I.

FUNDAMENTAL Sec 1, Art XIII, 1987 Constitution:

Social Justice and Human Rights
PRINCIPLES The Congress shall give highest priority to
A. Legal basis the enactment of measures that protect and
enhance the right of all the people to human
1. 1987 Constitution dignity, reduce social, economic, and
Social Justice, defined
political inequalities, and remove cultural
It is neither communism, nor despotism nor
inequalities by equitably diffusing wealth
atomism nor anarchy, but the humanization or
and political power for the common good.
laws and the equalization of social and
economic forces by the State so that justice in
To this end, the State shall regulate the
its rational and objectively secular conception
acquisition, ownership, use and, disposition
may at least be approximated.1
of property and its increments.
Sec 5, Art II, 1987 Constitution:
Sec 2, Art XIII, 1987 Constitution
Declaration of Principles
The promotion of social justice shall include
The maintenance of peace and order, the
the commitment to create economic
protection of life, liberty, and property, and
opportunities based on freedom of initiative
the promotion of the general welfare are
and self-reliance.
essential for the enjoyment by all the people
of the blessings of democracy.
2. Civil Code
Sec 10, Art II, 1987 Constitution:
Declaration of State Policies 3. Labor Code
The State shall promote social justice in all B. State policy towards labor
phases of national development. 1. Security of tenure
2. Social justice
Sec 1, Art XIII, 1987 Constitution: 3. Equal work
Social Justice and Human Rights
The Congress shall give highest priority to
opportunities
the enactment of measures that protect and 4. Right to self-
enhance the right of all the people to human organization and
dignity, reduce social, economic, and
political inequalities, and remove cultural collective bargaining
inequalities by equitably diffusing wealth 5. Construction in favor of
and political power for the common good. labor
To this end, the State shall regulate the 6. Burden of proof and
acquisition, ownership, use and, disposition quantum of evidence
of property and its increments.

Sec 2, Art XIII, 1987 Constitution

The promotion of social justice shall include
the commitment to create economic
opportunities based on freedom of initiative
and self-reliance.

1
Calalang v Williams, 70 Phil. 762 (1940)

1
A. LABOR LAW B. LEGAL BASIS
That body of statutes, rules and doctrines that i. 1987 Philippine Constitution
defines State policies on labor and
employment, and governs the rights and duties ii. Civil Code
of workers and employers respecting terms
and conditions of employment by prescribing
Article 1700, Book IV, New Civil Code
certain standards therefore, or by establishing
The relations between capital and labor are
a legal framework within which better terms
not merely contractual. They are so
and conditions of work could be obtained
impressed with public interest that labor
through collective bargaining or other
contracts must yield to the common good.
concerted activity.
Therefore, such contracts are subject to the
special laws on labor unions, collective
Labor Law, defined
bargaining, strikes and lockouts, closed
Law governing the rights and duties of
shop, wages, working conditions, hours of
employer and employees respecting term and
labor and similar subjects.
conditions of employment by:
Article 1701, Book IV, New Civil Code
1. Prescribing certain standards, or
2. By establishing a legal framework Neither capital nor labor shall act
within which better terms and oppressively against the other, or impair the
conditions of work could be obtained interest or convenience of the public.
through:
a. Collective Bargaining or Contracts
b. Other concerted activity • Under the Civil Code, contracts of labor are
explicitly subject to the police power of the
Elements of labor law state because they are not ordinary
1. Labor Standards law contracts but are impressed with public
Labor Standards is that branch of interest. Inasmuch as in this particular
Labor Law that establishes the instance the contract in question would
minimum terms and conditions of have been deemed in violation of pertinent
employment that an employer must labor laws, the provisions of said laws
provide to the workers.2 would prevail over the terms of the
contract, and private respondent would
2. Labor relations still be entitled to overtime pay. (PAL
Regulates the institutional relationship Employees Savings And Loan Assn., Inc.
between the workers organized into a vs. NLRC, 1996)
union and the employers.
Liberal Construction
3. Social Legislation • While the terms and conditions of a CBA
Includes laws that provide particular constitute the law between the parties, it is
kinds of protection or benefits to not however, an ordinary contract to which
society or segments thereof in is applied the principles of law governing
furtherance of social justice. ordinary contracts. A CBA, as a labor
contract within the contemplation of
Article 1700 of the Civil Code of the
Philippines which governs the relations
between labor and capital, is not merely
contractual in nature but impressed with
public interest, thus, it must yield to the
common good. As such, it must be
construed liberally rather than narrowly
and technically, and the courts must place
a practical and realistic construction upon
it, giving due consideration to the context
in which it is negotiated and purpose
which it is intended to serve. (Cirtek
Employees Labor Union-FFW v Cirtek
Electronics, 2010)

Fair treatment
2
Abad, Jr, Antonio H. (2008). The Law on Labor • The right of an employer to dismiss an
Standards. Rex Printing Company, Inc.

2
 employee differs from and should not be iii. Labor Code
confused with the manner in which such
right is exercised. It must not be Art. 3. Declaration of basic policy.
oppressive and abusive since it affects The State shall afford protection to labor,
one's person and property. (General Bank promote full employment, ensure equal
and Trust Co. vs. CA, 1985) work opportunities regardless of sex, race or
creed and regulate the relations between
Mutual obligation workers and employers. The State shall
• The employer's obligation to give his assure the rights of workers to self-
workers just compensation and treatment organization, collective bargaining, security
carries with it the corollary right to expect of tenure, and just and humane conditions
from the workers adequate work, diligence of work.
and good conduct. (Firestone Tire And Art. 211. Declaration of Policy.
Rubber Co. vs. Lariosa, 1987) A. It is the policy of the State:
Compliance with law (a) To promote and emphasize the primacy
• It is also important to emphasize that the of free collective bargaining and
return-to-work order not so much confers negotiations, including voluntary
a right as it imposes a duty; and while as a arbitration, mediation and conciliation, as
right it may be waived, it must be modes of settling labor or industrial
discharged as a duty even against the disputes;
worker's will. (Sarmiento vs. Tuico, 1988)
(b) To promote free trade unionism as an
Employee's compliance and obedience instrument for the enhancement of
to employer's orders democracy and the promotion of social
• The lack of a written or formal designation justice and development;
should not be an excuse to disclaim any
responsibility for any damage suffered by (c) To foster the free and voluntary
the employer due to his negligence. The organization of a strong and united labor
measure of the responsibility of an movement;
employee is that if he performed his
assigned task efficiently and according to (d) To promote the enlightenment of
the usual standards, then he may not be workers concerning their rights and
held personally liable for any damage obligations as union members and as
arising there from. Failing in this, the employees;
employee must suffer the consequences of
his negligence if not lack of due care in the (e) To provide an adequate administrative
performance of his duties. (PCIB vs. machinery for the expeditious settlement of
Jacinto, 1991) labor or industrial disputes;

(f) To ensure a stable but dynamic and just

industrial peace; and

(g) To ensure the participation of workers in

decision and policy-making processes
affecting their rights, duties and welfare.

To encourage a truly democratic method of

regulating the relations between the
employers and employees by means of
agreements freely entered into through
collective bargaining, no court or
administrative agency or official shall have
the power to set or fix wages, rates of pay,
hours of work or other terms and conditions
of employment, except as otherwise
provided under this Code. (As amended by
Section 3, Republic Act No. 6715, March 21,
1989)
Art. 212. Definitions.

3
(a) "Commission" means the National Labor (l) "Labor dispute" includes any controversy
Relations Commission or any of its or matter concerning terms and conditions
divisions, as the case may be, as provided of employment or the association or
under this Code. representation of persons in negotiating,
fixing, maintaining, changing or arranging
(b) "Bureau" means the Bureau of Labor the terms and conditions of employment,
Relations and/or the Labor Relations regardless of whether the disputants stand
Divisions in the regional offices established in the proximate relation of employer and
under Presidential Decree No. 1, in the employee.
Department of Labor.
(m) "Managerial employee" is one who is
(c) "Board" means the National Conciliation vested with the powers or prerogatives to lay
and Mediation Board established under down and execute management policies
Executive Order No. 126. and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline
(d) "Council" means the Tripartite Voluntary employees. Supervisory employees are those
Arbitration Advisory Council established who, in the interest of the employer,
under Executive Order No. 126, as amended. effectively recommend such managerial
actions if the exercise of such authority is
(e) "Employer" includes any person acting in not merely routinary or clerical in nature
the interest of an employer, directly or but requires the use of independent
indirectly. The term shall not include any judgment. All employees not falling within
labor organization or any of its officers or any of the above definitions are considered
agents except when acting as employer. rank-and-file employees for purposes of this
Book.
(f) "Employee" includes any person in the
employ of an employer. The term shall not (n) "Voluntary Arbitrator" means any
be limited to the employees of a particular person accredited by the Board as such or
employer, unless the Code so explicitly any person named or designated in the
states. It shall include any individual whose Collective Bargaining Agreement by the
work has ceased as a result of or in parties to act as their Voluntary Arbitrator,
connection with any current labor dispute or or one chosen with or without the assistance
because of any unfair labor practice if he has of the National Conciliation and Mediation
not obtained any other substantially Board, pursuant to a selection procedure
equivalent and regular employment. agreed upon in the Collective Bargaining
Agreement, or any official that may be
(g) "Labor organization" means any union or authorized by the Secretary of Labor and
association of employees which exists in Employment to act as Voluntary
whole or in part for the purpose of collective Arbitrator upon the written request and
bargaining or of dealing with employers agreement of the parties to a labor dispute.
concerning terms and conditions of
employment. (o) "Strike" means any temporary stoppage
of work by the concerted action of
(h) "Legitimate labor organization" means employees as a result of an industrial or
any labor organization duly registered with labor dispute.
the Department of Labor and Employment,
and includes any branch or local thereof. (p) "Lockout" means any temporary refusal
of an employer to furnish work as a result of
(i) "Company union" means any labor an industrial or labor dispute.
organization whose formation, function or
administration has been assisted by any act (q) "Internal union dispute" includes all
defined as unfair labor practice by this Code. disputes or grievances arising from any
violation of or disagreement over any
(j) "Bargaining representative" means a provision of the constitution and bylaws of a
legitimate labor organization whether or not union, including any violation of the rights
employed by the employer. and conditions of union membership
provided for in this Code.
(k) "Unfair labor practice" means any unfair
labor practice as expressly defined by the (r) "Strike-breaker" means any person who
Code. obstructs, impedes, or interferes with by
force, violence, coercion, threats, or

4
intimidation any peaceful picketing affecting
wages, hours or conditions of work or in the
exercise of the right of self-organization or
collective bargaining.

(s) "Strike area" means the establishment,

warehouses, depots, plants or offices,
including the sites or premises used as
runaway shops, of the employer struck
against, as well as the immediate vicinity
actually used by picketing strikers in moving
to and from before all points of entrance to
and exit from said establishment.
Art. 255. Exclusive bargaining
representation and workers’
participation in policy and decision-
making.

The labor organization designated or

selected by the majority of the employees in
an appropriate collective bargaining unit
shall be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining. However, an
individual employee or group of employees
shall have the right at any time to present
grievances to their employer.

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 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. (As amended by Section
22, Republic Act No. 6715, March 21, 1989)

5
C. WORK RELATIONSHIP

6
II. RECRUITMENT AND
PLACEMENT
A. Definition of recruitment
and placement
B. Regulation of recruitment
and placement activities
1. Regulatory authorities
a. Philippine Overseas
Employment
Administration
b. Regulatory and
visitorial powers of the
Department of Labor
and Employment
Secretary
2. Ban on direct hiring
3. Entities prohibited
from recruiting
4. Suspension or
cancellation of license or
authority
5. Prohibited practices
C. Illegal Recruitment
1. Elements
2. Types
3. Illegal recruitment as
distinguished from estafa
D. Liability of local
recruitment agency and
foreign employer
1. Solidary liability
2. Theory of imputed
knowledge
E. Termination of contract
of migrant worker
F. Employment of non-
resident aliens

7
Recruitment and Placement with them shall be deemed to be engaged
in the act of recruitment and placement. 4

A. Definition of Terms
License, defined
Article 13 (d) and (f), Labor Code
A license is a document issued by the
Department of Labor and Employment
(DOLE) authorizing a person or entity to
operate a private employment agency, while
an authority is a document issued by the
DOLE authorizing a person or association to
engage in recruitment and placement
activities as a private recruitment agency.

Private Employment Agency and Private

Recruitment Agency
Type Definition Requires
Private Any person or License
Employment entity engaged in
Agency recruitment and
placement of
workers for a fee
Private Any person or Authority
Recruitment association engaged
Agency in the recruitment
and placement of
workers, locally or
overseas, without
charging, directly
or indirectly, any
fee

Recruitment and placement, defined

Article 13 (b), Labor Code
“Recruitment and placement” refers to any
act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
of workers, and includes referrals, contract
services, promising or advertising for
employment, locally or abroad whether for
profit or not: 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.3
• Any of the acts mentioned in Art 13(b) will
constitute recruitment and placement even
if only prospective worker is involved. The
proviso merely lays down a rule of
evidence that when a fee is collected in
consideration of a promise or offer of
employment to two or more prospective
workers, the individual or entity dealing

3
People v Panis, 142 SCRA 667 (1986) 4
People v Panis, 142 SCRA 667 (1986)

8
B. EMPLOYMENT POLICIES the benefits of development. The
ultimate aim is local instead of
Art 2, Section 9, 1987 Constitution foreign employment.5
The State shall promote a just and dynamic • The Act further requires certain guarantee
social order that will ensure the prosperity of protection for the overseas workers
and independence of the nation and free the before they are deployed. For instance, the
people from poverty through policies that receiving country should have signed a
provide adequate social services, promote multi-nation document affording
full employment, a rising standard of living, protection to migrant workers or an
and an improved quality of life for all. agreement with the Philippine government
protecting the rights of overseas Filipino
Art 12, Labor Code workers.6
It is the policy of the State: • Selective employment and seasonal bans
are two governmental policies in order to
a) To promote and maintain a state of protect the migrant and overseas
full employment through improved employees.
manpower training, allocation and
utilization;

b) To protect every citizen desiring to

work locally or overseas by securing
for him the best possible terms and
conditions of employment;

c) To facilitate a free choice of available

employment by persons seeking work in
conformity with the national interest;

d) To facilitate and regulate the movement

of workers in conformity with the national
interest;

e) To regulate the employment of aliens,

including the establishment of a registration
and/or work permit system;

f) To strengthen the network of public

employment offices and rationalize the
participation of the private sector in the
recruitment and placement of workers,
locally and overseas, to serve national
development objectives;

g) To ensure careful selection of Filipino

workers for overseas employment in order
to protect the good name of the Philippines
abroad.

• RA 8042 redefines the policy of overseas

employment and establishes a higher
standard of protection and
promotion of the welfare of migrant
worker, their families, and of
overseas Filipinos in distress. It
declares that the State does not promote
overseas employment as a means to
sustain economic growth and national
development. It conveys that, instead, the
State shall continuously create local
employment opportunities and promote 5
Azucena
the equitable distribution of wealth and 6
Azucena

9
C. EMPLOYMENT AGENCIES/ the business of recruitment and placement of
ENTITIES Filipino workers for overseas employment:7

1. Filipino citizens, partnerships or

Art 12 (f), Labor Code corporations at least seventy-five percent
a. Allowed Entities (75%) of the authorized and voting capital
It is the policy of the State to strengthen the stock of which is owned and controlled by
network of public employment offices and Filipino citizens;
rationalize the participation of the private 2. A minimum capitalization of Two Million
sector in the recruitment and placement of Pesos (P2,000,000.00) in case of a single
workers, locally and overseas, to serve proprietorship or partnership and a
national development objective. minimum paid-up capital of Two Million
Art 16, Labor Code Pesos (P2,000,000.00) in case of a
Except as provided in Chapter II of this corporation; Provided that those with
Title, no person or entity other than the existing licenses shall, within four years
public employment offices, shall engage in from effectivity hereof, increase their
the recruitment and placement of workers. capitalization or paid-up capital, as the
Art 18. Ban on Direct Hiring case may be, to Two Million Pesos
No employer may hire a Filipino worker for (P2,000,000.00) at the rate of Two
overseas employment except through the Hundred Fifty Thousand (P250,000.00)
Boards and entities authorized by the every year; and
Secretary of Labor. Direct hiring by 3. Those not otherwise disqualified by law or
members of the diplomatic corps, other government regulations to engage in
international organizations and such other the recruitment and placement of workers
employers as may be allowed by the for overseas employment [seafarers].
Secretary of Labor is exempted from this
provision.

• As a general rule, only public employment

offices are allowed to engage in
recruitment and placement of workers.
The foregoing provisions show that the law
distrusts private entities in recruiting and
placing workers because the legislators
believe that it is in the better interest of the
workers if the State handles this.

Art 25, Labor Code

Pursuant to national development objectives
and in order to harness and maximize the
use of private sector resources and initiative
in the development and implementation of a
comprehensive employment program, the
private employment sector shall participate
in the recruitment and placement of
workers, locally and overseas, under such
guidelines, rules and regulations as may be
issued by the Secretary of Labor.

• This article seems to be in contrast to

Articles 16 & 18 but instead it allows
private sectors to create a partnership with
the State in recruitment and placement of
workers.

Qualifications
Only those who possess the following
qualifications may be permitted to engage in
7
POEA Rules and Regulations Governing the Recruitment
and Employment of Land-based Overseas Workers (Sec. 1,
Part II, Rule I, 2002 POEA Rules)

10
I. Private Employment Agency workers from one area to another; and
d. To require any person, establishment,
Private fee-charging employment organization or institution to submit
agency, defined such employment information as may
Art 13 (c), Labor Code be prescribed by the Secretary of Labor.
"Private fee-charging employment agency"
means any person or entity engaged in Sec. 3(f) Powers& Functions, EO No.
recruitment and placement of workers for a 247 (1986) Reorganizing the
fee which is charged, directly or indirectly, Philippines Overseas Employment
from the workers or employers or both. Administration and For Other
Purposes
License, defined The POEA shall recruit and place workers to
Art 13 (d), Labor Code service the requirement for trained and
"License" means a document issued by the competent Filipino workers by foreign
Department of Labor authorizing a person governments and their instrumentalities
or entity to operate a private employment and such other employers as public interest
agency. may require.

iv. Prohibited Entity

ii. Private Recruitment Entity
Article 26, Labor Code
Private recruitment entity, defined Travel agencies and sales agencies of airline
Art 13 (e), Labor Code companies are prohibited from engaging in
"Private recruitment entity" means any the business of recruitment and placement
person or association engaged in the of workers for overseas employment
recruitment and placement of workers, whether for profit or not.
locally or overseas, without charging,
directly or indirectly, any fee from the Disqualifications
workers or employers. The following are not qualified to engage in the
business of recruitment and placement of
Authority, defined Filipino workers overseas:8
Article (f), Labor Code 1. Travel agencies and sales agencies of
"Authority" means a document issued by the airline companies;
Department of Labor authorizing a person 2. Officers or members of the Board of any
or association to engage in recruitment and corporation or members in a partnership
placement activities as a private recruitment engaged in the business of a travel agency;
entity. 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
iii. Public Employment Offices partnership engaged in the business of a
travel agency;
Article 14, Labor Code 4. Persons, partnerships or corporations
The Secretary of Labor shall have the power which have derogatory records, such as but
and authority: not limited to the following:
a. Those certified to have derogatory
a. To organize and establish new record or information by the
employment offices in addition to the National Bureau of Investigation or
existing employment offices under the by the Anti-Illegal Recruitment
Department of Labor as the need arises; Branch of the POEA;
b. To organize and establish a nationwide b. Those against whom probable cause
job clearance and information system to or prima facie finding of guilt for
inform applicants registering with a illegal recruitment or other related
particular employment office of job cases exists;
opportunities in other parts of the c. Those convicted for illegal
country as well as job opportunities recruitment or other related cases
abroad; and/or crimes involving moral
c. To develop and organize a program that
will facilitate occupational, industrial 8
POEA Rules and Regulations Governing the Recruitment
and geographical mobility of labor and and Employment of Seafarers (Sec. 2, Part II, Rule I, 2003
POEA Rules)
provide assistance in the relocation of

11
 turpitude; and
d. Those agencies whose licenses have
been previously revoked or cancelled
by the Administration for violation
of RA 8042, PD 442 as amended and
their implementing rules and
regulations as well as these rules and
regulations.

All applicants for issuance/renewal

of license shall be required to submit
clearances from the National Bureau
of Investigation and Anti-illegal
Recruitment Branch, POEA,
including clearances for their
respective officers and employees.
5. Any official or employee of the DOLE,
POEA, OWWA, DFA and other
government agencies directly involved in
the implementation of R.A. 8042,
otherwise known as Migrant Workers and
Overseas Filipino Act of 1995 and/or any
of his/her relatives within the fourth civil
degree of consanguinity or affinity; and
6. Persons or partners, officers and Directors
of corporations whose licenses have been
previously cancelled or revoked for
violation of recruitment laws.

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D. GOVERNMENT TECHNIQUES
OF REGULATION Every applicant for license to operate a
private employment agency shall submit
– PRIVATE RECRUITMENT a written application together with the
following requirements:9
I. Issuance of License
1. A certified copy of the Articles of
Art 27. Citizenship Requirement, Incorporation or of Partnership duly
POEA Rules registered with the Securities and
Only Filipino citizens or corporations, Exchange Commission (SEC), in the case
partnerships or entities at least seventy-five of corporation or partnership or Certificate
percent (75%) of the authorized and voting of Registration of the firm or business
capital stock of which is owned and name with the Department of Trade and
controlled by Filipino citizens shall be Industry (DTI), in the case of a single
permitted to participate in the recruitment proprietorship;
and placement of workers, locally or 2. Proof of financial capacity: In the case of a
overseas. single proprietorship or partnership,
verified income tax returns of the
Art 28. Capitalization, POEA Rules proprietors or partners for the past two (2)
All applicants for authority to hire or years and a savings account certificate
renewal of license to recruit are required to showing a maintaining balance of not less
have such substantial capitalization as than P500,000.00, provided that the
determined by the Secretary of Labor. applicant should submit an authority to
examine such bank deposit.
• The minimum paid-up capital for single 3. In the case of a newly organized
proprietorship must be at least 2 million corporation, savings account certificate
pesos. showing a maintaining balance of not less
than P500,000.00 with authority to
Art 29. Non-transferability of license examine the same. For an existing
or authority, POEA Rules corporation, submission of a verified
Non-transferability of license or authority. - financial statement, corporate tax returns
No license or authority shall be used directly for the past two (2) years and savings
or indirectly by any person other than the account certificate showing a maintaining
one in whose favor it was issued or at any balance of not less than P500,000.00 with
place other than that stated in the license or the corresponding authority to examine
authority be transferred, conveyed or such deposit.
assigned to any other person or entity. Any 4. Proof of marketing capability
transfer of business address, appointment or a. A duly executed Special Power of
designation of any agent or representative Attorney and/or a duly concluded
including the establishment of additional Recruitment/Service Agreement;
offices anywhere shall be subject to the prior b. Manpower request(s) or visa
approval of the Department of Labor. certification from new
employer(s)/principal(s) for not
Licenses are non-transferrable because less than one hundred (100)
1. It can only be used by the person issued to workers; and
2. It can only be used at the place designated c. Certification from Pre-
therein. Employment Services Office of
POEA on the existence of new
Art 30. Registration fees, POEA Rules market.
The Secretary of Labor shall promulgate a 5. Clearance of all members of the Board of
schedule of fees for the registration of all Directors, partner, or proprietor of the
applicants for license or authority. applicant agency from the National Bureau
of Investigation (NBI) and other
Art 31. Bonds, POEA Rules government agencies as may be required;
appropriate clearance in case of persons
All applicants for license or authority shall
with criminal cases; provided that where
post such cash and surety bonds as
the member or partner concerned is a
determined by the Secretary of Labor to
guarantee compliance with
prescribed recruitment procedures, rules
9
POEA Rules and Regulations Governing the Recruitment
and Employment of Land-based Overseas Workers (Part
and regulations, and terms and conditions II, Rule II, 2002 POEA Rules)
of employment as may be appropriate.

13
 foreigner, clearance from his country of 8. Individual income tax return of the
origin shall be required. proprietor, partners, stockholders/
6. A verified undertaking stating that the incorporators, as the case may be, for the
applicant: past two (2) years.
a. Shall select only medically and 9. Proof of possession by the sole proprietor,
technically qualified recruits; partner or chief executive officer, as the
b. Shall assume full and complete case may be, of a bachelor's degree and
responsibility for all claims and three years business experience.
liabilities which may arise in 10. List of all officials and personnel involved
connection with the use of the in the recruitment and placement, together
license; with their appointment, bio-data and two
c. Shall assume joint and solidary (2) copies of their passport-size pictures as
liability with the employer for all well as their clearances from the National
claims and liabilities which may Bureau of Investigation and the Anti-
arise in connection with the illegal Recruitment Branch of the
implementation of the contract, Administration.
including but not limited to 11. Copy of contract of lease or proof of
payment of wages, death and building ownership, indicating the office
disability compensation and address, providing for an office space of at
repatriations; least one hundred (100) square meters.
d. Shall guarantee compliance with 12. Proof of publication of notice of the
the existing labor and social application with the names of the
legislations of the Philippines and proprietor, partners, incorporators and
of the country of employment of officers.
the recruited workers; 13. Certificate of attendance of owner and/or
e. Shall assume full and complete chief executive officer in a preapplication
responsibility for all acts of its seminar conducted by the Administration.
officials, employees and
representatives done in connection Only applications with complete
with recruitment and placement; supporting documents shall be processed.
f. Shall negotiate for the best terms
and conditions of employment; Sec 4. Payment of Fees and Posting of
g. Shall disclose the full terms and Bonds, Rule II, Part II, POEA Rules
conditions of employment to the Upon approval of the application, the
applicant workers; applicant shall pay a license fee of
h. Shall deploy at least 100 workers P50,000.00. It shall submit an Escrow
to its new markets within one (1) Agreement in the amount of P1,000,000.00,
year from the issuance of its confirmation of escrow deposit with an
license; accredited reputable bank and a surety bond
i. Shall provide orientation on of P100,000.00 from a bonding company
recruitment procedures, terms and acceptable to the Administration and
conditions and other relevant accredited with the Insurance Commission.
information to its workers and
provide facilities therefor; and Agencies with existing licenses shall, within
j. Shall repatriate the deployed four years from effectivity hereof, increase
workers and his personal their Escrow Deposit to One Million Pesos.
belongings when the need arises.
k. For the purpose of compliance Validity of the License. — Except in case of a
with item (1), the agency may provisional license, every license shall be valid
require the worker to undergo for four (4) years from the date of issuance
trade testing and medical unless sooner cancelled, revoked or suspended
examination only after the worker for violation of applicable Philippine law, these
has been pre-qualified for rules and other pertinent issuances. Such
employment. license shall be valid only at the place/s stated
7. In case of corporation or partnership, therein and when used by the licensed person,
verified undertaking by its officers, partnership or corporation.
directors, partners that they will be jointly
and severally liable with the company over A license is generally valid for 4 years but for
claims arising from employer-employee new applicants the license is valid only for 1
relationship. year.

14
Non-Transferability of License. — No license (i.e. over charging of fees)
shall be transferred, conveyed or assigned to b. To furnish or publish any false notice or
any person, partnership or corporation. It shall information or document in relation to
not be used directly or indirectly by any recruitment or employment;
person, partnership or corporation other than c. To give any false notice, testimony,
the one in whose favor it was issued. information or document or commit any
act of misrepresentation for the purpose
In case of death of the sole proprietor and to of securing a license or authority under
prevent disruption of operation to the this Code.
prejudice of the interest of legitimate heirs, the d. To induce or attempt to induce a worker
license may be extended upon request of the already employed to quit his
heirs, to continue only for the purpose of employment in order to offer him to
winding up business operations. another unless the transfer is designed
to liberate the worker from oppressive
ii. Workers’ Fee terms and conditions of employment;
e. To influence or to attempt to influence
Art 32, Labor Code any person or entity not to employ any
Any person applying with a private fee- worker who has not applied for
charging employment agency for employment through his agency;
employment assistance shall not be charged f. To engage in the recruitment or
any fee until he has obtained placement of workers in jobs harmful to
employment through its efforts or has public health or morality or to the
actually commenced employment. dignity of the Republic of the
Philippines;
Such fee shall be always covered with the g. To obstruct or attempt to obstruct
appropriate receipt clearly showing the inspection by the Secretary of Labor or
amount paid. The Secretary of Labor shall by his duly authorized representatives;
promulgate a schedule of allowable fees. h. To fail to file reports on the status of
employment, placement vacancies,
iii. Reports/Employment Information remittance of foreign exchange
earnings, separation from jobs,
Art 33, Labor Code departures and such other matters or
Whenever the public interest requires, the information as may be required by the
Secretary of Labor may direct all persons or Secretary of Labor.
entities within the coverage of this Title to i. To substitute or alter employment
submit a report on the status of contracts approved and verified by the
employment, including job vacancies, details Department of Labor from the time of
of job requisitions, separation from jobs, actual signing thereof by the parties up
wages, other terms and conditions and other to and including the periods of
employment data. expiration of the same without the
approval of the Secretary of Labor;
Failure to comply with this requirement will be j. To become an officer or member of the
deemed an illegal recruitment. Board of any corporation engaged in
(Anonuevo) travel agency or to be engaged directly
or indirectly in the management of a
iv. Prohibited Practices travel agency; and
k. To withhold or deny travel documents
Under the Labor Code, these are grounds for from applicant workers before departure
suspension and disqualification of for monetary or financial considerations
license. (Anonuevo) other than those authorized under this
Code and its implementing rules and
Article 34, Labor Code regulations.
It shall be unlawful for any individual,
entity, licensee, or holder of authority: Under Sec. 6 of RA 8042 consider these
a. To charge or accept, directly or grounds for illegal recruitment. With the
indirectly, any amount greater than that addition of two instances: (Anonuevo)
specified in the schedule of allowable 1. Failure to actually deploy without valid
fees prescribed by the Secretary of reasons as determined by the
Labor, or to make a worker pay any Department of Labor and
amount greater than that actually Employment; and
received by him as a loan or advance;

15
 2. Failure to reimburse expenses
incurred by the workers in connection
with his documentation and
processing for purposes of
deployment, in cases where the
deployment does not actually take
place without the worker's fault.

The persons criminally liable for the above

offenses are the principals, accomplices and
accessories. In case of juridical persons, the
officers having control, management or
direction of their business shall be liable.

16
v . Illegal Recruitment (Art. 38, LC) Definition of Illegal Recruitment under Article
38 is impliedly repealed by RA 8042.
Section 6, RA 8042 Migrant Workers (Anonuevo)
and Overseas Filipinos Act of 1995
Illegal recruitment shall mean any act of Elements of illegal recruitment: (1) the person
canvassing, enlisting, contracting, charged with the crime must have undertaken
transporting, utilizing, hiring, procuring recruitment activities; and (2) the said person
workers and includes referring, contact does not have a license or authority to do so.
services, promising or advertising for (Boneng vs. People and People vs. Gallo)
employment abroad, whether for profit or
not, when undertaken by a non-license or Illegal recruitment only becomes large scale
non-holder of authority contemplated under when the two elements concur with the
Article 13(f) of Presidential Decree No. 442, addition of a third element – the recruiter
as amended, otherwise known as the Labor committed the same against three or more
Code of the Philippines. Provided, that such persons, individually or as group. (People v.
non-license or non-holder, who, in any Hu)
manner, offers or promises for a fee
employment abroad to two or more persons Failure of the prosecution to prove the guilt of
shall be deemed so engaged. the accused beyond reasonable doubt does not
absolve the civil obligation to return the money
a. Illegal Recruitment w/o collected. (Id.)
license
Illegal recruitment is a crime that is mala
Any recruitment activities, including the prohibita. (People v. Chua)
prohibited practices enumerated under Article
34 of this Code, to be undertaken by non- vi. Enforcement and Sanctions
licensees or non-holders of authority, shall be
deemed illegal and punishable under Article 39 Suspension and/or cancellation of
of this Code. license or authority. (Art. 35, LC)
The Secretary of Labor shall have the power
The Department of Labor and Employment or to
any law enforcement officer may initiate suspend or cancel any license or authority to
complaints under this Article. All you need to recruit employees for overseas employment
prove is that the non-licensee is practicing for violation of rules and regulations issued
recruitment. (Anonuevo) by the Ministry of Labor, the Overseas
Employment Development Board, or for
b. Illegal Recruitment w/ license violation of the provisions of this and other
applicable laws, General Orders and Letters
Sec. 6 of RA 8042 enumerated grounds for of Instructions.
illegal recruitment done by those
who have license. (Id.) Regulatory Power (Art. 36, LC)
The Secretary of Labor shall have the power
c. Large Scale Illegal to
Recruitment restrict and regulate the recruitment and
placement activities of all agencies within
Illegal recruitment is deemed committed in the coverage of this Title and is hereby
large scale if committed against three (3) or authorized to issue orders and promulgate
more persons individually or as a group. rules and regulations to carry out the
objectives and implement the provisions of
d. Syndicated Illegal this Title.
Recruitment
Secretary of Labor has the power and
Illegal recruitment is deemed committed by a authority not only to restrict and regulate
syndicate if carried out by a group of three (3) the recruitment and placement activities of
or more persons conspiring and/or all agencies but also to promulgate rules
confederating with one another in carrying out and regulations to carry out the objectives
any unlawful or illegal transaction, enterprise and implement the provisions governing
or scheme defined under the first paragraph said activities. Implicit in these powers is
hereof. the award of appropriate relief to the
victims of the offenses committed by the
faulting agency or contractor. (Eastern

17
 Assurance and Surety Corp. v. Secretary of
Labor)

Visitorial Power (Art. 37, LC)

The Secretary of Labor or his duly
authorized representatives may, at any time,
inspect the premises, books of accounts and
records of any person or entity covered by
this Title, require it to submit reports
regularly on prescribed forms, and act on
violation of any provisions of this Title.
Close Down Power (Art. 38(c), LC)
The Secretary of Labor shall close
companies, establishments and entities
found to be engaged in the recruitment of
workers for overseas employment, without
having been licensed or authorized to do so.

The Secretary of Labor, not being a judge, may

no longer issue search or arrest warrants.
Hence, the authorities must go through the
judicial process. To that extent, Article 38(c) of
the Labor Code is unconstitutional and of no
force and effect. (Salazar v. Achacoso)

Only the power to issue search or arrests

warrants were stripped from the Secretary of
Labor. (Anonuevo)

Article 39 (d). Penalties, Labor Code

If the offender is a corporation, partnership,
association or entity, the penalty shall be
imposed upon the officer or officers of the
corporation, partnership, association or
entity responsible for violation; and if such
officer is an alien, he shall, in addition to the
penalties herein prescribed, be deported
without further proceedings.
Article 39 (e). Penalties, Labor Code
In every case, conviction shall cause and
carry the automatic revocation of the license
or authority and all the permits and
privileges granted to such person or entity
under this Title, and the forfeiture of the
cash and surety bonds in favor of the
Overseas Employment Development Board
or the National Seamen Board, as the case
may be, both of which are authorized to use
the same exclusively to promote their
objectives.

18
 Penalties for Illegal Recruitment under Article 39 and RA 8042
Article 39 RA 8042
Was repealed by implication by
RA 8042. (Anonuevo)
Illegal Imprisonment of not less than four Any person found guilty of illegal
Recruitment w/o years nor more than eight years or a recruitment shall suffer the penalty of
License fine of not less than P20,000 nor more imprisonment of not less than six (6)
than P100,000 or both such years and one (1) day but not more than
imprisonment and fine, at the twelve (12) years and a fine not less
discretion of the court. than two hundred thousand pesos
(P200,000.00) nor more than five
Illegal Imprisonment of not less than two hundred thousand pesos
Recruitment w/ years nor more than five years or a fine (P500,000.00).
License of not less than P10,000 nor more than
P50,000, or both such imprisonment Provided, however, that the maximum
and fine, at the discretion of the court penalty shall be imposed if the person
illegally recruited is less than eighteen
(18) years of age or committed by a
non-licensee or non-holder of
authority.
Large Scale Illegal Illegal recruitment when committed by The penalty of life imprisonment and a
Recruitment a syndicate or in large scale shall be fine of not less than five hundred
considered an offense involving thousand pesos (P500,000.00) nor
economic sabotage and shall be more than one million pesos
penalized in accordance with Article 39 (P1,000,000.00) shall be imposed if
hereof. (Art. 38(b), LC) The penalty of illegal recruitment constitutes
life imprisonment and a fine of One economic sabotage as
Hundred Thousand Pesos defined herein.
(P1000,000.00) shall be imposed if
illegal recruitment constitutes
economic sabotage as defined herein

for resolutions of cases provided under this

Money Claims Under Sec. 10 of RA section shall subject the responsible officials
8042 to any or all of the following penalties:
Any compromise/amicable settlement or
voluntary agreement on money claims a. The salary of any such official who fails to
inclusive of damages under this section shall render his decision or resolutions within
be paid within four (4) months from the the prescribed period shall be, or caused
approval of the settlement by the appropriate to be, withheld until the said official
authority. complies therewith;

In case of termination of overseas b. Suspension for not more than ninety (90)
employment without just, valid or authorized days; or
cause as defined by law or contract, the
workers shall be entitled to the full c. Dismissal from the service with
reimbursement of his placement fee with disqualifications to hold any appointive
interest of twelve percent (12%) per annum, public office for five (5) years.
plus his salaries for the unexpired portion of
his employment contract or for three (3) Provided, however, that the penalties herein
months for every year of the unexpired term, provided shall be without prejudice to any
whichever is less. liability which any such official may have
incurred under other existing laws or rules
Non-compliance with the mandatory periods and regulations as a consequence of violating
 the provisions of this paragraph.

• A plain reading of the above-mentioned

provision clearly reveals that the choice of
which amount to award an illegally
dismissed overseas contract worker comes
into play when the employment contract has
a term of at least 1 year or more. In case of
termination of overseas employment without
just, valid or authorized cause as defined by
law or contract, the worker shall be entitled
to the full reimbursement of his placement
fee with interest at 12% per annum, plus his
salaries for the unexpired portion of his
employment contract or for 3 months every
year of the unexpired term, whichever is
less.10

• The choice of which amount to award an

illegally dismissed overseas contract worker,
i.e., whether his salaries for the unexpired
portion of his employment contract, or 3
month’s salary for every year of the
unexpired term, whichever is less, comes
into play only when the employment
contract concerns has a term of at least 1
year or more.11

• This clause reiterated above was declared

unconstitutional because there is
discrimination and disparity. There is no
more choice and the illegally terminated
overseas employee will be fully paid his
unexpired term of his contract.12

10
Olarte vs. Navona
11
Flourish Maritime Shipping v. Almanzor
12
Serrano v. Gallant Maritime Services, GR No. 167614,
March 24,
2009
E. JOINT AND SEVERAL
LIABILITY OF PRIVATE
EMPLOYMENT AGENCY/
F. JURISDICTION
MANNING AGENTAND
EMPLOYER i. Regional Trial Court, for Criminal
Action for Illegal Recruitment
Section 10 (2 and 3), RA 8042
The liability of the principal/employer and the A criminal action arising from illegal recruitment
recruitment/placement agency for any and all as defined herein shall be filed with the Regional
claims under this section shall be joint and Trial Court of the province or city where the
several. These provisions shall be offense was committed or where the offended
incorporated in the contract for overseas party actually resides at the same time of the
employment and shall be a condition commission of the offense: Provided, That the
precedent for its approval. The performance court where the criminal action is first filed shall
bond to be filed by the recruitment/placement acquire jurisdiction to the exclusion of other
agency, as provided by law, shall be courts. Provided, however, That the aforestated
answerable for all money claims or damages provisions shall also apply to those criminal
that may be awarded to the workers. If the actions that have already been filed in court at
recruitment/placement agency is a juridical the time of the effectivity of this Act. (Sec. 9, RA
being, the corporate officers and directors and 8042)
partners as the case may be, shall themselves
be ii. NLRC, for Money Claims Arising from
jointly and solidarily liable with the Employer-Employee Relations
corporation or partnership for the aforesaid
claims and damages. Such liabilities shall Notwithstanding any provision of law to the
continue during the entire period or duration contrary, the Labor Arbiters of the National
of the employment contract and shall not be Labor Relations Commission (NLRC) shall have
affected by any substitution, amendment or the original and exclusive jurisdiction to hear
modification made locally or in a foreign and decide, within ninety (90) calendar days
country of the said contract. after filing of the complaint, the claims arising
out of an employer-employee relationship or by
Sec. 1(f)(3), Rule II, Part II, 2002 POEA Rules virtue of any law or contract involving Filipino
The applicant for license to operate a private workers for overseas deployment including
employment agency shall assume joint and claims for actual, moral, exemplary and other
solidary liability with the employer for all forms of damages.
claims and liabilities which may arise in
connection with the implementation of the iii. POEA, for Administrative and
contract, including but not limited to payment Disciplinary Actions
of wages, death and disability compensation
and repatriations. Section 28, RA 8042
The POEA shall exercise original and exclusive
Sec. 1(e)(8), Rule II, Part II, 2003 POEA Rules jurisdiction to hear and decide:
The applicant for license to operate a manning (a) all cases, which are administrative in
agency shall assume joint and solidary liability character, involving or arising out of
with the employer for all claims and liabilities violations of rules and regulations relating to
which may arise in connection with the licensing and registration of
implementation of the employment contract, recruitment and employment agencies or
including but not limited to wages, death and entities; and
disability compensation and their (b) disciplinary action cases and other special
repatriation. cases, which are administrative in character,
involving employers, principals, contracting
• The liability extends to the expiration of the partners and Filipino migrant workers.
contract.13
13
OSM Shipping Philippines, Inc. v. NLRC
G. ALIEN EMPLOYMENT participation of foreign investors in the
REGULATION governing body of any public utility enterprise
shall be limited to their proportionate share in
Art. XII, Sec. 12, 1987 Constitution its capital, and all the executive and managing
officers of such corporation or association
The State shall promote the preferential use of
must be citizens of the Philippines.
Filipino labor, domestic materials and locally
produced goods, and adopt measures that
help make them competitive. Employment permit of non-resident
aliens, Article 40 of the Labor Code
The ownership and management of mass media Any alien seeking admission to the Philippines
shall be limited to citizens of the Philippines, or for employment purposes and any domestic or
to corporations, cooperatives or associations, foreign employer who desires to engage an
wholly-owned and managed by such citizens. alien for employment in the Philippines shall
The Congress shall regulate or prohibit obtain an employment permit from the
monopolies in commercial mass media when the Department of Labor.
public interest so requires. No combinations in
restraint of trade or unfair competition therein The employment permit may be issued to a
shall be allowed. (Art. XVI, Sec. 11(1), non-resident alien or to the applicant
Constitution) employer after a determination of the non-
availability of a person in the Philippines who
Art. XVI, Sec. 11(2), 1987 Constitution is competent, able and willing at the time of
application to perform the services for which
The advertising industry is impressed with
the alien is desired. For an enterprise
public interest, and shall be regulated by law
registered in preferred areas of investments,
for the protection of consumers and the
said employment permit may be issued upon
promotion of the general welfare.
recommendation of the government agency
charged with the supervision of said registered
Only Filipino citizens or corporations or
enterprise.
associations at least seventy per centum of the
capital of which is owned by such citizens shall Article 41 of the Labor Code
be allowed to engage in the advertising Prohibition against transfer of employment.
industry. a. After the issuance of an employment
The participation of foreign investors in the permit, the alien shall not transfer to
governing body of entities in such industry another job or change his employer
shall be limited to their proportionate share in without prior approval of the Secretary of
the capital thereof, and all the executive and Labor.
managing officers of such entities must be b. Any non-resident alien who shall take up
citizens of the Philippines. employment in violation of the provision
of this Title and its implementing rules
and regulations shall be punished in
Art. XII, Sec. 11, 1987 Constitution
accordance with the provisions of Articles
No franchise, certificate, or any other form of
289 and 290 of the Labor Code.
authorization for the operation of a public
utility shall be granted except to citizens of the
In addition, the alien worker shall be subject
Philippines or to corporations or associations
to deportation after service of his sentence.
organized under the laws of the Philippines, at
Submission of List, Article 42 of the
least sixty per centum of whose capital is
Labor Code
owned by such citizens; nor shall such
franchise, certificate, or authorization be Any employer employing non-resident foreign
exclusive in character or for a longer period nationals on the effective date of this Code
than fifty years. Neither shall any such shall submit a list of such nationals to the
franchise or right be granted except under the Secretary of Labor within thirty (30) days
condition that it shall be subject to after such date indicating their names,
amendment, alteration, or repeal by the citizenship, foreign and local addresses,
Congress when the common good so requires. nature of employment and status of stay in the
country. The Secretary of Labor shall then
The State shall encourage equity participation determine if they are entitled to an
in public utilities by the general public. The employment permit.
 ii. Conditions of Grant of Permit
i. Coverage Section 10, D.O. 97-09
An application of AEP may be denied by the
Section 1, D.O. 97-09, The Revised Regional Director based on any of the
Rules for the Issuance of Employment following grounds:
Permits to Foreign Nationals 1. misrepresentation of facts in the
All foreign nationals who intend to engage in application;
gainful employment in the Philippines shall 2. submission of falsified documents;
apply for Alien Employment Permit (AEP). 3. the foreign national has a derogatory
record; or
Section 2, D.O. 97-09, The Revised 4. availability of a Filipino who is competent,
Rules for the Issuance of Employment able and willing to the job intended for the
Permits to Foreign Nationals foreign national.
The following categories of foreign nationals
are exempt from securing an employment
permit:

a. All members of the diplomatic service and

foreign government officials accredited by
and with reciprocity arrangements with
the Philippine government;
b. Officers and staff of international
organizations of which the Philippine
government is a member, and their
legitimate spouses desiring to work in the
Philippines;
c. Foreign nationals elected as members of
the Governing Board who do not occupy
any other position, but have only voting
rights in the corporation;
d. All foreign nationals granted exemption
by law;
e. Owners and representatives of foreign
principals whose companies are
accredited by the POEA, who come to the
Philippines for a limited period and solely
for the purpose of interviewing Filipino
applicants for employment abroad;
f. Foreign nationals who come to the
Philippines to teach, present and/or
conduct research studies in universities
and colleges as visiting, exchange or
adjunct professors under formal
agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign
government; provided that the exemption
is one a reciprocal basis; and
g) Permanent residing foreign nationals,
probationary or temporary resident visa
holders.
III. LABOR STANDARDS
A. Conditions of employment
1. Hours of work
a. Principles in
determining hours
worked and employees
exempted or not covered
b. Compensable Time
i. Normal hours of
work
ii. Night shift
differential
iii. Overtime work
(a) Compressed
work week
(b) Built-in
overtime
c. Non-compensable
hours; when
compensable
i. Meal break
ii. Power
interruptions or
brownouts
iii. Idle time
iv. Travel time
v. Commuting time
vi. Waiting time
2. Rest periods
3. Service Charge
Labor standards 2. Government-owned or controlled
corporations with original
charters.
A. COVERAGE
Governing law: Civil Service Law, rules and
Article 82. Coverage regulations
The provisions of this Title shall apply to Managerial employees
employees in all establishments and Those whose primary duty consists of the
undertakings whether for profit or not, but management of the establishment in which
not to government employees, managerial they are employed or of a department or
employees, field personnel, members of the subdivision thereof, and to other officers or
family of the employer who are dependent on members of the managerial staff.15
him for support, domestic helpers, persons in
the personal service of another, and workers
who are paid by results as determined by the 1. Managerial employees
Secretary of Labor in appropriate regulations. Must meet all requirements:16
As used herein, "managerial employees" a. Their primary duty
refer to those whose primary duty consists of consists of the
the management of the establishment in management of the
which they are employed or of a department establishment in which they
or subdivision thereof, and to other officers or are employed or of a
members of the managerial staff. department or sub-division
thereof.
"Field personnel" shall refer to non-
agricultural employees who regularly perform b. They customarily and
their duties away from the principal place of regularly direct the work
business or branch office of the employer and of two or more
whose actual hours of work in the field cannot employees therein.
be determined with reasonable certainty.
c. They have the authority to
hire or fire employees of
Coverage lower rank; or their
General rule: Applicable to all employees in all suggestions and
establishments and undertakings, whether for recommendations as to hiring
profit or not and firing and as to the
promotion or any other
Exception: Not covered change of status of other
1. Government employees employees, are given
2. Managerial Employees particular weight.
3. Field personnel
4. Dependent family members • Managerial employees are not usually
5. Domestic helpers employed for every hour of work but their
6. Persons in service of another compensation is determined
7. Piece workers considering their special training,
experience or knowledge which
Exempted from the coverage of the requires the exercise of discretion and
provisions of Book 3, Title I: Working independent judgment, or perform work
Conditions and Rest Periods under related to management policies or general
Labor Code business operations along specialized or
Government employees technical lines.17
The civil service embraces14 • It is not feasible to provide a fixed
1. All branches, subdivisions, hourly rate of pay or maximum hours of
instrumentalities, and agencies of 15
Art 82, Par 2, Labor Code
the Government 16
Sec 2 (b), Rule 1, Book III, IRR
17
NAWASA v NAWASA Consolidated Unions, 11 SCRA 766
14
Sec 2 (1), Art IX-B, 1987 Constitution (1964)
 labor.18 requires use of independent
judgment.20

2. Officers or members of a • A supervisor is deemed a member of the

managerial staff managerial staff.21
If they perform the ff duties:19
Field personnel
a. The primary duty consists of Non-agricultural employees who regularly
the performance of work perform their duties away from the principal
directly related to place of business or branch office of the
management policies of employer and whose actual hours of work
their employer; in the field cannot be determined with
reasonable certainty.22
b. Customarily and regularly
exercise discretion and • In deciding whether or not an employee’s
independent judgment; actual working hours in the field can be
and determined with reasonable certainty,
query must be made as to whether or not
c. (i) Regularly and directly such employee’s time and performance is
assist a proprietor or a constantly supervised by the employer.23
managerial employee • Field personnel are employees whose time
whose primary duty consists and performance is unsupervised by the
of the management of the employer.24
establishment in which he is Dependent Family Members
employed or subdivision
thereof; or Domestic Helpers
(ii) execute under general “Domestic or household service" shall mean
supervision work along service in the employer’s home which is
specialized or technical usually necessary or desirable for the
lines requiring special maintenance and enjoyment thereof and
training, experience, or includes ministering to the personal
knowledge; or comfort and convenience of the members
(iii) execute, under general of the employer’s household, including
supervision, special services of family drivers.25
assignments and tasks;
and Governing provisions: Book 3, Title III:
Working Conditions for Special Groups of
d. Who do not devote more Employees, Chapter 3: Employment of
than 20 percent of their househelpers, Labor Code
hours worked in a work
week to activities which are Persons in service of another
not directly and closely
Domestic servants and persons in the personal
related to the performance of
service of another are those who perform such
the work described in
services in the employer's home which are
paragraphs (a), (b) and (c)
usually necessary or desirable for the
above.
maintenance and enjoyment thereof, or
minister to the personal comfort, convenience,
3. Supervisory employees
or safety of the employer as well as the
They are those who, in the
interest of management,
effectively recommend such
20
Art 212, par N, Labor Code
21
Quebec v NLRC, 301 SCRA 627 (1999); Salazar v NLRC,
managerial actions if the exercise 256 SCRA 273 (1996); National Sugar Refineries Corporation
of such authority is not merely v NLRC (1993)
routinary or clerical in nature, but 22
Art 82, par 3, Labor Code; Sec 2 (f), Rule 1, Book III, IRR
23
Mercidar fishing corp v nlrc, 297 SCRA 440 (1998); Union
18
NAWASA v NAWASA Consolidated Unions, 11 SCRA 766 of Filipro Employees v Vivar (1992)
(1964) 24
Salazar v NLRC (1996)
19
Sec 2 (c), Rule 1, Book III, IRR 25
Art 141, Labor Code
 members of his employer's household. 26

Piece of Work
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.27

• Piece workers are paid depending upon

the work they do irrespective of the
amount of time employed in doing said
work.28

26
Sec 2(d), Rule 1, Book III, IRR
27
Sec 2 (e), Rule 1, Book III, IRR
28
Red v Coconut Products Ltd. v CIR, 1966
B. HOURS OF WORK a. Health personnel

i. Normal hours of work Health personnel, included

a. resident physicians
b. nurses, nutritionists
Art 83, Normal Hours of Work c. dietitians
The normal hours of work of any employee d. pharmacists
shall not exceed eight (8) hours a day. e. social workers
f. laboratory technicians
Health personnel in cities and municipalities g. paramedical technicians
with a population of at least one million h. psychologists
(1,000,000) or in hospitals and clinics with a i. midwives
bed capacity of at least one hundred (100) j. attendants
shall hold regular office hours for eight (8) k. All other hospital or clinic
hours a day, for five (5) days a week, exclusive personnel.
of time for meals, except where the exigencies
of the service require that such personnel Hours of work for health personnel
work for six (6) days or forty-eight (48) hours, Health personnel in cities and municipalities:
in which case, they shall be entitled to an 1. With a population of at least one
additional compensation of at least thirty
million (1,000,000) or
percent (30%) of their regular wage for work
on the sixth day. For purposes of this Article, 2. In hospitals and clinics with a bed
"health personnel" shall include resident capacity of at least one hundred
physicians, nurses, nutritionists, dietitians, (100)
pharmacists, social workers, laboratory
technicians, paramedical technicians, Normal working hours:
psychologists, midwives, attendants and all Shall hold regular office hours for eight (8) hours
other hospital or clinic personnel. a day, for five (5) days a week, exclusive of time
for meals (40 hours)
Exception:
General Rule: Where exigencies of the service require
The normal hours of work of any employee shall that such personnel work for six (6) days
not exceed 8 hours a day, for 6 days a week or forty-eight (48) hours (48 hours)
Exception:
1. Health personnel Health personnel shall be entitled to
2. Compressed work week an additional compensation of at
3. Management prerogative least thirty percent (30%) of their
regular wage for work on the sixth day
 b. Compressed workweek are entitled to meal periods of not less
Compressed Workweek (CWW), than sixty (60) minutes. Nothing herein
Department Order no. 2, series of 2004 shall impair the right of employees to rest
Conditions. DOLE shall recognize days as well as to holiday pay, rest day pay
CWW schemes adopted in accordance or leaves in accordance with law or
with the following: applicable collective bargaining
agreement or company policy.
1. The CWW scheme is undertaken as a result
of an express and voluntary agreement of 3. Adoption of the CWW scheme shall in no
majority of the covered employees or their case result in diminution of existing
duly authorized representatives. This benefits. Reversion to the normal
agreement may be expressed through eight-hour workday shall not
collective bargaining or other legitimate constitute a diminution of benefits.
workplace mechanisms of participation The reversion shall be considered a
such as labor-management councils, legitimate exercise of management
employee assemblies or referenda. prerogative, provided that the employer
shall give the employees prior notice of
2. In firms using substances, chemicals and such reversion within a reasonable period
processes or operating under conditions of time.
where there are airborne contaminants,
human carcinogens or noise prolonged
exposure to which may pose hazards to • D.O. No. 21 sanctions the waiver of
the employees' health and safety, there overtime pay in consideration of the
must be a certification from an accredited benefits that the employees will derive from
health and safety organization or the adoption of a compressed workweek
practitioner or from the firm's safety scheme.29
committee that work beyond eight hours • The compressed workweek scheme was
is within threshold limits or tolerable originally conceived for establishments
levels of exposure, as set in the OSHS. wishing to save on energy costs, promote
greater work efficiency and lower the rate of
3. The employer shall notify DOLE, through employee absenteeism, among others.30
the Regional Office having jurisdiction
over the workplace, of the adoption of the • Under this scheme, the generally observed
CWW scheme. The notice shall be in workweek of six (6) days is shortened to five
DOLE CWW Report Form attached to this (5) days but prolonging the working hours
Advisory. from Monday to Friday without the
employer being obliged for pay overtime
Effects. A CWW scheme which premium compensation for work performed
complies with the foregoing conditions in excess of eight (8) hours on weekdays, in
shall have the following effects: exchange for the benefits above cited that
will accrue to the employees. 31 The total
1. Unless there is a more favorable practice number of normal work hours per week
existing in the firm, work beyond eight remain at 48 hours.
hours will not be compensable by
overtime premium provided the total Conditions for Adoption of CWW
number of hours worked per day shall not 1. There must be an express and voluntary
exceed twelve (12) hours. In any case, any consent of the majority of the covered
work performed beyond 12 hours a day or employees or their duly authorized
48 hours a week shall be subject to representatives
overtime premium. 2.There must be a certification (from an
accredited health and safety organization or
2. Consistent with Articles 85 of the Labor practitioner or from the firm’s safety
Code, employees under a CWW scheme committee), that work beyond 8 hours is

29
Bisig Manggagawa sa Tryco v NLRC, GR 1513098, 2008
30
Bisig Manggagawa sa Tryco v NLRC, GR 1513098, 2008
31
Bisig Manggagawa sa Tryco v NLRC, GR 1513098, 2008
 within the threshold limits or tolerable levels c. Management prerogative
of exposure, as set in the Occupational Safety
and Health Standards. • Verily and wisely, management retained the
[This refers to firms using substances, chemicals and
processes or operating under conditions where there are prerogative, whenever exigencies of the
airborne contaminants, human carcinogens, or noise, service so require, to change the working
prolonged exposure to which may pose hazards to the hours of its employees.32
employees’ health and safety.]

3. The employer must notify the Regional • And as long as such prerogative is
Office of the DOLE having jurisdiction over exercised in good faith for the
the workplace about the adoption of the advancement of the employer's
compressed workweek scheme. interest and not for the purpose of
defeating or circumventing the rights
of the employees under special laws or under
 Failure to comply will hold the employer
valid agreements, this Court will uphold
liable for overtime pay to the employees
such exercise.33
concerned.

Firms that cannot Adopt CWW

1. Construction Industry
2. Health services
3. Occupations requiring heavy manual labor
4. Occupations or workplaces where the
workers are exposed to airborne
contaminants, human carcinogens,
substances, chemicals, or noise, that
exceed the threshold limits or tolerance
levels for an eight hour workday as
prescribed in the Occupational Safety and
Health Standards.

32
San Miguel Brewery Sales Force Union (PTGWO) vs. Ople,
170 SCRA 25 (1989)
33
San Miguel Brewery Sales Force Union (PTGWO) vs. Ople,
170 SCRA 25 (1989)
ii. Compensable hours of work iii. General Principles in
determining if time is considered
Art 83, Hours Worked as hours worked (Summary)35
Hours worked shall include (a) all time during
which an employee is required to be on duty 1. All hours are hours worked which
or to be at a prescribed workplace; and (b) all the employee is required to give his
time during which an employee is suffered or employer,
permitted to work.
a. regardless of whether or not such
Rest periods of short duration during working hours are spent in productive labor
hours shall be counted as hours worked. or involve physical or mental
exertion.
Compensable hours of work in general
1. On duty 2. An employee need not leave the
All time during which an employee is premises of the work place in
required to be on duty or to be at a order that his rest period shall not
prescribed workplace be counted, it being enough that:

All hours are hours worked which the a. he stops working,

employee is required to give his b. may rest completely and
employer, regardless of whether or c. may leave his work place, to go
not such hours are spent in elsewhere, whether within or outside
productive labor or involve the premises of his work place.
physical or mental exertion. 34
3. All time spent shall be Considered as
2. At work hours worked, if the work was with the
All time during which an employee is knowledge of his employer or
suffered or permitted to work. immediate supervisor.

a. If the work performed was

necessary, or
b. It benefited the employer, or
c. The employee could not abandon his
work at the end of his normal
working hours because he had no
replacement

4. 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:

a. the imminence of the resumption of

work requires the employee's
presence at the place of work or
b. if the interval is too brief to be
utilized effectively and gainfully in
the employee's own interest.

35
Sec 4, Rule I, Book III, IRR, Principles in determining
34
Sec 4(a), Rule 1, Book III, IRR hours worked.
iv. Specific rules determining less than one (1) hour time-off for regular
hours of work and compensability meals, except in the following cases when a
meal period of not less than twenty
(20) minutes may be given by the employer
a. Rest period provided that such shorter meal period is
credited as compensable hours worked
Short duration or “coffee break” of the employee:
• Rest periods of short duration during
working hours shall be counted as hours (a) Where the work is non-manual work in
worked.36 nature or does not involve strenuous
• Rest periods or coffee breaks running from physical exertion;
five (5) to twenty (20) minutes shall be
considered as compensable working time. 37 (b) Where the establishment regularly
operates not less than sixteen (16)
If more than 20 minutes38 hours a day;
• An employee need not leave the
premises of the work place in order that his (c) In case of actual or impending emergencies
rest period shall not be counted, it being or there is urgent work to be
enough that: performed on machineries,
a. he stops working, equipment or installations to avoid
b. may rest completely and serious loss which the employer would
c. may leave his work place, to go otherwise suffer; and
elsewhere, whether within or outside
the premises of his work place. (d) Where the work is necessary to prevent
serious loss of perishable goods.
b. Meal period
• During meal period where the laborers are
Regular meal period (1 hour) required to stand by for emergency work or
where said meal hour is not one of complete
Art 85, Meal Periods rest, such period is considered overtime.40
Subject to such regulations as the Secretary of
Labor may prescribe, it shall be the duty of General rule:
every employer to give his employees not Meal periods are not compensable
less than sixty (60) minutes time-off for Exceptions: it is compensable
their regular meals. 1. Where meal time is predominantly
spent for the employer’s benefit41
2. Meal period of 1 hour is deemed
• The eight-hour work period does not
compensable when employee is on
include the meal break. Nowhere in the
continuous shift42
law may it be inferred that employees must
3. Shortened meal period of less than 1
take their meals within the company
hour but not less than 20 hours
premises. Employees are not prohibited
subject to qualifications under Sec 7,
from going out of the premises as long as
par 1, Rule I, Book III, IRR
they return to their posts on time.39
If meal time is less than 20 minutes,
Shorter meal period (less than 1 hour but it is considered Rest period and shall
not less than 20 mins) be considered compensable time.

Sec 7, par 1, Rule I, Book III, IRR c. Waiting time

Meal and Rest Periods. — Every employer
shall give his employees, regardless of sex, not
Sec 5 (a). Waiting time, Rule 1, Book III,
40
Philippine Airlines v NLRC, 302 SCRA 582 (1999)
36
Art 84(a), Labor Code 41
Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and
37
Sec 7, par 2, Rule I, Book III, IRR Social Legislation
38
Sec 4(b), Rule I, Book III, IRR 42
National Development Co. v. CIR, G.R. No. L-15422 (1962)
39
Philippine Airlines v NLRC, 302 SCRA 582 (1999)
 IRR f. Work interruption due to
Waiting time spent by an employee shall be brownout
considered as working time if waiting is an
integral part of his work or the employee
Policy instruction no. 36 of the
is required or engaged by the employer
Department of Labor and Employment
to wait.
provided the following rides regarding power
interruptions or brownouts:
• “Waiting time” is compensable if during the
period the employee is subject to the 1. Brownouts not more than 20 mins
absolute control of the employer such that Brownouts of short duration but not
the employee is effectively deprived of the exceeding 20 minutes shall be treated as
time to attend to other personal pursuits43 worked or compensable hours whether
used productively by the employees or not.
Legal test
• Whether waiting time constitute working 2. Brownouts for more than 20 mins
time depends upon the circumstances of Brownouts running for more than 20
each particular case. The facts may show that minutes may not be treated as hours
the employer was engaged or was waiting to worked provided any of the following
be engaged. The controlling factor is whether conditions are present:
waiting time spend in idleness is so spent
predominantly for the employer’s benefit or a. The employees can leave their
for the employee’s.44 workplace or go elsewhere whether
within or without the work
d. On call premises; or
b. The employees can use the time
effectively for their own interest
Sec 5 (b). Working while on call, Rule 1,
Book III, IRR
In each case, the employer may extend the
An employee who is required to remain on call
working hours of his employees outside the
in the employer's premises or so close thereto
regular schedules to compensate for the loss of
that he cannot use the time effectively
productive man-hours without being liable
and gainfully for his own purpose shall
for overtime
be considered as working while on call.
Industrial enterprise with one or two workshifts
An employee who is not required to leave
may adopt any of the workshifts prescribed for
word at his home or with company officials
enterprises with 3 workshifts to prevent serious
where he may be reached is not working while
loss or damage to materials, machineries, or
on call.
equipment that may result in case of power
interruptions.
e. Inactive due to work
interruptions g. Work after normal hours
Sec 4 (d), Rule 1, Book III, IRR Sec 4 (c), Rule 1, Book III, IRR
The time during which an employee is inactive If the work performed was necessary, or it
by reason of interruptions in his work beyond benefited the employer, or the employee could
his control shall be considered working time not abandon his work at the end of his normal
either if the imminence of the resumption of working hours because he had no
work requires the employee's presence at the replacement,
place of work or if the interval is too brief to be all time spent for such work shall be
utilized effectively and gainfully in the considered as hours worked, if the work
employee's own interest. was with the knowledge of his employer or
immediate supervisor.

• All time spent shall be Considered as hours

43
Africa v NLRC, 170 SCRA 776 (1989) worked, if the work was with the
44
Azcucena citing Armour v Wantock
 knowledge of his employer or immediate traveling (such as driving an empty
supervisor. truck back to the point of origin)
c. is carried out under arduous and
a. If the work performed was unusual conditions (e.g. travel on
necessary, or rough terrain or under extremely
b. It benefited the employer, or severe weather contions); or
c. The employee could not abandon his d. results from an event that could not
work at the end of his normal be scheduled or controlled
working hours because he had no administratively by any individual
replacement (such as a job-related court
appearance required by a court
h. Lectures, meeting, subpoena)
trainings
j. Commuting time46
Sec 6. Lectures, meetings, training
programs, Rule 1, Book III, IRR General rule: Normal commuting time from
Attendance at lectures, meetings, training home to work and from work to home is not
programs, and other similar activities shall hours of work.
not be counted as working time if all of
the following conditions are met: Exception:
Commuting time may be hours of work
(a) Attendance is outside of the employee's when the employee is required to
regular working hours; perform substantial work under the
control and supervision of the employer.
(b) Attendance is in fact voluntary; and

(c) The employee does not perform any

productive work during such
attendance.

i. Travel time

Official travel away from an employee’s

(workplace) is hours of work if travel is:45

1. within the days and hours of the

employee’s regularly scheduled
administrative workweek, including
regularly scheduled overtime hours, or
2. outside the hours of the employee’s
regularly scheduled administrative
workweek, is ordered or approved, and
meets one of the following four
conditions:
a. involves the performance or work
while traveling (such as driving a
loaded truck)
b. is incidental to travel that involves
the performance of work while

45
USC 5542(b)(2) and 5 CFR 550. 112(g), US Office of
Personnel Management; Abad (2011), Compendium on labor 46
CFC 551.422(b), US Office of Personnel Management;
law Abad (2011), Compendium on labor law
 k. No work, no pay principle

General Rule: NO WORK, NO PAY

• law contemplates a "no work" situation
where the employees voluntarily absent
themselves. 47

When not applicable:

• Semestral break of private school
teachers. Petitioners certainly do not, ad
voluntatem absent themselves during
semestral breaks. Rather, they are
constrained to take mandatory leave
from work.48

• The principle of "no work, no pay" does not

apply as the fact that the complainants
had not worked at the jobsite was not
of their own doing. If they were not able
to work at all, it was because they refused to
sign the third contract providing for another
lowering of their salaries in violation of their
first agreement as approved by the POEA.
They had a right to insist on the higher
salaries agreed upon in the original contract
and to reject the subsequent impositions of
SAM, which obviously thought the
petitioners would have to accept because
they had no choice.49

• Work hours of seaman. Seamean are

required to stay on board of their vessels by
the very nature of their duties, and it is for
this reason that, in addition to their regular
compensation, they are given free living
quarters to be on board. It could not
have been the purpose of the law to
require their employers to pay them
overtime pay even when they are not
actually working. The correct criterion in
determining whether or not sailors are
entitled to overtime pay is not, therefore,
whether they are on board and cannot leave
ship beyond the regular eight working
number of hours, but whether they actually
rendered service in excess of said number of
hours. 50

47
University of Pangasinan Faculty Union v University of
Pangasinan, GR 64821-23 (1993)
48
University of Pangasinan Faculty Union v University of
Pangasinan, GR 64821-23 (1993)
49
Prieto v NLRC, 226 SCRA 232 (1993)
50
Cagampan, et. al. v. NLRC, G.R. Nos. 85122-24 (1991)
v. Overtime work/pay • When an employee spends additional time to
his work, the effect upon him is multi-
Art 87: Overtime work faceted: he puts in more effort, physical
and/or mental; he is delayed in going home
Work may be performed beyond eight (8)
to his family to enjoy the comfort thereof; he
hours a day provided that the employee is paid
might have no time for relaxation,
for the overtime work, an additional
amusement or sports; he might miss
compensation equivalent to his regular wage
important prearranged engagement; etc. it is
plus at least twenty-five percent (25%)
thus the additional work labor or service
thereof.
employed and the adverse effects of his
longer stay in his place of work that justify
Work performed beyond eight hours on a
and is the real reason for the extra
holiday or rest day shall be paid an additional
compensation called overtime.56
compensation equivalent to the rate of the
first eight hours on a holiday or rest day plus
at least thirty percent (30%) thereof. b. Emergency or compulsory
overtime work
a. Overtime work:
Voluntary and consensual Art 89. Emergency overtime work
Any employee may be required by the
Overtime compensation, defined employer to perform overtime work in any of
Overtime compensation is additional pay for the following cases:
service or work rendered or performed in excess
of eight hours a day by employees or laborers When the country is at war or when any
covered by the Eight-hour Labor Law. 51 other national or local emergency has been
declared by the National Assembly or the
Nature of Overtime work Chief Executive;
• To be considered as overtime work, the
hours worked must be in excess of and in When it is necessary to prevent loss of life or
addition to the 8 hours worked during the property or in case of imminent danger to
prescribed daily work period.52 public safety due to an actual or impending
• In case of health personnel, overtime work is emergency in the locality caused by serious
hours worked in excess of 8 hours during the accidents, fire, flood, typhoon, earthquake,
prescribed daily work period or in excess of epidemic, or other disaster or calamity;
40 hours worked during the regular work
week of 5 days.53 When there is urgent work to be
performed on machines, installations,
Rationale for overtime compensation or equipment, in order to avoid serious loss
or damage to the employer or some other
• There can be no other reason than that he is
cause of similar nature;
made to work longer than what is
commensurate with his agreed
compensation for the statutorily fixed or When the work is necessary to prevent loss
voluntary agreed hours of labor he is or damage to perishable goods; and
supposed to do.54
Where the completion or continuation of the
• In case of health personnel, overtime work is
work started before the eighth hour is
hours worked in excess of 8 hours during the
necessary to prevent serious obstruction or
prescribed daily work period or in excess of
prejudice to the business or operations of the
40 hours worked during the regular work
week of 5 days.55

51
National Shipyard and Steel Corp. v. CIR (1961)
52
Caltex Regular Employees at Manila Office v Caltex
Philippines Inc., 247 SCRA 398 (1995)
53
Art 83, Labor Code
54
PNB v PEMA, 115 SCRA 507 (1982) 56
Philippine National Bank v Philippine National Bank
55
Art 83, Labor Code Employees Association, 115 SCRA 507 (1982)
 employer. before an employee may avail of said
benefit.60
Any employee required to render overtime
work under this Article shall be paid the Factors to consider where Collective
additional compensation required in this Bargaining Agreement does not contain
Chapter. any provision on computation of overtime
pay:61

c. Computation of overtime 1. Whether or not the addition pay is for

extra work done or service rendered; and
pay
2. Whether the same is intended to be
permanent and regular, not contingent
Art 88. Undertime not offset by nor temporary and given only to remedy
overtime. a situation which can change anytime.
Undertime work on any particular day shall
not be offset by overtime work on any other Waiver of overtime pay
day. Permission given to the employee to go General rule:
on leave on some other day of the week shall Overtime compensation cannot be waived,
not exempt the employer from paying the whether expressly or impliedly; and stipulation
additional compensation required in this to the contrary is against the law. Quitclaim
Chapter. where workers agree to forego payment of
overtime compensation is null and void ab
Art 90. Computation of additional initio.62
compensation.
For purposes of computing overtime and Exceptions:
other additional remuneration as required by 1. Non-payment by employer of
this Chapter, the "regular wage" of an overtime pay to employee in excess
employee shall include the cash wage only, of the regular hours worked is valid
without deduction on account of facilities as overtime pay was already
provided by the employer. provided in the written contract with
a “built-in” overtime pay and signed
Base for overtime pay by the Director of the Bureau of
• Overtime pay shall be based only on the Employment Services and enforced
regular basic pay, exclusive of fringe by the employer.63
benefits.57
• Fringe benefits not regularly received, and 2. Adoption of Compressed Workweek
not by all employees, are not included in the (CWW) on voluntary basis, subject
computation.58 to the guidelines provided under
• Overtime pay is for extra effort beyond that Department Order no. 2 series of
contemplated in the employment contract, 2004.
hence when additional pay is given for any
other purpose, it is illogical to include the
same in the basis for the computation of
overtime pay.59

Burden of proof
• Entitlement to overtime pay must
first be established by proof that said
overtime work was actually performed,

57
Bisig Manggagawa ng Philippien Refining Co., Inc v Phil. 60
Lagatic v NLRC, GR 121004 (1998)
Refining Co., Inc., 107 SCRA 677 (1981) 61
PNB V PEMA, 115 SCRA 507 (1982)
58
Shell Oil Workers Union v Shell and Affiliates Supervisor’s 62
Pampanga Sugar Development Co., Inc. v CIR, 114 SCRA
Union, 70 SCRA 238 (1976) 725 (1982)
59
PNB v Phil National Bank Employees Association, 115 63
Engineering Equipment, Inc. v Minister of Labor, 138
SCRA 507 (1982) SCRA 616 (1985)
vi. Night work wage plus at least twenty-five per cent (25%)
and an additional amount of no less than ten
Art 86. Night shift differential. per cent (10%) of such overtime rate for each
hour or work performed between 10 p.m. to 6
Every employee shall be paid a night shift
a.m.
differential of not less than ten percent
(10%) of his regular wage for each
hour of work performed between ten o’clock Sec 4. Additional compensation on
in the evening and six o’clock in the morning. scheduled rest day/special holiday,
Rule II. Night Shift Differential, Book
III, IRR
Meaning: Premium given to a covered An employee who is required or permitted to
employee for work performed between 10:00pm work on the period covered during rest days
and 6:00am. and/or special holidays not falling on regular
holidays, shall be paid a compensation
Coverage:64 equivalent to his regular wage plus at least
All employees thirty (30%) per cent and an additional
amount of not less than ten (10%) per cent of
Exception: such premium pay rate for each hour of work
1. Government employees and GOCCs performed.
with special charters
2. Those of retail and service
Sec 5. Additional compensation on
establishments regularly employing
regular holidays, Rule II. Night Shift
not more than five (5) workers;
Differential, Book III, IRR
3. Domestic helpers
For work on the period covered during regular
4. Persons in the personal service of
holidays, an employee shall be entitled to his
another;
regular wage during these days plus an
5. Members of the family of the
additional compensation of no less than ten
employer who are dependent on him
(10%) per cent of such premium rate for each
for support
hour of work performed.
6. Managerial employees
7. Officers and members of managerial
staff;
8. Field personnel and other employees Overtime during 10:00pm – 6:00 am
whose time and performance is Rate: Employee shall be entitled to his regular
unsupervised by the employer wage plus at least twenty-five per cent (25%) and
including those who are engaged on an additional amount of no less than ten
task or contract basis, purely per cent (10%) of such overtime rate for
commission basis, or those who are each hour or work performed between 10 p.m. to
paid a fixed amount for performing 6 a.m.
work irrespective of the time
consumed in the performance Work on a scheduled rest day/special
thereof. holiday
9. Workers paid by results. Rate: Employee shall be paid a compensation
equivalent to his regular wage plus at least thirty
(30%) percent and an additional amount of not
Night shift
less than ten (10%) per cent of such premium
Time: 10:00pm – 6:00 am
pay rate for each hour of work performed.
Rate: not less than 10% of his regular wage for
Work on a regular holiday
each hour of work
Rate: regular wage plus an additional
compensation of no less than ten (10%) per cent
Sec 3. Additional compensation, Rule of such premium rate for each hour of work
II. Night Shift Differential, Book III, performed.
IRR
vii. CBA provision vis-a-vis
Where an employee is permitted or suffered to
work on the period covered after his work overtime
schedule, he shall be entitled to his regular
Sec 6. Relation to agreements, Rule II.
64
Sec 1, Rule II, Book III, IRR
Night Shift Differential, Book III, IRR
Nothing in this Rule shall justify an employer
in withdrawing or reducing any benefits,
supplements or payments as provided in
existing individual or collective agreements or
employer practice or policy.
B. Wages
1. Definition, components,
and exclusions
a. Wage vs. salary
b. Distinguish: facilities
and supplements
c. Bonus, 13th month pay
d. Holiday pay
2. Principles
a. No work, no pay
b. Equal pay for equal
work
c. Fair wage for fair
work
d. Non-diminution of
benefits
3. Minimum wage
a. Payment by hours
worked
b. Payment by results
4. Payment of wages
5. Prohibitions regarding
wages
6. Wage determination
a. Wage order
b. Wage distortion
C. WAGES “No work no pay” Principle
General Rule
Wage, defined A fair day‘s wage for a fair day‘s labor
Art 97 (f): Definition of Wage
Exception
"Wage" paid to any employee shall mean the
When the laborer was able, willing and
remuneration or earnings, however
ready to work but was illegally locked
designated, capable of being expressed in
out, suspended or dismissed, or
terms of money, whether fixed or ascertained
otherwise illegally prevented from
on a time, task, piece, or commission basis, or
working.65
other method of calculating the same, which is
payable by an employer to an employee under
“Equal Work for Equal Pay” Principle
a written or unwritten contract of employment
• Persons who work with substantially equal
for work done or to be done, or for services
qualifications, skill, effort and responsibility
rendered or to be rendered and includes the
under similar working conditions should be
fair and reasonable value, as determined by
paid similar salaries.66
the Secretary of Labor and Employment, of
board, lodging, or other facilities customarily
• If an employer accords employees the same
furnished by the employer to the employee.
position and rank, the presumption is that
"Fair and reasonable value" shall not include
these employees perform equal work.67
any profit to the employer, or to any person
affiliated with the employer.
Coverage
Definition of wage The rules on wages do not apply to the following
1. It is the remuneration or earnings, however 1. Household or domestic helpers,
designated capable of being expressed including family drivers, and persons in
in terms of money, the personal service of another
2. Whether fixed or ascertained on a time, task, 2. Homeoworkers engaged in needlework
piece, or commission basis, or other method 3. Workers employed in any establishment
of calculating the same, registered with the National Cottage
3. Which is payable by an employer to an Industries and Development Authority
employee (NACIDA) in accordance with RA 3470
4. Under a written or unwritten contract provided that such workers work in ther
of employment for work done or to be done, respective homes.68
or for services rendered or to be rendered 4. Workers in any duly registered
and cooperative with recommended by the
5. Includes the fair and reasonable Bureau of Cooperative Development and
value, as determined by the Secretary of upon approval of the Secretary of Labor
Labor and Employment, of board, lodging, and Employment.69
or other facilities customarily furnished by 5. Farm tenancy or leasehold;
the employer to the employee 6. Workers in registered barangay micro
6. Fair and reasonable value - shall not business enterprise70
include any profit to the employer, or to any
person affiliated with the employer.

65
Sugue v Triumph International (2009); Aklan Electric
Cooperative, Inc. vs. NLRC, 323 SCRA 258 (2000)
66
International School Alliance of Educators (ISAE) v
Quisumbing, Maccanley and Internatinal School, Inc, 333
SCRA 13 (2000)
67
Philex Gold Philippines, Inc v. Philex Bulawan Supervisors
Union, 468 SCRA 111 (2005)
68
Approved and took effect on 16 June 1962; amended by RA
5326 on 15 June 1968
69
When the cooperative cannot resort to other remedial
measures without serious loss or prejudice to its operation
70
RA 9178
Payment of Wages completion of the work.

Form of Payment
Art 102 There are only 2 instances which can justify
No employer shall pay the wages of an delayed payment of wages:
employee by means of promissory notes, 1. force majeure
vouchers, coupons, tokens, tickets, chits, or 2. fortuituous event
any object other than legal tender, even when
expressly requested by the employee. Place of Payment
Art. 104
 The law requires an employer to pay the Payment of wages shall be made at or near the
wages of an employee in legal tender. place of undertaking, except as otherwise provided
by such regulations as the Secretary of Labor and
Effect of Payment in a Medium Other than Employment may prescribe under conditions to
Legal Tender ensure greater protection of wages.
Payment of wages in a medium other than legal Exceptions
tender will not produce the effect of payment. Sec 4 Rule VIII Book III IRR
Hence, it will not discharge the employer from As a general rule, the place of payment shall
liability for unpaid wages. be at or near the place of undertaking.
Payment in a place other than the work place
When Payment in Check is Allowable shall be permissible only under the following
1. When customary on the date of effectivity of circumstances:
the Labor Code (a) When payment cannot be effected at or
2. When so stipulated in a CBA near the place of work by reason of the
3. When there is bank or other facility for deterioration of peace and order conditions, or
encashment within a radius of 1 km from the by reason of actual or impending emergencies
workplace, provided that: caused by fire, flood, epidemic or other
a. calamity rendering payment thereat
b. impossible;
c. (b) When the employer provides free
transportation to the employees back and
Frequency of Payment forth; and
Art 103 (c) Under any other analogous circumstances;
Wages shall be paid at least once every two (2) Provided, That the time spent by the
weeks or twice a month at intervals not employees in collecting their wages shall be
exceeding sixteen (16) days. If on account of considered as compensable hours worked
force majeure or circumstances beyond the
employer’s control, payment of wages on or To Whom Paid
within the time herein provided cannot be Art. 105. Direct payment of wages.
made, the employer shall pay the wages Wages shall be paid directly to the workers to
immediately after such force majeure or whom they are due, except:
circumstances have ceased. No employer shall a. In cases of force majeure rendering
make payment with less frequency than once a such payment impossible or under other
month. special circumstances to be determined
The payment of wages of employees engaged by the Secretary of Labor and
to perform a task which cannot be completed Employment in appropriate regulations,
in two (2) weeks shall be subject to the in which case, the worker may be paid
following conditions, in the absence of a through another person under written
collective bargaining agreement or arbitration authority given by the worker for the
award: purpose; or
1. That payments are made at intervals  
not exceeding sixteen (16) days, in b. Where the worker has died, in which
proportion to the amount of work case, the employer may pay the wages of
completed; the deceased worker to the heirs of the
  latter without the necessity of intestate
2. That final settlement is made upon proceedings. The claimants, if they are
 all of age, shall execute an affidavit i. Facilities
attesting to their relationship to the
deceased and the fact that they are his Facilities, defined
heirs, to the exclusion of all other Board, lodging, and other facilities customarily
persons. If any of the heirs is a minor, provided by an employer to his employees both
the affidavit shall be executed on his in agricultural and non-agricultural enterprises.
behalf by his natural guardian or next- Acceptance of facilities must be voluntary.
of-kin. The affidavit shall be presented
to the employer who shall make Facilities and Supplements, distinction
payment through the Secretary of Labor Facilities Supplements
and Employment or his representative. Items of expense, Extra remuneration
The representative of the Secretary of necessary for or special privileges
Labor and Employment shall act as employee’s or benefits given to
referee in dividing the amount paid subsistence. employees over and
among the heirs. The payment of wages above their ordinary
under this Article shall absolve the wages.
employer of any further liability with How treated
respect to the amount paid. Wage-deductible Not wage-deductible
(wage includes
facilities)
Sec 5 IRR Purpose
Payment of wages shall be made direct to the Articles or services Tools of the trade or
employee entitled thereto except in the for the benefit of articles or service
following cases: the employee or his primarily for the
(a) Where the employer is authorized in family. benefit of the
writing by the employee to pay his wages to a employer or
member of his family; necessary to the
(b) Where payment to another person of any conduct of the
part of the employee's wages is authorized by employer‘s business.
existing law, including payments for the
insurance premiums of the employee and • Criterion. In determining whether a
union dues where the right to check-off has privilege is a facility, the criterion is not so
been recognized by the employer in much its kind but it‘s purpose.71
accordance with a collective agreement or
authorized in writing by the individual Requirements for deducting value of
employees concerned; or facilities
(c) In case of death of the employee as 1. Customarily furnished by the trade -
provided in the succeeding Section. "Customarily furnished" is founded on long-
established and constant practice connoting
Sec 6 Wages of deceased employee regularity or permanency. The receipt of an
The payment of the wages of a deceased allowance on a monthly basis does not ipso
employee shall be made to his heirs without facto characterize it as regular and forming
the necessity of intestate proceedings. When part of salary because the nature of the grant
the heirs are of age, they shall execute an is a factor worth considering 72
affidavit attesting to their relationship to the 2. Voluntarily accepted in writing by the
deceased and the fact that they are his heirs to employee; and
the exclusion of all other persons. In case any 3. Charged at fair and reasonable value. 73 -
of the heirs is a minor, such affidavit shall be “fair and reasonable value” of facilities is the
executed in his behalf by his natural guardian cost of operation and maintenance,
or next of kin. Upon presentation of the including adequate depreciation plus
affidavit to the employer, he shall make reasonable allowance. It does not include
payment to the heirs as representative of the profit to employer or any person affiliated
Secretary of Labor and Employment. with employer.
71
Millares v NLRC & PICOP (1999)
72
Millares v. NLRC, (1999)
73
Mabeza v. NLRC (1997)
 ii. Wage distortion
Wages and Salaries, distinguished
• Wages and salary are in essence Wage distortion, defined
synonymous and are used A situation where an increase in prescribed wage
interchangeably. However, strictly speaking, rates results in the elimination or severe
there is a legal distinction.74 contraction of intentional quantitative
differences in wage or salary rates between and
Wage Salary among employee groups in an establishment as
Paid for skilled or Paid to white collar to effectively obliterate the distinctions
unskilled manual labor workers and denote a embodied in such wage structure based on skills,
higher grade of length of service, or other logical bases of
employment differentiation

Compensation for Compensation for Elements of wage distortion77

lower and less higher grade of 1. Existing hierarchy of positions with
responsible character employment and corresponding salary rates
of employment implies a position of 2. A significant change in the salary rate
office of a lower pay class without a
Not subject to Not exempt from concomitant increase in the salary rate
execution, execution, of a higher one
garnishment or garnishment or 3. The elimination of the distinction
attachment except for attachment76 between the two levels; and
debts related to 4. The existence of the distortion in the
necessities75 same region of the country.

[UNGOS
1. Existing hierarchy of positions with
corresponding salary rates
2. The RTWPB (or Congress) issued an
order (law)bfixing the minimum wage
3. The new minimum wage resulted in a
significant increase in the salary rate of a
lower pay class without a concomitant
increase in the salary rate of a higher one
to the extent that distinction between
the two pay classes has been eliminated
or severely contracted
4. The resulting distortion must be in the
same establishment within the region.

How to Resolve wage distortion

• Organized Establishment (with
bargaining representative)
1. Employer and the union shall
negotiate to correct the distortions.
2. Disputes shall be resolved through
the grievance procedure.
3. If still unresolved, voluntary
arbitration.

• Unorganized Establishment 78
1. Employer and Employees shall
endeavor to correct such distortions.
2. Disputes shall be settled through the
74
Songco v. NLRC (1990)
75
Art. 1708 77
Prubankers Assn. v. Prudential Bank and Co., (1999)
76
Gaa vs. CA, 1985 78
National Federation of Labor v. NLRC (1994)
 National Conciliation and Mediation iii. Non-diminution of Benefits
Board.
3. If still unresolved after 10 calendar Art. 100. Prohibition against
days of conciliation, it shall be elimination or diminution of benefits.
referred to the appropriate branch of Nothing in this Book shall be construed to
the NLRC for compulsory eliminate or in any way diminish
arbitration. supplements, or other employee benefits
being enjoyed at the time of promulgation of
• Both the employer and employee cannot this Code.
use economic weapons.
• Employer cannot declare a lock-out. General rule
Employee cannot declare a strike Prohibition against elimination or diminution of
because the law has provided for a benefits. Benefits granted voluntarily, regularly
procedure for settling and unconditionally cannot be reduced or
• The salary or wage differential does not withdrawn because benefits given regularly,
need to be maintained. voluntarily and unconditionally become part of
the terms of employment.
• In determining an employee‘s regular wage,
the pertinent stipulations in the CBA are Exceptions:
controlling, provided the result is not less Not applicable When at least one of the
than the statutory requirement.79 requisites is absent.
1. Mistake in the application of the
law80
2. Negotiated benefits81
Benefits initiated through
negotiation between Employee and
Employer, e.g. CBA, can only be
eliminated or diminished bilaterally.
3. Reclassification of Positions
e.g. loss of some benefits by
promotion.
4. Contingent or Conditional Benefits
The rule does not apply to a benefit
whose grant depends on the
existence of certain conditions, so
that the benefit is not demandable if
those preconditions are absent.

Requisites
If the following are met, then the employer
cannot remove or reduce benefits:
1. Ripened company policy
Benefit is founded on a policy which has
ripened into a practice over a long
period82
2. Practice is consistent and deliberate
and
3. Not due to error in the construction
or application of a doubtful or difficult
question of law.83
4. The diminution or discontinuance is
done unilaterally by the employer.
80
Globe Mackay Cable v. NLRC, G.R. No. 74156 (June 29,
1988)
81
Azucena
82
Prubankers Assn. vs. Prudential Bank and Co., (1999)
79
Philippine National Bank vs. PEMA, 115 SCRA 507 83
Globe Mackay Cable vs. NLRC (1988)
 The principle of non-diminution of benefits
is not violated if the action does not result in
the reduction or elimination of benefits.
 Likewise, the principle is not violated if an
employer reduces bonuses it used to grant its
employees. The grant of bonuses is an act of
liberality on the part of the employer and is
entirely dependent on profits.

Payment by Mistake
No vested right can exist if payment was done by
mistake. An employer, therefore, can stop a
benefit that has been erroneously granted
without violating the principle of non-
diminution of benefits.

Mistake is presumed if something which had

never been due was given. Under the
circumstances, the employer can not only
discontinue the benefit but may even recover
what it has erroneously paid, under the principle
of solution indebiti.
iv. Worker’s preference in case of Jurisprudence
bankruptcy Summary
1. It only creates a preference and not a
license;
Art. 110. Worker preference in case of
2. Worker preference shall apply only to
bankruptcy.
ordinary preferred credits (meaning
In the event of bankruptcy or liquidation of an
unencumbered property)
employer's business, his workers shall enjoy
3. It must yield to special preferred credits
first preference as regards their wages and
where liens are attached;
other monetary claims, any provision of
4. Covers unpaid wages as well as other
law to the contrary notwithstanding.
monetary claims; and
5. Judicial declaration of insolvency or
Such unpaid wages and monetary claims shall
bankruptcy and filing of claims by
be paid in full before the claims of the
workers still required.
Government and other creditors may be paid.
(As amended by R. A. 6715)
• Article 110 of the Labor Code did not sweep
away the overriding preference accorded
Art. 1707, Civil Code
under the scheme of the Civil Code: 84
The laborer's wages shall be a lien on the 1. Tax claims of the government or any
goods manufactured or the work done. subdivision thereof which constitute
a lien upon properties of the
Art 2241 (6) Insolvent still preferred over wages.
With reference to specific movable property of 2. The use of the phrase "first
the debtor, the following claims or liens shall preference" in Article 110 indicates
be preferred: that what Article 110 intended to
modify is the order of preference
6. Claims for laborers' wages, on the goods found in Art. 2244, which pertains to
manufactured or the work done; unencumbered property.
3. Art. 2241 and 2242 pertain to
Art 2242 (2) and (3) encumbered property and such
With reference to specific immovable property property shall still remain reserved
and real rights of the debtor, the following to its respective lienholder.
claims, mortgages and liens shall be preferred, 4. Exception is if either 2241 (6) or
and shall constitute an encumbrance on the 2242 (3) applies.
immovable or real right: 5. Primary effect
It moves wages from 2nd priority in
2. Credits for services rendered the insolvent 2244 to 1st priority; as if 2244 (2)
by employees, laborers, or household became 2244 (1).
helpers for one year preceding the
commencement of the proceedings in • Art. 110 of the Labor Code cannot be viewed
insolvency. in isolation but must be read in relation to
the Civil Code scheme on classification and
3. Claims of laborers, masons, mechanics and preference of credits. 85
other workmen, as well as of architects,
engineers and contractors, engaged in the Requirements of judicial liquidation or
construction, reconstruction or repair of declaration of bankruptcy still intact;
buildings, canals or other works, upon workers must also file their claims.
said buildings, canals or other works
A preference applies only to claims which do
not attach to specific properties. A lien
creates a charge on a particular property.
The right of first preference as regards
unpaid wages recognized by Art. 110 does
not constitute a lien on the property of the
84
Republic vs. Peralta (1987)
85
Development Bank of the Philippines vs. NLRC (1995)
 insolvent debtor in favor of workers. It is but claims of workers now take precedence
a preference of credit in their favor, a over claims for funeral expenses.
preference in application.
Taxes vis a vis Money Claims of
• Article 110 applies only in cases of Workers
bankruptcy or liquidation of employer’s With regard to special With regard to
business. A preference of credits bestows preferred credit (No. ordinary preferred
upon the preferred creditor the right to have 1 Art. 2241 and No. 1 credits, monetary
his credit satisfied ahead of other claims Art. 2242), taxes claims of workers
against the debtor. Therefore, it becomes take precedence take precedence
material only when the properties of the over monetary claims over taxes due the
debtor are insufficient to pay his debts in of workers. national government,
full, because if the debtor is able to pay all any province, any
his creditors in full, then there is no need to city, or any
determine which creditors shall be paid first. municipality, except
those mentioned in
The preferential right of credit attains No. 1 Art. 2241 and
significance only after the properties of the No. 1 Art. 2242.
debtor have been inventoried and liquidated, Mortgage vis a vis Money Claims of
and the claims of various creditors have been Workers
established If the monetary If the monetary
claims of the workers claims of the workers
The right of preference given to workers fall under special fall under ordinary
cannot exist in any effective way prior to its preferred credit, they preferred credit, the
presentation in distribution proceedings. It will be treated mortgage credit will
will find application only in judicial concurrently with take precedence over
proceedings wherein all creditors are mortgage credits. such monetary
convened, their claims ascertained and claims.
inventoried and the preferences determined
in order to subject the property to the
payment of his obligations. v. Wage protection
Article 110 cannot be invoked without a 1. Prohibition against interference in wage
formal declaration of bankruptcy or a disposal
liquidation order. 2. Prohibition against wage deduction
3. Prohibition against requirement to make
• Preference does not apply when the deposits for loss or damage
Employer corporation is under rehabilitation 4. Prohibition against withholding of wages
or receivership. 86 5. Prohibition against deduction to ensure
employment
• The monetary claims under Art. 110 are 6. Prohibition against retaliatory measures
ordinary preferred credits. They do not 7. Prohibition against False Reporting
impress any lien on the property of the 8. Prohibition against keeping of
employer but merely creates preference of employee’s records in a place than the
credit in favor of employees. workplace
9. Prohibition against garnishment or
• Article 110 modifis the order of preference in execution
the Civil Code:

1. Removing the one year limitation in Art.

2244(2) and
2. Moving up claims for unpaid wages and
other monetary claims of laborers or
workers from second priority to first
priority. Unpaid wages and monetary
86
Rubberworld (Phils.), Inc. vs. NLRC (1999)
 a. Prohibition against b. Prohibition against wage
interference in wage deduction
disposal
Art. 113. Wage deduction.
Art. 112. Non-interference in disposal of No employer, in his own behalf or in behalf of
wages. any person, shall make any deduction from
No employer shall limit or otherwise interfere the wages of his employees, except:
with the freedom of any employee to dispose
of his wages. He shall not in any manner force, a. In cases where the worker is insured
compel, or oblige his employees to purchase with his consent by the employer, and the
merchandise, commodities or other property deduction is to recompense the employer
from any other person, or otherwise make use for the amount paid by him as premium
of any store or services of such employer or on the insurance;
any other person.  
b. For union dues, in cases where the
1. No employer shall limit or otherwise right of the worker or his union to check-
interfere with the freedom of any off has been recognized by the employer
employee to dispose of his wages. or authorized in writing by the individual
2. He shall not in any manner force, worker concerned; and
compel, or oblige his employees  
3. To purchase merchandise, commodities c. In cases where the employer is
or other property from any other person, authorized by law or regulations issued by
or otherwise make use of any store or the Secretary of Labor and Employment.
services of such employer or any other
person.
General Rule
Related Civil Code Provisions No employer, in his own behalf or in behalf of
Art. 1705, Civil Code any person, shall make any deduction from the
The laborer's wages shall be paid in legal wages of his employees.
currency.
Art. 1706, Civil Code Exceptions
Withholding of the wages, except for a debt 1. Employee is insured with his
due, shall not be made by the employer. consent by the employer, and the
Art. 1707, Civil Code deduction is to recompense the
employer for the amount paid by
The laborer's wages shall be a lien on the
him as premium on the insurance;
goods manufactured or the work done.
2. For union dues, in cases where the
Art. 1708, Civil Code
right of the worker or his union to
The laborer's wages shall not be subject to check-off has been recognized by the
execution or attachment, except for debts employer or authorized in writing by
incurred for food, shelter, clothing and the individual worker concerned;
medical attendance. and
Art. 1709, Civil Code 3. In cases where the employer is
The employer shall neither seize nor retain authorized by law or regulations
any tool or other articles belonging to the issued by the Secretary of Labor and
laborer. Employment, such as:
a. Employee debt to employer is
due and demandable87
b. Attachment or execution in
cases of debts incurred for
necessities: food, shelter,
clothing, medical attendance88
c. Withholding tax
d. Deductions of a legally
87
Art 1706, Civil Code
88
Art 1708, Civil Code
 established cooperative
e. Payment to 3rd parties upon
written authority by employee
f. Deductions for loss or damage
g. SSS, Medicare, Pag-IBIG
premiums
h. Deduction for value meals and
other facilities.

• It shall be unlawful to make any deduction

from the wages of any Employee for the
benefit of the Employer as consideration of
a promise of employment or retention in
employment. (Art. 117) or to retaliate
against the Employee who filed a complaint.
(Art. 118)
• Rationale
Prohibition seeks to protect the employee against
unwarranted practices that would diminish his
compensation without his knowledge and
consent.89

With Employee’s Without

consent in Writing Employee’s
consent
1. Philhealth, SSS, 1. Worker‘s
Pag-ibig insurance
2. Value of meals and acquired by the
other facilities employer
3. Payments to third 2. Union dues, where
persons with the right to check-
employee‘s off is recognized
consent by the employer
4. Deduction of (provided in the
absences CBA)
5. Union dues, where 3. Due and
check-off is not demandable debts
provided in the of the employee to
CBA. the employer
4. Deductions made
in compliance
with writs of
execution against
employee.
5. Deductions made
in compliance
with legal
mandate.
6. Written
authorization is
not required to
deduct reasonable
fees to finance
mandatory
activities under
the Labor Code

89
Radio Communication of the Phil., Inc. v. Sec. of Labor
(1989)
 c. Prohibition against Daily Deposits to Cover Shortage in
requirement to make Boundary Illegal
• The article providing the rule on deposits for
deposits for loss or loss or damage to tools, materials or
damage equipment supplied by the employer does
not apply to or permit deposits to defray any
Art. 114. Deposits for loss or damage. deficiency which the taxi driver may incur in
No employer shall require his worker to make the remittance of his "boundary."
deposits from which deductions shall be made • When employee stops working for employer,
for the reimbursement of loss of or damage to the alleged purpose for the unauthorized
tools, materials, or equipment supplied by the deposits no longer exists. Any balance due
employer, except when the employer is must be returned to employee with legal
engaged in such trades, occupations or interest.91
business where the practice of making
deductions or requiring deposits is a d. Prohibition against
recognized one, or is necessary or desirable as withholding of wages
determined by the Secretary of Labor and
Employment in appropriate rules and Art. 116. Withholding of wages and
regulations. kickbacks prohibited
Art. 115. Limitations. It shall be unlawful for any person, directly or
No deduction from the deposits of an indirectly, to withhold any amount from the
employee for the actual amount of the loss or wages of a worker or induce him to give up
damage shall be made unless the employee any part of his wages by force, stealth,
has been heard thereon, and his responsibility intimidation, threat or by any other means
has been clearly shown. whatsoever without the worker’s consent.

General Rule The provision has two aspects, to wit:

Employers are forbidden from requiring its 1. Withholding any amount from the wages of a
employees to make deposits to answer for loss or worker without his consent
damage to tolls or equipment. No deposits from 2. Inducing an employee to give up any part of
which deductions shall be made for the his wages by force, stealth, intimidation, threat
reimbursement of loss of or damage to tools, or by any other means.
materials, or equipment supplied by the
employer In cases of unlawful withholding of wages, the
employer may be assessed attorney’s fees
Exception: equivalent to 10% of the amount of wages
1. Recognized industry practice or recovered.
2. When such is necessary or desirable
as determined by the DOLE
e. Prohibition against
Secretary in appropriate rules and
regulations. deduction to ensure
Conditions for the deductions employment
1. Employee is clearly shown to be
responsible for the loss or damage Art. 117. Deduction to ensure
2. The Employee is given ample employment
opportunity to show cause why It shall be unlawful to make any deduction
deduction should not be made; from the wages of any employee for the
3. The amount of the deduction is fair and benefit of the employer or his representative
reasonable and shall not exceed the or intermediary as consideration of a promise
actual loss or damage; and of employment or retention in employment.
4. The deduction from the employee‘s wage
does not exceed 20% of the employee‘s Even if the employees agreed to the
wages in a week.90 arrangement, it cannot be given any effect
because it is contrary to public policy.

90
Art. 115, Labor Code 91
Five J Taxi vs. NLRC (1994)
 f. Prohibition against The keeping of the employee's records in
retaliatory measures another place is prohibited.

Art. 118. Retaliatory measures i. Prohibition against

It shall be unlawful for an employer to refuse garnishment or execution
to pay or reduce the wages and benefits,
discharge or in any manner discriminate Art. 1708, Civil Code
against any employee who has filed any The laborer's wages shall not be subject to
complaint or instituted any proceeding under execution or attachment, except for debts
this Title or has testified or is about to testify incurred for food, shelter, clothing and
in such proceedings. medical attendance.

• This article is similar to Art. 248(f) which General Rule

classifies as unfair labor practice (ULP) an The laborer's wages shall not be subject to
employer‘s prejudicial act against an execution or attachment
employee who gave or is about to give a
testimony under the Code. However, they Exception
differ on the subject of the testimony. For debts incurred for food, shelter,
clothing and medical attendance
Art. 118 Art. 248(f)
Subject of testimony Subject is anything • Article 1708 of the New Civil Code to operate
is wages under the Code in favor of any but those who are laboring
The employer‘s The employer‘s men or women in the sense that their work is
retaliatory act is retaliatory act is ULP. manual. Persons belonging to this class
unlawful but not ULP usually look to the reward of a day's labor for
(unless the act is immediate or present support, and such
intended to impair persons are more in need of the exemption
the right to self- than any others.
organization of
employees) • In cases of unlawful withholding of wages,
the culpable party may be assessed
attorney's fees equivalent to 10% of the
g. Prohibition against False amount of wages recovered.
Reporting
• It shall be unlawful for any person to
Art. 119. False reporting demand or accept, in any judicial or
It shall be unlawful for any person to make administrative proceedings for the recovery
any statement, report, or record filed or kept of the wages, attorney‘s fees, which exceed
pursuant to the provisions of this Code 10% of the amount of wages recovered.
knowing such statement, report or record to
be false in any material respect.

h. Prohibition against
keeping of employee’s
records in a place than the
workplace
Sec. 11, Rule X, Book II, IRR
All employment records of the employees of
an employer shall be kept and maintained in
or about the premises of the workplace –
main or branch office or establishment, if any,
depending upon where the employees are
regularly assigned.
vi. Criteria/factors for wage setting judgment of the Regional Board, conditions
make such local differentiation proper and
Art. 99. Regional Minimum Wages necessary to effectuate the purpose of this
The minimum wage rates for agricultural and Title.
non-agricultural employees and workers in
each and every region of the country shall be Any person, company, corporation,
those prescribed by the Regional Tripartite partnership or any other entity engaged in
Wages and Productivity Boards. business shall file and register annually with
the appropriate Regional Board, Commission
Art.124. Standards/Criteria for and the National Statistics Office, an itemized
minimum wage fixing. listing of their labor component, specifying
The regional minimum wages to be the names of their workers and employees
established by the Regional Board shall be as below the managerial level, including learners,
nearly adequate as is economically feasible to apprentices and disabled/handicapped
maintain the minimum standards of living workers who were hired under the terms
necessary for the health, efficiency and prescribed in the employment contracts, and
general well-being of the employees within the their corresponding salaries and wages.
framework of the national economic and
social development program. In the Where the application of any prescribed wage
determination of such regional minimum increase by virtue of a law or wage order
wages, the Regional Board shall, among other issued by any Regional Board results in
relevant factors, consider the following: distortions of the wage structure within an
establishment, the employer and the union
a. The demand for living wages shall negotiate to correct the distortions. Any
  dispute arising from wage distortions shall be
b. Wage adjustment vis-a -vis the resolved through the grievance procedure
consumer price index under their collective bargaining agreement
  and, if it remains unresolved, through
c. The cost of living and changes or voluntary arbitration. Unless otherwise agreed
increases therein by the parties in writing, such dispute shall be
  decided by the voluntary arbitrators within
d. The needs of workers and their ten (10) calendar days from the time said
families dispute was referred to voluntary arbitration.
 
e. The need to induce industries to In cases where there are no collective
invest in the countryside agreements or recognized labor unions, the
  employers and workers shall endeavor to
f. Improvements in standards of living correct such distortions. Any dispute arising
therefrom shall be settled through the
 
National Conciliation and Mediation Board
g. The prevailing wage levels
and, if it remains unresolved after ten (10)
 
calendar days of conciliation, shall be referred
h. Fair return of the capital invested and
to the appropriate branch of the National
capacity to pay of employers
Labor Relations Commission (NLRC). It shall
 
be mandatory for the NLRC to conduct
i. Effects on employment generation
continuous hearings and decide the dispute
and family income; and
within twenty (20) calendar days from the
 
time said dispute is submitted for compulsory
j. The equitable distribution of income
arbitration.
and wealth along the imperatives of
economic and social development.
The pendency of a dispute arising from a wage
distortion shall not in any way delay the
The wages prescribed in accordance with the
applicability of any increase in prescribed
provisions of this Title shall be the standard
wage rates pursuant to the provisions of law or
prevailing minimum wages in every region.
wage order.
These wages shall include wages varying with
industries, provinces or localities if in the
 As used herein, a wage distortion shall mean a 1. Demand for living wages;
situation where an increase in prescribed 2. Wage adjustment vis-a-vis the
wage rates results in the elimination or severe consumer price index;
contraction of intentional quantitative 3. Cost of living and changes or increases
differences in wage or salary rates between therein;
and among employee groups in an 4. The needs of workers and their families;
establishment as to effectively obliterate the 5. The need to induce industries to invest
distinctions embodied in such wage structure in the countryside;
based on skills, length of service, or other 6. Improvements in standards of living;
logical bases of differentiation. 7. Prevailing wage levels;
8. Fair return of the capital invested and
All workers paid by result, including those capacity to pay of employers;
who are paid on piecework, takay, pakyaw or 9. Effects in employment generation and
task basis, shall receive not less than the family income; and
prescribed wage rates per eight (8) hours of 10. Equitable distribution of income and
work a day, or a proportion thereof for wealth along the imperatives of
working less than eight (8) hours. economic and social development.

All recognized learnership and apprenticeship Procedure for Wage Fixing by Regional
agreements shall be considered automatically Board
modified insofar as their wage clauses are 1. Investigate and study pertinent facts,
concerned to reflect the prescribed wage rates. based on criteria set in Art. 124
(As amended by Republic Act No. 6727, June 2. Conduct public hearings or consultations
9, 1989) with notice to employer and employee
groups, provinces, city, municipal
officials and other interested parties
Factors/Criteria in determining regional 3. Decide to ISSUE or NOT TO ISSUE a
minimum wages: wage order

Frequency Wage Order

Wage orders issued may not be Wage orders take effect after 15 days from its
disturbed for 12 months from effective complete publication in at least one newspaper
date; this serves as a bar for petitions for of general circulation in the region.
wage hikes as well
Appeal from Wage Orders
EXCEPT Wage orders may be appealed by any aggrieved
When Congress passes a new law party to the NWPC within 10 calendar days from
affecting wages or other supervening publication of such order
circumstances
The filing of appeal does not stay the effectivity
Effectivity of the wage order unless the appellant files a
If it decides to ISSUE a wage order, the surety bond to ensure compliance in the event
wage order takes effect after 15 days the wage order is affirmed.
from complete publication in at least 1
newspaper of general circulation in the Payment of Minimum Wage Mandatory
region Compliance with minimum wage law is
4. Appeal wage order to Commission mandatory. Failure or refusal to pay prescribed
within 10 calendar days; mandatory for minimum wage will subject the employer to the
the Commission to decide within 60 following sanctions:
calendar days from filing 1. Double indemnity
2. Criminal liability
• Filing of an appeal DOES NOT STAY order
unless appellant files an undertaking with a Fixing Compensation of Piece-Rate
surety, to guarantee payment of employees if Workers
the wage order is affirmed (as amended by
RA 6727) The compensation of piece-rate workers may be
fixed through time and motion studies of the
DOLE upon its own initiative or upon petition by
an interested party. The basis for fixing the
compensation of piece-rate workers is the
performance of an “ordinary worker of minimum
skill or ability”. An ordinary worker of minimum
skill or ability is the average worker of the lowest
50% producing group representing 50% of the
total number of employees engaged in similar
employment in a particular establishment,
excluding learners, apprentices and handicapped
workers employed therein.

Art. 124. Standards for wage fixing.

xxx All workers paid by result, including those
who are paid on piecework, takay, pakyaw or
task basis, shall receive not less than the
prescribed wage rates per eight (8) hours of
work a day, or a proportion thereof for
working less than eight (8) hours. xxx
Agencies on Wage Studies and Determination
National Wages and Productivity Regional Tri-partite Wages and
Commission Productivity Boards
Composition 1. Ex Officio Chairman: Secretary of Labor 1. Chairman: Regional Director of DOLE
and Employment 2. Vice Chairman: Regional Director of NEDA
2. Ex-officio vice-chairman: Director-General 3. Vice Chairman: Regional Director of DTI
of NEDA 4. 2 Members from the employer sector
3. Two members each from the workers‘ and 5. 2 Members from the employee sector
employers‘ sectors who shall be appointed 6. Secretariat
by the President of the Philippines upon the
recommendation of the Sec. of Labor
4. Executive Director of the Commission
Secretariat 1. Headed by the Executive Director Tri-partite body – 3 sectors are represented:
2. Two (2) Deputy Directors 1. Government
2. Employers
3. Employees.

Powers and 1. To act as the national consultative and 1. To develop plans, programs and projects
Functions advisory body to the President of the relative to wages, incomes and productivity
Philippines and Congress on matters improvement for their respective regions;
relating to wages, incomes and 2. To determine and fix minimum wage rates
productivity; applicable in their regions, provinces or
2. To formulate policies and guidelines on industries therein and to issue the
wages, incomes and productivity corresponding wage orders, subject to
improvement at the enterprise, industry guidelines issued by the Commission;
and national levels; 3. To undertake studies, researches, and
3. To prescribe rules and guidelines for the surveys necessary for the attainment of
determination of appropriate minimum their functions, objectives and programs,
wage and productivity measures at the and to collect and compile data on wages,
regional, provincial, or industry levels; incomes, productivity and other related
4. To review regional wage levels set by the information and periodically disseminate
Regional Tripartite Wages and Productivity the same;
Boards to determine if these are in 4. To coordinate with the other Regional
accordance with prescribed guidelines and Boards as may be necessary to attain the
national development plans; policy and intention of this Code;
5. To undertake studies, researches and 5. To receive, process and act on applications
surveys necessary for the attainment of its for exemption from prescribed wage rates
functions and objectives, and to collect and as may be provided by law or any Wage
compile data and periodically disseminate Order; and
information on wages and productivity and 6. To exercise such other powers and
other related information, including, but functions as may be necessary to carry out
not limited to, employment, cost-of-living, their mandate under this Code.93
labor costs, investments and returns;
6. To review plans and programs of the
Regional Tripartite Wages and Productivity
Boards to determine whether these are
consistent with national development
plans;
7. To exercise technical and administrative
supervision over the Regional Tripartite
Wages and Productivity Boards;
8. 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
9. To exercise such powers and functions as
may be necessary to implement this Act.92

92
Art 121, Labor Code
93
Art 122, Labor Code
D. REST DAYS The domestic worker shall be entitled to at
least 24 consecutive hours of rest in a week.
Coverage and Scheduling
Art 91. Right to weekly rest day.
It shall be the duty of every employer, Who are not entitled:
whether operating for profit or not, to provide The following are not entitled to premium pay
each of his employees a rest period of not for working on a special holiday or rest day:
less than twenty-four (24) consecutive 5. Government employees and GOCCs with
hours after every six (6) consecutive special charters;
normal work days. 6. Managerial employees
7. Officers and members of managerial staff
The employer shall determine and schedule 8. Field personnel
the weekly rest day of his employees subject 9. Domestic Helpers
to collective bargaining agreement 10. Persons in the personal service of another
and to such rules and regulations as the 11. Family members of the employer who are
Secretary of Labor and Employment may dependent on him for support
provide. However, the employer shall 12. Workers paid by results.
respect the preference of employees as
to their weekly rest day when such preference Compulsory Work
is based on religious grounds. Article 92. When employer may require
work on a rest day.
The employer may require his employees to
Rest Day of Health Personnel work on any day:
Art. 83
a. In case of actual or impending
Health personnel in cities and municipalities emergencies caused by serious accident,
with a population of at least one million fire, flood, typhoon, earthquake, epidemic
(1,000,000) or in hospitals and clinics with a or other disaster or calamity to prevent
bed capacity of at least one hundred (100) loss of life and property, or imminent
shall hold regular office hours for eight (8) danger to public safety;
hours a day, for five (5) days a week,
exclusive of time for meals, except where the b. In cases of urgent work to be performed
exigencies of the service require that such on the machinery, equipment, or
personnel work for six (6) days or forty-eight installation, to avoid serious loss which
(48) hours, in which case, they shall be the employer would otherwise suffer;
entitled to an additional compensation of at
least thirty percent (30%) of their regular c. In the event of abnormal pressure of
wage for work on the sixth day. For purposes work due to special circumstances, where
of this Article, “health personnel” shall include the employer cannot ordinarily be
resident physicians, nurses, nutritionists, expected to resort to other measures;
dietitians, pharmacists, social workers,
laboratory technicians, paramedical d. To prevent loss or damage to
technicians, psychologists, midwives, perishable goods;
attendants and all other hospital or clinic
personnel. e. Where the nature of the work requires
continuous operations and the stoppage of
Note: This does not apply to health workers in work may result in irreparable injury or
government service. They are excluded from loss to the employer; and
the coverage of Article 82-96 and their
employment benefits are defined in R.A. 7305, f. Under other circumstances analogous
The Magna Carta of Public Health Workers or similar to the foregoing as determined
by the Secretary of Labor and
Rest Day of Domestic Workers Employment.
Sec 21. Weekly Rest Period
Domestic Workers Act Sec.6. When work on rest day
authorized, Rule III, Book III, IRR
 An employer may require any of his Compensation
employees to work on his scheduled rest day Article 93. Compensation for rest day,
for the duration of the following emergencies Sunday or holiday work.
and exceptional conditions:
a. Where an employee is made or permitted
a. In case of actual or impending to work on his scheduled rest day, he shall
emergencies caused by serious accident, be paid an additional compensation
fire, flood, typhoon, earthquake, epidemic of at least thirty percent (30%) of
or other disaster or calamity, to prevent his regular wage. An employee shall be
loss of life or property, or in cases of force entitled to such additional compensation
majeure or imminent danger to public for work performed on Sunday only when
safety; it is his established rest day.

b. In case of urgent work to be performed b. When the nature of the work of the
on machineries, equipment or employee is such that he has no regular
installations to avoid serious loss which workdays and no regular rest days can be
the employer would otherwise suffer; scheduled, he shall be paid an
additional compensation of at least
c. In the event of abnormal pressure of thirty percent (30%) of his regular
work due to special circumstances, where wage for work performed on
the employer cannot ordinarily be Sundays and holidays.
expected to resort to other measures;
c. Work performed on any special holiday
d. To prevent serious loss of shall be paid an additional compensation
perishable goods; of at least thirty percent (30%) of the
regular wage of the employee. Where such
e. Where the nature of the work is such holiday work falls on the employee’s
that the employees have to work scheduled rest day, he shall be entitled to
continuously for seven (7) days in a week an additional compensation of at least
or more, as in the case of the crew fifty per cent (50%) of his regular wage.
members of a vessel to complete a voyage
and in other similar cases; and d. Where the collective bargaining
agreement or other applicable
f. When the work is necessary to avail of employment contract stipulates the
favorable weather or payment of a higher premium pay than
environmental conditions where that prescribed under this Article, the
performance or quality of work is employer shall pay such higher
dependent thereon. rate.

No employee shall be required against his will When work

to work on his scheduled rest day except Premium pay
performed
under circumstances provided in this Section:
On scheduled rest day 30% of Regular wage
Provided, However, that where an employee
On Sunday ONLY
volunteers to work on his rest day under other 30% of regular wage
established rest day
circumstances, he shall express such desire in
writing, subject to the provisions of Section 7 30% of regular wage
No regular work and of work performed
hereof regarding additional compensation.
rest days on Sundays and
Holidays
On any special
30% of regular wage
holidays/special day
On any regular
holiday falling on 30% of regular wage
scheduled rest day
Implementing rules schedules of weekly rest through written
Sec.1. General statement on coverage, notices posted conspicuously in the work
Rule III, Book III, IRR place at least one week before they
This Rule shall apply to all employers whether become effective.
operating for profit or not, including public
utilities operated by private persons.
Sec.7. Compensation on rest
Sec.2. Business on Sundays/Holidays., day/Sunday/holiday, Rule III, Book III,
Rule III, Book III, IRR IRR
All establishments and enterprises may a. Except those employees referred to under
operate or open for business on Sundays and Section 2, Rule I, Book Three, an
holidays provided that the employees are employee who is made or permitted to
given the weekly rest day and the benefits as work on his scheduled rest day shall be
provided in this Rule. paid with an additional compensation of
at least 30% of his regular wage. An
Sec.3. Weekly rest day, Rule III, Book employee shall be entitled to such
III, IRR additional compensation for work
Every employer shall give his employees a performed on a Sunday only when it is his
rest period of not less than twenty-four (24) established rest day.
consecutive hours after every six consecutive
normal work days. b. Where the nature of the work of the
employee is such that he has no regular
Sec.4. Preference of employee, Rule III, work days and no regular rest days can be
Book III, IRR scheduled, he shall be paid an additional
The preference of the employee as to his compensation of at least 30% of his
weekly day of rest shall be respected by the regular wage for work performed on
employer if the same is based on religious Sundays and holidays.
grounds. The employee shall make known his
preference to the employer in writing at least c. Work performed on any special holiday
seven (7) days before the desired effectivity of shall be paid with an additional
the initial rest day so preferred. compensation of at least 30% of the
regular wage of the employees. Where
Where, however, the choice of the employee as such holiday work falls on the employee's
to his rest day based on religious grounds will scheduled rest day, he shall be entitled to
inevitably result in serious prejudice or additional compensation of at least 50% of
obstruction to the operations of the his regular wage.
undertaking and the employer cannot
normally be expected to resort to other d. The payment of additional compensation
remedial measures, the employer may so for work performed on regular holiday
schedule the weekly rest day of his choice for shall be governed by Rule IV, Book Three,
at least two (2) days in a month. of these regulations.

e. Where the collective bargaining

agreement or other applicable
Sec.5. Schedule of rest day, Rule III,
employment contract stipulates the
Book III, IRR
payment of a higher premium pay than
a. Where the weekly rest is given to all
that prescribed under this Section, the
employees simultaneously, the employer
employer shall pay such higher rate.
shall make known such rest period by
means of a written notice posted
conspicuously in the work place at least
one week before it becomes effective. Sec.8. Paid-off days, Rule III, Book III,
IRR
b. Where the rest period is not granted to all
employees simultaneously and Nothing in this Rule shall justify an employer
collectively, the employer shall make in reducing the compensation of his
known to the employees their respective employees for the unworked Sundays,
holidays, or other rest days which are
considered paid-off days or holidays by
agreement or practice subsisting upon the
effectivity of the Code.

Sec.9. Relation to agreements, Rule III,

Book III, IRR

Nothing herein shall prevent the employer

and his employees or their representatives in
entering into any agreement with terms more
favorable to the employees than those
provided herein, or be used to diminish any
benefit granted to the employees under
existing laws, agreements, and voluntary
employer practices.
E. HOLIDAYS Coverage
General rule: Every worker should be paid his
Art. 94. Right to holiday pay. regular daily wage during regular holidays
a. Every worker shall be paid his regular
daily wage during regular holidays, except Exception:
in retail and service establishments Holiday pay benefits shall not cover the
regularly employing less than ten (10) following persons
workers;
  1. Those of the government and any of
b. The employer may require an employee to its political subdivisions, including
work on any holiday but such employee government-owned and controlled-
shall be paid a compensation equivalent to corporations with special charters
twice his regular rate; and 2. Those of retail and service
  establishments regularly employing
c. As used in this Article, "holiday" includes: less than 10 workers
New Year’s Day, Maundy Thursday, Good
Friday, the ninth of April, the first of May, a. Retail Establishment
the twelfth of June, the fourth of July, the One principally engaged in
thirtieth of November, the twenty-fifth the sale of goods to end-
and thirtieth of December and the day users for personal or
designated by law for holding a general household use96
election.94
b. Service establishment
One principally engaged in
the sale of service to
• Holiday pay is a legislated benefit enacted as individuals for their own or
part of Constitutional imperative that the household use and is
state shall afford protection to labor. Its generally recognized as
purpose is not merely “to prevent such97
diminution of the monthly income of the
workers on account of work interruptions. 3. Domestic helpers
Xxx although the worker is forced to take a 4. Persons in the personal service of
rest, he earns what he should earn, that is, another
his holiday pay.” It is also intended to 5. Family members of employer who
enable the worker to participate in are dependent upon him for support
the national celebrations held during 6. Managerial employees
the days identified as with great 7. Officers and members of managerial
historical and cultural significance.95 staff
8. Field personnel and other employees
• Holiday pay is premium given to an whose time and performance is
employee during regular holidays, the unsupervised by the employer
purpose of whice is to prevent diminution of including those who are engaged on
monthly income of employees on account of task or contract basis, purely
work interruptions. commission basis or those who
are paid a fixed amount for the
performing work irrespective of the
time consumed in the performance
thereof.

Mechanics of the availment of the holiday

pay benefit
1. The employee is entitled to the payment
of his regular daily basic wage
(100%) during said holidays, even if

94
Amended by RA 9492 96
IRR of RA 6727. Wage Rationalization Act
95
Asian Transmission v CA (2004) 97
IRR of RA 6727. Wage Rationalization Act
 the worker did not report for work on i. Holidays Covered
said days.
Regular Holidays and Nationwide Special
Provided that he was present or was on Days98
leave of absence with pay on the work Unless otherwise modified by law, and or
day immediately preceding the holiday. proclamation, the following regular holidays and
special days shall be observed in the country:
2. If the employee was suffered to work
during the holidays, he will be entitled to Regular Holidays
payment of holiday premium of 200% 1. New year’s Day. Jan 1
of his basic wage (100% of basic wage 2. Maundy Thursday
plus 100%) 3. Good Friday
4. Eidul Fitr
5. Araw ng Kagitingan
(Bataaan and Corregidor Day).
Monday nearest Apr 9
6. Labor Day. Mon nearest May 1
7. Independence Day. Mon nearest
Jun 12
8. National Heroes Day. Last mon of
Aug
9. Bonifacio Day. Mon nearest Nov 3
10. Christmas Day. Dec 25
11. Rizal Day. Mon nearest Dec 30

Nationwide Special Holidays

1. Ninoy Aquino Day. Mon nearest 21
2. All Saints Day. Nov 1
3. Last Day of the Year. Dec 31

In the event the holiday falls on a Wednesday,

the holiday will be observed on the Monday of
the week. If the holiday falls on a Sunday, the
holiday will be observed on the Monday that
follows:

Provided, That for movable holidays, the

President shall issue a proclamation, at
least six months prior to the holiday
concerned, the specific date that shall be
declared as a nonworking day:

Provided, however, The Eidul Adha shall

be celebrated as a regional holiday in the
Autonomous Region in Muslim
Mindanao."

Muslim holidays

Article 169. Official Muslim holidays,

PD 1083 Code of Muslim Personal Laws
The following are hereby recognized as legal
Muslim holidays:

98
RA 9492
 a. 'Amun Jadid (New Year), which falls on +
overtime
the first day of the first lunar month of 30% of the rate
Muharram; Regular daily wage
Work on special
+
holidays
b. Maulid-un-Nabi (Birthday of the Prophet 30% of regular wage
Muhammad), which falls on the twelfth Work on special Regular daily wage
day of the third lunar month of Rabi-ul- holiday +
Awwal; + 50% of the regular
Overtime daily wage
c. Lailatul Isra Wal Mi'raj (Nocturnal
Journey and Ascension of the Prophet • Special holidays are not the same as
Muhammad), which falls on the twenty- special working holidays
seventh day of the seventh lunar month of
Rajab; Special holidays:
a. National Special days
d. 'Id-ul-Fitr (Hari Raya Pausa), which falls Ninoy Aquino day
on the first day of the tenth lunar month All Saints day
of Shawwal, commemorating the end of Last day of new year
the fasting season; and
b. Declared Special days
e. 'Id-ul-Adha (Hari Raja Haji), which falls Special Non-Working Holiday
on the tenth day of the twelfth lunar Special Public Holiday
month of Dhu 1-Hijja. Special National Holiday

• Special working holiday is considered an

• There should be no distinction ordinary working holiday, so there is no
between muslims and non-muslims premium pay
as regards to the payment of benefits
for Muslim Holidays. Wages and other Double holiday pay
emoluments granted by aw to the working DOLE explanatory Bulletin on Worker’s
man are determined on the basis of the Entitlement to Holiday pay on 9 April 1993, if 2
criteria laid down by laws and not on holidays fall on the same day
worker’s faith.99
1. If unworked
ii. Computation of Holiday pay 200% of basic wage

When work 2. If worked

Premium pay 300% of basic wage
performed
Work on any regular 200% of regular daily
holiday wage • Double Holiday Rule for Monthly-paid
Work on any regular employees
200% of regular daily For covered employees whose monthly
holiday
wage salaries are computed based on 365 days and
+
+ for those other employees who are paid
overtime
30% of such amount using factor 314, or 262, or any other factor
(if it exceeds 8 hours)
Work on any regular which already considers the payment for the
200% of regular daily 11 regular holidays, NO additional payment
holiday which falls on
wage + 30% of such is due them.100
the scheduled rest
amount
day
Work on any regular Regular holiday- Successive holiday pay101
holiday which falls on on0restday rate Employee is entitled to holiday for both days if:
the scheduled rest (200% of regular
day, daily wage + 30% of 1. Employee is present on day immediately
+ such amount) preceding first holiday
100
BWC-WHSD Opinion No. 053, s. 1998
99
San Miguel Corp v CA (2002) 101
Sec 10, Rule IV, Book III, IRR
 2. Employee works on first holiday, which twice the amount of holiday pay on that
entitles him to pay on second holiday day.

Role of divisor in determining payment of 2. In fixing the salary:

holiday pay for monthly paid employees a. Deduct 51 Sundays from the 365
The divisor assumes an important role in b. The difference, 314, shall be
determining whether or not holiday pay is used as divisor for determining
already included in the monthly paid employee’s the monthly salary.
salary102 c. The monthly salary thus
fixed actually covers
Monthly paid employees are not entitled to the payment for 314 days of the
holiday pay if their total annual income is year, including regular
divided by 365 days resulting in a wage which is and special holidays.
beyond the minimum wage per day because they
are considered paid everyday of the year 3. No provision of law requires any
including holidays, rest days, and other non- employer to make adjustments in the
working days. The 365 days are as follows: monthly salary rate set by him to take
account of legal holidays falling on
365 days Sundays in a given year, otherwise to
300 ordinary days reckon a year at more than 365 days.
51 rest days
11 regular holidays Non-working/scheduled rest day
3 special holidays
Sec 6 (c), Rule V, Book III, IRR
Where the day immediately preceding the
1. For company with 6-day working holiday is a non-working day in the
schedule establishment or the scheduled rest day of the
The divisor 314 means that the 10 legal employee, he shall not be deemed to be on
holidays are already included in the leave of absence on that day, in which case he
monthly pay of the employee shall be entitled to the holiday pay if he
worked on the day immediately preceding the
2. For the company with 5-day non-working day or rest day.
working schedule
The divisor 261 means that the holiday
pay is already included in the monthly
salary of the employee

Sundays 103
1. When a holiday falls on a Sunday, the
following Monday will not be considered
a holiday unless a proclamation says so.
2. Furthermore as stated in the Wellington
case, a legal holiday falling on a Sunday
does not create a legal obligation to pay
extra, aside from the usual holiday pay,
to monthly-paid employees

Holidays falling on a Sunday104

1. Supreme Court ruled that the Regional
Director erred in saying that if a holiday
fell on Sunday, an extra day of pay was
created; thus, an employer should pay
102
Producers Bank v NLRC, 355 SCRA 489 (2001)
103
Letter of Instruction No. 1087
104
Wellington Investment and Manufacturing Corporation
vs. Trajano (1995):
iii. Right to Holiday Pay crews” that work during the
off-season and regular
Right to Holiday Pay holidays fall in that duration.
In case of absences Seafarers
Employee is on leave of Any hours of work or duty
Entitled to
absence with pay on the day including hours of watch-
Entitled paid rest day
immediately preceding a regular keeping performed by the
or holiday
holiday seafarer on designated rest
pay
An employee is on leave of days and holidays
absence without pay on the
day immediately preceding a
Not entitled
I. In case of absences
regular holiday
While on Disability Benefits
Employee not reporting for work Sec 6 (a), Rule IV, Book III, IRR
while enjoying disability benefits All covered employees shall be entitled to the
under social security law or Entitled benefit provided herein when they are on
employees compensation law leave of absence with pay.
Temporary cessation of work
Regular holidays falling within Employees who are on leave of absence
the period in cases of temporary without pay on the day immediately preceding
shutdowns or cessation of work, a regular holiday may not be paid the required
when: holiday pay if he has not worked on such
Entitled regular holiday.
1. an annual inventory; or
2. repair or cleaning of
machineries and equipment II. In case of temporary cessation of
is undertaken. work

Regular holidays during the Sec 7, Rule IV, Book III, IRR
suspension of work if: a. In cases of temporary or periodic
shutdown and temporary cessation of
1. Cessation of operation is due Not entitled work of an establishment, as when a
to business reverses, and yearly inventory or when the repair or
2. Authorized by the cleaning of machineries and equipment is
Secretary of Labor. undertaken, the regular holidays falling
Private school teachers, including within the periods shall be compensated
faculty members of colleges and in accordance with this Rule.
universities
regular holidays during b. The regular holiday during the cessation
Not entitled
semestral vacations. of operation of an enterprise due to
regular holidays during business reverses as authorized by the
Entitled
Christmas vacation; Secretary of Labor may not be paid by the
Piece workers employer.
His holiday pay shall not be
less than his average daily III. Of teachers, piece workers,
earnings for the last seven (7) seafarers and seasonal workers
actual working days preceding
the regular holiday; Sec 8. Holiday pay of certain
Entitled
employees, Rule IV, Book III, IRR
Provided, However, that in no a. Private school teachers, including
case shall the holiday pay be faculty members of colleges and
less than the applicable universities, may not be paid for the
statutory minimum wage rate. regular holidays during semestral
vacations. They shall, however, be paid for
Seasonal workers the regular holidays during Christmas
During off-season when they vacation;
Not entitled
are not at work
Workers assigned to “skeleton Entitled b. Where a covered employee, is paid by
 results or output, such as payment on rest day or holiday pay.107
piece work, his holiday pay shall not be
less than his average daily earnings for the Seasonal workers
last seven (7) actual working days Seasonal workers who do not work during off-
preceding the regular holiday; Provided, season are not entitled to pay for the regular
However, that in no case shall the holiday holidays occurring during their off-season.
pay be less than the applicable statutory Workers assigned to “skeleton crews” that work
minimum wage rate. during the off-season have the right to be paid on
regular holidays falling in that duration.
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 be entitled to the benefits
provided in this Rule.

Holiday Pay of Hourly-Paid Faculty Members105

1. They are not entitled to payment of

holiday pay because they are paid
only for work actually done. Since
regular holidays are known to both the school
and faculty members as ―no class days;
certainly the latter do not expect payment for
said unworked holidays.

2. They are entitled to their hourly rate

on days declared as special holidays.
Be it noted that when a special public holiday
is declared, the faculty member paid by the
hour is deprived of expected income, and it
does not matter that the school calendar is
extended in view of the days or hours lost, for
their income that could be earned from other
sources is lost during the extended days.

3. Similarly, when classes are called off or

shortened on account of typhoons,
floods, rallies, and the like, these
faculty members must likewise be
paid, whether or not extensions are ordered.

Piece workers
Philosophy underlying the exclusion of piece
workers from the 8-hour law is that said workers
are paid depending upon the work they do
irrespective of the amount of time employed in
doing said work.106

Seafarers
Any hours of work or duty including hours of
watch-keeping performed by the seafarer on
designated rest days and holidays shall be paid
105
Jose Rizal College v. NLRC, G.R. No. 65482, Dec. 1, 1987 107
Section 11.C, Standard Terms and Conditions Governing
the Employment of Filipino Seafarers on Board Ocean-Going
106
Red V Coconut Products Ltd., v. CIR, 1966 Vessels
C. Leaves
1. Labor Code .
a. Service incentive leave
2. Special laws
a. Parental leave for solo
parents
b. Expanded maternity
leave
c. Paternity leave
d. Gynecological leave
Who are entitled
Only female employees who undergo surgery
because of gynecological disorders.

Duration
The special leave for women is 2months with full
pay based on gross monthly compensation.

If unused, the special leave benefit for women is

not cumulative and not convertible to cash.

Conditions for Entitlement

To be entitled, the female employee:
1. Must have undergone surgery due to
gynecological disorder as certified by a
competent physician.
2. Must have rendered at least 6months
continuous aggregate service for the last
12months prior to surgery.
3. Must have filed an application for special leave
with the employer within a reasonable time from
the date of surgery or within such period as may
be provided under company policies or CBA.

If the woman had undergone surgery during her

maternity leave, she is entitled only to the
difference between the special leave benefit and
maternity leave benefit.

e. Battered woman leave

i. Service incentive leave the Secretary

Art. 95. Right to service incentive leave. • Teachers of private school on contract basis
Every employee who has rendered at least one are entitled to service incentive leave.109
year of service shall be entitled to a yearly • Piece-rate workers are not entitled to service
service incentive leave of five days with pay. incentive leave. 110 However, they shall be
entitled to service incentive leave when,
This provision shall not apply to those who are although they are piece-rate wokers, they are
already enjoying the benefit herein provided, regular employees.111
those enjoying vacation leave with pay of at
least five days and those employed in Meaning of “1 year of service”
establishments regularly employing less than Sec 3, Rule V, Book III, IRR
ten employees or in establishments exempted The term "at least one-year service" shall
from granting this benefit by the Secretary of mean service for not less than 12 months,
Labor and Employment after considering the whether continuous or broken, reckoned from
viability or financial condition of such the date the employee started working,
establishment. including authorized absences and paid
regular holidays unless the working days in
The grant of benefit in excess of that provided the establishment as a matter of practice or
herein shall not be made a subject of policy, or that provided in the employment
arbitration or any court or administrative contract is less than 12 months, in which case
action. said period shall be considered as one year.

Coverage Entitlement
Every employee who has rendered at least one • The grant of benefit in excess of that
year of service shall be entitled to a yearly service provided herein shall not be made a subject
incentive leave of five days with pay. of arbitration or any court or administrative
action. 112
Exceptions: not covered
1. Those of the government and any of its • The service incentive leave shall be
political subdivisions, including GOCCs with commutable to its money equivalent if not
special charter used or exhausted at the end of the year. 113
2. Persons in the personal service of another
3. Members of the family of the employer who • The cause of action of an entitled employee
are dependent upon him for support to claim his service incentive leave pay
3. Managerial employees as defined in Book 3 accrues from the moment the employer
of this Code refuses to remunerate its monetary
4. Officers and members of managerial staff equivalent if the employee did not make use
4. Field personnel and other employees whose of said leave credits but instead chose to
performance is unsupervised by the employer avail of its commutation (into money).
including those who are engaged on task or Accordingly, if the employee wishes to
contract basis, purely commission basis, or accumulate his leave credits and opts for its
those who are paid a fixed amount for commutation upon his resignation or
performing work irrespective of the time separation from employment, his cause of
consumed in the performance thereof action to claim the whole amount of his
5. Those who are already enjoying the benefit accumulated service incentive leave shall
herein provided arise when the employer fails to pay such
6. Those enjoying vacation leave with pay of at amount at the time of his resignation or
least 5 days separation from employment.114
7. Those employed in establishments regularly
employing less than 10 employees.108
9. Employees who have not rendered 1yr of
service
109
Cebu Institute of Technology v. Ople, 156 SCRA 531
110
Makati Haberdashery v NLRC (1989)
9. Workers paid by results 111
Labor Congress v NLRC (1998)
11. Employees of establishments exempted by 112
Art 95 (c)
113
Sec 3, Rule V, Book III, IRR
108
Sec. 1, Rule V, Implementing Rules and Regulations 114
Auto Bus Transport vs. NLRC (2005)
ii. Maternity leave115
Coverage
Every woman in the private sector, whether
married or unmarried, is entitled to the
maternity leave benefits.

Benefits
A daily maternity benefit equivalent to 100% of
her average daily salary credit for:

1. 60 days for normal delivery

2. 78 days for caesarean delivery

This benefit shall not be included in the

computation of 13th month pay as it is
granted to an employee in lieu of wages which is
the basis for computing 13th month.

Average daily salary credit is the result obtained

by dividing the sum of the six highest monthly
salary credits in the 12 month period
immediately preceding the semester of
contingency by 180.

Requisites

1. Must have paid at least 3 monthly

contributions in the 12-month period
immediately preceding the semester of her
childbirth, or miscarriage

2. Must have notified 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.

Avaliment
Other conditions
1. Employee may only avail of benefit for the
first four (4) deliveries or miscarriages

2. Cannot be enjoyed simultaneously with SSS

sickness benefit

3. Employer shall advance the full payment

within 30 days from filing of leave
application. SSS shall immediately
reimburse employer upon receipt of
satisfactory proof of such payment and
legality thereof.

4. Sanction: That if an employee should give

birth or suffer miscarriage
115
Sec 14-A, RA 1161 as amended by RA 7322 and RA 8282
a. without the required contributions
having been remitted for her by her
ER to the SSS, or
b. without the latter having been
previously notified by the ER of time
of the pregnancy
the employer shall pay to the SSS
damages equivalent to the benefits
which said employee member would
otherwise have been entitled to.
iii. Paternity leave116

Coverage
All married male employees regardless of
employment status on the occasion of his wife’s
childbirth or miscarriage.

Requisites
1. Employment
2. Marriage to and cohabitation with his
legitimate spouse
3. Delivery of the legitimate spouse

When may it be availed of

It may be availed of for the first 4 deliveries of
the legitimate spouse with whom he is
cohabiting117

What are the benefits under the law

A married male employee is allowed not to
report for work for seven (7) days.
While on leave, the employee continues to earn
the compensation, on the condition that his
spouse has delivered a child or suffered a
miscarriage for purposes of enabling him to
effectively lend support to his wife in her period
of recovery and/or in the nursing of the newly-
born child.118
• For purposes of this Act, delivery shall
include childbirth or any miscarriage.

Conditions for Entitlement

1. The woman who gave birth or suffered
miscarriage must be the legitimate wife
2. At time of delivery/ miscarriage the male
employee must be
a. an employee
b. cohabiting with his wife
3. The employee must notify the empoyer of the
pregnancy of his wife, stating the expected
delivery date.

116
RA 8187: Paternity Leave Act of 1996
117
Sec 2, RA8187. Paternity Leave
118
Sec 3, RA8187. Paternity Leave
iv. Parental leave119 no longer left alone with the responsibility of
Leave benefits granted to a solo parent to enable parenthood, shall terminate his/her
him/her to perform parental duties and eligibility for these benefits120
responsibilities where physical presence is
required. Conditions for entitlement
A solo parent employee shall be entitled to the
Coverage parental leave under the following conditions:
Any solo parent or individual who is left 1. He/she has rendered at least one (1) year
alone with the responsibility of parenthood due of service, whether continuous or broken
to: 2. He/she has notified his/her employer
that he/she will avail himself/herself of
1. Giving birth as a result of rape or, as it, within a reasonable period of time;
used by the law, other crimes against and
chastity 3. He/she has presented to his/her
2. Death of spouse employer a Solo Parent Identification
3. Spouse is detained or is serving sentence Card, which may be obtained from the
for a criminal conviction for at least one DSWD office of the city or municipality
(1) year where he/she resides.
4. Physical and/or mental incapacity of
spouse as certified by a public medical Other Employment-related benefits
practitioner available to all “solo parents”
5. Legal separation or de facto separation
from spouse for at least one (1) year: 1. Parental leave
Provided that he/she is entrusted with 2. Flexible work schedule- arrangement
the custody of the children where the employee can vary his arrival
6. Declaration of nullity or annulment of and departure time without affecting the
marriage as decreed by a court or by a core work hours as defined by the
church: Provided, that he/she is employer.
entrusted with the custody of the 3. No discrimination policy
children 4. Educational benefits
7. Abandonment of spouse for at least one 5. Housing benefits
(1) year 6. Medical assistance
8. Unmarried father/mother who has
preferred to keep and rear his/her
child/children, instead of having others
care for them or give them up to a
welfare institution
9. Any other person who solely provides
parental care and support to a child or
children: Provided, that he/she is duly
licensed as a foster parent by the
Department of Social Welfare and
Development (DSWD) or duly appointed
legal guardian by the court; and
10. 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: Provided,
that such abandonment, disappearance,
or prolonged absence lasts for at least
one (1) year.

• A change in status or circumstances of

parent claiming benefits, such that he/she is
119
RA 8972: Parental Leave for Solo Parents 120
Sec 3, RA 8972
v. Leaves for victims of Violence had sexual or dating relationship, or by a person
against Women with whom she has a child.

Duration
Sec 43, RA 9262: Anti Violence against Victims are entitled to take a leave of absence up
Women and Children to 10days, extendible when the need arises as
Victims under this Act shall be entitled to take specified in a protection.
a paid leave of absence up to ten (10) days in
addition to other paid leaves under the Labor The 10 days leave can be availed of only when the
Code and Civil Service Rules and Regulations, woman has to attend to medical or legal
extendible when the necessity arises as concerns.
specified in the protection order.
Availment
Any employer who shall prejudice the right of The only requirement is a certification from the
the person under this section shall be punong barangay or kagawad or clerk of court
penalized in accordance with the provisions of that a case for VAWC is pending.
the Labor Code and Civil Service Rules and
Regulations. Likewise, an employer who shall In addition to other paid leaves under existing
prejudice any person for assisting a co- labor laws, company policy, and/or collective
employee who is a victim under this Act shall bargaining agreement, the qualified victim
likewise be liable for discrimination. employee shall be entitled to a leave of up to 10
days with full pay, consisting of basic salary and
VAWC Victims mandatory allowances fixed by the Regional
A victim of VAWC who is employed shall be Wage Board, if any.
entitled to a paid leave of up to ten (10)
days in addition to other paid leaves under the
Labor Code and Civil Service Rules and
Regulations and other existing laws and
company policies:

1. At any time during the application of any

protection order, investigation,
prosecution and/or trial of the criminal
case, extendible when the necessity
arises as specified in the protection
order.
2. Upon the issuance of the Punong
Barangay/kagawad or prosecutor or the
Clerk of Court, as the case may be, of 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.
3. For government employees, in
addition to the aforementioned
certification, the employee concerned
must file an application for leave
citing as basis R.A. 9262.

Who are Entitled

VAWC leave is available t female employees who,
personally, or her chiled whether legitimate or
illegitimate, suffered from or has been
threatened with physical, sexual, psychological
or economic abuse, by her husband, former
husband, or by a person with whom she has or
G. SERVICE CHARGES the average monthly share of each employee
for the past twelve (12) months immediately
Art. 96. Service Charges preceding the abolition of withdrawal of such
charges.
All service charges collected by hotels,
restaurants and similar establishments shall
be distributed at the rate of eighty-five percent Sec. 6. Relation to agreements., Rule
(85%) for all covered employees and fifteen VI, Book III, IRR
percent (15%) for management. The share of Nothing in this Rule shall prevent the
the employees shall be equally distributed employer and his employees from entering
among them. In case the service charge is into any agreement with terms more favorable
abolished, the share of the covered employees to the employees than those provided herein,
shall be considered integrated in their wages. or be used to diminish any benefit granted to
the employees under existing laws, agreement
Distribution of Service Charges and voluntary employer practice.
Sec. 3.Distribution of service charges,
Rule VI, Book III, IRR Sec. 7, Rule VI, Book III, IRR
All service charges collected by covered This rule shall be without prejudice to
employers shall be distributed at the rate of existing, future collective bargaining
85% for the employees and 15% for the agreements.
management. The 85% shall be distributed
equally among the covered employees. The Nothing in this rule shall be construed to
15% shall be for the disposition by justify the reduction or diminution of any
management to answer for losses and benefit being enjoyed by any employee at the
breakages and distribution to managerial time of effectivity of this rule.
employees at the discretion of the
management in the latter case. Coverage
This rule shall apply only to establishments
Sec. 4. Frequency of distribution, Rule which collect service charges such as: 121
VI, Book III, IRR
The shares referred to herein shall be 1. Hotels, restaurants, lodging houses,
distributed and paid to the employees not less night clubs, cocktail lounge, massage
than once every two (2) weeks or twice a clinics, bars, casinos and gambling
month at intervals not exceeding sixteen (16) houses and similar enterprises
days.
2. Including those entities operating
Service charges are distributed in accordance primarily as private subsidiaries of the
with the following percentage of sharing: Government

• Shall apply to ALL employees of covered

1. Eighty-five percent (85%) for the employees
employers regardless of their positions,
to be distributed equally among them; and designations, or employment status, irrespective
The shares shall be distributed to employees of the method by which their wages are paid 122
not less than once every 2 weeks or twice a
month at intervals not exceeding 16 days. Exception: not covered
Managerial employees
2. Fifteen percent (15%) for the management to
answer for losses and breakages and, at the
discretion of the management, distribution
to managerial employees.

Integration
Sec. 5. Integration of service charges.,
Rule VI, Book III, IRR
In case the service charges is abolished the
share of covered employees shall be
considered integrated in their wages. The 121
Sec 1, Rule VI, Book 3, IRR
basis of the amount to be integrated shall be 122
Sec 2, Rule VI, Book 3, IRR
H. THIRTEENTH (13TH) MONTH
PAY AND OTHER BONUSES123
Definition
Thirteenth month pay is an extra remuneration
mandated by P.D. 851 given to rank and file
employees who have rendered at least one
month of service, the amount of which is
equivalent to at least ½ of the basic salary
earned during the calendar year.

Coverage

General Rule
All employers are hereby required to pay all
their rank and file employees a 13th month pay
not later than Dec 24 of every year, Provided that
they have worked for at least one (1) month
during a calendar year.

Who are not Entitled

1. Employees who have not yet rendered
service for one month of the calendar year

2. Employees already already receiving the

equivalent of a 13th month pay

“Equivalent” includes:
a. Christmas bonus, mid-year bonus, cash
bonuses
b. and other payments amounting to not less
than 1/12 of the basic salary
c. but shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all
other allowances regularly enjoyed by the
employee as well a non-monetary benefits.

3. Persons in the personal service of another

4. Employees of those who are paid on purely

commission, boundary or task basis and
those who are paid a fixed amount for
performing specific work

Exception
Where the workers are paid on
piece-rate basis in which case the
employer shall grant the required 13th
month pay to such workers.

Workers paid on a piece-rate basis:

those who are paid a standard amount for
every piece or unit of work produced that
123
Revised Guidelines on the Implementation of the 13th
Month Pay Law and PD 851
 is more or less regularly replicated, import as the said benefit contemplated by
without regard to the time spent in law.125
producing the same.
Terminated Employees
th
13 Month pay in Special Cases The payment of the 13th month pay may be
demanded by the employee upon the cessation of
Paid by Results employer- employee relationship. 126
Employees who are paid on piece work basis are,
by law, entitled to the 13th Month Pay. Amount of Payment
Basic salary shall include:
Employees who are paid a fixed or guaranteed 1. Cost of living allowances (COLA) if
wage plus commission are entitled to 13th integrated into the basic salary of a
month pay (not purely commission); the basis covered employee pursuant to EO 178.
for computation shall be both their fixed or
guaranteed wage and commission. 2. All remuneration‘s or earning paid by
this employer for services rendered.
Those with Multiple Employers
Government Employees working part time in a 13th month pay not exceeding 82k shall be
private enterprise, including private educational excluded in the computation of gross
institutions, as well as Employees working in two compensation income.
or more private firms, whether on full or part
time bases, are entitled to the required 13th Time of payment
Month Pay from all their private Employers General Rule
regardless of their total earnings from each or all 13th month pay is paid not later than Dec 24 of
their Employers. each year.

Private School Teacher Exception

Private school teachers, including faculty Employer may give to his employees half of
members of universities and colleges, are the required 13th Month Pay before the
entitled to the required 13th month pay, opening of the regular school year and the
regardless of the number of months they teach or other half on or before the 24th of December
are paid within a year, if they have rendered every year.
service for at least one (1) month within a year.
• The frequency of payment of this monetary
Overload pay is NOT included in the benefit may be the subject of agreement
computation for 13th month pay; overload is not between the employer and the recognized
overtime as it is additional work done within the CBA of the employees.
normal shift124
Additional Rules
Resigned or Separated Employee 1. Commissions
An Employee who has resigned or whose services If the commissions may be properly
were terminated at any time before the time for considered part of the basic salary, then they
payment of the 13th month pay is entitled to this should be INCLUDED. If they are not an
monetary benefit in proportion to the length of integral part of the basic salary, then they
time he worked during the year, reckoned from should be EXCLUDED. 127
the time he started working during the calendar
year up to the time of his resignation or Commissions of salesmen comprising a pre-
termination from service. determined percentage of the selling price of
the goods actually sold by each salesman are
Wage Difference considered part of the basic salary in
The difference between the minimum wage and computing 13th month pay.
the actual salary received by the Employee 2. Substitute Payment not allowed
cannot be deemed as his 13th month pay as such Benefits in the form of food or free electricity,
difference is not equivalent to or of the same assuming they were given, were not a proper
125
JPL Marketing Promotions vs. CA, 2005
126
Archilles Manufacturing Corp. vs. NLRC (1995)
124
Letran Calamba Faculty vs. NLRC, 2008 127
Phil. Duplicators Inc. vs. NLRC (1995)
 substitute for the 13th month pay required by BONUS
law. Neither may year-end rewards for loyalty
and service be considered in lieu of 13th month Bonus is an amount granted and paid to an
pay.128 employee for his industry and loyalty which
contributed to the employer’s business and made
3. 14th Month Pay is not mandated possible the realization of profits.
Employers already paying their employees a
13th month pay or its equivalent are not Generally, bonus is not a demandable and
covered by this Decree.129 enforceable obligation. It cannot be forced upon
the employer.

• In order to exempt the employer from paying Exception:

13th month pay, a bonus stipulation in the 1. If the grant arises from contract; or
CBA should be general in scope, applicable 2. If it is made part of wages
to all employees, not only a few, for the legal
obligation benefits all employees regardless It is considered part of wages if it is given in a
of their designation or employment status so fixed amount without any condition, regardless
long as they have worked at least one month of whether or not profits are realized; or if it has
during the calendar year.130 ripened into practice by virtue of its long and
regular concession.

128
Framanlis Farms, Inc. v. MOLE (1989)
129
Kamaya Port Hotel v. NLRC (1989)
130
Marcopper Mining Corp. vs. Ople
D. Sexual harassment in the employee.
work environment c. In an education or training
1. Definition environment, sexual harassment is
committed:
2. Duties and liabilities of 1. Against one who is under the care,
employers custody or supervision of the
3. Applicable laws: offender;
2. Against one whose education,
a. Sexual Harassment training, apprenticeship or tutorship
Act is entrusted to the offender;
3. When the sexual favor is made a
Work, education or training-related condition to the giving of a passing
sexual harassment, defined grade, or the granting of honors and
Sec 3. definition, RA 7877 scholarships, or the payment of a
stipend, allowance or other benefits,
Work, education or training-related sexual
privileges, or considerations; or
harassment is committed by an employee,
4. When the sexual advances result in
manager, supervisor, agent of the employer,
an intimidating, hostile or
teacher, instructor, professor, coach, trainor,
offensive environment for the
or any other person who, having
student, trainee or apprentice.
authority, influence or moral
ascendancy over another in a work or
training or education environment, Who are liable
demands, requests or otherwise requires any 1. The offender:
sexual favor from the other, regardless of a. Employee
whether the demand, request or requirement b. Manager, Supervisor, agent of the
for submission is accepted by the object of employer
said Act. c. Teacher, instructor, professor, coach,
trainer
d. Any other person who, having
How work-related sexual harassment is
authority, influence or moral
committed
ascendancy over another in a work or
Sec 3. Definition, RA 7877
training or education environment
b. In a work-related or employment 2. Any person who directs or induces another
environment, sexual harassment is to commit any act of sexual harassment
committed when: 3. Any person who cooperates in the
1. The sexual favor is made as a commission thereof by another without
condition in the hiring or in the which it would not have been committed
employment, re-employment or
continued employment of said
individual, or in granting said Role of the employer or Head of Office
individual favorable compensation, The Employer or Head of Office shall have the
terms, conditions, promotions, or duty:
privileges; or the refusal to grant the
sexual favor results in limiting, 1. To prevent the commission of such acts
segregating or classifying the and
employee which in a way would 2. To lay down the procedure for the
discriminate, deprive or diminish resolution, settlement or prosecution of
employment opportunities or committed acts.
otherwise adversely affect said
employee; Employer shall be solidarily liable for
2. The above acts would impair the damages if:
employee’s rights or privileges 1. The employer or head of office,
under existing labor laws; or educational or training institution is
3. The above acts would result in an informed of such acts by the offended
intimidating, hostile, or party and
offensive environment for the
 2. No immediate action is taken
thereon
Independent Action for Damages
The victim of work, education or training-related
sexual harassment can institute a separate and
independent action for damages and other
affirmative relief.

Sanctions
1. Criminal: imprisonment of 1 month to
mos. Or fine of P10k to P20k or both
Prescription of such action is in 3
years.

2. Termination

b. Safe Spaces Act

E. Working conditions for Art 58 Labor Code RA 7796
“TESDA Law”
special groups of employees Apprenticeship
1. Apprentices and Practical training on the Training within
job supplemented by employment with
Learners related theoretical compulsory related
instruction theoretical instructions
involving a contract
between an apprentice
and an employer on an
approved
apprenticeable
occupation
Apprentice
A worker who is A person undergoing
covered by a written training for an
apprenticeship approved
agreement with an apprenticeable
individual employer or occupation during an
any of the entities established period
recognized under this assured by an
Chapter. apprenticeship
agreement
Apprenticeship Agreement
An employment A contract wherein a
contract prospective employer
wherein the employer binds himself to train
binds himself to train the
the apprentice and the apprentice who in turn
apprentice in turn accepts the terms of
accepts the terms of training for a recognized
training. apprenticeable
occupation emphasizing
the rights, duties and
responsibilities of each
party
Apprenticeable Occupation
Any trade, form of An occupation officially
employment or endorsed by a tripartite
occupation which body and approved
requires more than for
three (3) months of apprenticeship by
practical training on the the Authority
job supplemented by
related theoretical
instruction.
When Apprentices may be Employed
Requirements The Department shall develop standard model
1. Apprenticeship program duly approved by programs of apprenticeship.
Tesda
2. Apprenticeship agreement with apprentice Sec. 12. Employment of Children,
RA 7610
Who can Put up an Apprenticeship Children below fifteen (15) years of age shall NOT
Program be employed except:
Art 60, Employment of apprentices,
Labor Code
Only employers in the highly technical 1. When a child works directly under the sole
industries may employ apprentices and only responsibility of his parents or legal guardian
in apprenticeable occupations approved by the and where only members of the employer's
Secretary of Labor and Employment. (As family are employed: Provided, however, That
amended by Section 1, Executive Order No. his employment neither endangers his life,
111, December 24, 1986) safety, health and morals, nor impairs his
normal development; Provided, further, That
Without an approved apprenticeship program, the parent or legal guardian shall provide the
said minor child with the prescribed primary
the person hired cannot be considered an
and/or secondary education; or
apprentice, even if an apprenticeship agreement
has been entered into between the “apprentice” 2. Where a child's employment or participation in
and the employer. public entertainment or information through
cinema, theater, radio or television is essential:
Prior approval by the Department of Labor and Provided, The employment contract is
Employment of the proposed apprenticeship concluded by the child's parents or legal
program is, therefore, a condition sine qua non guardian, with the express agreement of the
before an apprenticeship agreement can be child concerned, if possible, and the approval
validly entered into. The act of filing the of the Department of Labor and Employment:
and Provided, That the following requirements
proposed apprenticeship program with the in all instances are strictly complied with:
Department of Labor and Employment is a
preliminary step towards its final approval and
does not instantaneously give rise to an
employer-apprentice relationship. 131 a. The employer shall ensure the
protection, health, safety, morals and
Without an apprenticeship agreement, the normal development of the child;
person hired cannot be considered an
apprentice, even if the employer has an approved
apprenticeship program. b. The employer shall institute measures to
prevent the child's exploitation or
Article 61. Contents of apprenticeship discrimination taking into account the
agreements, Labor Code system and level of remuneration, and the
Apprenticeship agreements, including the duration and arrangement of working
wage rates of apprentices, shall conform to the time; and
rules issued by the Secretary of Labor and
Employment. The period of apprenticeship
shall not exceed six months. c. The employer shall formulate and
implement, subject to the approval and
Apprenticeship agreements providing for supervision of competent authorities, a
wage rates below the legal minimum wage, continuing program for training and skills
which in no case shall start below 75 percent acquisition of the requirements.
of the applicable minimum wage, may be
entered into only in accordance with
apprenticeship programs duly approved by
In the above exceptional cases where any such child
the Secretary of Labor and Employment. may be employed, the employer shall first secure,
before engaging such child, a work permit from the
131
Nitto Enterprises v. NLRC, 248 SCRA 654 (1995) Department of Labor and Employment which shall
ensure observance of the child. Qualifications
Art 59. Qualifications of Apprentice,
Labor Code
To qualify as an apprentice, a person shall:
The Department of Labor and Employment shall
promulgate rules and regulations necessary for the
effective implementation of this Section. b. At least fourteen (14) years of age;
c. Possess vocational aptitude and
capacity for appropriate tests; and
d. Possess the ability to comprehend and
follow oral and written instructions.
e. Trade and industry associations may
recommend to the Secretary of Labor
appropriate educational requirements
for different occupations.

Sec 11. Qualifications of Apprentices,

Rule VI, Book II, IRR
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;

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.

Trade and industry associations may,

however, recommend to the Secretary of
Labor and Employment appropriate
educational qualifications for apprentices in
certain occupations.

Compensation
An apprentice is entitled to the full minimum
wage (not 75%) when:
1. The employer stipulates in the contract and
2. The employer avails of the tax benefit where
he is able to deduct from his remittance to the
government in exchange of the training program
given to apprentice.

The rule on compensation of apprentices does

not apply to those who undergo apprenticeship
for purposes of complying with:
1. academice requirements for graduation
2. government requirements for board Art 74. When learners may be hired,
examinations Labor Code
Learners may be employed when no
Duration of Apprenticeship experienced workers are available, the
Under TESDA guidelines, the period of employment of learners is necessary to
apprenticeship should not be less than 4 months prevent curtailment of employment
and not more than 6 months. opportunities, and the employment does not
create unfair competition in terms of labor
Working hours costs or impair or lower working standards.
14 years old 15-18 yars
old Learners may be employed only under the
Time No work No work following conditions:
schedule between between 1. there are no available experienced workers
8:00PM and 10:00PM and 2. the job is semi-skilled or non-apprenticeable
6:00AM 6:00AM and can be learned in a practical way within a
Daily Not more that Not more period of not more than 3months
hours 4hours a day than 8hours a 3. the employment of learners is necessary to
day prevent curtailment of employment
Weekly Not more than Not more opportunities
Hours 20hours per than 40hours 4. the employment of learners does not create
week per week unfair competition in terms of labor costs or
impair or lower working standards
Termination
The Employer is not obliged to hire the Basic Requirements for Learners
apprentice as regular employee after the six- RA 7796
month apprenticeship period. Learnership programs must be approved by
the Authority.
Within the 6month period, the employer can 1. Learnership program approved by TESDA
terminate the apprentice on the following 2. Learnership Contract
grounds:
1. Habitual absenteeism Minimum age requirement for Learners
2. Willful disobedience to lawful order of a 15years old
superior
3. Poor physical condition Minimum Compensation
4. Theft or malicious destruction of company 75% of statutory minimum wage
property
5. Poor performance Duration
6. Gross misconduct132 Three months

Learners Learners must be absorbed as regular employees

Art 73. Learners defined, Labor Code after his completion of the three month training
Persons hired as trainees in semi-skilled period, otherwise, the employer can be held
and other industrial occupations liable for illegal dismissal.
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.
RA 7796
Persons hired as trainees in semiskilled and
other industrial occupations which are non-
apprenticeable.

When Learners may be Employed

132
Sec 25, Rule VI, Book II, Labor Code IRR
Learnership and Apprenticeship, distinguished
Learnership Apprenticeship
Nature
Non-apprenticeable/ Semi-Skilled Apprenticeable/ Highly Technical
Does not undergo theoretical training Undergoes theoretical training
Minimum Age Requirement
15 years old 14 years old
Necessity of DOLE approval of program
Not necessary. Only DOLE inspection required Prior approval by DOLE is necessary
Duration
3 Months Not less than 3 months but not more than 6
months
When employed
1. When no experienced workers are available 1. The person is at least fifteen (15) years of age,
provided those who are at least fifteen (15)
2. The employment of learners is necessary to years of age but less than eighteen (18) may be
prevent curtailment of employment eligible for apprenticeship only in non-
opportunities; and hazardous occupation;

3. The employment does not create unfair 2. The person is physically fit for the occupation
competition in terms of labor costs or impair in which he desires to be trained;
or lower working standards.
3. The person possesses vocational aptitude and
capacity for the particular occupation as
established through appropriate tests; and

4. The person is able to comprehend and follow

oral and written instructions
Wage rate
General Rule General Rule
Not less than 75% of the minimum wage Not less than 75% of the minimum wage

Exception Exception
Learners in piecework shall be paid in full for No compensation if SOLE authorizes, as OJT is
the work done. required by the school
Deductibility of training cost
Not allowed Allowed
Conditions
1. Program is duly recognized by DOLE
2. Deduction shall not exceed 10% of direct labor
wage
3. Payment of minimum wage to apprentices
Commitment to employment
At the option of the Learner At the option of the employer
Regularization
A commitment to employ the learners if they so
desire, as regular employees upon completion of
the learnership.

All learners who have been allowed or suffered to

work during the first two (2) months shall be
deemed regular employees if training is
terminated by the employer before the end
of the stipulated period through no fault of the
learners.
 2. Disabled workers government agencies, offices or corporations
Handicapped Workers engaged in social development shall be
Art 78. Handicapped worker defined, reserved for disabled persons.
Labor Code Sec 6. Sheltered Employment, R.A. 7277
Handicapped workers are those whose If suitable employment for disabled persons
earning capacity is impaired by age or physical cannot be found through open employment as
or mental deficiency or injury. provided in the immediately preceding
Section, the State shall endeavor to provide it
Disabled persons, defined by means of sheltered employment. In the
placement of disabled persons in sheltered
Sec 4 (a). Disabled persons, RA 7277.
employment, it shall accord due regard to the
Magna Carta for Disabled Persons
individual qualities, vocational goals and
Disabled Persons are those suffering from
inclinations to ensure a good working
restriction of different abilities, as a result of a
atmosphere and efficient production.
mental, physical or sensory impairment, to
perform an activity in the manner or within
the range considered normal for a human b. Discrimination on
being; employment
The Magna Carta for Disabled Persons mandates
Impairment, defined that qualified disabled persons be granted the
Sec 4 (b). Impairment, RA 7277. Magna same terms and conditions of employment as
Carta for Disabled Persons qualified able-bodied employees. Once they have
Impairment is any loss, diminution or attained the status of regular workers, they
aberration of psychological, physiological, or should be accorded all the benefits granted by
anatomical structure of function; law, notwithstanding written or verbal contracts
to the contrary. This treatment is rooted not
Disability, defined merely on charity or accommodation, but on
Sec 4 (c). Disability, RA 7277. Magna justice for all. 133
Carta for Disabled Persons
Disability shall mean:
1. a physical or mental impairment that
c. Incentives for
substantially limits one or more employers
psychological, physiological or anatomical Employers of PWD are entitled to additional
function of an individual or activities of deduction, from their gross income, equivalent
such individual; to 25% of total amount paid as salaries and
2. a record of such an impairment; or wages to PWD.
3. being regarded as having such an
impairment; Conditions:
1. certification from DOLE that he employs PWD
2. disabled employee must be accredited by
a. Equal opportunity DOLE and DOH as to his disability, skills, and
Sec 5 (1). Equal Opportunity for qualifications.
Employment, RA 7277
No disabled person shall be denied access to
opportunities for suitable employment. 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.
Section 5 (2). Guaranteed Employment
in Government, R.A. 7277
Five percent (5%) of all casual emergency and
contractual positions in the Departments of
Social Welfare and Development; Health;
Education, Culture and Sports; and other
133
Bernardo v NLRC, 310 SCRA 186 (1999)
 3. Gender dismiss, discharge, discriminate or
a. Discrimination otherwise prejudice a woman
Art 135. Discrimination prohibited employee merely by reason of her
It shall be unlawful for any employer to marriage.
discriminate against any woman employee
with respect to terms and conditions of
employment solely on account of her sex.
c. Prohibited acts
The following are acts of Prohibited acts
discrimination: 1. Night work
a. Payment of a lesser 2. Discrimination
compensation, including wage, 3. Stipulation against marriage
salary or other form of remuneration 4. Discharge to prevent enjoyment of
and fringe benefits, to a female benefits and on account of pregnancy
employees as against a male 5. Discharge on account of Testimony
employee, for work of equal value;
and Night work
  RA 1015
b. Favoring a male employee over Art 130. Night work prohibition
a female employee with respect to No woman, regardless of age, shall be
promotion, training opportunities, employed or permitted or suffered to work,
study and scholarship grants solely on with or without compensation:
account of their sexes.
a. In any industrial undertaking or branch
Criminal liability for the willful thereof between ten o’clock at night and
commission of any unlawful act as provided in six o’clock in the morning of the following
this Article or any violation of the rules and day; or
regulations issued pursuant to Section 2 b. In any commercial or non-industrial
hereof shall be penalized as provided in undertaking or branch thereof, other than
Articles 288 and 289 of this Code: Provided, agricultural, between midnight and six
That the institution of any criminal action o’clock in the morning of the following
under this provision shall not bar the day; or
aggrieved employee from filing an c. In any agricultural undertaking at
entirely separate and distinct action nighttime unless she is given a period of
for money claims, which may include rest of not less than nine (9) consecutive
claims for damages and other affirmative hours.
reliefs. The actions hereby authorized shall
proceed independently of each other. (As
amended by Republic Act No. 6725, May 12, General rule
1989) No woman should work during the following
periods.
b. Stipulation against Industry Prohibited hours
Industrial 10 pm – 6 pm (8 hrs)
marriage Commercia
Art 136. Stipulation against marriage 12 mn to 6 am (6 hrs)
l
It shall be unlawful for an employer to At nighttime unless she is given
require as a condition of employment Agricultural a rest period of not less than 9
or continuation of employment that a hrs134
woman employee shall not get Exceptions:135
married, or to stipulate expressly or The prohibitions prescribed by the preceding
tacitly that upon getting married, a Article shall not apply in any of the following
woman employee shall be deemed cases:
resigned or separated, or to actually 134
Art 130, Labor Code (Repealed by RA 10151)
135
Art 131, Labor Code (Repealed by RA 10151)
 pregnant.
1. In cases of actual or impending
emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other Discharge on Account of Testimony
disasters or calamity, to prevent loss of life or Sec 13(d), Rule XII, Book III
property, or in cases of force majeure or It shall be unlawful for any employer to
imminent danger to public safety; discourage any woman or child or any other
  employee for having filed a complaint or
2. In case of urgent work to be performed having testified or being about to testify under
on machineries, equipment or installation, to the code.
avoid serious loss which the employer
would otherwise suffer;
  d. Facilities for women
3. Where the work is necessary to prevent Art 132. Facilities for Women
serious loss of perishable goods; The Secretary of Labor and Employment shall
  establish standards that will ensure the safety
4. Where the woman employee holds a and health of women employees. In
responsible position of managerial or appropriate cases, he shall, by regulations,
technical nature, or where the woman require any employer to:
employee has been engaged to provide health
and welfare services; a. Provide seats proper for women
  and permit them to use such seats when
5. Where the nature of the work requires they are free from work and during
the manual skill and dexterity of working hours, provided they can perform
women workers and the same cannot be their duties in this position without
performed with equal efficiency by male detriment to efficiency;
workers;  
  b. To establish separate toilet
6. Where the women employees are rooms and lavatories for men and
immediate members of the family women and provide at least a dressing
operating the establishment or undertaking; room for women;
and  
  c. To establish a nursery in a
7. Under other analogous cases workplace for the benefit of the women
exempted by the Secretary of Labor and employees therein; and
Employment in appropriate regulations.  
d. To determine appropriate
Discharge to prevent enjoyment of minimum age and other standards
benefits and on account of pregnancy for retirement or termination in special
Art 137. Prohibited Act occupations such as those of flight
It shall be unlawful for any employer: attendants and the like.
1. To deny any woman employee the
benefits provided for in this Chapter or to
discharge any woman employed by Art. 134. Family planning services;
him for the purpose of preventing incentives for family planning.
her from enjoying any of the a. Establishments which are required by
benefits provided under this Code. law to maintain a clinic or infirmary
  shall provide free family planning
2. To discharge such woman on services to their employees which shall
account of her pregnancy, or while include, but not be limited to, the
on leave or in confinement due to her application or use of contraceptive pills
pregnancy; and intrauterine devices.
   
3. To discharge or refuse the admission b. In coordination with other agencies of
of such woman upon returning to her the government engaged in the promotion
work for fear that she may again be of family planning, the Department of
 Labor and Employment shall
develop and prescribe incentive
bonus schemes to encourage family
planning among female workers in any
establishment or enterprise.

e. Women working in
night clubs, etc
Art. 138. Classification of certain
women workers.
Any woman who is permitted or
suffered to work, with or without
compensation, in any night club,
cocktail lounge, 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 establishment for purposes of labor
and social legislation.
 4. Minors guardian, and approved by DOLE
c. The ER shall ensure the protection,
Article 139. Minimum employable age.
health, safety and morals of the
No child below fifteen (15) years of age
child
shall be employed, except when he works
d.The ER shall institute measures to
directly under the sole responsibility of his
prevent the child’s exploitation or
parents or guardian, and his employment does
discrimination taking into account the
not in any way interfere with his schooling.
system and level of remuneration, and the
duration and arrangement of working time
Any person between fifteen (15) and
e. The ER shall formulate and implement,
eighteen (18) years of age may be
subject to the approval and supervision of
employed for such number of hours and
competent authorities, a continuing
such periods of the day as determined by the
program for training and skills
Secretary of Labor and Employment in
acquisition of the child.140
appropriate regulations.
Employment of Children from 15 to 18 -
The foregoing provisions shall in no case
allowed but restricted to non-hazardous
allow the employment of a person below
undertakings.
eighteen (18) years of age in an undertaking
which is hazardous or deleterious in
The following are hazardous workplaces: 141
nature as determined by the Secretary of
1. Nature of the work exposes the workers
Labor and Employment.
to dangerous environmental elements,
contaminants or working conditions;
2. construction work, logging, fire-fighting,
General Rule mining, quarrying, blasting, stevedoring, dock
Children below 15 shall NOT be employed 136 work, deep sea fishing, and mechanized
Exceptions: farming;
1. Child works directly under the sole 3. manufacture or handling of explosives
responsibility of his parents or legal and other pyrotechnic products;
guardian and where only members of the ER‘s 4. exposure to or use of heavy power-
family are employed, provided: driven machinery or equipment;
a. his employment does NOT 5. exposure to or use of power-driven tools
endanger his life, safety, health and
morals, Quantity
b.nor impairs his normal Age Bracket Daily Max Weekly Max
development, and Below 15 y 4 hours 20 hours
c. the parent or legal guardian shall 15 to below 18 8 hours 40 hours
provide the said minor child with the
prescribed primary and/or Night work prohibition
secondary education137 Age Bracket Prohibited Hours
Below 15 y 8 pm to 6 am (10 hrs)
2. Child‘s employment or participation in 15 to below 18 10 pm to 6 am (8 hrs)
public entertainment or information
through cinema, theater, radio or television is
essential, provided that:138

a. employment does NOT involve ads or

commercials promoting alcohol,
tobacco and its by-products or
violence.139
b.the employment contract is
concluded by the child’s parents or

136
Art. 139(a), Labor Code and Sec. 12 to 16 of RA 7610 as
amended by RA 7658 and RA 9231
137
Sec. 12, RA 7610 as amended by RA 7658 140
Sec. 12 of RA 7610 as amended by RA 7658
138
Sec. 12 of RA 7610 as amended by RA 7658 141
Sec 3, Rule XIII, Book III, IRR
139
Sec. 14 of RA 7610 as amended by RA 7658
5. Kasambahays
 6. Homeworkers 7. If subcontractor/contractor fails to pay
Homeworker, defined homeworker, ER is jointly and severally
liable with the former to the homeworker for
Sec. 1, Rule XIV, Book III, IRR
his/her wage148
Homeworker applies to any person who
8. ER shall assist the homeworkers in the
performs industrial homework for an
maintenance of basic safe and healthful
employer, contractor, or sub-contractor.
working conditions at the homeworkers‘
place of work149
Employer of a homeworkers, defined
9. Homework prohibited in the ff: 150
Art. 155. Distribution of homework. a. explosives, fireworks and articles of like
For purposes of this Chapter, the character;
"employer" of homeworkers includes any b.drugs and poisons; and
person, natural or artificial who, for his c. other articles, the processing of which
account or benefit, or on behalf of any person requires exposure to toxic substances.
residing outside the country, directly or
indirectly, or through an employee, agent • Regional Office shall provide technical
contractor, sub-contractor or any other assistance to registered homeworkers‘
person: organizations151
1. Delivers, or causes to be delivered, Conditions for deduction from
any goods, articles or materials to be homeworker’s earnings
processed or fabricated in or about a Sec. 8. Deduction, Rule XIV, Book III
home and thereafter to be returned or to No deduction from the homeworker‘s earnings
be disposed of or distributed in for the value of materials lost, destroyed or
accordance with his directions; or damaged unless:
 
2. Sells any goods, articles or materials 1. Homeworker is clearly shown to be
to be processed or fabricated in or about a responsible for loss or damage
home and then rebuys them after such 2. Reasonable opportunity to be heard
processing or fabrication, either by 3. Amount of deduction is fair and
himself or through some other person. reasonable, and does not exceed actual
loss or damage
Rights and benefits of homeworkers 4. Deduction does not exceed 20% of
1. Right to form, join or assist homeworker‘s weekly earnings
organizations 142
2. Right to acquire legal personality and
the rights and privileges granted by law to
legitimate labor organizations upon issuance
of the certification of registration143
3. Immediate payment upon ER‘s receipt of
finished goods or articles144
4. SSS, MEDICARE and ECC premium
contributions shall be deducted from their pay
and shall be remitted by
ER/contractor/subcontractor to the SSS145
5. Employer may require homeworker to
redo work improperly executed without
additional pay146
6. Employer need not pay homeworker for
any work done on goods or articles not
returned due to homeworker‘s fault147

142
Sec 3, Rule XIV, Book III
143
Sec 4, Rule XIV, Book III
144
Sec 6, Rule XIV, Book III 148
Sec 11, Rule XIV, Book III
145
Sec 6, Rule XIV, Book III 149
Sec 11, Rule XIV, Book III
146
Sec 9a, Rule XIV, Book III 150
Sec 13, Rule XIV, Book III
147
Sec 9b, Rule XIV, Book III 151
Sec 14, Rule XIV, Book III
7. Solo parents
8. Night workers
9. Migrant workers
10. Security guards
V. Working Conditions for 4. 78 days for caesarean delivery
Special groups This benefit shall not be included in the
computation of 13th month pay as it is
granted to an employee in lieu of wages which is
the basis for computing 13th month.
A. WOMEN WORKERS
Avaliment
Coverage Other conditions
Shall apply to all employers, whether operating 1 Employer shall advance the payment subject
for profit or not, including educational, religious to reimbursement by the SSS within 30 days
and charitable institutions from filing of leave application.
2 Availment shall be a bar to the recovery of
Exceptions sickness benefits provided by this Act for the
The government and its subdivisions same period for which daily maternity
including GOCC’s and to the employers benefits have been received.
of household helpers and persons in 3 Employee may only avail of benefit for the
their personal service insofar as such first four (4) deliveries or miscarriages.
workers are concerned.152 4 Sanction: That if an employee should give
birth or suffer miscarriage
i. a. Without the required contributions
having been remitted for her by her
iii. Special women workers ER to the SSS, or
b. Without the latter having been
iv. Maternity leave153 previously notified by the ER of time
of the pregnancy, then the employer
Coverage shall pay to the SSS damages
Every woman in the private sector, whether equivalent to the benefits which said
married or unmarried, is entitled to the employee member would otherwise
maternity leave benefits. have been entitled to.

Requisites
3. Employment
A female employee employed at the time of
delivery, miscarriage or abortion

4. Contribution
Who has paid at least 3 monthly
contributions in the 12-month period
immediately preceding the semester of her
childbirth, or miscarriage

5. Notice
Employee notified 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.

Benefits
Adaily maternity benefit equivalent to 100% of
her average daily salary credit for:

3. 60 days for normal delivery

152
Sec 1, Rule XII, Book III, IRR
153
Sec 14-A, RA 1161 as amended by RA 7322 and RA 8282
B. MINOR WORKERS
i. Conditions of employment and
rights of househelpers
C. EMPLOYMENT OF
1. Compensation
HOUSEKEEPERS Minimum wage rates shall be equivalent
to the basic cash wages plus lodging,
Domestic or household Service, defined food and medical attendance.157
Art 141. Coverage
This Chapter shall apply to all persons Art 143. Minimum Wage
rendering services in households for Househelpers shall be paid the
compensation. following minimum wage rates:

"Domestic or household services" shall 1. Eight hundred pesos

mean service in the ER's home, which (P800.00) a month for
is usually necessary or desirable for househelpers in Manila, Quezon,
the maintenance and enjoyment thereof Pasay, and Caloocan cities and
and includes ministering to the personal municipalities of Makati, San
comfort and convenience of the members of Juan, Mandaluyong,
the ER's. Muntinlupa, Navotas, Malabon,
Paranaque, Las Pinas, Pasig,
Sec1(b), Rule XII, BookIII, IRR Marikina, Valenzuela, Taguig
(b) The term ―househelper” as used herein and Pateros in Metro Manila and
is synonymous to the term ―domestic in highly urbanized cities;
servant” and shall refer to any person,  
whether male or female, who renders services 2. Six hundred fifty
in and about the employer‘s home and which pesos (P650.00) a month for
services are usually necessary or desirable for those in other chartered cities
the maintenance and enjoyment thereof, and and first-class municipalities;
ministers exclusively to the persona comfort and
and enjoyment of the employer‘s family.  
3. Five hundred fifty
pesos (P550.00) a month for
• The term `househelper' is those in other municipalities.
synonymous to the term `domestic
servant' and shall refer to any person, Provided, That the employers shall
whether male or female, who renders review the employment contracts of
services in and about the ER's home and their househelpers every three (3)
which services are usually necessary or years with the end in view of
desirable for the maintenance and improving the terms and conditions
enjoyment thereof, and ministers exclusively thereof.
to the personal comfort and enjoyment of
the ER's family.154 Provided, further, That those
househelpers who are receiving at
• A househelper or a laundry woman, as well least One thousand pesos
as a gardener, driver, or a houseboy who (P1,000.00) shall be covered by the
work in the staff house of a company Social Security System (SSS) and be
are not househelpers. 155 entitled to all the benefits provided
thereunder. (As amended by
• The criterion is not the nature of the Republic Act No. 7655, August 19,
work but the personal comfort and 1993)
enjoyment of the family of the employer
in the home of said employer. 156 Art 144. Minimum Cash Wage
Minimum cash wage. The
154
Apex Mining Co. v. NLRC, 1991
155
Apex Mining Co. v. NLRC, 1991
156
Apex Mining Co. v. NLRC, 1991 157
Art. 143-144; Civil Code Art. 1689
 minimum wage rates prescribed unless there is a stipulation to the
under this Chapter shall be the basic contrary.
cash wages which shall be paid to the Art 1691, Civil Code
househelpers in addition to lodging, If the house helper is under the age
food and medical attendance. of eighteen years, the head of the
family shall give an opportunity to
Art. 1689, Civil Code the house helper for at least
Household service shall always be elementary education. The cost of
reasonably compensated. Any such education shall be a part of the
stipulation that household service is house helper's compensation, unless
without compensation shall be void. there is a stipulation to the contrary.
Such compensation shall be in
addition to the house helper's 5. Just and humane treatment
lodging, food, and medical The employer shall treat the househelper
attendance. in a just and humane manner. In no case
shall physical violence be used upon the
2. Time and Manner of Payment: househelper159
Wages shall be paid directly to the
househelper to whom they are due at 6. Board, lodging and medical
least once a month. No deductions attendance shall be furnished by
therefrom shall be made by the employer employer
unless authorized by the househelper
himself or by existing laws.158 Art. 148. Board, lodging, and
medical attendance
3. Right against assignment to non- The employer shall furnish the
household work at a wage rate lower househelper, free of charge, suitable
than that mandated for agricultural or and sanitary living quarters as well
non-agricultural enterprises depending as adequate food and medical
on the case. attendance.
Art 1690, Civil Code
Art. 145. Assignment to non- The head of the family shall furnish,
household work. free of charge, to the house helper,
No househelper shall be assigned to suitable and sanitary quarters as well
work in a commercial, industrial or as adequate food and medical
agricultural enterprise at a wage or attendance.
salary rate lower than that provided
for agricultural or non-agricultural 7. Household work
workers as prescribed herein. Non-hazardous work for persons
between 15-18 years old.160

4. Opportunity for education 8. Contract for Domestic Service shall

If househelper is below 18 years, not exceed 2 years but renewable
employer shall provide for at least annually
elementary education. The cost shall be
part of the emplyee’s compensation Art. 142. Contract of domestic
unless otherwise agreed upon. service.
The original contract of domestic
Art. 146. Opportunity for service shall not last for more than
education. two (2) years but it may be renewed
If the househelper is under the age of for such periods as may be agreed
eighteen (18) years, the employer upon by the parties.
shall give him or her an opportunity Art 1692, Civil Code
for at least elementary education. No contract for household service
The cost of education shall be part of shall last for more than two years.
the househelper’s compensation, 159
Art. 147, Labor Code; Art 1694, Civil Code
158
Sec 9, Rule XIII, Book III, IRR 160
DO 4-99 Sec. 4
 However, such contract may be househelper.
renewed from year to year. Art 1699, Civil Code
Upon the extinguishment of the
9. Hours of Work - House helpers shall service relation, the house helper
not be required to work more than 10 may demand from the head of the
hours a day family a written statement on the
nature and duration of the service
Art 1695, Civil Code and the efficiency and conduct of the
House helper shall not be house helper.
required to work more than
ten hours a day. Every house 13. Employment Records
helper shall be allowed four days' The employer may keep such records as
vacation each month, with pay. he may deem necessary to reflect the
actual terms and conditions of
10. Vacation with Pay employment of his househelper, which
Shall be allowed 4 paid vacation days per the latter shall authenticate by signature
month or thumbmark upon request of the
employer.
Art 1695, Civil Code
House helper shall not be required to Art. 152. Employment record
work more than ten hours a day. The employer may keep such records
Every house helper shall be as he may deem necessary to reflect
allowed four days' vacation the actual terms and conditions of
each month, with pay. employment of his househelper,
which the latter shall authenticate by
11. Funeral Expenses signature or thumbmark upon
In case of death of the house helper: request of the employer.
a. The head of the family shall bear
the funeral expenses
b. If the house helper has no
ii. Termination of a housekeeper
relatives in the place where the
head of the family lives, with 1. Fixed- Security of tenure
Termination prior to contract expiry must be
sufficient means.
for just cause, if the duration of the
household service is NOT determined either
Art 1696, Civil Code
by stipulation or by the nature of the service,
In case of death of the house helper,
the ER or the househelper may give notice
the head of the family shall bear the
to put an end to the relationship five
funeral expenses if the house helper
days before the intended termination
has no relatives in the place where
of the service.
the head of the family lives, with
sufficient means therefor.
If the period for household service is fixed,
the house helper has a right against
12. Employment Certification termination before the expiration of the
ER shall give the househelper a written term, except for a just cause.
statement of the nature and duration of
the service and his or her efficiency and
Art. 149. Indemnity for unjust
conduct as househelper upon severance.
termination of services.
If the period of household service is fixed,
Art 151. Employment
neither the employer nor the househelper may
Certification
terminate the contract before the expiration of
Upon the severance of the household the term, except for a just cause. If the
service relation, the employer shall househelper is unjustly dismissed, he or she
give the househelper a written shall be paid the compensation already earned
statement of the nature and duration plus that for fifteen (15) days by way of
of the service and his or her indemnity.
efficiency and conduct as
 If the househelper leaves without justifiable 3. If the compensation is paid by the month,
reason, he or she shall forfeit any unpaid notice may be given, at the latest, on the
salary due him or her not exceeding fifteen fifth day of the month, that the service
(15) days. shall cease at the end of the month.

Art. 1697, Civil Code

If the period for household service is fixed • If unjustly dismissed, the house helper is
neither the head of the family nor the house entitled to be paid the compensation already
helper may terminate the contract before the earned plus that for 15 days by way of
expiration of the term, except for a just cause. indemnity.
If the house helper is unjustly dismissed, he
shall be paid the compensation already earned D. EMPLOYMENT OF HOMEWORKERS
plus that for fifteen days by way of indemnity.
If the house helper leaves without justifiable TOPIC K-I. Definition
reason, he shall forfeit any salary due him and Note: DO 5, DOLE (February 4, 1992), is now
unpaid, for not exceeding fifteen days. Rule XIV, Book III of the IRRI.

2. Not fixed- Indemnity for unjust

termination of service

If the duration of the household service is

not fixed either by stipulation or by the
nature of the service, the employer or the
house helper may give notice to end, the
relationship five days before the intended
termination. (Rule XII, Book III Sec. 10-17
IRR)

Art. 150. Service of termination notice

If the duration of the household service is not
determined either in stipulation or by the
nature of the service, the employer or the
househelper may give notice to put an end to
the relationship five (5) days before the
intended termination of the service.

Art. 1698, Civil Code

If the duration of the household service is not
determined either by stipulation or by the
nature of the service, the head of the family or
the house helper may give notice to put an end
to the service relation, according to the
following rules:

1. If the compensation is paid by the day,

notice may be given on any day that the
service shall end at the close of the
following day

2. If the compensation is paid by the week,

notice may be given, at the latest on the
first business day of the week, that the
service shall be terminated at the end of
the seventh day from the beginning of the
week
IV. POST-EMPLOYMENT merely contractual. They are so impressed
with public interest that labor contracts must
A. Employer-employee yield to common good. Therefore, such
relationship contracts are subject to the special laws on
Person, defined labor unions, collective bargaining, strikes and
Art 97. Definitions, (a) Person lockouts, closed shop, wages, working
The relation between capital and labor are not conditions, hours of labor and similar subjects
merely contractual. They are so impressed
with public interest that labor contracts must
yield to 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

Employer, defined
Art 97. Definitions, (b) Employer
Any person acting directly or indirectly in the
interest of an employer in relation to an
employee and shall include government and
all its branches, subdivisions and
instrumentalities, all government-owned or
controlled corporations and institutions, non-
profit private institutions, or organizations. 161

Employee, defined
Art 97. Definitions, (c) Employee
Any individual employed by an employer
Art 167. Definitions, (c) Employee
Any person compulsorily covered by the GSIS
under Commonwealth Act no. 186 as
amended, including the members of the
Armed Forces of the Philippines, and any
person employed as casual, emergency,
temporary, substitute or contractual, or any
person compulsory covered by the SSS under
RA 1161, as amended.162
Art 212. Definitions, (f) Employee
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 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.163

Employer-Employee Relationship
Art 1700, Civil Code
The relation between capital and labor are not
161
Art 97. Definitions, (a) Employer
162
Art 167. Definitions, (c) Employee, Title II: Employee’s
compensation and State Insurance Fund, Book 4: Health,
Safety and Social Welfare Benefits, Labor Code
163
Art 212. Definitions, (f) Employee, Title I: Policy and
Definitions. Book 5: Labor Relations, Labor Code
 1. Tests to determine e. Seasonal
existence f. Fixed-term
Existence of Employer-Employee g. Probationary; private
relationship as condition sine quo non.
The law on labor standards is predicated upon school teachers
the existence of an employer-employee Employer and employee, defined
relationship. Absent employer-employee
relation, the law on labor standards will not
apply.164

Four-Fold Test: The four elements must be

considered to determine the existence of
employer-employee relationship:
2. Selection and engagement of the
employees
3. Payment of wages
4. Power of dismissal
5. Power to control the employees
conduct in relation to his work,

• The control test is the most crucial

indication of the existence of an employer-
employee relationship.165
• Power of control refers to the existence of
the power and not necessarily to the actual
exercise thereof.
• The most important is the employer’s
control of the employee’s conduct, not only
as to the results of the work to be done, but
also as to the means and methods to
accomplish.

2. Legitimate
subcontracting contracting
as distinguished from
labor-only
a. Elements
b. Trilateral relationship
c. Liabilities

3. Kinds of employment
a. Regular
b. Casual
c. Contractual
d. Project
164
Abad, Jr, Antonio H. (2008). The Law on Labor
Standards. Rex Printing Company, Inc.
165
The Manila Hotel Corp v. NLRC, 343 SCRA 1 (2000); Jo v.
NLRC 324 SCRA 437 (2000); Canlubang Security Agency v.
NLRC, et al., 216 SCRA 280 (1992).
Contracting or Sub-Contracting Independent contractor, defined
Contracting or sub-contracting is an The independent contractor is tasked to do work
arrangement whereby an employer engages the according to his own methods and without the
services of a contractor who undertakes to control of the sub-contractor only as to the
perform a certain work, task, or job on his own results.
account under his own responsibility free from
the control and direction of his employer in all They must have:
matters except as to result of the work. 1. Substantial Capital
2. Assure that the contractual employees
Contracting is not illegal per se. the are entitled to all labor and occupational safety
determination of whether services should be and health standards, free to exercise right to
performed by its own personnel or contracted to self-organization, security of tenure and social
outside agencies belongs to the employer. and welfare benefits.

In a valid contracting or subcontracting Contractors must be registered with the DOLE

arrangement, employer-employee relationship is Regional Office where it principally operates.
not created between the principal and the
employees of the contractor. The employees of Failure to register shall give rise to the
the contractor remain the contractor’s employees presumption that the contractor is engaged in
and his alone. labor only- contracting. But this presumption is
merely a disputable presumption which can be
However, when the contractor fails to pay the overcome by proof that the contractor has a
wages of his employees, the principal becomes distinct and independent business.
solidarily liable with his contractor for such
unpaid wages. The solidary liability of the Conversely, the mere fact of registration does not
principal is limited to the extent of the work necessarily mean that it is a legitimate
performed under the contract. This is the period contractor. Registration merely removes the
when contractor’s employees were working for presumption of being a mere labor-only
the principal. contractor. It does not bar a party from proving
that the contractor is a labor only contractor.
Other than unpaid wages, the principal is not
liable for any other monetary claim made by the The registration is valid for 2 years and may be
employees of the contractor. renewed 30 days prior to its expiration.

The imposition of solidary liability does not Contractors must submit to DOLE Regional
preclude the principal from seeking Office a semi-annual report.
reimbursement from the contractor for whatever
amount he may be adjudged to pay the Contractors that are not required to register:
contractor’s employees. 1. Contractors in the construction industry
licensed by the PCAB
Requisites of Valid Contracting 2. Firms engaged in information technology-
1. The contractor must have a distinct and enabled services involving an entire business
independent business; process, such as:
2. The contractor must have substantial capital, a. knowledge process outsourcing
tools, equipment, work premises and other b. business process outsourcing
necessary materials to carry out the contracted c. hardware or software support
services. d. medical transcription
3. The contractor must undertake to perform the e. animation services
work free from the control and direction of his f. back office operations or support166
employer in all matters except as to results
thereof.
Where Illegal
Contracting or sub-contracting is deemed illegal
when:
1. entered into with a labor-only contractor

166
Department Circular No. 01, series of 2012
 Engaging in a contracting or sub-contracting
2. the principal farms out work to a cabo. arrangement under any of the following
[Cabo refers to a person or group of persons or to a labor circumstances is a ground for cancellation of
group which, in the guise of a lab org, supplies workers to the registration. Contractors whose
an employer, with or without monetary or other
consideration, whether in the capacity of an agent of the registration were cancelled can no longer
employer or as an ostensible independent contractor.] engage in contracting or sub-contracting even
if it uses a different name.
3. entered into with an in-house agency
[In-house agency refers to a contractor or subcontractor Labor- Only Contracting
engaged in the supply of labor which is owned, managed
or controlled by the principal and which operates solely for
Labor-only contracting is an arrangement
the principal.] whereby the contractor who does not have
substantial capital or investment in the form of
4. entered into with an in-house cooperative tools, equipment, machineries, and work
which merely supplies workers to the premises merely recruits or supplies workers
principal. only, to a principal employer to perform a job,
[In-house cooperative refers to a cooperative which is work or activity directly related to the main
managed or controlled, directly or indirectly, by the business of the principal employer.
principal or one where the principal or any of its officers
owns/ represents any equity or interest, and which
operates solely or mainly for the principal.] Elements
1. The contractor merely supplies workers
5. contracting was done because of an actual or only to a principal
impending 2. the activities performed by the workers are
a. strike or directly related to the main business of the
b. lockout principal employer.
3. the contractor does not have substantial
6. the contractual employees are required to capital or investment in the form of tools,
sign, as a precondition to employment or equipment, machineries, or work premises to
continued employment: carry out the contracted job or service
a. an antedated resignation letter
b. a blank payroll Labor only contractor, defined
c. a waiver of labor standards, minimum This happens when the contractors merely
wages, and welfare benefits supply, recruit, or place workers to perform job,
work/ service for the principal and any of the
7. contracting interferes with the exercise their following are present:
right to self- organization 1. Does not have substantial capital
and
8. the employees of the contractor or sub- 2. Does not have substantial
contractor are required to perform functions Investment
which are currently being performed by the 3. The service to be rendered by the
regular employees employee is directly related to the main
business
9. the contractor or subcontractor repeatedly 4. The recruiter does not exercise
hires employees under an employment control over the performance of the
contract of short duration contractual employees

10. the employees are required to sign a Substantial capital

contract fixing the period of employment to a Sec. 3(l) D.O. No 174 series of 2017
term shorter than the term of the Service
Substantial capital refers to paid up capital
Agreement, unless the contract is divisible into
stocks/ shares of at least 5M in the case of
phases which require substantially different
corporation, partnership and cooperatives;
skills, made known to the employee at the time
in the case of single proprietorship, a net
of engagement.
worth of at least 5M.
11. other practices, schemes or employment The contractor has burden of proving
arrangement designed to circumvent the right that he has substantial capital or
to security of tenure. investment.
Effect of Labor Only Contracting
When there is labor-only contracting,
the employees of the LOC will become
employees of the principal which means
that they are entitled to all rights and
benefits accorded to regular employees
of the principal.

Liability of indirect employer

Article 106: Trilateral Relationship in
Contracting Arrangements, Labor Code
In legitimate contracting, there exists a
trilateral relationship under which there is a
contract for a specific job, work or service
between the principal and the contractor or
subcontractor, and a contract of employment
between the contractor or subcontractor and
its workers. Hence, there are three parties
involved in these arrangements, the principal
which decides to farm out a job or service to a
contractor or subcontractor, the contractor or
subcontractor which has the capacity to
independently undertake the performance of
the job, work or service, and the contractual
workers engaged by the contractor or
subcontractor to accomplish the job work or
service.

• An employer who enters into a contract with

a contract for the performance of work for
the employer does not create an employee
employer relationship between himself and
the contractor. However, when a contractor
fails to pay the wages and and severally
liable.167

• This trilateral relationship is limited

only to ensure that the employee get
paid what is due them.

167
Phil. Bank Communications vs. NLRC 146 SCRA 347
(1986)
Job Labor-only
Contracting Contracting
Contractor Contractor
provides services provides
manpower only
No ER-EE ER-EE
relationship relationship is
exists between created by law
employees of between the
contractor and principal
principal employer and
employer employees of the
labor-only
contractor
Principal Principal
employer is employer is
considered only considered as
as an indirect direct employer
employer. of the employees
of labor- only
contractor
The Principal The principal
employer employer and
becomes LOC are
solidarily liable solidarily liable
only if the
contractor fails
to pay
Principal Principal
employer is employer is
solidarily liable solidarily liable
to employees of to employees of
contractor only LOC for all rights
for unpaid wages and benefits
accorded to
regular
employees of the
principal.
B. Termination by employer The employer’s privilege to transfer its
employees to different workstations cannot be
Art 278. Coverage
used as a subterfuge to rid itself of an
The provisions of this Title shall apply to all
undesirable worker.171
establishments or undertakings, whether for
profit or not.
Nature of right
Art 279. Security of Tenure
• Security of tenure is a right of paramount
In cases of regular employment, the employer value guaranteed by the Constitution .
shall not terminate the services of an 172
It stands to reason that a right so highly
employee except for a just cause or when ranked as security of tenure should not lightly
authorized by this Title. An employee who is be denied on mere speculation.173
unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority
• Dismissal based on loss of trust and
rights and other privileges and to his full
confidence arising from alleged misconduct
backwages, inclusive of allowances, and to his
of employee is not to be used as a shield to
other benefits or their monetary equivalent
dismiss an employee arbitrarily.174
computed from the time his compensation
was withheld from him up to the time of his
• Termination without just cause entitles a
actual reinstatement.
worker to reinstatement regardless of
whether he was accorded due process.
Security of Tenure, defined
Security of Tenure means the right not to be Termination for a just cause even without
removed from one’s job except for a valid reason procedural due process, does not warrant
and through proper procedure.168 reinstatement. The employer incurs only
liability for damages.175
Balancing of Interest in disciplinary cases
1.Labor’s interests Coverage
Worker’s right to labor is recognized by the • All workers are entitled to security of
Constitution as property right. An employee tenure.176
cannot be deprived of his work without just
• Confidential and Managerial employees are
cause or due process
also entitled to security of tenure. They
cannot be arbitrarily dismissed at any time,
2. Management’s interests
and without cause as reasonably established
Discipline of employees is a management
in an appropriate investigation.177
prerogative. The employer cannot be
compelled to continue to employ such persons
In case of regular employment, the employer
whose continuance in the service will patently
shall not terminate the services of an employee.
be inimical to his interest.169
Exceptions:178
The right of employees to security of tenure does
1. When it is for a just cause179 or
not give them vested rights to their positions to
2. When authorized by law180
the extent of depriving management of its
prerogative to change their assignments or to
transfer them. 171
Veterans Security Agency Inc. v Gonzalvo, Jr.
172
Art 11, Sec 9, 1987 Constitution. The State shall afford
The employer must be able to show that the protection to labor and "shall assure the rights of workers to .
transfer is not unreasonable, inconvenient or . . security of tenure"
prejudicial to the employee; nor does it involve 173
Llosa Tan v Silahis International Hotel 181 SCRA 738
a demotion in rank or a diminution of his (1990); City Service Corp. Workers Union v City Services
Corp 135 SCRA 564 (1985)
salaries, privileges and other benefits. 174
Llosa Tan v Silahis International Hotel 181 SCRA 738
Otherwise the transfer shall tantamount to (1990);
constructive dismissal.170 175
Alhambra Industries v NLRC
176
Art XIII, Sec 3, 1987 Constitution
177
Inter Oriental Maritime Enterprises, Inc. v NLRC 235
SCRA 268 (1994)
178
Subject to the requirements of due process (IRR, Book V,
168
azucena Rule 23, Sec1. Security of Tenure)
169
Virginia Sugue v Triumph International Phils, Inc. (2009) 179
See Art 282, Labor Code
170
Endico v Quantim Foods Distribution Center 180
See Art 283-284, Labor Code
Requisites of a Valid Termination181 employee of his duties;
1. Substantive due process • Fraud or willful breach by the
Legality of the act of dismissal as employee of the trust reposed in him by
provided under articles 282 to 284 of the his employer or duly authorized
Labor Code. representative;
2. Procedural due process • Commission of a crime or offense by
the employee against the person of his
Legality in the manner of employer or any immediate member of his
dismissal with due observance of the family or his duly authorized
representatives; and
procedural requirements. • Other causes analogous to the
foregoing.
Measure of Penalty
• Employee’s length of service is taken into
consideration in imposing the penalty to be
meted an erring employee.182 But if it is to be a. Serious Misconduct or
regarded as a justifying circumstance in Willful disobedience
moderating the penalty of dismissal, it will Misconduct, defined
actually become a prize for disloyalty, Improper or wrong conduct. It is the
perverting the meaning of social justice and transgression of some established and definite
undermining the efforts of labor to cleanse its rule of action, a forbidden act, a dereliction of
ranks of all undesirables.183 duty willful in character, and implies wrongful
• The penalty must be commensurate intent and not mere error in judgment.186
with the act, conduct or omission
imputed to the employee and must be Requisites for serious misconduct187
imposed in connection with the disciplinary 1. Conduct must be serious
authority of the employer.184 2. Must relate to the performance of the
• While the employer has the inherent right to employee’s duties
discipline, including that of dismissing its 3. Must show that the employee has
employees, this prerogative is subject to the become unfit to continue working for
regulation by the State in the exercise of its the employer
police power.185
Examples of Serious Misconduct
justifying termination
1. Requisites for validity 1. Falsification of time records188
2. Immorality. Teachers must adhere to the
a. Substantive due exacting standards of morality and
process decency. A teacher, both in his official
and personal conduct, must display
i. Just causes exemplary behavior.189
Art. 282. Termination by employer. 3. Moonlighting. It is a valid ground for
An employer may terminate an employment dismissal for unauthorized use of
for any of the following causes: company time.190
4. Theft of company property191
• Serious misconduct or willful 5. Drug abuse. Supreme Court has taken
disobedience by the employee of the judicial notice of scientific findings that
lawful orders of his employer or
representative in connection with his
work; 186
Pastor Austria v NLRC, 312 SCRA 410 (1999); Fujitsu
• Gross and habitual neglect by the Computer Products Corporation of the Philippines v CA, 454
SCRA 737 (2005)
181
Shoemart v NLRC, 176 SCRA 385 (1989); Ting v CA, 494 187
Pastor Austria v NLRC, 312 SCRA 410 (1999); Fujitsu
SCRA 610 (2006) Computer Products Corporation of the Philippines v CA, 454
182
Inter Oriental Maritime Enterprises, Inc. v NLRC 235 SCRA 737 (2005)
SCRA 268 (1994) 188
Felix v Enertech Systems Industries, Inc, 355 SCRA 680
183
Bago v NLRC (2007) (2001)
184
Sagales v Rustan’s Commercial Corporation (2008); 189
Santos, Jr v NLRC, 287 SCRA 117 (1998)
Farrol v CA (2000) 190
Capitol Wireless v Balagot, 513 SCRA 672 (2007)
185
Sagales v Rustan’s Commercial Corporation (2008) 191
Caltex Phils, Inc v Agad (2010)
 drug abuse can damage the mental results to loss of trust and confidence,
faculties of the user. 192 dismissal is valid and legal.196
• A single or isolated acts of negligence do not
Willful disobedience constitute a just cause for the dismissal of the
(Insubordination) employee.197
Requisites of Willful disobedience 193 • An unsatisfactory rating can be a just cause
1. Employee’s assailed conduct must have for dismissal only if it amounts to gross and
been willful or intentional, habitual neglect of duties. The fact that an
2. The willfulness being characterized by a employee’s performance is found to be poor
“wrongful and perverse attitude”; or unsatisfactory does not necessarily mean
3. The order violated must have been that the employee is grossly and habitually
reasonable, lawful, made known to negligent of his duties.198
the employee and
4. Order must pertain to the duties which Examples of Gross of Habitual neglect of
he had been engaged to discharge. duties justifying termination

1. Abandonment of work
The deliberate and unjustified refusal of
b. Gross and Habitual an employee to resume his employment.
Neglect (Neglect of duties) It is a form of neglect of duty, and hence,
Gross Negligence, defined a just cause for termination by
Want or absence of or failure to exercise slight employer.199
care of diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences Requisites of Abandonment200
without exerting any effort to avoid them. 1. Failure to report for work or
absence without valid or
Requisites of Neglect of duties justifiable reason
1. Gross neglect of duty 2. Clear intention to sever the
2. Neglect must be habitual employer-employee
relationship.
Gross Negligence, Habitual Neglect and
Fraud194 The burden of proof to show that there
Fraud and was unjustified refusal to go back to
Gross Habitual willful work rests on the employer.201
negligence neglect neglect of
duties The filing by an employee of a complaint
Want of Repeated Imply bad for illegal dismissal is proof of her desire
care in the failure to faith on the to return to work, thus negating the
performance perform one’s part of the employer’s charge of abandonment.202
of one’s duties duties over a employee in
period of failing to Employer must serve a memo or show-
time, perform his cause letter to the employee at her last
depending job to the known address requiring her to report
upon the detriment of
circumstances the employer for work or to explain her absence, with
and the a warning that her failure to report
employer’s
business
195
National Sugar v NLRC (1998)
196
School of the Holy Spirit of Quezon City v Taguiam, GR
165565 (2008)
• To be a valid ground for dismissal, neglect 197
National Bookstore, Inc. v CA (2000), 327 SCRA 541
must be both gross and habitual.195 However, 198
Eastern Overseas Employment Center, Inc. v Bea, GR
if gross negligence, though not habitual, 143023 (2005)
199
Abad
192
Bughaw Jr v Treasure Island 550 SCRA 307 (2008) 200
Padilla Machine Shop v Javilgas, 2008, 546 SCRA 351
193
First Dominion Resources Corporation v Penaranda, 480 201
Tacloban Far East Marketing Corporation v CA, GR
SCRA 504 (2006) 182320, 2009
194
JGB and Associates, Inc. v NLRC (1996), 254 SCRA 457 202
Henlin Panay Company v NLRC, GR no 180718
 would be construed as abandonment of 4. There must exist substantial
work.203 evidence, and should not be based on
Employer should serve the employee a mere surmises, speculations and
conjectures
notice of termination as required by
law.204 Breach must be willful and not ordinary
2. Habitual absenteeism breach211
Repeated and habitual infractions,
committed despite several warnings, • The breach is willful if it is done intentionally,
constitute gross misconduct. Habitual knowingly and purposely without justifiable
absenteeism without leave constitute excuse.
gross negligence and is sufficient to • There must be a cause for the loss of
justify termination of an employee.205 confidence. It must rest on some basis which
must be convincingly established. An
Employee’s infractions are worse than employee must not be dismissed on mere
inefficiency. They border on presumptions or suppositions.212
dishonesty constituting serious
misconduct.206
Employee holds a position of trust and
A series of irregularities when put confidence
together may constitute serious • General rule: dismissal on the ground of
misconduct.  We also held that gross loss of trust and confidence is restricted to
neglect of duty becomes serious in Managerial employees213
character due to frequency of instances. 
There can be no good faith in Exception: it also applies to rank-and-
intentionally and habitually incurring file employees when position is reposed
inexcusable absences.207 with trust and confidence. 214 (Cashiers,
auditors, property custodians)
c. Loss of trust and
confidence/ fraud or • Rules of dismissal for managerial
employees are different from those
willful breach of trust governing ordinary employees.215
Fraud, defined
Deemed to comprise anything calculated to
Managerial and
deceive, including all acts, omissions, and Rank and file
confidential
concealment involving a breach of legal or employees
employees
equitable duty, trust or confidences justly
Employers are Termination based
reposed, resulting in damage to another, or by
generally allowed a on the ground of
which an undue and unconscientious advantage
wider latitude of loss of trust and
is taken of another. Deceit is a specie of fraud.208
discretion in confidence
terminating requires proof of
Requisites of willful breach of trust managerial personnel, involvement in the
leading to loss of trust and confidence 209 or those similar rank, events in
1. Breach must be willful and not performing functions question216
ordinary breach210 which, by their nature,
2. Employee hold a position of trust
and confidence
3. Must be in relation to the work
performed
211
Salas v Aboitiz One, Inc., GR 178236 (2008) 
203
Henlin Panay Company v NLRC, GR no 180718 212
Nozario Austria v NLRC, 310 SCRA 293 (1991)
204
Henlin Panay Company v NLRC, GR no 180718 213
Fujitsu Computer Products Corp v. CA; 2005, Villanueva v
205
Challenge Socks Corporation v CA, 2005, 474 SCRA 356 NLRC (1998)
206
Arseno Quiambao v Manila Electric Company, 2009 214
Coca Cola v NLRC (1989)
207
Quiambao v Manila Electric Co., GR 171023, 2009 215
Mania Midtown Commercial Corporation v NUHRAIN,
208
Yolanda Garcia v People (1999), 375 Phil 1078, 1091 (1988), 159 SCRA 212
209
Roberto Gonzales v NLRC 216
Mania Midtown Commercial Corporation v NUHRAIN,
210
Salas v Aboitiz One, Inc., GR 178236 (2008) (1988), 159 SCRA 212
 require the employer’s 1. The employer himself or
full trust and 2. Any immediate member of his family224
confidence 1. Spouse
2. Ascendants
• Strained Relation Rule 3. Descendants
It would be unjust and inequitable to compel 4. Legitimate, natural or adopted
an employer to continue with the siblings of the employer or of his
employment of a person who occupies a relative by affinity or consanguinity
managerial and sensitive position despite loss within the 4th civil degree
of trust and confidence
• Termination by employer on the basis of
The relationship must be considered commission of a crime is an act of self-
seriously strained, foreclosing the remedy of defense impelled by the natural instinct of
reinstatement.217 self-preservation.
• The acquittal in a criminal prosecution
Trust in an employee, once lost is difficult, if involving misconduct is not binding and
not impossible to regain.218 conclusive upon a labor tribunal. 225
Conviction of an employee in a criminal case
• Strained Relation rule does not apply to ULP is not indispensable to warrant his dismissal
cases where the employee was dismissed for by his employer.226
union activities.219
e. Analogous causes
• Penalty of dismissal for breach of trust cannot Examples of Analogous causes justifying
be mitigated by length of service.220 The termination
longer an employee stays in the service of the 1. Attitude problem is a valid ground for
company, the greater is his responsibility for termination.227
knowledge and compliance with the norms
and conduct and the code of discipline of the An employee who cannot get along with
company.221 his co-employees is detrimental to the
company for he can upset and strain the
Requirement of Substantial evidence working environment. Thus
• Proof beyond reasonable doubt of employee’s management has the prerogative to take
misconduct is not required. It is sufficient the necessary action to correct the
that employer has reasonable grounds to situation and protect its organization.
believe that the employee is responsible for
the misconduct which renders him unworthy It is analogous to loss of trust and
of the trust and confidence demanded of his confidence that must be duly proved by
position.222 the employer.
• If there is sufficient evidence to show that the
employee occupying a position of trust and 2. Stealing the wallet of a co-
confidence is guilty of a breach of trust, or employee cannot be a ground for
that his employer has ample reason to dismissal under serious misconduct
distrust him, the labor tribunal cannot justly because it is not work-related. But the
deny the employer the authority to dismiss employee can be validly dismissed for
such employee.223 cause analogous to serious
misconduct.228
d. Commission of a crime
Commission of a crime should be made against:
217
Aurelio v NLRC, 1993, 221 SCRA 432 224
Art 11 (2), RPC
218
Bago v NLRC, Standard Insurance Co. Inc., 2007 225
Starlight Plastic Industrial Corporation v NLRC, 1989, 171
219
Gubac v NLRC, 187 SCRA 412 (1990) SCRA 315; Commercial motors Corporation v
220
PLDT v NLRC, 164 SCRA 671 (1988) Commissioners, NLRC. 1990, 192 SCRA 191; Reno Foods Inc.
221
Citybank N.A. v Gatchalian, 240 SCRA 212 (1995) v Nagkakaisang Lakas ng Manggagawa-Katipunan, 2010
222
Ocean Terminal Services, Inc. v NLRC, 197 SCRA 491 226
Mercury Drug Corp. v NLRC, 1989, 177 SCRA 580
(1991) 227
Heavylift Manila, Inc v CA, 473 SCRA 541, 2005
223
Eats-cetera Food Services Outlet v Letran, GR 179507, 228
John hancock life insurance corporation v Davis, GR
2009 169549, 2008
 A cause analogous to serious misconduct
is a voluntary and/or willful act or General rule:
omission attesting to an employee's It is the totality, not the compartmentalization of
moral depravity.  company infractions that the employee had
consistently committed, which justifies the
Theft committed by an employee against penalty of dismissal. 235
a person other than his employer, if
proven by substantial evidence, is a Exceptions:
cause analogous to serious misconduct. Previous past infractions may be used as
a justification for an employee’s
3. Obesity of a flight attendant, when dismissal from work only if in
the airline company constituted a connection with a subsequent similar
continuing qualification of an employee offense.236
to keep the job, is a ground for dismissal
under Art 282(e). His obesity may not be • Past infractions for which an employee had
unintended, but is nonetheless already been penalized cannot be collectively
voluntary.229 taken as a justification for his dismissal from
the service.237
f. Others
• Courtesy resignations were utilized in g. Constructive Dismissal
government reorganization.230 Constructive dismissal, defined
• Change of ownership is a management Quitting because continued employment is
prerogative. Where such transfer of rendered impossible, unreasonable or unlikely,
ownership is in good faith, the transferee is as an offer involving demotion in rank and a
under no legal duty to absorb the transferor diminution in pay.238
employees. The most that the transferee may May also involve act of clear discrimination,
do is to give preference to the qualified insensibility, or disdain by an employer that it
separated employees in the filling of becomes so unbearable on the part of the
vacancies in the facilities of the purchaser.231 employee that it could foreclose any choice by
• Fixed-term employment. If the contract him except forego his continued employment.239
is for a fixed term and the employee is
dismissed without just cause, he is entitled to Test of constructive dismissal
the payment of his salaries corresponding to Whether a reasonable person in the employee's
the unexpired portion of the employment position would have felt compelled to give up
contract.232 his position under the circumstances.240
•  Previous offenses may be used as valid
justification for dismissal from work only if • Resignation contemplates a voluntary act;
they are related to the subsequent infraction- thus, an employee who is forced to relinquish
basis of the termination of employment.  his position due to the employer's unfair or
Previous infractions, in other words, may be unreasonable treatment is deemed to have
used if they have a bearing on the proximate been illegally terminated or discharged.241
offense warranting dismissal.233
• Employer’s sudden, arbitrary and unfounded
Totality of Infraction Doctrine adoption of the two-day work scheme which
Where the employee has been found to have greatly reduced petitioners’ salaries renders it
repeatedly incurred several suspensions or liable for constructive dismissal.242
warnings on account of violations of company
rules and regulations, the law warrants their
dismissal as it is akin to “habitual
235
Manila Electric Company v NLRC, 263 SCRA 531 (1996)
236
Stellar Industrial Services, Inc. v NLRC, 252 SCRA 323
delinquency”.234 (1996)
237
Tower Industrial Sales v CA, 487 SCRA 556 (2006), citing
229
Yrasuegui v PAL, GR 168081, 2008 Lopez v NLRC, 297 SCRA 508 (1998)
230
Batongbacal v Associated Bank, 168 SCRA 600, 1988 238
Jo Cinema Corporation v. Abellana, 2001, 360 SCRA 142
231
Manlimos v nlrc , 242 SCRA 145, 1995 239
Hyatt Taxi Services, Inc v. Catinoy, 2002, 359 SCRA 686;
232
Medenilla v PVB, GR 127673, 2000 Gilles v CA, GR 149273, 2009
233
Mc Donald’s v Alba, GR 156382, 2008; La Carlota Planters 240
Gilles v CA, GR 149273, 2009;
Association v NLRC, 1998 241
Gilles v CA, GR 149273, 2009;
234
Villeno v NLRC, 251 SCRA 494 (1995) 242
La Rosa v Ambassador Hotel, GR 177059, 2009
• Demotion is allowed as a penalty. The Promotion, defined
appropriateness depends on factors such as The  advancement from one position to another
employer’s tolerance of or laxity in past with an increase in duties and responsibilities as
similar offences, employee’s years of service authorized by law, and usually accompanied by
and record, and even the amount of money or an increase in salary.247
value involved.
• For there to be a promotion is that there must
h. Transfer be an “advancement from one position to
• The transfer of employees is a another” or an upward vertical movement of
management prerogative subject only to the employee’s rank or position.  Any increase
limitations found in law, collective bargaining in salary should only be considered incidental
agreement, and general principles of fair play but never determinative of whether or not a
and justice.243 promotion is bestowed upon an employee.248
• An employee’s right to security of tenure
does not give him such a vested right • There is no law that compels an employee to
in his position as would deprive the accept a promotion for the reason that a
company of its prerogative to change his promotion is in the nature of a gift or reward,
assignment or transfer him where he will be which a person has a right to refuse.249
most useful.244
• The objection to the transfer being grounded j. Residency training
solely upon the personal inconvenience • Residency or resident physician position in a
or hardship that will be caused to the medical specialty is never a permanent one.
employee by reason of the transfer is not a Residency connotes training and temporary
valid reason to disobey an order of transfer. status. It is a step taken by a physician right
Employee may be dismissed for Willful after post-graduate internship prior to his
disobedience.245 recognition as a specialist or sub specialist in
a given field.
Transfer as valid management
prerogative and transfer as constructive • The appointment was for a definite and
dismissal246 renewable period which, when it was not
Valid renewed, did not involve a dismissal but an
Constructive expiration of the petitioner's term.250
management
dismissal
prerogative
When continued
No demotion in employment is
rank or diminution rendered impossible,
of salary, benefits, unreasonable or
and other privileges, unlikely;
and the action is not When there is a
motivated by demotion in rank
discrimination, and/or a diminution
made in bad faith, in pay; or
or effected as a form When a clear
of punishment or discrimination,
demotion without insensibility or
sufficient cause. disdain by an
employer becomes
unbearable to the
employee.

i. Promotion
243
Aguanza v Asian Termminal Inc, GR 163505, 2009
244
PLDT v Paguio, 472 SCRA 453, 2005 247
Phil Telegraph v CA, GR 152057, 2003
245
Herida v F&C Pawnshop and Jewelry Store, GR 172601, 248
Phil Telegraph v CA, GR 152057, 2003
2009 249
Phil Telegraph v CA, GR 152057, 2003
246
Aguanza v Asian Termminal Inc, GR 163505, 2009 250
Felix v Buenaseda, 240 SCRA 139, 1995
 ii. Authorized causes
Art. 283. Closure of establishment and Installation of Labor-Saving
reduction of personnel.  Devices
The employer may also terminate the Contemplates the installation of machinery to
employment of any employee due to the effect economy and efficiency in its method of
installation of labor-saving devices, production.254
redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the Where the introduction of labor-saving devices is
establishment or undertaking unless the resorted to not merely to effect greater
closing is for the purpose of circumventing the efficiency in the operations of the business but
provisions of this Title, by serving a written principally because of serious business reverses
notice on the workers and the Ministry of and to avert further losses, the device could then
Labor and Employment at least one (1) month verily be considered one of retrenchment.255
before the intended date thereof. In case of
termination due to the installation of labor- Redundancy
saving devices or redundancy, the worker Situation where the services of an employee are
affected thereby shall be entitled to a in excess of what is reasonably demanded by the
separation pay equivalent to at least his one actual requirements of the enterprise.
(1) month pay or to at least one (1) month pay
for every year of service, whichever is higher.
An employer has no legal obligation to keep on
In case of retrenchment to prevent losses and
the payroll employees more than the number
in cases of closures or cessation of operations
needed for the operation of the business.256
of establishment or undertaking not due to
serious business losses or financial reverses,
the separation pay shall be equivalent to one Requisites for valid redundancy
(1) month pay or at least one-half (1/2) month program257
pay for every year of service, whichever is 1. Written notice served on both the employee
higher. A fraction of at least six (6) months and the DOLE at least one month prior to
shall be considered one (1) whole year. the intended date of termination;
2.Payment of separation pay equivalent to at
least one month pay or at least one month
Authorized causes of termination251
pay for every year of service, whichever is
1. Labor-saving devices
higher;
2.Redundancy
3.good faith in abolishing the redundant
3.Retrenchment
position; and
4.Closing or cessation of operation
4.Use of fair and reasonable criteria in
5. Disease or illness
ascertaining what positions are to be
6.Totality of infractions
declared redundant.
Basis of employer’s right
Criteria in implementing a redundancy
The law acknowledges the right of every business
program258
entity to reduce its work force if such measure is
1. Preferred status
made necessary or compelled by economic
2.Efficiency
factors that would otherwise endanger its
3.Seniority.
stability or existence.252

General rule: The wisdom or soundness of the Retrenchment

decision is not subject to discretionary review on An economic ground to reduce the number of
the part of the Labor Arbiter, the NLRC and the employees due to business losses or reverses
CA. which are serious, actual and real.
Exception: Such decision may, however, be
rejected if the same is found to be in Cause of retrenchment
violation of the law or is arbitrary or
malicious.253  254
Edge Apparel Inc. v NLRC, 286 SCRA 302, 1998
255
Edge Apparel Inc. v NLRC, 286 SCRA 302, 1998
251
Art 283, 284; Abad 256
Edge Apparel Inc. v NLRC, 286 SCRA 302, 1998
252
Edge Apparel Inc. v NLRC, 286 SCRA 302, 1998 257
Lowe Inc v CA, GR 164813, 2000
253
Elleccion v NLRC, GR 184735, 2009 258
Lowe Inc v CA, GR 164813, 2000
Normally resorted to by management during • Retrenchment cannot be resorted to once
periods of business reverses and economic business losses had already decreased and the
difficulties occasioned by such events as business had picked up.264
recession, industrial depression, or seasonal
fluctuations.  Closing or cessation of operation
Closure of company may pertain to:265
Retrenchment as a means of last resort 1. Complete cessation of business
Retrenchment is only a measure of last resort, operation
when other less drastic means have been tried 2. Partial cessation of business operation
and found to be inadequate.259 3. Shut-down of establishment

Requirements for valid retrenchment260 Closure may be due to:

The requirements must be proved by clear and 1. Serious business loss
convincing evidence 2. Not due to business loss
1. That retrenchment is reasonably
necessary and likely to prevent business Requisites of a valid Closure of business
losses which, if already incurred, are not 1. Bona fide closure/cessation of
merely de minimis, but substantial, business, i.e., its purpose is to advance
serious261, actual and real, or if only the interest of the employer and not to
expected, are reasonably imminent as defeat or circumvent the rights of
perceived objectively and in good faith employees under the law or a valid
by the employer; agreement; 
2. Written notice served on both the 2. Written notice served on both the
employee and the DOLE at least one employee and the DOLE at least one
month prior to the intended date of month prior to the intended date of
termination; termination;
3. Payment of separation pay 3. Separation pay, in case of
equivalent to at least one month pay or closure/cessation of business not due to
at least one month pay for every year of financial losses. It must be equivalent to
service, whichever is higher; ½ month pay for every year of service or
4. good faith in exercising management’s one month pay, whichever is higher.
prerogative to retrench employees for
the advancement of its interest and not Effects of closure of business266
to defeat or circumvent the employees' Due to NOT due
Closure of
right to security of tenure; and, serious to serious
business
5. Used of fair and reasonable business business
done in bad
criteria in ascertaining who would be losses losses
faith
dismissed and who would be retained Good faith
among the employees, such as status, Legal Legal Illegal dismissal
efficiency, seniority262, physical fitness, dismissal dismissal
age, and financial hardship for certain No Employee Employee is
workers. separation is entitled entitled to
benefits to reinstatement
• The fact alone that a mere portion of the separation and payment of
business shut down and not the whole of it pay. full wages.
does not necessarily remove the measure
within the meaning of Retrenchment.263 If reinstatement
not possible,
employee is
entitled to full
backwages and
259
Flight Attendants & Stewards Association of the separation pay
Philippines v PAL, GR 178083, 2008
260
Flight Attendants & Stewards Association of the 264
PSBA v NLRC, 223 SCRA 305 (1993)
Philippines v PAL, GR 178083, 2008 265
Cheniver Deco Print Technics Corp. v NLRC, 325 SCRA
261
Metro Construction Inc. v Aman, GR 168324, 2009 758 (2000)
262
Emcor, Inc v Sienes, GR 152101, 2009 266
Eastridge Golf Club Inc. v Eastridge Golf Club Inc. Labor
263
Edge Apparel Inc. v NLRC, 286 SCRA 302, 1998 Union, GR 166760, 2008
 Procedural Steps Required
Temporary Closure 1. Written notice to DOLE 30 days prior to the
Article 286. When employment not intended date of termination
deemed terminated. 2.Written notice to employee(s) concerned 30
The bona-fide suspension of the operation of a days prior to the intended date of
business or undertaking for a period not termination
exceeding six (6) months, or the fulfillment by Notice must be served personally upon the
the employee of a military or civic duty shall employee concerned.
not terminate employment. In all such 3.Payment of separation pay:
cases, the employer shall reinstate the Amount of Separation Pay Required
employee to his former position without loss Installation of Labor One month pay for
of seniority rights if he indicates his desire to Saving Devices or every year of service
resume his work not later than one (1) month Redundancy
from the resumption of operations of his Retrenchment to One month pay or
employer or from his relief from the military prevent losses or 1/2month pay for
or civic duty. closure NOT due to every year of service
losses whichever is higher
bona fide suspension of the operation Closure due to No separation pay
• less than 6 months: serious business
closure shall not terminate employment losses
• More then 6 months:
employment shall be deemed terminated Other rates
For Salesmen Paid on Commission Basis- Based
• Article 286 applies only when there is on average commissions earned during the past
a bonafide suspension of the employer’s year
operation of a business or undertaking for a For Seasonal Workers- ½ average monthly pay
period not exceeding six (6) months.  In such during the last season for every year of service
a case, there is no termination of employment provided they work at least 6 months during a
but only a temporary displacement of given year
employees, albeit the displacement should For Piece rate Workers- computed on the basis
not exceed six (6) months.267 of the applicable minimum wage
• The paramount consideration should be
the dire exigency of the business of the
employer that compels it to put some of its
employees temporarily out of work.268
• If the employee was forced to remain without
work or assignment for a period exceeding six
months, then he is in effect constructively
dismissed.269
• The so-called "floating status" of an employee
should last only for a legally prescribed
period of time. When that "floating status" of
an employee lasts for more than six months,
he may be considered to have been illegally
dismissed from the service.270

267
Eagle Gold Club Inc. v Mirando, GR 179512, 2009
268
Eagle Gold Club Inc. v Mirando, GR 179512, 2009
269
Valdez v NLRC, 286 SCRA 87, 1998
270
Valdez v NLRC, 286 SCRA 87, 1998
Redundancy, Retrenchment and Closure

Redundancy Retrenchment Closure of business

Management prerogative Management prerogative Management prerogative
Cause Service capability of the Effected by management during Carried out to either stave off the
workforce is in excess of what periods of business recession, financial ruin or promote the
is reasonably needed to meet the industrial depression, seasonal business interest of the employer.
demands of the business fluctuations, lack of work or Art 283 authorizes termination of
enterprise considerable reduction in the employment due to business
volume of the employer’s business. closure, regardless of the
Resorted to by an employer to underlying reasons and
avoid or minimize business motivations therefor, be it
losses. financial losses or not.

Requisite to 1. Written notice served on 1. That retrenchment is reasonably 1. Bona fide closure/ cessation of
be valid both the employee and the necessary to prevent business business, i.e., its purpose is to
DOLE at least one month prior losses which, if already incurred, advance the interest of the
to the intended date of are not merely de minimis, but employer and not to defeat or
termination; substantial, serious272, circumvent the rights of
2. Payment of separation actual and real, or if only employees under the law or a
pay equivalent to at least one expected, are reasonably valid agreement; 
month pay or at least one imminent as perceived 2. Written notice served on
month pay for every year of objectively and in good faith by both the employee and the
service, whichever is higher; the employer; DOLE at least one month
3. Good faith in abolishing the 2.Written notice served on both prior to the intended date of
redundant position; and the employee and the DOLE at termination;
4. Use of fair and reasonable least one month prior to the 3. Separation pay, in case of
criteria in ascertaining what intended date of termination; closure/cessation of
positions are to be declared 3.Payment of separation pay business not due to financial
redundant, such as:   (1) equivalent to at least one month losses. It must be equivalent
preferred status; (2) efficiency; pay or at least one month pay for to ½ month pay for every year
and (3) seniority. 271
every year of service, whichever of service or one month pay,
is higher; whichever is higher.
4.Good faith in exercising
management’s prerogative to
retrench employees for the
advancement of its interest and
not to defeat or circumvent the
employees’ right to security of
tenure; and,
5.Used of fair and reasonable
criteria in ascertaining who
would be dismissed and who
would be retained among the
employees, such as status,
efficiency, seniority273, physical
fitness, age, and financial
hardship for certain workers.
Justification Employer must prove that it has Employer must prove serious Must prove that the closure is
become overmanned. business losses. bona fide. Unlike retrenchment,
closure or cessation of business, as
Necessary conditions for the an authorized cause of termination
company losses to justify of employment, need not depend
retrenchment: for validity on evidence of actual or
1. Losses must be substantial and imminent reversal of the
not de minimis; employer's fortune.
2.Losses must be actual or
reasonably imminent;
3.the retrenchment is reasonably
necessary and is likely to be
effective in preventing the
expected losses; and
4.the alleged losses, if already
incurred, or the expected
imminent losses sought to be
forestalled, are proven by

271
Lowe Inc v CA, GR 164813, 2000
272
Metro Construction Inc. v Aman, GR 168324, 2009
273
Emcor, Inc v Sienes, GR 152101, 2009
 sufficient and convincing
evidence.
Evidence New staffing pattern, feasibility Books of accounts, profit and loss
that may be studies/ proposal on the viability statements, and even its
proffered of the newly created positions, job accountant to competently amplify
description and the approval by its financial position.275
the management of the
restructuring.274

Disease
Article 284. Disease as ground for
termination.
An employer may terminate the services of an
employee who has been found to be suffering
from any disease and whose continued
employment is prohibited by law or is
prejudicial to his health as well as to the
health of his co-employees: Provided, That he
is paid separation pay equivalent to at least
one (1) month salary or to one-half (1/2)
month salary for every year of service,
whichever is greater, a fraction of at least six
(6) months being considered as one (1) whole
year.

274
AMA v Garcia, GR 166703, 2008
275
Metro Construction Inc. v Aman, GR 168324, 2009
Requisites for Disease or illness to be a
ground for termination276
1. The continued employment of the
employee is prohibited by law or
prejudicial to his health or the health
of his co-employees
2. There is a certification by a
competent public health authority
that the disease is of such a nature or at
such a stage that it cannot be cured
within a period of 6 month, even with
proper medical treatment
3. Notice to the employee and DOLE
at least 1 month prior to the intended
date of termination
4. Separation pay of one month or one-
half month for every year of service,
whichever is higher, a fraction of 6
months or more being considered as 1
year.

• Requirements are mandatory for valid

termination.277

The requirement for a medical certificate

under Art 284 of the Labor Code cannot
be dispensed with.
• The burden of proving the validity of the
dismissal of the employee rests on the
employer.278
• The employer, before it can legally dismiss its
employee on the ground of disease, must
adduce a certification from a competent
public authority that the disease of which its
employee is suffering is of such nature or at
such a stage that it cannot be cured
within a period of six months even
with proper treatment.279
• The requirement of a medical certificate
under Article 284 cannot be dispensed with;
otherwise, it would sanction the unilateral
and arbitrary determination by the employer
of the gravity or extent of the employee's
illness and thus defeat the public policy in the
protection of labor.280

276
Savallana v IT International Corp., 356 SCRA 451 (2001)
277
Viola Cruz v NLRC, 324 SCRA 770 (2000)
278
Savallana v IT International Corp., 356 SCRA 451 (2001)
279
Duterte v Kingswood Trading Co., GR 160325, 2007
280
Crayon Processing v Pula, GR 167727, 2007
 b. Procedural due Procedural Requirement
Basis for
process termination
Requirements
Art 277(b). Miscellaneous provisions. Art 282: Just Cause Twin-notices and
Subject to the constitutional right of workers 1. Serious misconduct hearing rule
to security of tenure and their right to be or willful 1. Notice
protected against dismissal except for a just disobedience specifying the
and authorized cause and without prejudice to 2. Gross and habitual grounds for
the requirement of notice under Article 283 of neglect of duties which dismissal
3. Fraud or willful is sought
this Code, the employer shall furnish the
breach 2. Hearing or
worker whose employment is sought to be opportunity to be
5. Commission of a
terminated a written notice containing a crime or offense heard
statement of the causes for termination and 6. Analogous causes 3. Notice of the
shall afford the latter ample opportunity to be decision to
heard and to defend himself with the dismiss
assistance of his representative if he so desires Art 283 and 284: 1. Notice to:
in accordance with company rules and Authorized cause a. Employee
regulations promulgated pursuant to 1. Labor-saving devices b. DOLE
guidelines set by the Department of Labor and 2. Redundancy At least 30 days prior
Employment. Any decision taken by the 3. Retrenchment to the effectivity of
4. Closing or cessation the separation
employer shall be without prejudice to the
right of the worker to contest the validity or of operation
legality of his dismissal by filing a complaint 5. Disease or illness
with the regional branch of the National Labor
Relations Commission. The burden of proving
that the termination was for a valid or Procedural requirements for
authorized cause shall rest on the employer. termination with just cause
The Secretary of the Department of Labor and
Employment may suspend the effects of the 1. First written notice to be served on
termination pending resolution of the dispute the employees. It must contain:
in the event of a prima facie finding by the a. Specific causes or grounds for
appropriate official of the Department of termination
Labor and Employment before whom such b. Directive that the employees are
dispute is pending that the termination may given the opportunity to submit
cause a serious labor dispute or is in their written explanation within a
implementation of a mass lay-off. (As reasonable period. 
amended by Section 33, Republic Act No. c. Detailed narration of the facts
6715, March 21, 1989) and circumstances that will serve as
basis for the charge
General concepts d. Company rules, if any, are
Dismissals based on just causes contemplate acts violated and/or which among the
or omissions attributable to the employee while grounds under Art. 282 is being
dismissals based on authorized causes involve charged against the employees.
grounds under the Labor Code which allow the
employer to terminate employees. 281 “Reasonable opportunity” should be
construed as a period of at least 5 calendar days
Rationale for strict adherence to from receipt of notice.283
procedural requirements
The due process must be observed in effecting an 2. A hearing or conference wherein the
employee’s dismissal because the dismissal of an employees will be given the opportunity
employee affects not only his position but also to:
his means of livelihood and his dependents’ a. Explain and clarify their defenses to
sustenance.282 the charge against them;

281
Agabon v NLRC, 442 SCRA 573, 2004 283
King of Kings Transport, Inc. v Mamac, GR 166208 (2007)
282
RCPI v NLRC, 221 SCRA 782 (1993)
 b. present evidence in support of their b. Dismissal without due process
defenses; and Consequence of non-compliance with
c. rebut the evidence presented against procedural requirements
them by the management.  Just or Effects
Due
authorized Employer’s
process Dismissal
cause
• Hearing or conference in termination liability
cases is not necessary. Employer   Legal No liability
however must provide the employee an Separation
ample opportunity to be heard and to pay if
defend himself with the assistance of his dismissal is due
to authorized
representatives if he so desires284 cause

Exception:285 X  Illegal Reinstatement

Full backwages
a formal hearing or conference becomes
mandatory only when: Separation
pay if
reinstatement
1. Requested by the employee in writing not possible
2. Substantial evidentiary disputes exist
3. company rule or practice requires it X X Illegal Reinstatement
Full backwages
4. When similar circumstances justify it
Separation
• “Ample opportunity”, connotes every pay if
reinstatement
kind of assistance that management must not possible
accord the employee to enable him to
prepare adequately for his defense, including  X Legal Damages due to
non-compliance
legal representation286 with procedural
requirements
3. Written notice of Separation
termination indicating that: pay if
1. All circumstances involving the dismissal is due
to authorized
charge against the employees have cause
been considered; and
2. grounds have been established to History of the effects of non-compliance
justify the severance of their with procedural requirements
employment. Ruling
Year Employer’s liability for
Dismissal non compliance with
procedural requirements
Prior to 1989 Illegal
1989 Legal Damages
Wenphil Corp v
NLRC
2000 Legal Full backwages
Serrano v NLRC Computed from the time of
dismissal until the court
finds the dismissal to be for
just cause
2004 Legal Nominal damages
Agabon v NLRC Indenity is stiffer than
Wenphil Corp. v NLRC to
discourage the practive of
“dismiss now, pay later”

Wenphil or Belated Due process rule

• Where the employer had a valid reason to
284 dismiss an employee but did not follow the
285
Perez v Philippine Telegraph and Telephone Company, GR due process requirement, the dismissal may
152048, 2009
286
Abiera v NLRC, 215 SCRA 476 (1992)
 be upheld but the employer will be penalized • All administrative determinations require
to pay an indemnity to the employee.287 only substantial proof and not clear and
convincing evidence.291
Wenphil-Serrano Doctrine  As a general rule, employers are allowed
• Serrano modifies Wenphil. The Wenphil a wider latitude of discretion in
doctrine was meant to discourage dismissal terminating the services of
without due process. But the purpose is not managerial employees who perform
achieved as many employers “dismiss now functions which by their nature require the
and pay later”. Employer is liable for the employers' full trust and confidence, thus,
full backwages although the existence of basis for believing that the
dismissal is not outright illegal since it employee has breached the trust of the
is based on a valid reason. employer is sufficient and does not require
proof beyond reasonable doubt. In fact, it
• The employee remains dismissed. The has been held that when the employer
dismissal is merely defective or “ineffectual”. has ample reason to distrust an
The doctrine applies to dismissals under Art employee, a labor tribunal cannot
282, 283 and 284. deny the employer the authority to
dismiss him.292
Agabon abandoned Serrano ruling
• The doctrine in Serrano had already been v. Prescription
abandoned in Agabon v. NLRC by ruling  An action for reinstatement by reason of
that if the dismissal is done without due illegal dismissal is one based on an injury
process, the employer should which may be brought within 4 years from
indemnify the employee with nominal the time of dismissal.293
damages.288

ii. Right to counsel 2. Preventive suspension

• It is true that administrative and quasi- A disciplinary measure for a protection of the
judicial bodies are not bound by the company’s property pending investigation of any
technical rules of procedure in the alleged malfeasance committed by the employee.
adjudication cases. However, the right to
counsel, a very basic requirement of Preventive suspension is not a penalty.
substantive due process, has to be
observed. Indeed, rights to counsel and to Period: It cannot exceed 30 days.
due process of law are two of fundamental • After the period, employee must be
rights guaranteed by the 1987 Constitution reinstated to his former position
to person under investigation, be the • If suspension is extended, the employee
proceeding administrate civil, or criminal.289 shall be entitled to his salaries and other
benefits that may accrue to him during the
period of such suspension.294
iii. Burden of proof • When preventive suspension exceeds
Burden of Proof290 maximum period allowed without
Employee Employer reinstatement or when preventive suspension
Must first establish Burdened to prove is for indefinite period, only then will
the fact of his or her that they did not constructive dismissal set in.295
dismissal. commit illegal
dismissal. Requirements for preventive
suspension296
iv. Degree of proof 1. An employee may be placed in a
preventive suspension if his continued
employment poses a serious and
291
Manalo v Roldan-Confesor, 215 SCRA 808 (1992)
287
Agabon v NLRC, 442 SCRA 573, 2004 292
Rentokil Philippines, Inc. v Sanchez, GR 176219, 2008
288
King of Kings Transport, Inc. v Mamac, GR 166208, 2007 293
Art 1146, Civil Code
289
Salaw v NLRC, 202 SCRA 7, 1991 294
Philippine Airline v NLRC, 1998
290
Romeo Basay, et al. v Havienda Consolacion, et al., GR 295
Mandapat v ADD Force Personnel Services, Inc. 2010
175532 (2010) 296
Gatbanton v NLRC, 479 SCRA 416, 2006
 imminent threat to the life or property of Reinstatement
the employer or his co-workers. The restoration to a state or condition from
2. However, when it is determined that which one had been removed or separated. 297 It
there is no sufficient basis to justify an is the return to the position from which he was
employee’s preventive suspension, the removed.
employee is entitled to the payment of
salaries during the time of preventive Reinstatement is a relief separate and distinct
suspension from backwages. Reinstatement restores the lost
position while backwages restores the lost
income.
3. Illegal dismissal
a. Kinds General rule:
i. No just or An employee illegally dismissed is entitled to
reinstatement.
authorized cause Exceptions:
ii. Constructive 1. Closure of business
When the position no longer exists, order
dismissal of reinstatement is improper. The law
(a) Burden of proof itself cannot exact compliance with what is
(b) Liability of impossible298
officers 2.Prayer is for separation pay in lieu of
(c) Reliefs from reinstatement
Reinstatement is no longer viable where
illegal dismissal the employee decides not to be
RELIEFS IN ILLEGAL DISMISSAL reinstated. By so doing, he forecloses
1. For OFW reinstatement as a relief by implication.299
a. salaries for the unexpired portion of his
contract Omission to pray for reinstatement in
b. reimbursement of his placement fee with employee’s position paper before the labor
12% interest per annum arbiter cannot be considered as an implied
2. For locally employed workers waiver to be reinstated.  Technicalities
a. reinstatement without loss of seniority have no place in labor cases.300
rights and other privileges
b. separation pay, if reinstatement is no longer 3.Economic business conditions
possible or feasible When employer is declared to be
c. backwages insolvent, reinstatement is no longer
In appropriate cases, an illegally dismissed feasible.301
employee may be awarded
1. moral and exemplary damages 4.Employees unsuitability
2. attorney’s fees Reinstatement is no longer possible when,
though innocent herself, her continued
presence as a teacher in a catholic school
may well be met with antipathy and
antagonism by some sectors in the school
community.302

5. Employee’s retirement/overage

297
Pheschem Industrial Corporation v Moldez, 458 SCRA
339, 2005
298
Philippine Engineering Corporation v CIR, 41 SCRA 102
(1971)
299
City trucking, Inc. v Balajadia, GR 160769 (2006)
300
Pheschem Industrial Corporation v Moldez, 458 SCRA
339 (2005)
301
Electruck Asia, Inc. v Meris, 435 SCRA 310 (2004)
302
Divine Word High School v NLRC, 143 SCRA 346 (1986)
 When during the pendency of the illegal Backwages
dismissal case, the employee reaches the Earnings lost by a work due to employee’s illegal
age of retirement, reinstatement becomes dismissal. It is a form of relief that restores the
academic.303 income lost by reason of such unlawful
dismissal.
6.Strained relations
In order for the doctrine of strained It is not a private compensation or damages, nor
relations to apply, it should be proved that is it a redress of a private right, but rather, in the
the employee concerned occupies a nature of a command to the employer to make
position where he enjoys the trust and public reparation for illegally dismissing an
confidence of his employer and that it is employee308
likely that if reinstated, an atmosphere of
antipathy and antagonism may be Backwages refer to compensation which an
generated as to adversely affect the employee would have earned had he not been
efficiency and productivity of the employee unjustly dismissed. Unpaid wages refer to
concerned.304 compensation for services already rendered but
Indeed, labor disputes almost always withheld by the employer.
result in "strained relations," and the
phrase cannot be given an overarching When Awarded:
interpretation; otherwise, an unjustly Full Backwages
dismissed employee can never be 1. If EE was dismissed without any cause
reinstated.305 whatsoever
2. Dismissal is prohibited by law
7. Not feasible a. Dismissal of employee who filed complaint
The impossibility of the reinstatement of or testified RE: non-payment/underpayment
petitioner considering that his position or of wages
any equivalent position may no longer be b. Dismissal because of pregnancy
available in view of the length of time that c. Dismissal of employee who testified RE
this case has been pending. Moreover, the ULP
protracted litigation may have seriously d.
abraded the relationship of the parties so
as to render reinstatement impractical.306 Limited Backwages
1. Dismissal is not commensurate to offense
Doctrine of Strained relations rule307 commited
Reinstatement should not be ordered if the 2. There was delay in filing complaint for
relationship between the parties has become so illegal dismissal
strained and ruptured as to preclude a
harmonious working relationship. None
1. Employer acted in good faith
Effect of Employment Elsewhere 2. Cessation of employment was brought about
An unjustly dismissed employee cannot be neither by dismissal nor by abandonment.
denied the right to reinstatement simply because 3. Cessation was not caused by dismissal but
he has obtained employment elsewhere. A by employee’s refusal to work
dismissed employee cannot be expected to
remain idle while his claim is pending. Computation of Backwages
1. Without deduction for their earnings
elsewhere during their layoff309
Backwages to be awarded to an illegally
dismissed employee, should not, as a rule, be
diminished or reduced by earnings derived by
him elsewhere during the period of dismissal.
2. Awards including salary differentials are
303
City Trust Banking Corporation v. NLRC, GR 104860 not allowed310
(1996)
304
Cabigting v San Miguel Foods, Inc., GR 167706 (2009) 308
St. Theresa’s School of Novaliches Foundation v NLRC
305
Pentagon Steel Corporation v CA, GR 174141 (2009) (1998)
306
Goma v Pamplona Plantation, Inc., GR 160905 (2008) 309
Bustamante v NLRC, 265 v SCRA 61 (1996)
307
Quijano v Mercury Drug Corp (1998) 310
Insular Life Assurance Co. v NLRC (1987)
 wages during period
3. The salary base properly used should be the of suspension
basic salary rate at the time of dismissal plus Exceeds 6months Employment
the regular allowance. relations terminated.
Allowance includes: EE entitled to wages
Emergency cost of living allowances (ECOLA), during period of
transportation allowances, 13th month pay311 suspension until 6th
Vacation leaves, service incentive leaves and month plus
sick leaves separation pay.

4. The effects of extraordinary inflation are Temporary Off-Detailing/ Floating Status

not to be applied without an official Should not exceed 6months otherwise,
declaration thereof by competent authority312 employment relationship will automatically
terminate.
Failure of NLRC to order Backwages
The fact that the NLRC did not award backwages
to the respondents or that the respondents
themselves did not appeal the NLRC decision
does not bar the Court of Appeals from awarding
backwages.313

4. Money claims arising

from employer-employee
relationship
5. When not deemed
dismissed; employee on
floating status
Art. 301

Lay-Off
Temporary separation of an employee from
service brought about by by bona fide suspension
of operations or fulfillment of an employee of
civic or military duty.

Legal Effect
Good faith
Less than 6months EE merely
suspended. ER-EE
relationship restored
once operations
resume
Exceeds 6months Employment
automatically
terminated,
Bad faith
Less than 6months Employment not
interrupted.
Employees entitled to

311
Paramount Vinyl Product Corpo v NLRC (1990)
312
Lantion v NLRC (1990)
313
Asian Terminals, Inc. v NLRC, GR 158458 (2007)
Separation pay than just causes under worker318
When reinstatement no longer available, Art 282 or those
reflecting on his moral
payment of separation pay is awarded
character.316
• Clearly, the law intended reinstatement to
be the general rule.  It is only when
3. Separation pay in lieu of
reinstatement is no longer feasible that
reinstatement where reinstatement is
payment of separation pay is awarded to an
not feasible.
illegally dismissed employee.314
The grant of separation pay was a proper
substitute only for reinstatement; it
Payment of separation pay as a substitute for could not be an adequate substitute both
reinstatement is allowed only under exceptional for reinstatement and for backwages.319
circumstances, viz:315 
1. When reasons exist which are not 4. Separation pay as a benefit in the
attributable to the fault or beyond the CBA or company policy
control of the employer, such as, when the
employer, who is in severe financial strait Separation pay and Backwages
and has suffered serious business losses, has Separation pay in
ceased operations, implemented lieu of Backwages
retrenchment, or abolished the position due reinstatement
to the installation of labor-saving devices;  Granted to an illegally Granted to an illegally
2. when the illegally dismissed employee dismissed employee dismissed employee
has contracted a disease and his
reinstatement will endanger the safety of his Granted where Granted with
co-employees;  or, reinstatement is no reinstatement
3. where strained relationship exists longer feasible.
between the employer and the dismissed
employee. Employer must still pay
for backwages.

Kinds of separation pay Oriented towards the Payment of backwages

1. Separation pay as statutory immediate future, the is a form of relief that
requirement for authorized causes: transitional period the restores the income
When termination is based on grounds dismissed employee that was lost by reason
under Art 283 and 284: must undergo before of unlawful dismissal321
a. Installation of labor saving devices locating a replacement
b. Redundancy job.320
c. Retrenchment
d. Cessation of the employer’s business Computation of Separation pay
e. Disease 1. Employer may not, in the guise of
exercising management prerogatives,
2. Separation pay as financial pay separation benefits unequally.322
assistance 2. Allowances and commissions are
Separation pay shall be allowed as a included in the computation of
measure of social justice separation pay323
Separation Pay as Financial Assistance
When allowed When not allowed 316
Bristol Myers Squibb v Baban, GR 167449 (2008); Toyota
Though validly Where employee was Motor Phils. Corp Workers Association v NLRC, 537 SCRA
dismissed, employee dismissed for just 171 (2007)
may be awarded as cause under Art 282 of
317
BPI and BPI Family Bank v NLRC and Arambulo, GR
some equitable relief in the Labor code317 or for 179801 (2010)
318
PLDT v NLRC, GR 80609 (1988)
consideration of the an offense involving 319
Nissan North EDSA Balintawak v Serrano, GR 162538
past services rendered moral turpitude, like (2009)
where dismissal was theft or illicit sexual 320
Nissan North EDSA Balintawak v Serrano, GR 162538
due to causes other relations with a fellow (2009)
321
Nissan North EDSA Balintawak v Serrano, GR 162538
314
Pheschem Industrial Corporation v Moldez, 458 SCRA 339 (2009)
(2005) 322
Businessday Information Systems and Services, Inc. v
315
Pheschem Industrial Corporation v Moldez, 458 SCRA 339 NLRC, 221 SCRA 9, 1993
(2005) 323
Songco v NLRC, 183 SCRA 610 (1990)
• Employees who receive their
separation pay are not barred from Liability of Corporate officers
contesting the legality of their • In cases of illegal dismissal, corporate
dismissal from the service and their directors and officers are solidarily liable
acceptance of those benefits would not with the corporation, where termination of
amount to estoppel. Otherwise, employees employment are done with malice or
who have been forced to resign and accept bad faith.330
their separation pay can no longer resort to
legal remedies.324
• Corporate veil is pierced:
1. When it is deliberately and
iv. Damages, Attorney’s Fees and maliciously designed to evade
other Indemnity financial obligations to employees or
Moral damages when used as means to perpetuate
Recoverable when the dismissal of an employee is fraud or an illegal act331
attended by: 325 2. Directors or trustees who willfully
1. badfaith, and knowingly assent to patently
2. fraud unlawful acts or who are guilty of
3. constitutes an act oppressive to
gross negligence or bad faith in the
labor
4. done in a manner contrary to managing corporate affairs332
good customs and public policy
• Otherwise, the manager, officer or the
Such an award cannot be justified solely stockholder s are not liable personally since
upon the premise that the employer fired his the corporation is vested by law with a
employee without just cause or due process. separate and distinct personality.333
Additional facts must be pleaded and proven
to warrant the grant of moral damages under
the Civil Code.326
Exemplary damages
Awarded if the dismissal is effected in a
wanton, oppressive or malevolent
manner.327
Attorney’s fees
Not recoverable when there is no sufficient
showing of bad faith.

Justified when claimant is compelled to

litigate with 3rd parsons or to incur expenses
to protect his interest by reason of an
unjustified act of the party against whom it is
sought.328
Attorney’s fees
Not recoverable when there is no sufficient
showing of bad faith.

Justified when claimant is compelled to

litigate with 3rd parsons or to incur expenses
to protect his interest by reason of an
unjustified act of the party against whom it is
sought.329
324
Amkor Technlogy Philippines, Inc. v Juangco, GR 166507
(2006)
325
PAL v NLRC (1999)
326
M+W Zander Philippines, Inc. v Enriquez, GR 169173 330
Bogo Medelin Sugarcane Planters Association v NLRC
(2009) (1998)
327
Kay Products v CA, 464 SCRA 544 (2005) 331
Pabalan v NLRC (1990)
328
Lopez v NLRC (1998) 332
Sec 31 of the Corporation Code
329
Lopez v NLRC (1998) 333
Sunio v NLRC (1984)
C. Termination by employee
• Voluntary resignation, when accepted, cannot
1. With notice to the be withdrawn without consent of the
employer employer as employer has no longer any right
to the job.335
2. Without notice to the • If resignation is not voluntary, it can be
employer deemed to be constructive dismissal.336
3. Distinguish voluntary • Voluntary resignation and illegal dismissal
are adversely opposed modes of terminating
resignation and employment relations, in that the presence of
constructive dismissal one precludes that of the other337
• Voluntary resignation requires one month
Art. 285. Termination by employee. notice. If employee does not comply, he is
a. An employee may terminate without liable for damages.
just cause the employee-employer
relationship by serving a written notice on Not entitled to separation pay338
the employer at least one (1) month in An employee who voluntarily resigns is not
advance. The employer upon whom no entitled to separation pay.
such notice was served may hold the Exceptions:
employee liable for damages. 1. When otherwise stipulated in the
  employment contract
b. An employee may put an end to the 2. Stipulated in the CBA
relationship without serving any notice on 3. Sanction by established employer
the employer for any of the following just practice and policy.
causes:
1. Serious insult by the employer or Art. 286. When employment not
his representative on the honor and deemed terminated.
person of the employee; The bona-fide suspension of the operation of a
2. Inhuman and unbearable business or undertaking for a period not
treatment accorded the employee by exceeding six (6) months, or the fulfillment by
the employer or his representative; the employee of a military or civic duty shall
3. Commission of a crime or not terminate employment. In all such cases,
offense by the employer or his the employer shall reinstate the employee to
representative against the person of his former position without loss of seniority
the employee or any of the immediate rights if he indicates his desire to resume his
members of his family; and work not later than one (1) month from the
4. Other causes analogous to any of resumption of operations of his employer or
the foregoing. from his relief from the military or civic duty.

Resignation ii. RA 7641: Retirement Pay Law

Voluntary resignation is the act of an employee, Coverage
who finds himself in a situation in which he Any employee may be retired upon reaching the
believes that personal reasons cannot be retirement age established in the collective
sacrificed in favor of the exigency of the service; bargaining agreement or other applicable
thus he has no other choice but to disassociate employment contract.
himself from his employment.334 Formal Exempted
renouncement or relinquishment of a job. Retail, service and agricultural
establishments or operations
Elements employing not more than (10)
1. It must be unconditional employees or workers
2. Intent to relinquish job
3. Actual act of relinquishment 335
Intertrod Martime, Inc v NLRC, 198 SCRA 318 (1991)
336
Abad, Jr, Antonio H. (2008). The Law on Labor
Standards. Rex Printing Company, Inc.
337
Alfaro v CA, 363 SCRA 799 (2001)
334
Alfaro v CA, 363 SCRA 799 (2001) 338
CJC Trading, Inc. v NLRC, 246 SCRA 724 (1995)
In the absence of a CBA or an applicable
employment contract:
1. When retirement is optional
Age of sixty (60) years or more, but
not beyond sixty-five (65) years

2. Compulsory
65 years old

How much are employees entitled to as

retirement pay
At least one-half (1/2) month salary for every
year of service, a fraction of at least six (6)
months being considered as one whole year.

Unless the parties provide for broader

inclusions, the term one-half (1/2) month salary
shall mean fifteen (15) days plus one-twelfth
(1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of
service incentive leaves.

How long is the service requirement for

an employee to be entitled to retirement
pay
Employee must have served at least five (5) years
in the said establishment
D. Retirement faithful service of the employee for the
requisite period.
Art 302. Retirement
Any employee may be retired upon reaching
the retirement age established in the collective RA 7641
bargaining agreement or other applicable Age requirement
employment contract. 1. Compulsory
Upon reaching 65 years of age; with at least
In case of retirement, the employee shall be 5 years of service
entitled to receive such retirement benefits as
he may have earned under existing laws and 2. Optional
any collective bargaining agreement and other Upon reaching 60 years of age; with at least
agreements: Provided, however, That an 5 years of service; at the option of the
employee’s retirement benefits under any employee
collective bargaining and other agreements
shall not be less than those provided therein.
Computation of retirement pay
In the absence of a retirement plan or 1. 15 days based on the employee’s latest
agreement providing for retirement benefits of salary
employees in the establishment, an employee 2. 1/12 of the 13th month pay; and
upon reaching the age of sixty (60) years or 3. cash equivalent of the 5 years service
more, but not beyond sixty-five (65) years incentive leave
which is hereby declared the compulsory
retirement age, who has served at least five (5) • Computation: 22.5 days x number of
years in the said establishment, may retire and years of service
shall be entitled to retirement pay equivalent 22.5 days is computed at 15 days plus 2.5
to at least one-half (1/2) month salary for days representing 1/12 of the 13 th month pay
every year of service, a fraction of at least six plus 5 days of service incentive leave339
(6) months being considered as one whole
year. • R.A. No. 7641 does not apply to a
retirement plan which gives to the
Unless the parties provide for broader retiring employee more than what
inclusions, the term ‘one-half (1/2) month the law requires.340
salary’ shall mean fifteen (15) days plus one- • While termination of employment and
twelfth (1/12) of the 13th month pay and the retirement from service are common modes
cash equivalent of not more than five (5) days of ending employment, they are mutually
of service incentive leaves. exclusive, with varying juridical bases and
resulting benefits. 341
Retail, service and agricultural establishments
or operations employing not more than ten
(10) employees or workers are exempted from
the coverage of this provision.

Violation of this provision is hereby declared

unlawful and subject to the penal provisions
under Article 288 of this Code.
Retirement
Withdrawal from office, employment or
occupation upon reaching a certain age or
rendering certain number of years of service.

• A retirement plan in a company partakes

the nature of a contract, with the employer
and the employee as the contracting parties.
It creates a contractual obligation in which 339
Capitol Wireless v Confessor, 264 SCRA 68 (1996)
the promise to pay retirement benefits is 340
Oxales v Unilab, GR 152991, 2008
made in consideration of the continued
341
Quevedo v Benguet Electric Cooperative Inc., GR 168927,
2009
Termination and Retirement,
distinguished342
Termination Retirement
mode of ending mode of ending
employment employment
Statutory, governed Contractual, based
by the Labor code on a bilateral
and other related law agreement of the
as to its grounds, employer and
benefits and employee
procedure
Benefits resulting Article 287 of the
from termination Labor Code gives
vary, depending on leeway to the parties
the cause to stipulate above a
floor of benefits

Quevedo v Benguet Electric Cooperative Inc., GR 168927,

342

2009
VI. MANAGEMENT faith for the advancement of the employer's
interest.345
PREROGATIVE
Management Prerogative D. Bonus
Grant of bonus
Management Prerogative, defined
A bonus is a gratuity or act of liberality of the
Act by which one directing a business is able
giver which the recipient has no right to demand
to control the variables thereof so as to
as a matter of right. The grant of a bonus is
enhance the chances of making a profit.
basically a management prerogative which
This is also one which, the employer is free to
cannot be forced upon the employer who may
regulate, according to his own discretion and
not be obliged to assume the onerous burden of
judgment all aspects of employment; this
granting bonuses or other benefits aside from
includes hiring, working assignments,
the employee’s basic salaries or wages.346
methods, time, place and manner, tools
to be used, process to be followed,
A bonus, however, becomes a demandable or
supervision of workers, working
enforceable obligation when it is made part of
regulations, transfer of employees, lay-
the wage or salary or compensation of the
off of workers, discipline, dismissal and
employee
recall of work.
E. Change of working hours
Change of working hours
A. Discipline The management is also empowered to change
Discipline their employees work schedule whenever
In revising the employees Code of Conduct exigencies so require provided that it is done in
which would have repercussions to their security good faith.347
of tenure and deprive them of their livelihood
the company must have participation in the
decision and policy making process of affecting F. Bona fide occupational
their rights, duties, and welfare.343 qualifications
G. Post-employment
B. Transfer or employees restrictions
Transfer of employees Post-employment ban
Business enterprises have the right to transfer Whether such an agreement would be held valid
employees from one work station to another and binding will depend on its reasonableness in
where it deems the employee will be most useful relation to the parties concerned, as well as to its
and productive. The limits as to transferring public policy.
employees are as long as there is no
unreasonable cause, inconvenience, and
prejudice in their transfer.344 H. Marriage between
employees of competitor-
C. Productivity standards employers
Productivity standard Marital discrimination
Failure to observe prescribed standards of work Section 136, Title III, Chapter I,
or to fulfil reasonable work assignments due to Stipulation Against Marriage
inefficiency may constitute just cause for It shall be unlawful for an employer to require
dismissal. Such inefficiency is understood to as a condition of employment or continuation
mean failure to attain work goals or work quotas, of employment that a woman employee shall
either by failing to complete the same within the not get married, or to stipulate expressly or
allotted reasonable period, or by producing
unsatisfactory results. This management 345
Buiser v. Leogardo, Jr. 131 SCRA 151, 158 (1984)
prerogative of requiring standards may be
availed of so long as they are exercised in good 346
Trader’s Royal Bank v. National Labor Relations
Commission, G.R. No. 88168, August 30, 1990, 189 SCRA
274, 277
343
Philippine Airlines v. NLRC 225 SCRA 301 (1993) 347
Union Carbide Labor Union vs. Union Carbide Phils., Inc.
344
Chu vs. NLRC 232 SCRA 764 (1994) 215 SCRA 554 (1992)
 tacitly that upon getting married, a
woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman
employee merely by reason of her marriage.

Limitations in its exercise

The limitations of the exercise of management
prerogative is that there must be an exercise of
good faith for the advancement of the
employees interest and not for the purpose of
defeating or circumventing the rights of
the employees under the law are valid exercise
of management prerogative.348

Limitations in their exercise of management

prerogatives are the following:
1. Constitution
2.Law
3.Contracts (CBA)
4.General principles of fair play and justice

348
Chu vs. NLRC 232 SCRA 764 (1994)
VII. SOCIAL LEGISLATION
A. Social Security System Law
1. Coverage and exclusions
2. Dependents and
beneficiaries
3. Benefits
B. Government Service
Insurance System Law
1. Coverage and exclusions
2. Dependents and
beneficiaries
3. Benefits
C. Limited Portability Law
D. Disability and death
benefits
1. Labor Code
2. Employees
Compensation and State
Insurance Fund '
3. Philippine Overseas
Employment
Administration-Standard
Employment Contract
E. Solo Parents
F. Kasambahay
G. Agrarian Relations
Social legislation

A. SOCIAL SECURITY SYSTEM

and GOVERNMENT SERVICE
INSURANCE SYSTEM

Concept
• The new law establishes a state insurance
fund built up by the contributions of
employers based on the salaries of
their employees.349

• The injured worker does not have to

litigate his right to compensation. No
employer opposes his claim. There is no
notice of injury nor requirement of
controversion. The sick worker simply files a
claim with a new neutral Employees'
Compensation Commission which then
determines on the basis of the employee's
supporting papers and medical evidence
whether or not compensation may be paid.
The payment of benefits is more
prompt. The cost of administration is
low. The amount of death benefits has
also been doubled.350

• The employer's duty is only to pay the

regular monthly premiums to the scheme.351

• Since there is no employer opposing or

fighting a claim for compensation, the
rules on presumption of
compensability and controversion
cease to have importance.352 The
lopsided situation of an employer versus one
employee, which called for equalization
through the various rules and concepts
favoring the claimant, is now absent.353

SSS and GSIS

349
De Jesus v ECC, GR L-56191, 1986
350
De Jesus v ECC, GR L-56191, 1986
351
De Jesus v ECC, GR L-56191, 1986
352
GSIS v de Guzman, GR 173049, 2009
353
De Jesus v ECC, GR L-56191, 1986
 Government Service
Social Security Act of 1997
Insurance Act of 1997
RA 8282
RA 8291
Enabling Law RA 1161 as amended by RA 8282 Social Security RA 8291 amending PD 1146
Act of 1997.
Definition of Employer
terms Any person, natural or juridical, domestic or National government, its political subdivisions,
foreign, who carries on in the Philippines any branches, agencies or instrumentalities, including
trade business, industry, undertaking, and uses government-owned or controlled corporations
the services of another person who is under his and financial institutions with original charters
orders as regards the employment, except (GOCCs).
those considered as employer under the
GSIS.

A self-employed person shall be both at the

same time.
Employee
Any person who performs services for an Any person receiving compensation while in
employer who receives compensation for service of an employer whether by election or
such services, where there is an appointment, irrespective of status of
Employer-employee relationship. appointment.

A self-employed person shall be both employer

and employee at the same time.
Self-employed
Any person whose income is not derived No definition provided
from employment, including, but not limited
to:

a. self-employed professionals
b. partners and single proprietors of
businesses;
c. actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition;
d. Individual farmers and fishers.

Dependents
a. Legal spouse entitled to receive support Same except that a child here is below 18
b. Child
• unmarried, not gainfully
employed and below 21 or
• Child over 21 if he or she became
incapacitated while still a minor:

child may be legitimate, legally adopted, or

illegitimate;

c. Parent who is receiving regular support.

Beneficiaries
Primary Same except that RA 8291 does not distinguish
a. Dependent spouse share of legitimate and illegitimate children
b. Dependent children

Illegitimate children are entitled only to 50% of

the share of legitimate children unless there are
no legitimate children, in which case, they get
100%.

Secondary
 Shall only receive when the primary
beneficiaries are absent.
a. Dependent parents.
b. Other person designated by employee.

Compensation
all actual remuneration for employment, basic pay received excluding per diems, bonuses,
including allowance, converted value of noncash overtime, honoraria, allowances and other
remuneration, except that portion already above emoluments not integrated into the basic pay
the max salary credit under existing laws.
(P 15,000).

Coverage Compulsory Public sector employees below the compulsory

a. Employers retirement age of 65,
b. Employees not over 60 years including
household helpers with at least 1,000 Exceptions;
monthly pay; and a. AFP and PNP;
c. Self-employed b. Members of the Judiciary and
Constitutional Commissions who are
Voluntary covered only by life insurance as they
a. Spouses who devote full time to have separate retirement schemes.
managing household and family c. Contractual employees with no
affairs; employee-employer relationship
b. OFWs recruited by foreign-based with the agency they serve.
employers;
c. Employees already separated from
employment or those self-employed
with no realized income for a given
month, who chose to continue with
contributions to maintain right to full
benefit.

Note: Foreign governments, international

organizations or their wholly owned
instrumentally employing workers in the
Philippines may enter into an agreement with the
Philippine government to include their
employees in the SSS except those already
covered by their civil service retirement system.

Benefits 1. Monthly pension 1. Monthly pension.

(tax-exempt) 2. Dependents’ pension 2. Retirement benefits
3. Retirement benefits 3. Permanent disability benefits
4. Permanent disability benefits 4. Funeral benefits
5. Death benefits 5. Loan – GSIS website provides for this
6. Funeral benefits 6. Temporary disability benefits (similar to
7. Loan sickness)
8. Sickness benefits. 7. Separation benefits
9. Maternity Leave benefits. 8. Unemployment benefits
9. Survivorship benefits
10. Life insurance benefits
Reporting 2. Each employer shall immediately 1. The employer shall report to the GSIS
requirements report to the SSS the names, ages, civil the names of all its employees, their
status, occupations, salaries and corresponding employment status, positions,
dependents of all his employees who are salaries and such other pertinent
subject to compulsory coverage.354 information, including subsequent changes
3. Each covered self-employed person shall, therein, if any, as may be required by the
within thirty (30) days from the first day he GSIS; the employer shall deduct each month
started the practice of his profession or from the monthly salary or compensation of
business operations register and report to each employee the contribution payable by
the SSS his name, age, civil status, and him in accordance with the schedule
occupation, average monthly net income prescribed in the rules and regulations
and his dependents.355 implementing this Act.356

2. Each employer shall remit directly to

the GSIS the employee’s and employer’s
contributions within the first ten (10) days of
the calendar month following the month to
which the contributions apply. The
remittance by the employer of the
contribution to the GSIS shall take priority
over and above the payment of any and all
obligations, except salaries and wages of its
employees.357

354
Sec 24, RA 8282. SSS Act
355
Sec 24-A, RA 8282. SS Act of 1997
356
Sec 6. RA 8291. GSI Act of 1997
357
Sec 6. RA 8291. GSI Act of 1997
Effect of Non- To the Employee
reporting and Employee is still entitled to SSS benefits even if
Non-remittance the employer fails or refuses to remit the SSS
of Contributions contributions.

To the Employer
Employer is liable to the employee and must:
1. Pay to SSS damages equivalent to the
benefits of those who die, become
disabled, get sick or reach retirement
age, except that in case of pension
benefits;
2. Pay all unpaid contributions plus a
penalty of 3% per month until paid;
and
3. Be held criminally liable through
an action commenced either by the SS
or the employee concerned.

To the Self-employed
a self employed person who fails to register with
SSS will also be fined and/or imprisoned.
However, in the event the self-employed person
does not realize earnings in a given month,
payment of SSS contributions for that month is
no longer required.

To the Self-employed and voluntary

Member
a self-employee and voluntary member who
fails to remit contributions after membership is
approved, may pay the monthly contribution
prospectively but is not allowed to pay
contributions retroactively from the month no
contribution payments were remitted.

Change of Membership Category:

1. Non-working spouse gets
employed or becomes self-
employed: membership shall be
reclassified accordingly as employed
or self-employed or OFW.
2. The receipt of a lump sum
permanent total disability, who is
re-employed or has resumed self-
employment or as an OFW or Non-
working spouse, not earlier than one
year from the date of disability, shall
again be subject to compulsory
coverage and shall be considered a
new member.

Effective Date of Employer: 1st day of the operation.

Coverage Employee: 2nd day at work
Self-employed: upon retirement system
Effective 1. Employer’s contribution, and Continued membership for the unemployed
separation from 2. Employee’s obligation to pay contribution member; and entitlement to whatever benefits he
employment both cease at the end of the month of has qualified to in the event of any compensable
separation; contingency.
3. EE shall be credited with all contribution
paid on his behalf and entitled to all
benefits set forth by the law.
Dispute 1. Social Security Commission 1. GSIS
Settlement 2. CA (Rule 43; Questions of law and fact) 2. CA (Rule 43)
3. SC (Rule 45; questions of law only) 3. SC (Rule 45); appeal does not stay execution.
Prescriptive 20 years 4 years
Period

SSS Benefits GSIS Benefits

Monthly Pension
Computation of monthly pension: the monthly pension shall The amount shall be:
be the highest of the following amounts:
a. 37.5% x (revalued ave. monthly compensation)
a. P300 + [20% x (ave. monthly credit)] + [2% x (ave. b. Plus 2.5 x (revalued ave. monthly compensation) x (years
monthy credit) x (# of cash credited years of service in in service in excess of 15 years).
excess of 10 years)]; or
The monthly pension shall not exceed 90% of the average
b. 40% x (ave. monthly credit); or monthly compensation.

c. P1,000; provided, that the monthly pension shall in no It shall not be less than P2,400 for those with 20 years of
case be paid for an aggregate amount of less than 60 service
months.

d. Notwithstanding the abovementioned, minimum pension

is P1,200 for members with at least 10 years credit service,
P2,400 for those with 20 years.

Dependents’ Pension
a. Paid when member dies, retires or with permanent total Not available
disability.
b. Paid to each child conceived on or prior to contingency
with the youngest and preferring the legitimate;
c. Amount is either P250 or 10% of the monthly
pension as computed above, whichever is higher.

Retirement Benefits
Eligibility requirements
a. 120 monthly contributions; 1. 15 years service;
b. Age 2. 60 years of age; and
• 65 years old; or 3. Not receiving pension benefit from permanent total
• A member who has reached 60 years may also avail if disability.
he is already separated from employment or has
ceased to be self-employed. Note: Retirement is compulsory for employees 65 years of age
who have rendered at least 15 years of service; if employee has
less than 15 years of service, he may be allowed to continue in
accordance with civil service laws.
Benefits
Benefit: Choice between Benefit: Choice between

a. Monthly pension a. 60 x (basic monthly pension) lump sum payment at

Entitled to monthly pension from retirement until the time of retirement plusbasic monthly pension
death payable monthly for life after expiry of the 5-year
guaranteed period which is already covered by the
b. Lump sum Alternative lump sum; or
Member may opt to receive his first 18 monthly b. Cash payment equivalent to 18 x (basic monthly
pensions in lump sum but such is discounted at a pension) plus monthly pension for life
preferential rate of interest.

To those Ineligible – to the 60 year old with less than 120

monthly contributions who is no longer employed or self-
employed, and who is not continuing contributions
independently, he is entitled to a lump sum equal to his
total contributions paid.

Permanent Disability Benefits

Eligibility requirements
36 monthly contributions prior to the semester of disability; 1. Disability not due to employee’s own grave misconduct,
same as death benefit; only difference is that the pension is notorious negligence, habitual intoxication, or willful
paid directly to the member. intention to kill himself or another;
2. Employee is:
a. in service at the time of disability; or
b. even if separated, he has paid at least 36 monthly
contributions within the 5-year period immediately
prior to disability or has paid a total of at least 180
monthly contributions prior to disability; and
3. Member is not enjoying old-age retirement benefit.

Benefits
a. When a permanently disabled member dies. In 1. Permanent Total Disability Monthly income benefit
case the permanently disabled member dies, it would be for life equal to basic monthly pension –This is effective
given the same treatment as a retiree dying. from date of disability;

b. For permanent partial disability, the pension is not If member is in service at the time of disability and he has
lifetime. (e.g. loss of thumb entitles member to only 10 paid at least 180 monthly contributions, in addition to the
months of pension, while loss of arm 50 months). monthly income benefit, he shall receive an additional
cash payment of 18 times basic monthly pension.
It shall be paid in lump sum if the period is less than 12
months. 2. To the ineligible
If member has rendered at least 3 years of service, then he
c. For multiple partial disabilities, they shall be additive shall receive cash payment equal to 100% of ave. monthly
when related or deteriorating – the percentage shall be compensation for each year of service (essentially total
equal to the number of months the partial disability is amount of contributions made) or P12,000 whichever is
entitled to divided by 75 months. (e.g. loss of sight in one higher.
eye à 25/75; loss of arm à 50/75; if both occur due to same
cause, then 25/75 + 50/75 = 100% so treated as if it were 3. Partial Disability
permanent total disability. Paid according to GSIS prescribed schedule (this is similar
to the scheme used by SSS; refer to section II subsection
D-3 above); member availing of permanent partial
disability must satisfy condition E.1.a. above regarding the
disability not being due to his own fault and either E.1.b.i.
or E.1.b.ii. regarding employment status and services
rendered.
Death Benefits
Eligibility requirements
36 monthly contributions prior to the semester of death When member dies, the primary beneficiaries are entitled to
only one of the following:

a. Survivorship pension
1. If he was in the service when he died; or
2. Even if separated from the service, he has at least 3
years of service and has paid 36 monthly
contributions within the 5 years immediately
preceding death; or
3. Even if separated from the service, he has paid 180
monthly contributions prior to death.

b. Survivorship pension plus cash payment of

100%ave. monthly compensation for every year of service
1. If he was in the service when he died; and
2. With 3 years of service.

c. Cash payment equivalent to 100% ave. monthly

compensation for each year of service he paid
 contributions or P12,000 whichever is higher
1. With 3 years of service; and
2. He has failed toqualify in the prior 2 schemes.

Benefits
Monthly pension to primary or secondary beneficiaries. When member dies, the primary beneficiaries are entitled to
only one of the following:
To those ineligible – lump sum benefit which shall be the
higher between the two: a. Survivorship benefits
Beneficiaries are entitled to the following:
a. (monthly pension) x 12; or 1. Basic survivorship pension which is 50% of basic
b. (monthly pension) x (# of monthly contributions) monthly pension; and
2. Dependent children’s pension not exceeding 50% of
the basic monthly pension.

b. Survivorship pension plus cash payment of 100%ave.

monthly compensation for every year of service (pension
plus total contributions made)

c. Cash payment equivalent to 100% ave. monthly

compensation for each year of service he paid
contributions or P12,000 whichever is higher

Funeral Benefits
Eligibility requirements
Upon death of a member Entitled to this are the following:
a. Active member;
b. Member separated from service but still entitled to
funeral benefit;
c. Pensioner;
d. Retiree who at the time of retirement was of pensionable
age but opted to retire under RA 1616.

Benefits
P12,000 in cash or in kind, upon death of member Beneficiaries are entitled to a P20,000 funeral benefit
payable upon the death of a member or old age pensioner.
Loan
Social Security Commission Resolution No. 669.
Moreover, several SSS-issued circulars such as Circular No. 21-
P and No. 52 pertain to the treatment of salary loans,
sometimes providing for more flexible payment terms or
condonation for delinquent payers; Santiago v. CA and
SSS, GR # L-39949 (1984) resolved an issue involving the
treatment of salary loan repayments

Sickness benefits (SSS) / Temporary disability benefits (GSIS)

Eligibility requirements and other conditions
1. Inability to work due to sickness or injury 1. Employee must be:
2. Confined for at least 4 days either in a hospital or a. in service at the time of disability; or
elsewhere with SSS approval; b. if separated, he has rendered at least 3 years of
3. At least 3 months of contributions in the 12 month period service and paid at least 6 monthly contributions in
immediately before the semester of sickness or injury has the 12 month period immediately prior to disability;
been paid;
4. All company sick leaves with pay for the current year has 2. All sick leave credits including CBA sick leaves for the
been used up; current year has been used up; and
5. Maximum of 120 days per 1 calendar year (so maximum 3. Maximum of 120 days per 1 calendar year (maximum
permissible for the same sickness and confinement is 240 permissible for the same sickness and confinement is 240
days for 2 consecutive years); days for 2 consecutive years).
6. The employer has been notified, or, if a separated,
voluntary or self-employed member, the SSS directly
notified within 5 days of confinement;
7. Notice to employer or SSS not needed when confinement
is in a hospital; notice to employer not required as well
when Employee became sick or injured while working or
within premises of the employer.

Benefits
Daily cash allowance paid for the number of days a member is 75% of the current daily compensation for every day or
unable to work due to sickness or injury equivalent to 90% x fraction thereof of disability or P70 whichever is higher.
(average daily salary credit)
Maternity Leave benefits
limited only to first four deliveries or miscarriage Not available
Separation Benefits
Eligibility requirements
Not available 1. 60 years of age, or separation from service with at least 3
years but not over 15 years served
2. Below 60 years of age, but at least 15 years of service
rendered.
Benefits
1. For 60 years of age or separated from service with
3 to 15 years of service:
cash payment of 100% of ave. monthly compensation for
each year of service (so essentially, the total amount of all
contributions paid) or P12,000 whichever is higher.

2. Below 60 years of age and at least 15 years of

service:
cash payment equivalent to 18 x (monthly pension) at the
time of resignation or separation plus an old-age pension
benefit equal to basic monthly pension.
Life Insurance Benefits
Not available Note: Judiciary and Constitutional Commissions are entitled
to life insurance only.
B. RA 7699: LIMITED RA 7875: NATIONAL HEALTH
PORTABILITY SCHEME INSURANCE ACT
Coverage
1. Workers who transfer employment from one Coverage: All citizens
sector to another; and 1. Paying:
2. Those employed in both sectors (private and a. Both public and private sector
public). employees; and
b. The self-employed
Definition of terms 2. Nonpaying:
1. Portability a. Retirees and pensioners of either SSS or
Shall refer to the transfer of funds for the GSIS;
account and benefit of a worker who b. Members who have reached retirement
transfers from one system to the other358 age and who at least have paid 120
monthly contributions;
2. Totalization c. Indigent members; and
Shall refer to the process of adding up the d. Legal dependents.
periods of creditable services or
contributions under each of the Systems, for Who are dependents?
purposes of eligibility and computation of 1. Legitimate spouse who is not a member,
benefits359 (same as SSS);
2. Children below 21 unless
Sec 3, RA 7699 incapacitated (same as SSS; RA 9241
A covered worker who transfers employment however also includes step children as well);
from one sector to another or is employed in and
both sectors shall have his credible services or 3. Parents who are 60 years old or above
contributions in both Systems credited to his whose monthly income is below an amount
service or contribution record in each of the to be determined by Phil Health Insurance
Systems and shall be totalized for purposes Corp (PHIC).
of old-age, disability, survivorship and other
benefits in case the covered member National Health Insurance Benefits
does not qualify for such benefits in INCLUDED
either or both Systems without In-patient Hospital Care
totalization. 1. Room and board
2. Services of health care professionals
Provided, however, That overlapping periods 3. Diagnostics, laboratory, and other medical
of membership shall be credited only once for examination services
purposes of totalization. 4. Use of surgical or medical equipment and
facilities
5. Prescription drugs and biological
What happens? 6. Inpatient education packages
Workers shall be combine his years of creditable
service and paid contributions in one sector, Out-patient Care
private or public, as represented by his 1. Services of health care professionals
contributions to either SSS or GSIS, respectively, 2. Diagnostic, laboratory, and other medical
with his service in the other sector. examination services
Why? 3. Personal preventive services; and
To be able to satisfy eligibility requirements of 4. Prescription drugs and biologists
benefits provided for by either SSS or GSIS.
Emergency and transfer services
Overlapping periods Other health care services
Overlapping periods of membership in case of
NOT INCLUDED360
those employed in both sectors at once are to be
1. Non-Prescription drugs and services
counted once only for purposes of
2. Alcohol abuse or dependency treatment
totalization.
3. Cosmetic surgery
358
Sec 2(b), RA 7699
359
Sec 2(b), RA 7699 360
Sec 11, RA 7875
 4. Optometric Services
5. Fifth and Subsequent normal obstetrical
deliveries; and
6. Cost-ineffective procedures, which shall
be defined by the PHIC.

Note: This list of excluded items are subject

to review and revision by the PHIC through
actuarial studies every 3 years.

Requisites for availment361

1. Payment of at least 3 monthly
contributions within the immediate 6
months prior to availment; and
2. The following need not pay to qualify:
a. SSS and GSIS pensioners to
effectively of RA 7875.
b. Members who have reached the
age of retirement and have paid
at least 120 monthly
contributions;
c. Enrolled indigents

361
Sec 12, RA 7875
Labor Standards-Related last two (2) years, subject to the
provision of Section 7 of this
Special Laws issuance;
b. The Government and any of its
A. RA 8187: Paternity Leave Act of political subdivisions, including
1996 government-owned and controlled
corporations,
Who is entitled to paternity leave • except those corporations
Married male employee both in the public and operating essentially as private
private sectors362 subsidiaries of the Government;
c. Employers already paying
When may it be availed of their employees 13-month pay
It may be availed of for the first 4 deliveries of or more in a calendar year of its
the legitimate spouse with whom he is equivalent at the time of this
cohabiting363 issuance;
d. Employers of household
What are the benefits under the law helpers and persons in the
A married male employee is allowed not to personal service of another in
report for work for seven (7) days. relation to such workers; and
While on leave, the employee continues to earn e. Employers of those who are paid
the compensation, on the condition that his on purely commission,
spouse has delivered a child or suffered a boundary, or task basis, and
miscarriage for purposes of enabling him to those who are paid a fixed amount
effectively lend support to his wife in her period for performing a specific work,
of recovery and/or in the nursing of the newly- irrespective of the time consumed in
born child.364 the performance thereof, except
where the workers are paid on piece-
B. PD 851: 13th month pay rate basis in which case the
employer shall be covered by this
What is 13th month pay issuance insofar as such workers are
Sec 2(a), PD 851 concerned.
Thirteenth-month pay shall mean one twelfth
(1/12) of the basic salary of an employee Features of the benefit
within a calendar year; • Employers shall pay to all their employees
receiving a basic salary of not more than
Coverage P1,000 a month a thirteenth-month pay
ALL employers, provided that they have worked not later than December 24 of every year.366
for at least one month during the calendar year
• Memorandum Order no. 28, 1986 Aug
Exempted:365 13 removed “limiting coverage to
a. Distressed employers workers receiving not more than
• those which are currently P1,000”
incurring substantial • Employers are required to pay all
losses or their rank-and-file employees 13th
• in the case of non-profit month pay
institutions and organizations,
where their income, • 13th month pay may be the subject of
whether from donations, collective bargaining367
contributions, grants and other • The benefits granted under this issuance
earnings from any source, has shall not be credited as part of the
consistently declined by regular wage of the employees for
more than forty (40%) percent purposes of determining overtime and
of their normal income for the premium pay, fringe benefits, as well as
362
Sec 2, RA8187. Paternity Leave
premium contributions to the State
363
Sec 2, RA8187. Paternity Leave
364
Sec 3, RA8187. Paternity Leave 366
Sec 1, PD 851
365
Sec 3, PD 851 367
Sec 5, PD 851
 Insurance Fund, social security, medicare VI. Against one who is under the care,
and private welfare and retirement plans.368 custody or supervision of the
offender;
C. RA 7877: Anti-Sexual VII.Against one whose education,
training, apprenticeship or tutorship
Harrasment Act is entrusted to the offender;
VIII. When the sexual favor is
Work, education or training-related made a condition to the giving of a
sexual harassment, defined passing grade, or the granting of
Sec 3. definition, RA 7877 honors and scholarships, or the
Work, education or training-related sexual payment of a stipend, allowance or
harassment is committed by an employee, other benefits, privileges, or
manager, supervisor, agent of the employer, considerations; or
teacher, instructor, professor, coach, trainor, IX. When the sexual advances result in
or any other person who, having an intimidating, hostile or
authority, influence or moral offensive environment for the
ascendancy over another in a work or student, trainee or apprentice.
training or education environment,
demands, requests or otherwise requires any Who are liable
sexual favor from the other, regardless of 1. The offender:
whether the demand, request or requirement a. Employee
for submission is accepted by the object of b. Manager, Supervisor, agent of the
said Act. employer
c. Teacher, instructor, professor, coach,
How work-related sexual harassment is trainer
committed d. Any other person who, having
Sec 3. Definition, RA 7877 authority, influence or moral
d. In a work-related or employment ascendancy over another in a work or
environment, sexual harassment is training or education environment
committed when: 2. Any person who directs or induces another
VI. The sexual favor is made as a to commit any act of sexual harassment
condition in the hiring or in the 3. Any person who cooperates in the
employment, re-employment or commission thereof by another without
continued employment of said which it would not have been committed
individual, or in granting said
individual favorable compensation,
terms, conditions, promotions, or Role of the employer or Head of Office
privileges; or the refusal to grant the The Employer or Head of Office shall have the
sexual favor results in limiting, duty:
segregating or classifying the
employee which in a way would 3. To prevent the commission of such acts
discriminate, deprive or diminish and
employment opportunities or 4. To lay down the procedure for the
otherwise adversely affect said resolution, settlement or prosecution of
employee; committed acts.
VII.The above acts would impair the
employee’s rights or privileges Employer shall be solidarily liable for
under existing labor laws; or damages if:
VIII. The above acts would result 3. The employer or head of office,
in an intimidating, hostile, or educational or training institution is
offensive environment for the informed of such acts by the offended
employee. party and
4. No immediate action is taken
e. In an education or training environment, thereon
sexual harassment is committed: Independent Action for Damages
The victim of work, education or training-related
368
Sec 6, PD 851 sexual harassment can institute a separate and
independent action for damages and other reason of his disability unless the
affirmative relief. employer can prove that he impairs the
satisfactory performance of the work involve
Sanctions to the prejudice of the business entities;
3. Criminal: imprisonment of 1 month to Provided, however, That the employer first
mos. Or fine of P10k to P20k or both sought provide reasonable accommodations
Prescription of such action is in 3 years. for disabled persons;
4. Termination 8. Failing to select or administer in the
effective manner employment tests
D. RA 7277: Magna Carta for the which accurately reflect the skills,
Disabled Persons aptitude or other factor of the disabled
applicant or employee that such test
purports to measure, rather than the
Forms of discrimination impaired sensory, manual or speaking skills
1. Discrimination in employment of such applicant or employee, if any; and
2. Discrimination on transportation 9. Excluding disabled persons from
3. Discrimination on the use of Public membership in labor unions or similar
accommodations and services organization.
Forms of discrimination against the the If the violator is a corporation or an
handicapped in employment369 organization, who is/are liable under the
1. Limiting, segregating or classifying a Act
disabled job applicant in such a manner that • If the violator is a corporation, organization
adversely affects his work opportunities; or any similar entity, the officials thereof
2. Using qualification standards, directly involved shall be liable370
employment tests or other selection
criteria that screen out or tend to
screen out a disabled person unless E. RA 8972: Paternity Leave Act
such standards, tests or other selection
criteria are shown to be job related for the What are the employment-related
position on question and are consistent with benefits available to all solo parents?
business necessity; 1. Parental leave
3. Utilizing standards, criteria, or In addition to leave privileges under
methods of administration that: existing laws, parental leave of not more
a. have the effect of discrimination on the than seven (7) working days every year
basis of disability; or shall be granted to any solo parent
b. perpetuate the discrimination of others employee who has rendered service of at
who are subject to common least one (1) year.371
administrative control;
4. Providing less compensation, such as 2. Flexible work schedule
salary, wage or other forms of The employer shall provide for a flexible
remuneration and fringe benefits, to a working schedule for solo parents:
qualified disabled employee, by reason of his Provided, That the same shall not affect
disability, than the amount to which a non- individual and company productivity:
disabled person performing the same work is Provided, further, That any employer
entitled; may request exemption from the above
5. Favoring a non-disabled employee requirements from the DOLE on certain
over a qualified disabled employee with meritorious grounds.372
respect to promotion, training opportunities,
study and scholarship grants, solely on 3. Non discrimination policy
account of the latter’s disability; No employer shall discriminate against
6. Re-assigning or transferring a any solo parent employee with respect to
disabled employee to a job or position he
cannot perform by reason of his disability;
7. Dismissing or terminating the
services of a disabled employee by 370
Sec 46 (c), RA 7277
371
Sec 8, RA 8972
369
Sec 32, RA 7277 372
Sec 6, RA 8972
 terms and conditions of employment on
account of his/her status.373

4. Educational benefits
The DECS, CHED and TESDA shall
provide the following benefits and
privileges:

a. Scholarship programs for

qualified solo parents and their
children in institutions of basic,
tertiary and technical/skills
education; and
b. Nonformal education programs
appropriate for solo parents and
their children.

The DECS, CHED and TESDA shall

promulgate rules and regulations for the
proper implementation of this
program.374

5. Housing benefits
Solo parents shall be given allocation in
housing projects and shall be provided
with liberal terms of payment on said
government low-cost housing projects in
accordance with housing law provisions
prioritizing applicants below the poverty
line as declared by the NEDA.375

6. Medical assistance
The DOH shall develop a comprehensive
health care program for solo parents and
their children. The program shall be
implemented by the DOH through their
retained hospitals and medical centers
and the local government units (LGUs)
through their provincial/ district/ city/
municipal hospitals and rural health
units (RHUs).376

373
Sec 7, RA 8972
374
Sec 9, RA 8972
375
Sec 10, RA 8972
376
Sec 11, RA 8972
V. LABOR RELATIONS 5. Agency shop- agreement which does not
require union membership but only support
from employees within the bargaining unit in
A. Right to self-organization the form of agency fees.
The right to self-organization is the entitlement
given to all employees to form, join, or assist in Limitations on Applicability of Union
the formation of a labor organization or workers’ Security Agreements
association. Union Security Agreements cannot be enforced
on employees who:
1. already members of another union at the time
1. Who may or may not of the signing of the CBA
exercise the right 2. were refused admission by the union itself
Sec 8, Art III, 1987 Constitution without any reasonable ground
3. members of religious sects which prohibit
their members from joining a labor organization
Art. 253 A union cannot invoke the union security clause
to cause the dismissal of an employee whom it
refused to accept as member.
The right to self-organization is accorded to all
kinds of employees working in any type of
establishment, whether commercial, industrial, a. Doctrine of necessary
agricultural, religious, charitable, medical or implication
educational institutions, operating for profit or
not.
2. Commingling or mixture
of membership
Union Security Agreement 3. Rights and conditions of
Art. 259(e)
membership
a. Nature of relationship
A stipulation in CBAs which requires employees i. Member-Labor
covered by CBUs to join the contracting union
and maintain their union membership in good union
standing to keep their jobs. ii. Labor union
Union Security Agreements are valid and legal .
federation
(a) Disaffiliation
Types (b) Substitutionary
1. Closed Shop- ER binds himself to hire
members of union only who must maintain the ir
doctrine
membership in good standing
2. Union Shop- ER can hire non-members on the
condition that they should join the contracting
union within a specified period and maintain
their union membership in good standing to
keep their jobs.
3. Maintenance of membership-members of
union are required at time of execution of CBA to
maintain their membership in good standing
during the lifetime of the CBA as a condition of
continued employment
4. Preferential hiring- arrangement whereby
members of union are given preference in
engagement, all circumstances being equal, and
for them to maintain membership in good
standing during lifetime of CBA as a condition of
continued employment
B. Bargaining unit
C. Bargaining representative
1. Determination of
representation status
D. Rights of labor
organizations
1. Check off, assessment,
agency fees
2. Collective bargaining
a. Duty to bargain
collectively
b. Collective Bargaining
Agreement
i. Mandatory
prov1s10ns in a
Collective Bargaining
Agreement
E. Unfair labor practices
1. Nature, aspects
Art. 258

2. By employers
3. By labor organizations
F. Peaceful concerted  If ground is based on ULP- 15 days before
intended date
activities  if ground is CBA deadlock- 30 days before
1. By labor organization intended date
a. Strike
Art. 212 Definition  Cooling off period need not be observed
when ground is ULP but union is still
Strike- any temporary stoppage of work by the
obliged to observe the mandatory
concerted action of employees because of a
requirements of strike.
labor dispute.
2. strike vote- referendum to determine
 Mass resignation is not a strike even if it whether general membership is in favor of
arose from a labor dispute because the strike
stoppage of work, though concerted, is not
temporary.
 NCMB must be notified 24hrs before the
conduct. It may supervise at its own
Art. 212 Definition
initiative or at the request of any affected
Labor Dispute- includes any controversy or party.
matter concerning terms and conditions of
employment or the association or
 Voting should be done by secret ballot.
representation of persons in negotiating,
Only when majority of total union
fixing, maintaining, changing or arranging the
membership votes in favor can union go
terms and conditions of employment,
on strike.
regardless of whether the disputants stand in
the proximate relation of employer and
3. strike vote report- results of the strike
employee
referendum.
 The phrase “regardless of whether the
 Submitted to NCMB at least 7 days before
disputants stand in the proximate relation of
date of intended strike. Within 7day
employer and employee” means that there
period, union cannot strike.
need not be a direct employment relation
between the parties in order that their
 When to Declare Strike
controversy can be considered as a labor
The union can declare strike only when the
dispute.
dispute is not settled after the lapse of:
1. cooling off period
i. Valid strikes as 2. seven-day strike ban
distinguished from
Seven-day strike ban is reckoned from the
illegal strikes date the strike vote report is submitted to
Art. 278 NCMB.

 Status of Strikers
 Who Can Declare a Strike The employment status of strikers subsists
Only a certified collective bargaining agent during the strike.
can declare a strike. If no certified CB
representative, a strike can be declared: Under the principle of “a fair day’s wage for a
1. by a LLO fair day’s labor”, strikers are not entitled to
2. on the ground of ULP wages during the period of the strike even if
the strike is legal.
 Grounds
1. bargaining deadlock  Strikes in Medical Institutions
2. ULP Strikes are strongly discouraged but should a
strike be inevitable, the striking union must
 Mandatory Requirements provide and maintain an effective skeletal
1. notice of strike force.
 b. Effects of assumption
of jurisdiction
b. Picket
2. By employer
a. Lockout
Art. 219
Lockout- any temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute.

Grounds
1. Collective bargaining Deadlock
2. ULP

Mandatory Requirements
1. Notice of lockout
 If ground is based on ULP- 15 days before
intended date
 if ground is CBA deadlock- 30 days before
intended date

2. Lockout vote- referendum among Board of

Directors to determine whether the Board or
partners are in favor of a lockout.

NCMB must be notified 24hrs before the

conduct. It may supervise at its own initiative or
at the request of any affected party.

3. Lockout vote report- results of the strike

referendum.

Submitted to NCMB at least 7 days before date of

lockout. Within 7day period, union cannot strike.

When to Declare Lockout

The employer may declare a lockout only when
the dispute is not settled after the lapse of:
1. cooling off period- 30/15
2. seven-day strike ban-7

3. Assumption of
jurisdiction by Secretary of
Labor and Employment
a. Industry
indispensable to the
national interest
VIII. JURISDICTION AND
REMEDIES
A. Labor Arbiter
1. Jurisdiction of the Labor
Arbiter as distinguished
from the
Regional Director
2. Requirements to perfect
appeal to National Labor
Relations
Commission
3. Reinstatement and/or
execution pending appeal
B. National Labor Relations
Commission

C. Court of Appeals
D. Supreme Court
E. Bureau of Labor Relations
F. National Conciliation and
Mediation Board
1. Jurisdiction
2. Conciliation as
distinguished from
mediation
3. Preventive mediation
G. Department of Labor and
Employment Regional
Directors
1. Jurisdiction
2. Recovery and
adjudicatory power
H. Department of Labor and the findings of labor employment and
enforcement officers or industrial safety
Employment Secretary engineers made in the course of inspection.
1. Jurisdiction The Secretary or his duly authorized
representatives shall issue writs of execution
to the appropriate authority for the
2. Visitorial and enforcement of their orders, except in cases
enforcement powers where the employer contests the findings of
the labor employment and enforcement officer
Visitorial Powers and raises issues supported by documentary
Art. 128. Visitorial and Enforcement proofs which were not considered in the
Power course of inspection. (As amended by
(a) The Secretary of Labor and Employment Republic Act No. 7730, June 2, 1994).
or his duly authorized representatives, An order issued by the duly authorized
including labor regulation officers, shall have representative of the Secretary of Labor and
access to employers records and premises at Employment under this Article may be
any time of the day or night whenever work is appealed to the latter. In case said order
being undertaken therein, and the right to involves a monetary award, an appeal by the
copy therefrom, to question any employee and employer may be perfected only upon the
investigate any fact, condition or matter which posting of a cash or surety bond issued by a
may be necessary to determine violations or reputable bonding company duly accredited
which may aid in the enforcement of this Code by the Secretary of Labor and Employment in
and of any labor law, wage order or rules and the amount equivalent to the monetary award
regulations issued pursuant there to. in the order appealed from. (As amended by
Republic Act No. 7730, June 2, 1994).
If a violation of Labor Standards is discovered
during the inspection, the DOLE RD is A writ of execution may not be issued under the
empowered to issue compliance orders pursuant following circumstances:
to Art. 128(b). 1. when the employer contests the findings of the
inspectors
The compliance order will apply only to 2. when the employer raises issues which were
employeees who are still working with the not considered in the course of inspection
employer. It cannot cover employees whose
employment has already been terminated. Essential Features of Visitorial and
Enforcement Powers
If the inspection discovers a violation that poses 1. Not restricted by the amount involved
grave threat and imminent danger to the health 2. all employees still employed will benefit
and safety of workers in the workplace, the therefrom even if they did not sign the
DOLE RD can order suspension of operations of complaint.
any unit or department of the establishment. If
the violation is attributable to employer, the Remedy From Orders Issued
employees are entitled to their wages during the Orders issued are appealable to the Secretary of
period of suspension. Labor within 10days from receipt of Order. The
appeal will be perfected upon posting of a cash
Enforcement Power or surety bond issued by a reputable bonding
Art. 128. Visitorial and Enforcement company.
Power
(b) Notwithstanding the provisions of Articles Adjudicatory Power
129 and 217 of this Code to the contrary, and The authority given to the DOLE RD to hear and
in cases where the relationship of employer- decide money claims not exceeding 5thousand
employee still exists, the Secretary of filed by employees who have already been
Labor and Employment or his duly separated from service and who do not seek
authorized representatives shall have reinstatement.
the power to issue compliance orders to
give effect to the labor standards provisions of Conditions for Exercise
this Code and other labor legislation based on
The DOLE RD can exercise its adjudicatory
power only when the following conditions are
present:
1. a complaint for pure money claims has been
filed by an employee who has already been
separated from service and does not seek
reinstatement
2. the aggregate money claim of each
complainant does not exceed 5thousand pesos

If the foregoing are not complied with,

jurisdiction will be vested in the Arbitration
Branch of the NLRC.

Remedy
Decisions or Orders of the DOLE RD in the
exercise of his adjudicatory power under Art. 129
are appealable to the NLRC within 5days from
receipt.

Adjudicatory Enforcement
Power Power
As to Basis
Based on complaint Based on inspection
filed by the employee results
As to Subject Matter
Exercisable only on Exercisable on money
pure money claims claims and health and
safety standards
As to Workers Involved
Applies to employees Applies only to
who have already employees who are
been separated from still in service
service and do not
seek reinstatement
As to Amount Involved
Money claims not Not limited by the
exceeding 5k amount involved
As to Appellate Body
Orders are appealed Orders are appealed
to NLRC to DOLE Secretary
As to Period to Appeal
Appealable Appealable within
withiapprecntn 5days 10days from receipt
from receipt

3. Power to suspend effects

of termination
4. Remedies
I. Voluntary Arbitrator
1. · Jurisdiction
Art. 274

2. Remedies
 Voluntary Arbitrator DOLE Regional Director Labor Arbiter
Jurisdiction
OEJ over: 1. Pure money claims not 1. Unfair Labor Practices
1. unresolved grievance exceeding 5k cases
arising from interpretation or 2. Termination Disputes
implementation of CBA or 3. Money claims of workers
interpretation or enforcement regardless of amount if there
of company personnel is prayer for reinstatement
policies 4. Money claims exceeding
P5k even without prayer for
 matters which do not reinstatement
arise from interpretation 5. Claims for damages arising
or implementation of CBA from ER-EE relationship
or company personnel 6. Violation of Art. 279
policies may be submitted including legality of strikes
to voluntary arbitration and lockouts
without passing through 7. All other claims arising
grievance machinery. from ER-EE relationship
except claims for employees’
2. wage distortion disputes in compensation (under SSS),
organized establishments SS, medicare, and maternity
benefits (under Social
3. disputes arising from Security Commission)
interpretation and 8. Claims of migrant workers
implementation of the arising from ER-EE
productivity incentive relationship
programs under RA6971. 9. Wage distortion disputes in
unorganized establishments
4. other labor disputes upon
agreement of the parties. Reasonable Causal
Connection Doctrine
 The specific dispute must For LA to acquire jurisdiction,
be expressly identified. claim must have a reasonable
Without such express causal connection with the
identification, the phrase ER-EE relationship.
“all disputes” should be
construed as limited to
areas traditionally within
the jurisdiction of the VA.
Requisites for Assumption
1. The dispute was first
brought to the grievance
machinery for resolution
2. the grievance machinery
failed to resolve the dispute
3. the parties agreed to
submit the dispute for VA.
Acquire Jurisdiction
VA acquire jurisdiction upon
receipt of Submission
Agreement duly signed by
both parties
Remedies
 Decisions of VA are
appealable to CA under Rule
43.
NATIONAL LABOR RELATIONS
COMMISSION
Jurisdiction
J. Prescription of actions
1. Money claims
2. Illegal dismissal
3. Unfair labor practice
4. Offenses under the
Labor Code
5. Illegal recruitment