratified either expressly or impliedly
(Asia Steel Corp. vs. WCC, L-7636, June 27, 1956.
 FOUR-FOLD TEST

• 1. MANNER OF SELEC TION AND ENGAGEMENT OF THE PUTATIVE

EMPLOYEE;
• 2. MODE OF PAYMENT OF WAGES;
• 3. PRESENCE OR ABSENCE OF THE POWER OF DISMISSAL;
• 4. PRESENCE OR ABSENCE OF POWER TO CONTROL THE PUTATIVE
EMPLOYEE’S CONDUCT (Hijos De F. Escano, Inc. v. NLRC, G.R. No. 59229,
August 22, 1991).
• The most decisive CONTROL TEST; Factors that determine control test:
• A. Rules that fix the methodology and bind or restrict the party Consulta vs. CA,
G.R. No. 145443);
• B. The skills rendered, source of instrumentalities and tools, location of the
work, etc. (Sonza vs. ABS-CBN)
• C. The owner has control of the bus driver although paid on commission basis
(R. Transport vs. Ejandra, G.R. 148508
• D. Employment does not exist for a sales agent who receives commission on his
gross sales (Abante vs. Lamadrid, G.R. No. 138051.
• E. Where there is less control in the exercise, the more likely the person hired is
an independent contractor (Sonza vs. ABS-CBN, G.R. No. 138051.) Or where the
hirer cannot discipline or dismiss the hired person over his performance (Ibid).
• F. The worker performs subject to employer’s specifications indicating
control (Dy Keh Beng v. ILMUP, G.R. No. 32245).
• G. The company has direct control and supervision over the activities of
pakiao workers (PRC vs. CA, G.R. No. 29590)
• H. Since the owner controls the work performance of a caretaker of a
barber shop, he is an employee of the establishment (Jo vs NLRC, G.R. No.
121605)
 TWO-TIERED TEST

• Economic Dependence and Control Test

• 1. The putative employer’s power to control the employee with respect to
the means and methods by which the work is to be accomplished;
• 2. The underlying economic realities of the activity or relationship.
 RECRUITMENT AND PLACEMENT
RECRUITMENT OF LOCAL AND MIGRANT WORKERS

• Worker
Any member of the labor force, whether employed or unemployed [Art. 13 (a), LC]

• Recruitment and placement

 Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers; and

Includes referrals, contract services, promising or advertising for employment, locally or

abroad, whether for profit or not [Art. 13 (b), LC]
• Essential elements in determining whether one is engaged in
recruitment and placement
It must be shown that:
1. The accused gave the complainant the impression that he had the power or ability to
send the complainant for work,
2. Such that the latter was convinced to part with his money in order to be so employed
(People v. Goce, G.R. No. 113161, August 29, 1995).

• Persons deemed engaged in recruitment and placement

Any person or entity which, in any manner, offers or promises for a fee employment to 2 or
more persons [Art. 13 (b), LC]
• Persons or entities that may engage in recruitment and placement
GR: No person or entity other than the public employment offices, shall engage in the
recruitment and placement of workers.

XPNs:
1. Construction contractors if authorized by the DOLE and Construction Industry
Authority;
2. Other persons or entities as may be authorized by the SLE;
3. Members of the diplomatic corps (but hiring must be through POEA)
4. Public employment offices;
5. Private recruitment offices;
6. Private employment agencies;
7. POEA
8. Shipping or manning agents or representatives;
9. Name hires [Sec. 1 (i) of Rule II, Omnibus Rules and Regulations
implementing the Migrant Workers and Overseas Filipinos Act of 1995 as
amended by R.A. 10022]

NOTE: Name Hires – They are individual workers who are able to secu8re
contracts for overseas employment opportunities with Ers without the
assistance or participation of any agencies (Rule II, Omnibus Rules and
Regulations implementing the Migrant Workers and Overseas Filipinos Act
of 1995 as amended by R.A. 10022]
• Private employment agency
Any person or entity engaged in the recruitment and placement of workers for a fee which is
charged, directly or indirectly, from the workers or Ers or both (Art. 13, LC).

• Private recruitment agency

It is any person or association engaged in the recruitment and placement of workers without
charging any fee, directly or indirectly, from the workers or Ers.

• Overseas employment
It is the employment of a worker outside the Philippines.
• Overseas Filipino Worker (OFW)
A person who is to be engaged, is engaged or has been engaged in a
remunerated activity in a State of which he or she is not a citizen or on board
a vessel navigating the foreign seas other than a government ship used for
military or non-commercial purposes or on an installation located offshore or
on the high seas. [Sec. (jj), Rule ii, Omnibus Rules and Regulations
implementing Migrant Workers Act as amended by R.A. 10022 (2010)]

NOTE: The term “OFW” is to be used interchangeably with “migrant worker” as

in R.A. 10022.
• Seafarer
Refers to any person who is employed or engaged in overseas employment in
any capacity on board a ship other than a government ship used for military
or non-commercial purposes. The definition shall include fishermen, cruise
ship personnel and those serving on mobile offshore and drilling units in the
high seas [Sec. 1 (ss), Rule Ii, Onmibus Rules and Regulations Implementing
Migrant Workers Act as amended by R.A. 10022 (2010].

• Emigrant
A person, worker or otherwise, who emigrates to a foreign country by virtue
of an immigrant visa or resident permits or its equivalent in the country of
destination (Art. 13, LC).
EMPLOYMENT OF NON-RESIDENT ALIENS

• Employment of non-resident alien

Non-residents alien may be hired if an employment permit is issued to a non-resident alien
or to the applicant employer after a:
1. Determination of the non-availability of a person in the Philippines who is competent;
2. Able and willing at the time of application to perform the services for which the alien is
desired.
• Requirements in employment of non-resident aliens
Any alien seeking admission to the Philippines for employment purposes and
any domestic or foreign Er who desires to engage an alien for employment in
the Philippines:
1. Shall obtain an employment permit from the DOLE;
2. The permit may be issued to a non-resident alien or to the applicant Er after a
determination of the non-availability of a person in the Philippines who is competent,
able and willing at the time of application to perform the services for which the alien
is desired;
3. For an enterprise registered in preferred areas of investments, said permits may be
issued upon recommendation of the Government agency charged with the
supervision of said registered enterprise.
PROHIBITION AGAINST TRANSFER OF EMPLOYMENT

• Requirements for immigrants and resident aliens

It is required for immigrants and resident aliens to secure an Alien Employment Registration
Certificate.

• Duration of the employment permit

GR: Minimum of one (1) year
XPN: If the employment contract, consultancy services, or other modes of engagement
provides otherwise, which in no case shall exceed 5 years [DOLE D.O. 97-09, Revised Rules
for the Issuance of Employment Permits to Foreign Nationals (2009)].
• Persons required to obtain employment permit
GR: Only non-resident aliens;
XPNs:
1. Diplomatic services and foreign government officials;
2. Officers and staff of international organizations and their legitimate spouses;
3. Members of governing board who has voting rights only;
4. Those exempted by special laws;
5. Owners and representatives of foreign principals who interview Filipino applicants
for employment abroad;
6. Aliens whose purposes is to teach, present and/or conduct research studies;
7. Resident aliens (D.O. 75-06).
• Employment of aliens in entities engaged in nationalized activities
GR: Aliens may not be employed in entities engaged in nationalized activities
XPNs:
1. Secretary of Justice specifically authorizes the employment of technical personnel;
2. Aliens are elected members of the board of directors or governing body of
corporations or associations engaging in partially nationalized activities shall be
allowed in the proportion to their allowable participationor share in the capital of
such entities [Section 2-A of Anti-Dummy Law, as amended by P.D. 715]; or
3. Enterprises registered under the omnibus Investment Code in case of technical,
supervisory or advisory positions, but for a limited period.
PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT
AND PLACEMENT OF WORKERS
• Entities in the private sectors that can participate in recruitment and
placement of workers
1. Shipping or manning agents or representatives
2. Private recruitment offices
3. Public employment offices
4. Construction contractors if authorized by the DOLE and Construction Industry
Authorized.
5. Persons that may be authorized by the SLE
6. Private employment agencies (Sec. 1, Rule VII, Book I, IRR of the LC).
• Requirements for participation in recruitment and placement of
workers

1. Filipino citizens, or partnerships or corporations with at least 75% of the

authorized capital stock is owned and controlled by Filipino citizens; Art. 27,
LC)

2. Capitalization
a. Single proprietorship or partnership
- A minimum capitalization of P2 million
b. Corporation
- A minimum paid-up capital of P2 million
Provided, that those with existing licenses shall, within 4 yrs. from the
effectivity hereof, increase their capitalization or paid-up capital, as the case
may be, to P2 million at the rate of Php 250,000.00 every year (Art. 28. LC).
4. Not otherwise disqualified by law or other government regulations to
engage in the recruitment and placement of workers for overseas
employment (Rule I, Part II, POEA Rules).

5. Payment of registration fees; and

6. Posting of surety/cash bonds
• Regulations of the private sector’s participation in the
recruitment and overseas placement of workers
The government regulates the participation of the private sector in recruitment and
overseas placement of workers by setting up a licensing and registration system (Sec. 14,
R.A. 10022)

• Persons and entities disqualified to engage in the business of

recruitment and placement of workers
1. Travel agencies and sales agencies of airline companies; (Art. 26, LC)
2. Officers or members in a partnership engaged in the business of a travel agency;
3. Corporations and partnerships, when any of its officers, members of the board or
partners, is also an officer, member of the board or partner of a corporation or
partnership engaged in the business of a travel agency;
4. Persons, partnerships or corporations which have derogatory records,
such as but not limited to those:

 Certified to have derogatory record or information by the NBI or by

the Anti-Illegal Recruitment Branch of the POEA;

 Against whom probable cause or prima facie finding of guilt for

illegal recruitment or other related cases exists;

 Convicted for illegal recruitment or other related cases and/or

crimes involving moral turpitude; and

 Agencies whose licenses have been previously revoked or cancelled

by the
5. Any official or Ee of the DOLE, POEA, OWWA, DFA and other
government agencies directly involved in the implementation of R.A.
8042 and/or any of his/her relatives within the 4th civil degree of
consanguinity of affinity; and

6. Persons or partners, officers and directors of corporations whose

licenses have been previously cancelled or revoked for violation of
recruitment laws (Sec. 2, Rule 1, 2002 Rules and Regulations on the Recruitment
and Employment of Land-Based Workers)
TRAVEL AGENCIES PROHIBITED FROM RECRUITMENT
AND PLACEMENT

• Prohibition on travel agencies and sales agencies of airline companies to

recruit
They are prohibited from engaging in the business of recruitment and placement
whether for profit or not.
• Instances when a worker may be charged
Only when:
 He has obtained work through recruiters’ effort; and
 The worker has actually commenced working.

NOTE: A land-based agency may charge and collect from its hired
workers a placement fee in an amount equivalent to 1 month
salary, exclusive of documentation costs (Sec. 3, Rules V, POEA Rules
and Regulations)
ILLEGAL RECRUITMENT,
ART. 38 (LOCAL), SEC. 6, MIGRANT WORKERS ACT. R.A. 8042

• Prohibited practices in recruitment or placement

1. Furnishing or publishing any falsie notice/information/document related to the
recruitment/employment;

2. Failure to file reports required by SLE

3. Inducing or attempting 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 condition

4. Recruitment/placement of workers in jobs harmful to public health or morality or to

the dignity of the country
5. Engaging directly or indirectly in the management of a travel agency

6. Substituting or altering of employment contracts without approval of

DOLE

7. Charging or accepting any amount greater that actually received by him

8. Committing any act of misinterpretation to secure a license or authority

9. Influencing or attempting to influence a person/ entity not to employ
any worker who has not applied employment through his agency

10.Obstructing or attempting to obstruct inspection by the SLE or by his

representatives

11.Withholding or denying travel documents from applicant workers

before departure for monetary considerations other than authorized by
law
12.Granting 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 or through a guarantor or accommodation party,
postdated checks in relation to the said loan.

13.Refusing to condone or renegotiate a loan incurred by an OFW after his

employment contract has been prematurely terminated through no
fault of his or her own
14.For a suspended recruitment/ manning agency to engage in any kind of
recruitment activity including the processing of pending worker’s
applications; and

15.For recruitment/ manning agency of a foreign principal/Er to pass on

the OFW or deduct from his or her salary the payment of the cause of
fees, premium or other issuances related charges, as provided under
the compulsory worker’s insurance coverage;
16.Imposing a compulsory and exclusive arrangement whereby an OFW is
required to:
 Avail a loan only from specifically designated institutions, or entities or
persons;

 To undergo health examinations only from specifically designated medical,

entities or persons, except seafarers whose medical examination cost is
shouldered by the ship owner; and

 To undergo training of any kind from designated institutions, entities or

persons, except for recommendatory trainings mandated by the principals/
ship-owners (Sec. 6, R.A. 8042, Migrant Workers and Overseas Filipino Act, as
amended by R.A. 10022)
Differences between the prohibited acts under LC and R.A. 8042
or the Overseas Migrant Workers Act, as amended by R.A. 10022

Labor Code R.A. 8042, as amended by R.A. 10022

• Illegal recruitment Art. 38 Illegal recruitment under Sec. 6

• Prohibited acts under Art. 34 of means any recruitment activity
committed by non-licensees/ non-
LC
holders of authority or prohibited
acts (same as Art. 34, LC)
Added to the following in the list of
prohibited acts:
1. Failure to actually deploy
without valid reason;
 Labor Code R.A. 8042, as amended by R.A. 10022

• Illegal recruitment Art. 38 2. Failure to reimburse expenses

• Prohibited acts under Art. 34 of incurred by the workers in
LC connection with his/her
documentation and processing
for purposes of deployment;

To allow a non-Filipino citizen to head

or manage a licensed
recruitment/manning agency.
• Persons prohibited from engaging in the business of recruiting migrant
workers

1.It is unlawful for any official or Ee of the following agencies to engage in

recruiting migrant workers:
 DOLE
 POEA
 Overseas Workers Welfare Administration (OWWA)
 DFA
 Other Government agencies involved in the implementation of R.A.
8042
  DFA
 Other Government agencies involved in the implementation of R.A.
8042

2. The relatives within the 4 thcivil degree of consanguinity or

affinity of such official or Ee are also prohibited from engaging
directly or indirectly in the business of recruiting migrant workers
(Sec. 8, R.A. 8042).
LICENSE v. AUTHORITY

• License requirement
The business of recruitment and replacement is regulated by law by
requiring them to obtain license and authority.

• License
A document issued by DOLE authorizing a person or entity to operate a
private employment agency.
• Authority
A document issued by DOLE authorizing a person or association to engage
in recruitment and placement activities as a private recruitment entity.

• Person who may be issued license and authority

1. Natural persons – Must be a Filipino

2. Artificial persons – 75% of the capital and voting stock of which is

owned and controlled by Filipino
• Non-licensee/ non-holder of authority
Any person, corporation or entity:
1. Which has not been issued a valid license or authority to engage in
recruitment and placement by the SLE, or
2. Whose license or authority has been suspended, revoked or cancelled
by the POEA of the SLE

• Non-transferability of license or authority

License or authority are non-transferable (Art. 29, LC). License or authority is
granted on the basis of personal qualifications of the grantee. Thus, it is
beyond the commerce of man
ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT

• Illegal Recruitment
Illegal recruitment is defined by law as any recruitment activities
undertaken by non-licensee or non-holders of authority (People v. Senoron,
G.N. 119160, January 30, 1997)

• Elements of illegal recruitment

1. Offender is a non-licensee or non-holder of authority to lawfully engage
in the recruitment/placement of workers.
2.Offender undertakes:
 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 [Art. 13 (f), as
amended by R.A. 10022]; or
 Any of prohibited practices under Art. 34 of the LC

3. For complex illegal recruitment, an additional element that the offender

commits the act against three or more persons, individually, or as a
group (People v. Baytic, G.R. No. 150530, February 20, 2003) or there are three
or more offenders.
• Kinds of illegal recruitment
1.Simple Illegal Recruitment
2.Complex Illegal Recruitment

• Persons liable for illegal recruitment

Any person (whether non-licensee, non-holder) who commits any of the
prohibited acts, shall be liable for illegal recruitment (R.A. 8042, as amended by
R.A. 10022).
SIMPLE ILLEGAL RECRUITMENT

• Simple Illegal Recruitment

It is the violation of Arts. 13(b) and 34 of the LC involving less than three
recruiters or victims.

• Complex Illegal Recruitment

It is the violation of Arts. 13(b) and 34 of the LC involving at least three
recruiters or victims. It may either be:
 Committed by a syndicate; or
 In Large Scale
ILLEGAL RECRUITMENT IN LARGE SCALE
Sec. 6, R.A. 10022
• Illegal recruitment in large scale
Illegal recruitment in large scale is committed against three or more
persons individually or as a group.

• Illegal recruitment committed by a syndicate

Illegal recruitment is committed by a syndicate if it was carried out by a
group of three or more persons conspiring or confederating with one
another.
NOTE: “Illegal recruitment in large scale” pertains to the number of victims while
“syndicate illegal recruitment pertains to the numbers of recruiters.
ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE

• Illegal recruitment as economic sabotage

Art. 38 (b) of LC, as amended by PD 2018

It is economic sabotage when complex illegal recruitment is committed,

such that it is syndicated or done in a large scale.
 Illegal recruitment v. Estafa
ILLEGAL RECRUITMENT
• Malum Prohibitum, thus:
• 1. CRIMINAL INTENT IS NOT NECESSARY
• 2. It is a crime which involves moral turpitude
• 3. It is not required that it be shown that the
recruiter wrongfully represented himself as a
licensed recruiter.
• NOTE: It is enough that the victims were deceived
as they relied on the misrepresentation and
scheme that caused them to entrust their money
in exchange of what they later discovered was a
vain hope of obtaining employment abroad.
ESTAFA
• MALUM IN SE, THUS:
• 1. CRIMINAL INTENT IS NECESSARY
• 2. It is a crime which involves moral turpitude
• 3. Accused defrauded another by abuse of
confidence or by means of deceit.
• NOTE: It is essential that the false statement
or fraudulent representation constitutes the
very cause or the only motive which induces
the complainant to part with the thing of
value.
 Illegal recruitment v. Estafa

ILLEGAL RECRUITMENT & ESTAFA

• Illegal recruitment and estafa cases may be filed
simultaneously or separately. The filing of charges for illegal
recruitment does NOT bar the filing of estafa, and vice versa.
• Double Jeopardy will NOT set in.
• As explicitly mentioned under Section 21, Article III of the 1987 Philippine Constitution:
“No person shall be twice put in jeopardy of punishment for the same offense. If an act is
punished by law or an ordinance, conviction or acquittal under either shall constitute a bar to
another prosecution for the same act.”
To strengthen the aforementioned tenet, Rule 117 of our Revised Rules of Criminal Procedure states
that:
“Sec. 7. Former conviction or acquittal; double jeopardy. – When an accused has been
convicted or acquitted, or the case against him dismissed or otherwise terminated without his express
consent by a court of competent jurisdiction, upon a valid complaint or information or other formal
charge sufficient in form and substance to sustain a conviction and after the accused had pleaded to
the charge, the conviction or acquittal of the accused or the dismissal of the case shall be a bar to
another prosecution for the offense charged, or for any attempt to commit the same or
frustration thereof, or for any offense which necessarily includes or is necessarily included in the
offense charged in the former complaint or information.
 JURISDICTION
Labor Arbiter
• Original and exclusive jurisdiction over all
claims arising out of Er-Ee relationship or by
virtue of any law or contract involving OFWs
including claims for:
• ACTUAL, MORAL, EXEMPLARY AND OTHER
FORMS OF DAMAGES (SEC. 10, R.A. 8042).
POEA
• Original and exclusive jurisdiction over:
• 1. All cases which are administrative in character
relating to licensing and registration of
recruitment and employment agencies.
• 2. Disciplinary action cases and other special cases
which are administrative in character, involving
Ees, principals, contracting partners and Filipino
migrant workers (Rule VII, Book VII, POEA Rules).