FACULTY OF CIVIL LAW (1734)

LABOR LAW AND

SOCIAL LEGISLATION

2023 GOLDEN NOTES

FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS
MANILA
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 Faculty of Civil Law (1734)

ACADEMIC YEAR 2022-2023

CIVIL LAW STUDENT COUNCIL
NICOLO B. BONGOLAN PRESIDENT
IVAN ARNIE C. QUIAMCO VICE PRESIDENT INTERNAL
JANNODIN D. DIPATUAN VICE PRESIDENT EXTERNAL
BRIAN CHOOYE S. LIM SECRETARY
ROMBERT JOSEPH EMIEL D. CRUZ TREASURER
HARLEY JANSEN L. CALDERON AUDITOR
BIENVENIDO L. ORTIZ III PUBLIC RELATIONS OFFICER
KAREN DARYL L. BRITO CHIEF-OF-STAFF

UST BAR-OPS

JUSTINE RENEE GERVACIO CHAIRPERSON

PAULINNE STEPHANY G. SANTIAGO VICE-CHAIRPERSON
KAREN DARYL L. BRITO HEAD, SECRETARIAT
JAN YSABEL U. DE LEON HEAD, PUBLIC RELATIONS OFFICER
GABRIEL C. LAPID HEAD, FINANCE COMMITTEE
BIANCA PATRICIA ALLEN C. FLORES HEAD, HOTEL ACCOMMODATIONS COMMITTEE
FRITZ N. CANTERO HEAD, LOGISTICS COMMITTEE
JOSEPHINE GRACE W. ANG SENIOR MEMBER
MA. ANDREA D. CABATU SENIOR MEMBER
SABINA MARIA H. MABUTAS SENIOR MEMBER
REBECCA JOY M. MALITAO SENIOR MEMBER
JOHN FREDERICK A. NOJARA SENIOR MEMBER
JEDIDIAH R. PADUA SENIOR MEMBER
VANESSA A. SIENA SENIOR MEMBER

ATTY. AL CONRAD B. ESPALDON

ADVISER
 Faculty of Civil Law (1734)

ACADEMICS COMMITTEE 2023

ANGELA BEATRICE S. PEÑA KATHERINE S. POLICARPIO

SECRETARIES-GENERAL

RON-SOPHIA NICOLE C. ANTONIO CRIMINAL LAW

HERLENE MAE D. CALILUNG LABOR LAW AND SOCIAL LEGISLATION

POLITICAL LAW AND

PATRISHA LOUISE E. DUMANIL
PUBLIC INTERNATIONAL LAW

LEGAL AND JUDICIAL ETHICS WITH

ALEXANDRA MAUREEN B. GARCIA
PRACTICAL EXERCISES

HANNAH JOY C. IBARRA COMMERCIAL LAW

JEDIDIAH R. PADUA CIVIL LAW

PAULINNE STEPHANY G. SANTIAGO TAXATION LAW

DIANNE MICAH ANGELA D. YUMANG REMEDIAL LAW

EXECUTIVE COMMITTEE

PAULA ANDREA F. PEÑAFLOR COVER DESIGN ARTIST

 Faculty of Civil Law (1734)

LABOR LAW AND SOCIAL LEGISLATION

COMMITTEE 2023
ADRIANNE C. TAMAYO

LABOR LAW AND SOCIAL LEGISLATION

SUBJECT HEAD

JONA CHRISTIA A. SALVADOR ASST. HEAD, LABOR STANDARDS

ASST. HEAD, SOCIAL LEGISLATION &
JOSE MARI M. LEE
LABOR STANDARDS
DYANA KATRINA T. ROLDAN ASST. HEAD, LABOR RELATIONS

LABOR LAW AND SOCIAL LEGISLATION

ASSISTANT SUBJECT HEADS

MEMBERS
DANIE LOIS B. BAUTISTA CHELSEA KATE M. LAVILLA
JEANIA ANN D. BORJA SARAH MAY D. MEDALLE
MARY GENELLE S. CLEOFAS CHUSTINE IRA C. SISON
RYLE NICOLE Q. CUSTODIO JENILYN B. TOLEDO
NICOLE ANNE C. DEOCARIS SANTIAGO U. VITUG
LEXI DEI G. FALGUI

ADVISERS
COMMISSIONER LEONARD VINZ OCHOA IGNACIO
LABOR ARBITER BENEDICT G. KATO
 Faculty of Civil Law (1734)

FACULTY OF CIVIL LAW

UNIVERSITY OF SANTO TOMAS

ACADEMIC OFFICIALS
ATTY. NILO T. DIVINA REV. FR. ISIDRO C. ABAÑO, O.P.
DEAN REGENT

ATTY. ARTHUR B. CAPILI

FACULTY SECRETARY

ATTY. ELGIN MICHAEL C. PEREZ

LEGAL COUNSEL
UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC

JUDGE PHILIP A. AGUINALDO

SWDB COORDINATOR

LENY G. GADIANA, R.G.C.

GUIDANCE COUNSELOR
 Faculty of Civil Law (1734)

OUR DEEPEST APPRECIATION TO OUR

MENTORS AND INSPIRATION
Dean Jacqueline O. Lopez-Kaw, DCL

Dean Salvador A. Poquiz

Commissioner Leonard Vinz Ochoa Ignacio

Labor Arbiter Benedict G. Kato

Atty. Arnold E. Cacho

Atty. Irvin Joseph Fabella

Atty. Ian Jerny E. De Leon

Atty. Roland L. Marquez

Atty. Alwyn Faye B. Mendoza

Atty. Cesar E. Santamaria, Jr.

For being our guideposts in understanding the intricate sphere of

Labor Law and Social Legislation.
– Academics Committee 2023
 DISCLAIMER

THE RISK OF USE OF THIS BAR

REVIEW MATERIAL SHALL BE
BORNE BY THE USER
 Table of Contents

I. FUNDAMENTAL PRINCIPLES AND CONCEPTS ........................................................................................................... 1

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

II. PRE-EMPLOYMENT ...................................................................................................................................................... 13

A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS .................................................. 13
1. DEFINITION OF RECRUITMENT AND PLACEMENT ............................................................................... 13
2. REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES ...................................................... 14
a) REGULATORY AUTHORITIES ............................................................................................................. 15
(1) PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION ......................................... 15
(2) REGULATORY AND VISITORIAL POWERS OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT SECRETARY ........................................................................... 16
b) BAN ON DIRECT HIRING ..................................................................................................................... 16
c) ENTITIES PROHIBITED FROM RECRUITING .................................................................................. 17
d) SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY ............................................... 19
e) PROHIBITED PRACTICES (Art. 34, LC) ............................................................................................. 27
3. ILLEGAL RECRUITMENT (Labor Code and the Migrant Workers and Overseas
Employment Act of 1995 (R.A. No. 8042), as amended by R.A. No. 10022) ...................................... 27
a) ELEMENTS .............................................................................................................................................. 30
b) TYPES....................................................................................................................................................... 30
c) ILLEGAL RECRUITMENT vs. ESTAFA ................................................................................................ 32
4. LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN EMPLOYER ..................................... 33
a) SOLIDARY LIABILITY ........................................................................................................................... 34
b) THEORY OF IMPUTED KNOWLEDGE ............................................................................................... 35
5. TERMINATION OF CONTRACT OF MIGRANT WORKER ....................................................................... 35
B. EMPLOYMENT OF NON-RESIDENT ALIENS ....................................................................................................... 36
C. DISCRIMINATORY PRACTICES ............................................................................................................................. 41
1. AGE (R.A. No. 10911 or the Anti-Age Discrimination in Employment Act) ....................................... 42
2. GENDER AND/OR MARITAL STATUS (R.A. No. 9710 or the Magna Carta of Women) .................. 43
3. HEALTH CONDITION (R.A. No 7277 or the Magna Carta for Disabled Persons) ............................ 45
4. SOLO PARENTS (Sec. 7, R.A. No. 8972, as amended by R.A. No. 11861) ............................................. 47

III. EMPLOYMENT PROPER ............................................................................................................................................. 48

A. MANAGEMENT PREROGATIVE ............................................................................................................................. 48
1. DISCIPLINE ...................................................................................................................................................... 50
2. TRANSFER OF EMPLOYEES ......................................................................................................................... 51
3. PRODUCTIVITY STANDARD ........................................................................................................................ 53
4. BONUS ............................................................................................................................................................... 53
5. CHANGE OF WORKING HOURS ................................................................................................................... 54
6. BONA FIDE OCCUPATIONAL QUALIFICATIONS ...................................................................................... 56
7. MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS................................................. 57
8. POST-EMPLOYMENT RESTRICTIONS ....................................................................................................... 57
B. LABOR STANDARDS ................................................................................................................................................ 58
1. CONDITIONS OF EMPLOYMENT ................................................................................................................. 58
a) COVERAGE .............................................................................................................................................. 58
b) HOURS OF WORK.................................................................................................................................. 62
 (1) NORMAL HOURS OF WORK AND HOURS WORKED........................................................ 62
(2) COMPRESSED WORK WEEK ................................................................................................. 69
(3) MEAL PERIODS ........................................................................................................................ 71
(4) NIGHT-SHIFT DIFFERENTIAL .............................................................................................. 73
(5) OVERTIME WORK ................................................................................................................... 74
(6) COMPUTATION OF ADDITIONAL COMPENSATION (RATES ONLY) ........................... 79
c) REST PERIODS ....................................................................................................................................... 79
d) HOLIDAYS ............................................................................................................................................... 81
e) SERVICE CHARGE (Art. 96 of the LC, as amended by R.A. No. 11360) ....................................... 83
f) OCCUPATIONAL SAFETY AND HEALTH STANDARDS LAW (R.A. No. 11058).......................... 84
(1) COVERED WORKPLACES (Sec. 3(c)) ................................................................................... 84
(2) DUTIES OF EMPLOYERS, WORKERS, AND OTHER PERSONS (Sec. 4)......................... 85
(3) WORKERS’ RIGHT TO KNOW (Sec. 5)................................................................................. 85
(4) WORKERS’ RIGHT TO REFUSE UNSAFE WORK (Sec. 6) ................................................. 86
(5) WORKERS’ RIGHT TO PERSONAL PROTECTIVE EQUIPMENT (PPE) (Sec. 8) .......... 86
2. WAGES .............................................................................................................................................................. 86
a) DEFINITIONS .......................................................................................................................................... 86
(1) WAGE vs. SALARY.................................................................................................................... 87
(2) FACILITIES vs. SUPPLEMENTS ............................................................................................. 87
b) PRINCIPLES ............................................................................................................................................ 89
(1) NO WORK, NO PAY .................................................................................................................. 89
(2) EQUAL PAY FOR EQUAL WORK ........................................................................................... 90
(3) FAIR WAGE FOR FAIR WORK ............................................................................................... 90
(4) NON-DIMINUTION OF BENEFITS......................................................................................... 90
c) PAYMENT OF WAGES ........................................................................................................................... 92
d) PROHIBITIONS REGARDING WAGES ............................................................................................... 95
e) WAGE DISTORTION .............................................................................................................................. 98
(1) CONCEPT ................................................................................................................................... 98
f) MINIMUM WAGE LAW ........................................................................................................................ 102
g) HOLIDAY PAY....................................................................................................................................... 104
h) 13TH MONTH PAY.............................................................................................................................. 109
3. LEAVES............................................................................................................................................................ 116
a) SERVICE INCENTIVE LEAVE.............................................................................................................. 116
b) MATERNITY LEAVE ............................................................................................................................ 118
c) PATERNITY LEAVE ............................................................................................................................. 126
d) SOLO PARENT LEAVE (R.A. No. 8972, as amended by R.A. No. 11861) .................................. 128
e) LEAVE BENEFITS FOR WOMEN WORKERS UNDER MAGNA CARTA OF
WOMEN (R.A. No. 9710) and ANTI-VIOLENCE AGAINST WOMEN AND THEIR
CHILDREN OF 2004 (R.A. No. 9262) .............................................................................................. 130
f) COMPASSIONATE LEAVES ................................................................................................................. 133
4. SPECIAL GROUPS OF EMPLOYEES ........................................................................................................... 134
a) WOMEN ................................................................................................................................................. 134
(1) DISCRIMINATION .................................................................................................................. 135
(2) STIPULATION AGAINST MARRIAGE ................................................................................. 136
(3) PROHIBITED ACTS................................................................................................................ 137
b) MINORS ................................................................................................................................................. 138
c) KASAMBAHAYS ..................................................................................................................................... 145
d) HOMEWORKERS ................................................................................................................................. 153
e) NIGHT WORKERS ................................................................................................................................ 155
f) APPRENTICES AND LEARNERS ........................................................................................................ 157
g) PERSONS WITH DISABILITIES......................................................................................................... 159
(1) DISCRIMINATION .................................................................................................................. 161
(a) MAGNA CARTA FOR DISABLED PERSONS (R.A. No. 7277).............................. 161
(b) MENTAL HEALTH ACT (R.A. No. 11036) .............................................................. 161
(2) INCENTIVES FOR EMPLOYERS ........................................................................................... 162
5. SEXUAL HARASSMENT IN THE WORK ENVIRONMENT ...................................................................... 163
a) SEXUAL HARASSMENT ACT (R.A. No. 7877) ................................................................................. 163
b) SAFE SPACES ACT (Art. IV of R.A. No. 11313 Only; Exclude Liability of Employers) ............ 166
 C. SOCIAL WELFARE LEGISLATION ........................................................................................................................ 169
1. SSS LAW (R.A. No. 8282, as amended by R.A. No. 11199) .................................................................... 169
a) COVERAGE ............................................................................................................................................ 171
b) DEPENDENTS AND BENEFICIARIES ............................................................................................... 173
c) BENEFITS .............................................................................................................................................. 177
2. GSIS LAW (R.A. No. 8291) ........................................................................................................................... 185
a) COVERAGE ............................................................................................................................................ 186
b) DEPENDENTS AND BENEFICIARIES ............................................................................................... 187
c) BENEFITS .............................................................................................................................................. 187
3. DISABILITY AND DEATH BENEFITS ........................................................................................................ 196
a) LABOR CODE ........................................................................................................................................ 196
b) POEA-STANDARD EMPLOYMENT CONTRACT ............................................................................ 203
D. LABOR RELATIONS ............................................................................................................................................... 221
1. RIGHT TO SELF-ORGANIZATION ............................................................................................................. 222
a) COVERAGE ............................................................................................................................................ 223
b) ELIGIBILITY FOR MEMBERSHIP ..................................................................................................... 229
c) DOCTRINE OF NECESSARY IMPLICATION..................................................................................... 229
d) COMMINGLING OR MIXED MEMBERSHIP .................................................................................... 229
e) EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES OUTSIDE OF THE
BARGAINING UNIT ......................................................................................................................... 229
2. BARGAINING UNIT....................................................................................................................................... 230
3. BARGAINING REPRESENTATIVE.............................................................................................................. 234
4. RIGHTS OF LABOR ORGANIZATIONS ...................................................................................................... 246
a) CHECK OFF, ASSESSMENT, AND AGENCY FEES ............................................................................ 254
b) COLLECTIVE BARGAINING ............................................................................................................... 256
(1) ECONOMIC TERMS AND CONDITIONS ............................................................................. 257
(2) NON-ECONOMIC TERMS AND CONDITIONS ................................................................... 258
(3) DUTY TO BARGAIN COLLECTIVELY.................................................................................. 260
(4) MANDATORY PROVISIONS IN THE COLLECTIVE BARGAINING
AGREEMENT (CBA)............................................................................................................. 260
5. UNFAIR LABOR PRACTICES....................................................................................................................... 262
a) NATURE AND ASPECT........................................................................................................................ 262
b) BY EMPLOYERS ................................................................................................................................... 263
c) BY ORGANIZATIONS ........................................................................................................................... 269
6. PEACEFUL CONCERTED ACTIVITIES ....................................................................................................... 272
a) STRIKES (VALID vs. ILLEGAL) ......................................................................................................... 273
b) PICKETING............................................................................................................................................ 286
c) LOCKOUTS ............................................................................................................................................ 290
d) ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY................................................... 292
E. TELECOMMUTING ACT (R.A. No. 11165) .......................................................................................................... 296
1. DEFINITION (Sec. 3) .................................................................................................................................... 296
2. TELECOMMUTING PROGRAM (Sec. 4) .................................................................................................... 296
3. FAIR TREATMENT (Sec. 5) ......................................................................................................................... 297

IV. POST-EMPLOYMENT ................................................................................................................................................ 298

A. EMPLOYER-EMPLOYEE RELATIONSHIP .......................................................................................................... 298
1. TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP..................................................... 300
2. KINDS OF EMPLOYMENT ........................................................................................................................... 305
a) REGULAR............................................................................................................................................... 305
b) CASUAL .................................................................................................................................................. 311
c) PROBATIONARY .................................................................................................................................. 312
d) PROJECT ................................................................................................................................................ 321
e) SEASONAL ............................................................................................................................................. 324
f) FIXED-TERM.......................................................................................................................................... 325
g) FLOATING STATUS ............................................................................................................................. 327
3. LEGITIMATE SUBCONTRACTING VS. LABOR-ONLY CONTRACTING ............................................... 329
a) ELEMENT............................................................................................................................................... 329
b) TRILATERAL RELATIONSHIP .......................................................................................................... 332
 c) SOLIDARY LIABILITY ......................................................................................................................... 334
B. TERMINATION OF EMPLOYMENT BY EMPLOYER ......................................................................................... 336
1. JUST CAUSES.................................................................................................................................................. 338
2. AUTHORIZED CAUSES................................................................................................................................. 354
3. DUE PROCESS ................................................................................................................................................ 366
a) TWIN NOTICE REQUIREMENT ......................................................................................................... 366
b) HEARING ............................................................................................................................................... 369
4. TERMINATION OF CONTRACT OF MIGRANT WORKERS (R.A. No. 8042,
as amended by R.A. No. 10022) ................................................................................................................ 372
C. TERMINATION OF EMPLOYMENT BY EMPLOYEEE ....................................................................................... 373
1. RESIGNATION vs. CONSTRUCTIVE DISMISSAL ..................................................................................... 373
D. PREVENTIVE SUSPENSION .................................................................................................................................. 379
E. RELIEFS FROM ILLEGAL DISMISSAL ................................................................................................................. 380
F. RETIREMENT .......................................................................................................................................................... 392
AC No. 034
V. JURISDICTION AND REMEDIES ............................................................................................................................... 399
A. LABOR ARBITER .................................................................................................................................................... 399
1. JURISDICTION OF LABOR ARBITER VS. JURISDICTION OF REGIONAL DIRECTOR ..................... 399
2. REQUISITES TO PERFECT AN APPEAL WITH THE NATIONAL LABOR
RELATIONS COMMISSION......................................................................................................................... 404
3. REINSTATEMENT AND/OR EXECUTION PENDING APPEAL ............................................................. 408
B. NATIONAL LABOR RELATIONS COMMISSION ................................................................................................ 412
C. COURT OF APPEALS .............................................................................................................................................. 417
D. SUPREME COURT................................................................................................................................................... 419
E. BUREAU OF LABOR RELATIONS......................................................................................................................... 420
F. NATIONAL CONCILIATION AND MEDIATION BOARD................................................................................... 423
1. CONCILIATION vs. MEDIATION ................................................................................................................ 426
G. DOLE REGIONAL DIRECTORS ............................................................................................................................. 428
H. DOLE SECRETARY ................................................................................................................................................. 431
1. JURISDICTION ............................................................................................................................................... 431
2. VISITORIAL AND ENFORCEMENT POWERS .......................................................................................... 434
3. POWER TO SUSPEND EFFECTS OF TERMINATION.............................................................................. 435
4. REMEDIES ...................................................................................................................................................... 437
I. VOLUNTARY ARBITRATOR .................................................................................................................................. 437
J. PRESCRIPTION OF ACTIONS ................................................................................................................................ 443
1. MONEY CLAIMS............................................................................................................................................. 443
2. ILLEGAL DISMISSAL .................................................................................................................................... 444
3. UNFAIR LABOR PRACTICES....................................................................................................................... 445
4. OFFENSES UNDER THE LABOR CODE ..................................................................................................... 445
5. ILLEGAL RECRUITMENT ............................................................................................................................ 447

APPENDIX

SUMMARY OF PRESCRIPTION OF ACTIONS ............................................................................................................. 448

SUMMARY OF JURISDICTIONS ..................................................................................................................................... 449
 I. GENERAL PRINCIPLES
LEGEND Secretary of Labor and
SOLE -
Bona Fide Occupational Employment
BFOQ -
Qualification ULP - Unfair Labor Practice
BLR - Bureau of Labor Relations UT - Undertime
CB - Collective Bargaining VA - Voluntary Arbitrator
CBA - Collective Bargaining Agreement VR - Voluntary Recognition
CBN - Collective Bargaining Negotiation WD - Wage Distortion
CE - Certification Election WRD - Weekly Rest Day
Department of Labor and
DOLE -
Employment
DMW - Department of Migrant Workers I. FUNDAMENTAL PRINCIPLES AND CONCEPTS
Ee - Employee
Er - Employer
GBOSH - Gender-Based Online Harrassment
GBSH - Gender-Based Harrassment
Implementing Rules and A. LEGAL BASIS
IRR -
Regulations
LA - Labor Arbiter
LC - Labor Code Labor
LLO - Legitimate Labor Organization
LOA - Leave of Absence It is the exertion by human beings of physical or
MH - Muslim Holiday mental efforts, or both, towards the production of
NCC - New Civil Code goods and services. (Poquiz, 2012)
National Conciliation and
NCMB -
Mediation Board The State affirms labor as a primary social economic
National Labor Relations force. It shall protect the rights of workers and
NLRC -
Commission promote their welfare. (Sec. 18, Art. II, 1987
NSD - Night Shift Differential Constitution)
OFW - Overseas Filipino Worker
OT - Overtime Labor Law
PCE - Petition for Certification Election
Pre-Employment Medical The law that governs the rights and duties of the
PEME -
Examination employer (Er) and employee (Ee) as to:
Philippine Overseas Employment
POEA -
Administration 1. The terms and conditions of employment; and
PPD - Permanent Partial Disability 2. Labor disputes arising from collective
PTD - Permanent Total Disability bargaining or other concerted activities
RD - Regional Director respecting such terms and conditions.
RH - Regular Holiday
Regional Tripartite Wages and Labor Legislation
RTWPB -
Productivity Boards
RW - Regular Wage It consists of statutes, regulations, and
RWD - Regular Working Day jurisprudence governing the relations between
Sole and Exclusive Bargaining capital and labor by providing for certain
SEBA -
Agent employment standards and a legal framework for
SEnA - Single Entry Approach negotiating, adjusting, and administering those
SLB - Special Leave Benefit standards and other incidents of employment.
SIL - Service Incentive Leave (Azucena, 2016)

1 U N IV E R S I T Y O F S A N T O T O M A S
FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
Classification of Labor Laws 3. Sec. 14, Art. II - The State recognizes the role of
women in nation-building, and shall ensure the
1. Labor Standards – The minimum fundamental equality before the law of women
requirements prescribed by existing laws, and men.
rules, and regulations as to the terms and
conditions of employment relating to wages, Law: R.A. No. 9710 – Magna Carta of Women
hours of work, cost-of-living allowance, and
other monetary and welfare benefits, including 4. Sec. 18, Art. II – The State affirms labor as a
occupational, safety, and health standards. primary social economic force. It shall protect
(Maternity Children’s Hospital v. Secretary of the rights of workers and promote their
Labor, G.R. No. 78909, 30 June 1989) welfare.

e.g., 13th month pay 5. Sec. 20, Art. II – The State recognizes the
indispensable role of the private sector,
2. Labor Relations – Defines and regulates the encourages private enterprise and provides
status, rights and duties, and the institutional incentives to needed investments.
mechanisms that govern the individual and
collective interactions of Ers, Ees, or their Bill of Rights
representatives.
1. Sec. 1, Art. III - No person shall be deprived of
e.g., Collective Bargaining Negotiations (CBNs) life, liberty, or property without due process of
law, nor shall any person be denied the equal
Sources of Labor Laws protection of the laws.

1. Constitution; 2. Sec. 4, Art. III – No law shall be passed

2. Labor Code and other related special legislation abridging the freedom of speech, of expression,
(including their respective IRRs); or of the press, or the right of the people
3. Contracts; peaceably to assemble and petition the
4. Collective Bargaining Agreements (CBAs); government for redress of grievances.
5. Company practices; and
6. Company policies. 3. Sec. 8, Art. III – The right of the people,
including those employed in the public and
1. 1987 CONSTITUTION private sectors, to form unions, associations, or
societies for purposes not contrary to law shall
not be abridged.
Declaration of Principles and State Policies

Law: E.O. No. 180 s. 1987 providing guidelines

1. Sec. 9, Art. II – The State shall promote a just
for the exercise of the right to organize of
and dynamic social order that will ensure the
government Ees, creating a Public Sector Labor
prosperity and independence of the nation and
Management Council and for other purposes.
free the people from poverty through policies
that provide adequate social services, promote
4. Sec. 10, Art. III – No law impairing the
full employment, a rising standard of living, and
obligation of contracts shall be passed.
an improved quality of life for all.

5. Sec. 16, Art. III – All persons shall have the right
2. Sec. 10, Art. II – The State shall promote social
to a speedy disposition of their cases before all
justice in all phases of national development.
judicial, quasi-judicial or administrative bodies.

U N IV E R S I T Y O F S A N T O T O M A S 2
2023 GOLDEN NOTES
 I. FUNDAMENTAL PRINCIPLES AND CONCEPT
6. Sec. 18(2), Art. III – No involuntary servitude in 4. Sec. 14, Art. XIII – The State shall protect
any form shall exist except as a punishment for working women by providing safe and healthful
a crime whereof the party shall have been duly working conditions, taking into account their
convicted. maternal functions, and such facilities and
opportunities that will enhance their welfare
Social Justice and Human Rights and enable them to realize their full potential in
the service of the nation.
1. Sec. 2, Art. XIII – The promotion of social justice
shall include the commitment to create Law: R.A. No. 9710 – Magna Carta of Women
economic opportunities based on freedom of
initiative and self-reliance. Q: Are the constitutional provisions on labor
self-executing?
2. Sec. 3, Art. XIII – The State shall afford full
protection to labor, local and overseas, A: The constitutional mandates of protection to
organized and unorganized, and promote full labor and security of tenure may be deemed as self-
employment and equality of employment executing in the sense that these are automatically
opportunities for all. acknowledged and observed without need for any
enabling legislation. However, to declare that the
It shall guarantee the rights of all workers to constitutional provisions are enough to guarantee
self-organization, collective bargaining and the full exercise of the rights embodied therein, and
negotiations, and peaceful concerted activities, the realization of ideals therein expressed, would be
including the right to strike in accordance with impractical, if not unrealistic. The espousal of such
law. They shall be entitled to security of tenure, view presents the dangerous tendency of being
humane conditions of work, and a living wage. overbroad and exaggerated. (Agabon v. NLRC, G.R.
They shall also participate in policy and No. 158693, 17 Nov. 2004)
decision-making processes affecting their
rights and benefits as may be provided by law. Basic Rights of Workers Guaranteed by the
Constitution
The State shall promote the principle of shared
responsibility between workers and Ers and the 1. Security of tenure;
preferential use of voluntary modes in settling 2. Living wage;
disputes, including conciliation, and shall 3. Share in the fruits of production;
enforce their mutual compliance therewith to 4. Just and humane working conditions;
foster industrial peace. 5. Self-organization;
6. Collective bargaining;
The State shall regulate the relations between 7. Collective negotiations;
workers and Ers, recognizing the right of labor 8. Engage in peaceful concerted activities,
to its just share in the fruits of production and including the right to strike; and
the right of enterprises to reasonable returns to 9. Participate in policy and decision-making
investments, and to expansion and growth. processes. (Sec. 3, Art. XIII, 1987 Constitution)

3. Sec. 13, Art. XIII – The State shall establish a

special agency for disabled persons for their
rehabilitation, self-development and self-
reliance and their integration into the
mainstream of society.

Law: R.A. No. 7277 – Magna Carta for Disabled

Person

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 LABOR LAW AND SOCIAL LEGISLATION
Rights of Management Arts. 3 and 4 of the Labor Code (LC) explicitly
recognize shared responsibility of the Ers and
It should not be supposed that every labor dispute workers and the right of enterprise to reasonable
will be automatically decided in favor of labor. returns on investment and to expansion and
Management also has its own rights which are growth. (Ibid.)
entitled to respect and enforcement in the interest
of simple fair play. (Sosito v. Aguinaldo Development In employment bargaining, there is no doubt that
Corp., G.R. No. 48926, 24 Dec. 1987) the Er stands on higher footing than the Ee. The law
must protect labor, at least, to the extent of raising
NOTE: The Secretary of Labor (SOLE) is duly him to equal footing in bargaining relations with
mandated to equally protect and respect not only capital and to shield him or her from abuses brought
the laborer, but also the management. about by the necessity for survival. (Sanchez, et al v.
Harry Lyons Construction Inc., et al, G.R. No. L-2779,
Fundamental Management Rights (S-P-I-T) 18 Oct. 1950)

1. Right to Select Ees; Yet, the Constitution has not overlooked the rights
2. Right to Prescribe rules; of capital. The State is mandated to regulate the
3. Right to reasonable return on Investments; relations between workers and Ers.
and
4. Right to Transfer or discharge Ees. While labor is entitled to a just share in the fruits of
production, the enterprise has the right not only to
Management has the right to regulate all aspects of reasonable returns on investments, but also to
employment which include, among others, work expansion and growth.
assignment, working methods and place, and
manner of work. (Marsman & Co., Inc. v. Sta. Rita, G.R. Q: What are the salient features of the
No. 194765, 23 Apr. 2018) protection to labor provision of the
Constitution? (1998 BAR)
Restrictions to Management Rights
A: The salient features of the Protection to Labor
Management rights are never absolute. Under the provision of the Constitution are as follows:
Constitution, the right to own and operate economic
enterprises is subject to the duty of the State to 1) Extent of Protection – Full protection to
promote distributive justice and to intervene when labor;
the common good so demands.
2) Coverage of Protection – Local and
Management rights are subject to limitations overseas, organized and unorganized;
provided by:
3) Employment Policy – Full employment and
1. Law; equality of employment opportunities for
2. Contract, whether individual or collective; all;
and
3. General principles of fair play and justice. Guarantees:

Balancing of Rights between Labor and Capital 4) Unionism and Method of Determination
of Conditions of Employment – Right of all
It should not be deduced that the basic policy is in workers to self-organization, CBNs;
favor of labor to prejudice capital. The basic policy
is to balance or to coordinate the rights and 5) Concerted Activities – Right to engage in
interests of both workers and Ers. (Azucena, 2016) peaceful concerted activities, including the

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 I. FUNDAMENTAL PRINCIPLES AND CONCEPT
right to strike in accordance with law; security of tenure clause in the LC, is
unconstitutional as it goes against the
6) Working Conditions – Right to security of constitutional provision granting workers the right
tenure, humane conditions of work, and a to security of tenure under Sec. 3, Art. XIII.
living wage;
As to the second innovative measure, which allows
7) Decision Making Processes – Right to contractualization in all areas needed in the
participate in policy and decision-making employer’s business operations, is constitutional.
processes affecting their rights and benefits There is no constitutional prohibition against
as may be provided by law; and contractualization. However, the new law cannot
prejudice employees who have acquired security of
8) Share in Fruits of Production – tenure.
Recognition of right of labor to its just share
in fruits of production. (Sec. 3, Art. XIII, 1987 2. CIVIL CODE
Constitution)

1. Art. 19 – Every person must, in the exercise of

Q: Who is an employer and an employee?
his rights and in the performance of his duties,
act with justice, give everyone his due, and
A: An employer is a person who employs the
observe honesty and good faith. This is known
services of another and pays for their wages and
as the “Principle of Abuse of Rights.”
salaries. While an employee is a person who works
under the employ of another in exchange of a
2. Art. 1700 – The relations between capital and
valuable consideration in the form of wages,
labor are not merely contractual. They are so
salaries, benefits, among others.
impressed with public interest that labor
contracts must yield to the common good.
Q: In her State of the Nation Address (SONA), the
Therefore, such contracts are subject to the
President stressed the need to provide an
special laws on labor unions, collective
investor-friendly business environment so that
bargaining, strikes and lock outs, closed-shop,
the country can compete in the global economy
wages, working conditions, hours of labor, and
that now suffers from a crisis bordering on
similar subjects.
recession. Responding to the call, Congress
passed two innovative legislative measures,
3. Art. 1701 – Neither capital nor labor shall act
namely: (1) a law abolishing the security of
oppressively against the other or impair the
tenure clause in the Labor Code; and (2) a law
interest or convenience of the public. This is
allowing contractualization in all areas needed
known as the “Principle of Non-Oppression.”
in the employer’s business operations.
However, to soften the impact of these new
4. Art. 1702 – In case of doubt, all labor legislation
measures, the law requires that all employers
and all labor contracts shall be construed in
shall obtain mandatory unemployment
favor of the safety and decent living for the
insurance coverage for all their employees.
laborer.

The constitutionality of the two (2) laws is

5. Art. 1703 – No contract which practically
challenged in court. As Judge, how will you rule?
amounts to involuntary servitude, under any
(2009 BAR)
guise whatsoever, shall be valid.

A: If I were the Judge, I would rule against the

6. Art. 1704 – In collective bargaining, the labor
constitutionality of the first law and rule in favor of
union or members of the board or committee
the constitutionality of the second law. As to the
signing the contract shall be liable for non-
first innovative measure, which abolishes the
fulfillment thereof.
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 LABOR LAW AND SOCIAL LEGISLATION
7. Art. 1708 – The laborer’s wages shall not be Rule-Making Power Granted by the Labor Code
subject to execution or attachment, except for
debts incurred for food, shelter, clothing, and The Department of Labor and Employment (DOLE)
medical attendance. through the SOLE and other Government agencies
charged with the administration and enforcement
8. Art. 1709 – The employer shall neither seize of the LC or any of its parts shall promulgate the
nor retain any tool or other articles belonging necessary IRRs. (Art. 5, LC)
to the laborer.
Limitations to the Rule-Making Power Granted
9. Art. 1710 – Dismissal of laborers shall be by the Labor Code
subject to the supervision of the Government,
under special laws. 1. It must be issued under the authority of
law;
3. LABOR CODE 2. It must not be contrary to law and the
Constitution; and
3. It must not go beyond the law itself.
Presidential Decree (PD) No. 442, otherwise known
as the “Labor Code of the Philippines”, is a decree
A rule or regulation promulgated by an
instituting a Labor Code, thereby revising and
administrative body to implement a law in excess of
consolidating labor and social laws to afford
its rule-making power is void. (Azucena, 2016)
protection to labor, promote employment and
human resources development, and ensure
An administrative interpretation which takes away
industrial peace based on social justice. It is a
a benefit granted in the law is ultra vires, that is,
charter of human rights and a bill of obligations for
beyond one’s power. (CBTC Employees Union v.
every working man.
Clave, G.R. No. L-49582, 07 Jan. 1986)

Date of Effectivity
Applicability of Labor Code

P.D. 442 was signed into law on 01 May 1974 and

GR: All rights and benefits granted to workers
took effect on 01 Nov. 1974, six (6) months after its
under the LC shall apply alike to all workers,
promulgation.
whether agricultural or non-agricultural. (Art. 6, LC)
Declaration of Basic Policy
XPNs:

The State shall:

1. Government Ees;
2. Ees of government-owned and controlled
1. Afford full protection to labor;
corporations (GOCCs) created by special or
2. Promote full employment;
original charter;
3. Ensure equal work opportunities regardless of
3. Foreign governments;
sex, race, or creed;
4. International agencies;
4. Regulate the relations between workers and
Ers; and
NOTE: International organizations and
5. Assure the rights of workers to self-
intergovernmental bodies are not covered by
organization, collective bargaining, security of
the Philippine Labor Laws. The remedy of the
tenure, and just and humane conditions of
aggrieved Ee is to file a complaint before the
work. (Art. 3, LC)
Department of Foreign Affairs (DFA). (Duka,
2016)

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 I. FUNDAMENTAL PRINCIPLES AND CONCEPT
5. Corporate officers/intra-corporate disputes Extraterritorial Application of LC
which fall under P.D. 902-A and now falls
under the jurisdiction of the regular courts Whether employed locally or overseas, all Filipino
pursuant to the Securities Regulation Code; workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to
6. Local water district except where the NLRC’s the contrary notwithstanding. This is in keeping
jurisdiction is invoked; and with the basic public policy of the State to afford
protection to labor, promote full employment,
7. As may otherwise be provided by the LC. ensure equal work opportunities regardless of sex,
race, or creed, and regulate the relations between
Test to Determine the Applicability of the LC to workers and Ers. For the State assures the basic
GOCCs rights of all workers to self-organization, collective
bargaining, security of tenure, and just and humane
When a GOCC is created by a special charter, it is conditions of work. (PNB v. Cabansag, G.R. No.
subject to the provisions of the Civil Service Law. 157010, 21 June 2005)
while those incorporated under the general
corporation law are subject to the provisions of the Q: One of Pacific Airline's policies was to hire
LC. (PNOC-EDC v. Leogardo, G.R. No. 58494, 05 July only single applicants as flight attendants, and
1989) considered as automatically resigned the flight
attendants at the moment they got married. Is
Labor Dispute between Government Ees the policy valid? Explain your answer. (2017
Bar)
It is the Public Sector Labor-Management Council,
not the DOLE, which shall hear the dispute. (Sec. 15, A: The policy is not valid. It violates the provisions
E.O. No. 180, 01 June 1987) of Art.136 (now Art. 134) of the LC on stipulations
against marriage, to wit: “It shall be unlawful for an
Applicability without Er-Ee Relationship employer to require as a condition of employment
or continuation of employment that a woman
The LC may apply even if the parties are not Ers and employee shall not get married, or to stipulate
Ees of each other. It is not correct to say that expressly or tacitly that upon getting married, a
employment relationship is a pre-condition to the woman employee shall be deemed resigned or
applicability of the Code (e.g., illegal recruitment, separated, or to actually dismiss, discharge,
misuse of POEA license). (Azucena, 2016) discriminate, or otherwise prejudice a woman
employee merely by reason of her marriage."
Likewise, in legitimate independent job-
contracting arrangements under Art. 106 of the LC, REVISED PENAL CODE
in case of non-payment of the wages of the agency
Ees and other monetary benefits under the Service 1. Slavery – The penalty of prision mayor and a
Contract, said monetary claims shall be the joint fine of not exceeding 10,000 pesos shall be
and solidary liability of the principal and the job imposed upon anyone who shall purchase,
contractor. So too, in security of tenure cases where sell, kidnap or detain a human being for the
the agency Ees are claiming that they are regular purpose of enslaving him.
Ees already of the principal where they occupy core
positions and performing functions which are If the crime be committed for the purpose of
necessary and desirable in the usual business or assigning the offended party to some
trade of the principal who likewise gets to exercise immoral traffic, the penalty shall be imposed
control and supervision over them. (Cacho, 2022) in its maximum period. (Art. 272, RPC)

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2. Exploitation of child labor - The penalty of shall employ violence or threats in such a
prision correccional in its minimum and degree as to compel or force the laborers or
medium periods and a fine not exceeding 500 employers in the free and legal exercise of
pesos shall be imposed upon anyone who, their industry or work, if the act shall not
under the pretext of reimbursing himself of a constitute a more serious offense in
debt incurred by an ascendant, guardian or accordance with the provisions of this Code.
person entrusted with the custody of a minor, (Art. 289, RPC)
shall, against the latter's will, retain him in his
service. (Art. 273, RPC) SPECIAL PENAL LAWS

3. Services rendered under compulsion in Anti-Trafficking in Persons Act of 2003 (R.A. No.
payment of debt – The penalty of arresto 9208)
mayor in its maximum period to prision
correccional in its minimum period shall be Forced Labor and Slavery - refer to the extraction
imposed upon any person who, in order to of work or services from any person by means of
require or enforce the payment of a debt, enticement, violence, intimidation or threat, use of
shall compel the debtor to work for him, force or coercion, including deprivation of freedom,
against his will, as household servant or farm abuse of authority or moral ascendancy, debt-
laborer. bondage or deception. (Sec. 3(d), R.A. 9208)

4. Other similar coercions; (Compulsory Debt Bondage - refers to the pledging by the debtor
purchase of merchandise and payment of of his/her personal services or labor or those of a
wages by means of tokens.) - The penalty of person under his/her control as security or
arresto mayor or a fine ranging from 200 to payment for a debt when the length and nature of
500 pesos, or both, shall be imposed upon services is not clearly defined or when the value of
any person, agent, or officer, of any the services as reasonably assessed is not applied
association or corporation who shall force or toward the liquidation of the debt. (Sec. 3(g), R.A.
compel, directly or indirectly, or shall 9208)
knowingly permit any laborer or employee
employed by him or by such firm or Involuntary Servitude - refers to a condition of
corporation to be forced or compelled, to enforced, compulsory service induced by means of
purchase merchandise or commodities of any scheme, plan or pattern, intended to cause a
any kind. person to believe that, if the person did not enter
into or continue in such condition, that person or
The same penalties shall be imposed upon another person would suffer serious harm or other
any person who shall pay the wages due a forms of abuse or physical restraint, or the abuse or
laborer or employee employed by him, by threatened abuse of the legal process (Sec. 5(k), R.A.
means of tokens or objects other than the 9208)
legal tender currency of the laborer or
employee. (Art. 288, RPC)

5. Formation, maintenance and prohibition

of combination of capital or labor through
violence or threats – The penalty of arresto
mayor and a fine not exceeding 300 pesos
shall be imposed upon any person who, for
the purpose of organizing, maintaining or
preventing coalitions or capital or labor,
strike of laborers or lock-out of employees,

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 I. FUNDAMENTAL PRINCIPLES AND CONCEPT
Focuses on the
Focuses on the rights
B. STATE POLICY TOWARDS LABOR particular part of the
of the worker in the
society or segment
workplace
thereof.

1. SECURITY OF TENURE
NOTE: All labor laws are social legislation, but not
all social legislation is labor law. Social legislation as
No worker shall be dismissed except for a just or a concept is broader while labor laws are narrower.
authorized cause provided by law and after due (Duka, 2016)
process. (Art. 294, LC)

3. EQUAL WORK OPPORTUNITIES

The policy of the State is to assure the right of
workers to security of tenure. (Sec. 3, Art. XIII, 1987
Constitution) The guarantee is an act of social The State shall afford protection to labor, promote
justice. full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the
Security of Tenure is the right not to be removed relations between workers and Ers. (Art. 3, LC)
from one’s job without valid cause and valid
procedure. It extends to regular as well as non- Equal work opportunities vs. Equal Protection
regular employment. (Kiamco v. NLRC, G.R. No. Clause
129449, 29 June 1999)
Under the Constitution of the United States, the
assurance of equality in employment and work
2. SOCIAL JUSTICE
opportunities regardless of sex, race, or creed is also
given by the equal protection clause of the Bill of
Social Legislation Rights. (Shauf v. Court of Appeals, G.R. No. 90314, 27
Nov. 1990)
It refers to all laws passed by the State to promote
public welfare. Social legislation involves laws that
4. RIGHT TO SELF-ORGANIZATION AND
provide specific type of protection or benefits to
COLLECTIVE BARGAINING
society or segments thereof in furtherance of social
justice. It includes statutes intended to enhance the
welfare of the people even where there is no Er-Ee The State shall assure the right of workers to self-
relationship. organization, collective bargaining, security of
tenure, and just and human conditions of work. (Art.
e.g., GSIS Law, SSS Law, PhilHealth, Agrarian Laws 3, LC)

Labor Legislation vs. Social Legislation The right to form, join, or assist a union is
specifically protected by the Constitution and such
Labor Legislation Social Legislation right shall not be abridged. Art. 257 of the LC
Governs effects of empathically relates to the policy of the State to
Directly affects promote and emphasize the primacy of free
employment (e.g.
employment (e.g. collective bargaining and negotiations, free trade
compensation for
wages) unionism, and free and voluntary organization of a
injuries)
strong and united labor movement. (Chan, 2019)
Refers to labor statutes
like Labor Relations Refers to Social
Law and Labor Security Laws
Standards Law

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 LABOR LAW AND SOCIAL LEGISLATION

5. CONSTRUCTION IN FAVOR OF LABOR survival. (Sanchez et. al. v. Harry Lyons Construction,
Inc., et. al., supra)

All doubts in the implementation and interpretation

Q: Several Ees of Novo Jeans filed a case of illegal
of the provisions of the LC, including its IRRs, shall
dismissal against Novo Jeans. However, Novo
be resolved in favor of labor. (Art. 4, LC)
Jeans argued that they were able to present the
First Notice of Termination of Employment sent
In case of doubt, all labor legislation and all labor
to Ees, asking them to explain their sudden
contracts shall be construed in favor of the safety
absence from work without proper
and decent living for the laborer. (Art. 1702, NCC)
authorization. In contrast, the Ees alleged that
there were only sample letters of the Notices,
In case of doubt in the interpretation or application
and there was no evidence to prove that the
of laws, it is presumed that the lawmaking body
Notices were sent to them at their last known
intended right and justice to prevail. (Art. 10, NCC)
addresses. They insist that if doubt exists
between the evidence presented by the Er and
Protection to Labor
the evidence presented by the Ees, the doubt
must be resolved in favor of the Ees, consistent
When the conflicting interests of labor and capital
with the LC's policy to afford protection to labor.
are weighed on the scales of social justice, the
Are the Ees correct?
heavier influence of the latter must be counter-
balanced by sympathy and compassion the law
A: YES. Under the law, where both parties in a labor
must accord the underprivileged worker.
case have not presented substantial evidence to
prove their allegations, evidence will be considered
This is in line with the express mandate of the LC
in equipoise. In such a case, the scales of justice are
and the principle that those with less in life should
tilted in favor of labor. (Hubilla et al. v. HSY
have more in law. (Eastern Shipping Lines v. POEA,
Marketing Ltd., Co., et al. G.R. No. 207354, 10 Jan.
G.R. No. 76633, 18 Oct. 1998)
2018)

It is a time-honored rule that in controversies

Q: What is the concept of liberal approach in
between a laborer and his master, doubts
interpreting the Labor Code and its IRRs in favor
reasonably arising from the evidence, or in the
of labor? (2006 BAR)
interpretation of agreements and writing, should be
resolved in the former’s favor. The policy is to
A: The State is bound under the Constitution to
extend the doctrine to a greater number of Ees who
afford full protection to Labor and when conflicting
can avail themselves of the benefits under the law,
interests collide, they are to be weighed on the
which is in consonance with the policy of the State
scales of social justice. The law should accord more
to give maximum aid and protection to labor.
sympathy and compassion to the less privileged
(Lepanto Consolidated Mining Co. v. Dumapis, et. al.,
workingman. (Fuentes v. NLRC, G.R. No. 110017, 02
G.R. No. 163210, 13 Aug. 2008)
Jan. 1997)

We need to protect labor because there is no doubt

However, it should be borne in mind that social
that the Er stands on higher footing than the Ee.
justice ceases to be an effective instrument for the
First, there is greater supply than demand for labor.
“equalization of the social and economic forces” by
Secondly, the need for employment by labor comes
the State when it is used to shield wrongdoing.
from vital and even desperate necessity.
(Corazon Jamer v. NLRC, G.R. No. 112630, 05 Sept.
Consequently, the law must protect labor at least to
1997)
the extent of raising him to equal footing in
bargaining relations with capital and to shield him
from abuses brought about by the necessity for

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 I. FUNDAMENTAL PRINCIPLES AND CONCEPT
Q: Clarito, an employee of Juan, was dismissed The law must protect labor, at least to the extent of
for allegedly stealing Juan’s wristwatch. In the raising him to equal footing in bargaining relations
illegal dismissal case instituted by Clarito, the with capital and to shield him or her from abuses
Labor Arbiter, citing Art. 4 of the Labor Code, brought about by the necessity for survival.
ruled in favor of Clarito upon finding Juan’s (Azucena, 2016)
testimony doubtful.
6. BURDEN OF PROOF AND QUANTUM OF
On appeal, the NLRC reversed the Labor Arbiter EVIDENCE
holding that Art. 4 applies only when the doubt
involves “implementation and interpretation”
Burden of Proof
of the Labor Code provisions. The NLRC
explained that the doubt may not necessarily be
In determining the Ee’s entitlement to monetary
resolved in favor of labor since this case
claims, the burden of proof is shifted from the Er or
involves the application of the Rules on
the Ee, depending on the monetary claim sought.
Evidence, not the Labor Code. Is the NLRC
(Minsola v. New City Builders, Inc., G.R. No. 207613,
correct? Reasons. (2017, 2009 BAR)
31 Jan. 2018)

A: NO. The NLRC is not correct. It is a well-settled

In an illegal dismissal case, the Ee has the burden of
doctrine that if doubts exist between the evidence
proof to first show that he was indeed dismissed
presented by the employer and the employee, the
from employment. Before the Er must bear the
scale of justice must be tilted in favor of the latter. It
burden of proving that the dismissal was legal, the
is a time-honored rule that in controversies
Ee must first establish by substantial evidence the
between laborer and master, doubts necessarily
fact of his dismissal from service. (Reyes v. Global
arising from the evidence, or in the implementation
Beer Below Zero, Inc., G.R. No. 222816, 04 Oct. 2017)
of the agreement and writing should be resolved in
favor of the laborer. (Nicario v. NLRC, G.R. No.
Quantum of Evidence
125340, 17 Sept. 1998)

Q: What is the quantum of evidence required in

Compassionate Justice
labor cases? (2012 BAR)

The social justice policy mandates a compassionate

A: In labor cases, as in other administrative and
attitude towards the working class in its relation to
quasi-judicial proceedings, the quantum of proof
management. In calling for protection to labor, the
necessary is substantial evidence or such amount of
Constitution does not condone wrongdoing by the
relevant evidence which a reasonable mind might
Ee. However, it urges moderation of the sanctions
accept as adequate to justify a conclusion. (Valencia
that maybe applied to him or her in the light of the
v. Classique Vinyl Products Corp., G.R. No. 206390, 30
many disadvantages that weigh heavily on him or
Jan. 2017)
her like an albatross on his neck. (Gandara Mill
Supply vs. NLRC, G.R. No. 126703, 29 Dec. 1998)
Q: A complaint for illegal dismissal was filed by
A against B. A alleges that during one payday,
Labor law determinations are not only secundum
while B was under the influence of alcohol, he
rationem (according to reason) but also secundum
was hit by the latter and threatened him and his
caritatem (according to charity). (Paz v. Northern
live-in partner that they will be killed. Due to
Tobacco Redrying Co., Inc., G.R. No. 199554, 18 Feb.
fear, A did not report to work. To prove the
2015)
power of control over him, A presented a copy of
the driver’s itinerary. This was not signed by any
It is disregarding rigid rules and giving due weight
authorized personnel of the company. A claimed
to all equities of the case. (Gandara Mill Supply v.
that he was constructively dismissed because B
NLRC, supra.)
made his continued employment impossible,
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unbearable, and unlikely. B asserts that A is not It should be made clear that when the law tilts the
its employee. B submitted its list of employees scale of justice in favor of labor, it is a recognition of
as filed with the BIR, payroll and monthly the inherent economic inequality between labor
reports, reports on SSS regarding the and management. The intent is to balance the scale
contributions of his employees, and Philhealth of justice—to put the two parties on relatively equal
remittance reports. All the said documents did positions. There may be cases where the
not include A’s name. Will the complaint for circumstances warrant favoring labor over the
illegal dismissal prosper? interests of management, but never should the scale
be so tilted if the result is an injustice to the Er.
A: NO. In cases of illegal dismissal, an Er-Ee Justitia nemini neganda est. (Justice is to be denied
relationship must first be established. In this to none). (Philippine Geothermal, Inc. v. NLRC, G.R.
instance, since it is A who is claiming to be an Ee of No. 106370, 08 Sept. 1994)
B, the burden of proving the existence of an Er-Ee
relationship lies upon him. Unfortunately, A failed to
discharge this burden. He presented no document
setting forth the terms of his employment.

As to the power of control, said driver’s itineraries

were not signed by respondent’s authorized
personnel. Absent this, it cannot be ascertained who
actually exercised control over petitioner. For
failure to prove the existence of an Er-Ee
relationship, the complaint for illegal dismissal
must fail. (Gerome B. Ginta-Ason vs. J.T.A. Packaging
Corporation and Jon Tan Arquilla, G.R. No. 244206, 16
Mar. 2022, as penned by J. Hernando)

Limitation to Protection of Labor

1. Recognition of management rights - The law

also recognizes that management has rights
which are also entitled to respect and
enforcement in the interest of fair play. (St.
Luke’s Medical Center Employees Association-
AFW v. NLRC, G.R. No. 162053, 07 Mar. 2007)

2. Principle of non-oppression - Neither capital

nor labor shall act oppressively against the
other or impair the interest or convenience of
the public. (Art. 1701, NCC)

The protection to labor clause in the Constitution is

not designed to oppress or destroy capital. (Capili v.
NLRC, G.R. No. 117378, 26 Mar. 1997)

The law, in protecting the rights of the Ees,

authorizes neither oppression nor self-destruction
of the Er. (Pacific Mills Inc. v. Alonzo, G.R. No. 78090,
26 July 1991)

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 II. PRE-EMPLOYMENT
offer or promise of employment is made in the
II. PRE-EMPLOYMENT course of the canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring of
workers. (People v. Panis, G.R. L-58674-77, 11 July
1986)

A. RECRUITMENT AND PLACEMENT OF LOCAL The definition of “recruitment and placement”

AND MIGRANT WORKERS under Art. 13(b) of the LC includes promising or
advertising for employment, locally or abroad,
whether for profit or not, provided, that any person
Governing Laws or entity which, in any manner, offers or promises
for a fee, employment to two or more persons shall
1. Labor Code; and be deemed engaged in recruitment and placement.
2. Migrant Workers and Overseas Filipinos Act of (People v. Racho, G.R. No. 227505, 02 Oct. 2017)
1995. (R.A. No. 8042, as amended by R.A. No.
10022) NOTE: Regardless of the number of persons dealt
with, recruitment and placement are still
1. DEFINITION OF RECRUITMENT AND constituted. The proviso merely lays down a rule of
PLACEMENT evidence that where a fee is collected in
consideration of a promise or offer of employment
to two (2) or more prospective workers, the
Recruitment and Placement (C-E-T-C-H-U-P-C-R-
individual or entity dealing with them shall be
A-P)
deemed to be engaged in the act of recruitment and
placement. The words “shall be deemed” create that
Recruitment and placement refer to:
presumption. (People v. Panis, supra)
1. Any act of Canvassing, Enlisting, Transporting,
Thus, the Code applies to any recruitment or
Contracting, Hiring, Utilizing, or Procuring
placement, whether for profit or not. The reference
workers; and
in the Code that any person who offers employment
to “two or more persons” as being engaged in
2. Includes Contract services, Referrals,
recruitment and placement does not mean that
Advertising, or Promising for employment,
there must be at least two persons involved as this
locally or abroad, whether for profit or not.
(Art. 13(b), LC) reference is merely evidentiary. Any person may be
charged with illegal recruitment if they already
charged fees even if they have not yet obtained
Persons Deemed Engaged in Recruitment and
employment for the applicant. (People v. Peredo, G.R.
Placement
No. 211197, 28 Sept. 2016)
Any person or entity which, in any manner, offers or
NOTE: For a corporation to validly engage in
promises for a fee, employment to two or more
recruitment, and local and overseas placement of
persons shall be deemed engaged in recruitment
workers, at least 75% of its authorized and voting
and placement. (Art. 13(b), LC)
capital stock must be owned and controlled by
Filipino citizens. (Art. 27, LC)
This proviso was intended neither to impose a
condition on the basic rule nor to provide an
exception thereto but merely to create a
presumption. The presumption is that the
individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two or
more persons to whom, in consideration of a fee, an
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 LABOR LAW AND SOCIAL LEGISLATION
ADDITIONAL DEFINITIONS of similar category. For purposes of this Act, it shall
include fishers onboard commercial fishing vessels
Overseas Filipino Worker (OFW) / Migrant on international waters or as defined under
Worker relevant maritime conventions, cruise ship
personnel, yacht crew, those serving on mobile
It refers to a Filipino who is to be engaged, is offshore and drilling units in the high seas, and
engaged, or has been engaged in remunerated other persons similarly situated. (Sec. 3(j), R.A. No.
activity in a country of which he or she is not an 11641)
immigrant, citizen, or permanent resident or is not
awaiting naturalization, recognition, or admission, NOTE: Those employed in non-mobile vessels or
whether land-based or sea-based regardless of fixed structures, even if the said vessels/structures
status; excluding a Filipino engaged under a are located offshore or in the middle of the sea,
government-recognized exchange visitor program cannot be considered as seafarers under the law. (V
for cultural and educational purposes. For purposes People Manpower Phils., Inc. v. Buquid, G.R. No.
of this provision, a person engaged in remunerated 222311, 10 Feb. 2021, as penned by J. Hernando)
activity covers a person who has been contracted
for overseas employment but has yet to leave the Ethical Recruitment
Philippines, regardless of status, and includes
“Overseas Contract Workers.” The term “OFW” is It refers to the lawful hiring of workers in a fair and
synonymous to “Migrant Worker.” (Sec. 3(f), R.A. No. transparent manner that respects and protects their
11641) dignity and human rights. (Sec. 3(b), R.A. No. 11641)

Balik-manggagawa 2. REGULATION OF RECRUITMENT AND

PLACEMENT ACTIVITIES
a) An OFW who is returning to the same
employer;
DEPARTMENT OF MIGRANT WORKERS ACT
R.A. No. 11641
b) An OFW who changed employer in the same
jobsite provided he/she can show proof of
NOTE: POEA is now consolidated with Department
his/her new employment contract duly
of Migrant Workers (DMW)
verified by POLO;
Consolidation and Merger of Agencies and
c) Undocumented/Irregular workers like
Functions.
tourists, dependents, students, businessmen
who became OFWs and have partially served
The following agencies are hereby consolidated
their duly verified employment contracts;
and merged into and constituted as the
Department, and their powers and functions
d) An OFW who will transfer to another
subsumed to the Department which shall assume
jobsite/country with the same employer,
and perform all their powers and functions:
provided that the worker shall subsequently
have another contract to be verified by the
(a) The POEA, as created under the EO No.
POLO in the receiving post. (Sec. 29, DOLE
247 and R.A. No. 8042, as amended;
A.O. 168-13)
(b) The Office of the Undersecretary for
Seafarers
Migrant Workers' Affairs (OUMWA) of
the DFA as provided under R.A. No. 8042,
It refers to an OFW who is engaged in employment
as amended;
in any capacity on board a merchant marine vessel
plying international waters or other sea-based craft

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 II. PRE-EMPLOYMENT
(c) All Philippine Overseas Labor Offices hear and decide money claims involving overseas
(POLO) under the DOLE; Filipino workers from the POEA to the Labor
Arbiters, the law did not remove from the POEA the
(d) The International Labor Affairs Bureau original and exclusive jurisdiction to hear and
(ILAB) under the DOLE; decide all disciplinary action cases and other special
cases administrative in character involving such
(e) The National Reintegration Center for workers. It is that the NLRC had no appellate
OFWs (NRCO) under the OWWA; jurisdiction to review the decision of the POEA in
disciplinary cases involving overseas contract
(f) The National Maritime Polytechnic workers. In conclusion, we hold that petitioners
(NMP) under the DOLE; and should have appealed the adverse decision of the
POEA to the SOLE instead of to the NLRC (Eastern
(g) The Office of the Social Welfare Attaché Mediterranean Maritime Ltd. v. Surio, G.R. 154213, 23
(OSWA) under the DSWD. (Sec. 19, R.A. Aug. 2012)
No. 11641)
The obvious intent of R.A. No. 8042 was to have
a) REGULATORY AUTHORITIES POEA focus its efforts in resolving all administrative
matters affecting and involving such workers. This
(1) PHILIPPINE OVERSEAS EMPLOYMENT intent was even expressly recognized in the
ADMINISTRATION Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1995
Jurisdiction of the POEA promulgated on 29 Feb. 1996. (Ibid.)

The POEA shall exercise original and exclusive Q: Can a seafarer who was prevented from
jurisdiction over: leaving the port of Manila and refused
deployment without valid reason but whose
1. All administrative pre-employment/ POEA-approved employment contract provides
recruitment violation cases which are that the employer-employee relationship shall
administrative in character, involving or commence only upon the seafarer's actual
arising out of violations of Rules and departure from the port in the point of hire, is
Regulations relating to licensing and entitled to relief?
registration, including refund of fees
collected from the workers or violation of NO. A distinction must be made between the
the conditions for issuance of license or perfection of the employment contract and the
authority to recruit workers; and commencement of the employer-employee
relationship. The perfection of the contract, which
2. Administrative disciplinary action cases in this case coincided with the date of execution
involving Ers, principals, contracting thereof, occurred when the seafarer and the
partners, and OFWs processed by the shipping company agreed on the object and the
POEA. (Sec. 6, Rule X, Omnibus Rules and cause, as well as the rest of the terms and conditions
Regulations Implementing R.A. No. 8042, as therein. The commencement of the employer-
amended by R.A. No. 10022) employee relationship would have taken place had
the seafarer been actually deployed from the point
Petitioners’ adamant insistence that the NLRC of hire. Thus, even before the start of any employer-
should have appellate authority over the POEA’s employee relationship, contemporaneous with the
decision in the disciplinary action because their perfection of the employment contract was the birth
complaint against respondents was filed in 1993 of certain rights and obligations, the breach of which
was unwarranted. Although Sec. 10 of R.A. No. 8042, may give rise to a cause of action against the erring
transferred the original and exclusive jurisdiction to party. Thus, if the reverse had happened, that is the

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 LABOR LAW AND SOCIAL LEGISLATION
seafarer failed or refused to be deployed as agreed No license to engage in recruitment and placement
upon, he would be liable for damages. (Santiago v. shall be used directly or indirectly by any person
C.F. Sharp Crew Management, Inc., G.R. No. 162419, other than the one in whose favor it was issued nor
10 July 2007) may such license be transferred, conveyed or
assigned to any other person or entity. (Art. 29, LC)
(2) REGULATORY AND VISITORIAL POWERS OF
THE DEPARTMENT OF LABOR AND b) BAN ON DIRECT HIRING
EMPLOYMENT SECRETARY
Direct Hiring
Objective of Labor Standards Enforcement
Framework (LSEF) It occurs when an Er hires a Filipino worker for
overseas employment without going through the
To build a culture of voluntary compliance with POEA or entities authorized by the SOLE.
labor standards by all establishments and
Workplaces and expand the reach of the DOLE Ban on Direct Hiring
through partnership with labor and Ers’
organization as well as with other government GR: No Er may hire a Filipino worker for overseas
agencies and professional organizations that also employment except through the Boards and entities
have a stake on the welfare and protection of authorized by the SOL (Art. 18, LC)
workers. (D.O. No. 57-04)
XPNs: Direct hiring by: (M-I-H-O)
The framework comprises three approaches:
a. Members of the diplomatic corps;
1. Self-assessment – It is a voluntary mode; b. International organizations;
encouraged in establishments with at least c. Heads of state and government officials
200 workers. It shall also apply to with the rank of at least deputy minister; or
unionized establishments with certified
CBAs regardless of the number of workers. d. Other Ers as may be allowed by the SOLE,
Ers will be provided with a checklist for this such as:
purpose.
(1) Those provided in (a), (b), and (c) who
2. Inspection – This shall be undertaken in bear a lesser rank, if endorsed by the
workplaces with 10 to 199 workers and POLO or Head of Mission in the absence
effect restitutions/corrections if there are of the POLO;
violators; and
(2) Professionals and skilled workers with
3. Advisory service – It shall be undertaken in duly executed/authenticated contracts
workplaces with less than 10 workers and containing terms and conditions over
those registered as Barangay Micro and above the standards set by the
Business Enterprises (BMBEs). (Sec. 1, D.O. POEA. The number of professional and
No. 57-04) skilled OFWs hired for the first time by
the Er shall not exceed five (5). For the
Non-transferability of License purpose of determining the number,
workers hired as a group shall be
The grant of a license is a governmental act by the counted as one; or
DOLE based on personal qualifications, and
citizenship and capitalization requirements. (Arts. (3) Workers hired by a relative/family
27-28, LC) member who is a permanent resident
of the host country. (Sec. 124, Rule II,

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 II. PRE-EMPLOYMENT
Part III, Revised POEA Rules And 3. Corporations and partnerships, when any of
Regulations Governing the Recruitment its officers, members of the board or partners,
and Employment of Land-Based OFWs is also an officer, member of the board, or
of 2016) partner of a corporation or partnership
engaged in the business of a travel agency;
Purposes of the Prohibition on Direct Hiring
4. Persons, partnerships, or corporations which
1. To ensure the best possible terms and have derogatory records, such as but not
conditions of employment for the worker; limited to those:
2. To assure the foreign Er that he hires only
qualified Filipino workers; and a. Certified to have derogatory record or
3. To ensure full regulation of employment to information by the NBI or by the Anti-
avoid exploitation. Illegal Recruitment Branch of the POEA;

Q: TRUE or FALSE. As a general rule, direct b. Against whom probable cause or prima
hiring of OFWs is not allowed. (2010 BAR) facie finding of guilt for illegal
recruitment or other related cases
A: TRUE. Art. 15 of the LC provides that no exists;
employer may hire a Filipino worker for overseas
employment except through the Boards and entities c. Convicted for illegal recruitment or
authorized by the DOLE except direct-hiring by other related cases and/or crimes
members of the diplomatic corps, international involving moral turpitude; and
organizations and such other employers as may be
allowed by the DOLE. d. Agencies whose licenses have been
previously revoked or cancelled by the
Another exception is ‘‘Name Hire,” which refers to a POEA for violation of R.A. No. 8042, as
worker who is able to secure an overseas amended by R.A. No. 10022, P.D. 442 as
employment opportunity with an employer without amended, and their IRRs.
the assistance or participation of any agency.
(2009-2017 UST FCL Bar Q&A) 5. Any official or Ee of the DOLE, POEA, OWWA,
DFA, and other government agencies directly
NOTE: The obligation to register its personnel with involved in the implementation of R.A. 8042
the POEA belongs to the officers of the agency not and/or any of his/her relatives within the
its employees. (People v. Chowdury, G.R. No. 129577- fourth civil degree of consanguinity or
80, 15 Feb. 2000) affinity; and

c) ENTITIES PROHIBITED FROM RECRUITING 6. Persons or partners, officers, and directors of

corporations whose licenses have been
Land-based Overseas Workers previously cancelled or revoked for violation
of recruitment laws. (Sec. 2, Rule I, Part II,
1. Travel agencies and sales agencies of airline POEA Rules and Regulations Governing the
companies; Recruitment and Employment of Land-Based
Overseas Workers)
2. Officers or members of the board of any
corporation or members in a partnership Sea-based Overseas Workers
engaged in the business of a travel agency;
1. Travel agencies and sales agencies of airline
companies;

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 LABOR LAW AND SOCIAL LEGISLATION
2. Officers or members of the board of any 7. Any official or Ee of the DOLE, POEA, OWWA,
corporation or members in a partnership DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI,
engaged in the business of a travel agency; PNP, Civil Aviation Authority of the Philippines
(CAAP), international airport authorities, and
3. The applicant is presently an incorporator, other government agencies directly involved in
director or key officer of at least five (5) the implementation of R.A. No. 8042, as
licensed manning agencies; amended, and/or any of his/her relatives
within the 4th civil degree of consanguinity or
4. Corporations and partnerships, when any of its affinity. (Sec. 3, Rule I, Part II, 2016 Revised POEA
officers, members of the board or partners, is Rules and Regulations Governing the
also an officer, member of the board, or partner Recruitment and Employment of Seafarers)
of a corporation or partnership engaged in the
business of a travel agency; Prohibition on Travel Agencies and Sales
Agencies of Airline Companies to Recruit
5. Individuals, partners, officers or directors of an
insurance company who make, propose or They are prohibited from engaging in the business
provide an insurance contract under the of recruitment and placement of workers for
compulsory insurance coverage for agency- overseas employment, whether for profit or not,
hired OFW; due to conflict of interest. (Art. 26, LC)

6. Sole proprietors, partners or officers and Purpose for Prohibiting Travel Agencies
members of the board with derogatory records,
such as, but not limited to the following: This is because travel agencies are under the
supervisory powers of the Department of Tourism
a. Those convicted, or against whom (DOT), not the DOLE. Otherwise, confusion may
probable cause or prima facie finding arise to the detriment and disadvantage of an
of guilt is determined by a competent overseas applicant-worker or may lead to
authority, for illegal recruitment, or exploitation of the applicant-worker who will be at
for other related crimes or offenses the economic mercy of the travel agency or sales
committed in the course of, related agencies of airline company from the time his
to, or resulting from, illegal papers are processed to the time he departs.
recruitment, or for crimes involving
moral turpitude; It cannot be discounted that travel agencies can
facilitate with the airlines the issuance of the
b. Those agencies whose licenses have worker's plane ticket. Moreover, illegal recruitment
been revoked for violation of R.A. No. activities can be traced to travel agencies that
8042, as amended, P.D. 442 (LC), as facilitate papers of job-seekers for overseas. They
amended, and R.A. No. 9208 could do a dirty job of legalizing the travel on
(Trafficking in Persons Act of 2003), tourist-visas with the assurance that the same could
as amended, and their IRRs; be converted into work-visas in the country of
employment.
c. Those agencies whose licenses have
been cancelled, or those who, Q: WTTA is a well-known travel agency and an
pursuant to the Order of the authorized sales agent of PAL. Since majority of
Administrator, were included in the its passengers are overseas workers, WTTA
list of persons with derogatory applied for a license for recruitment and
record for violation of recruitment placement activities.
laws and regulations; and

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 II. PRE-EMPLOYMENT
It stated in its application that its purpose is not 2) Non-licensee – any person, corporation, or
for profit but to help Filipinos find employment entity:
abroad. Should the application be approved?
(2006 BAR) a. Which has not been issued a valid
license or authority to engage in
A: NO. The application should be disapproved, recruitment and placement by the
because it is prohibited by Art. 26 of the LC, which SOLE; or
provides that travel agencies and sales agencies of
airline companies are prohibited from engaging in b. Whose license or authority has
the business of recruitment and placement of been suspended, revoked, or
workers for overseas employment, whether for cancelled by the POEA or the SOLE.
profit or not.
Jurisdiction
Sec. 3, Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of The SOLE and the POEA Administrator are vested
Land-Based Workers also disqualifies any entity with power to suspend or cancel any license or
having a common director or owner of travel authority to recruit Ees for overseas employment.
agencies and sales agencies of airlines, including (Art. 35, LC)
any business entity, from the recruitment and
placement of Filipino workers overseas, whether The SOLE has the power under Art. 35 of the LC to
they derive profit or not. apply the penalties of suspension and cancellation
of license and authority. The SOLE also has the
d) SUSPENSION OR CANCELLATION OF LICENSE authority, under Art. 36 of the LC, not only to restrict
OR AUTHORITY and regulate the recruitment and placement
activities of all agencies, but also to promulgate
“License” vs. “Authority” rules and regulations to carry out the objectives and
implement the provisions governing said activities.
LICENSE AUTHORITY
It means a document It means a document Pursuant to this rule-making power, the SOLE
issued by DOLE issued by DOLE authorized the POEA to conduct the necessary
authorizing a person or authorizing a person or proceedings for the suspension or cancellation of
entity to operate a association to engage license or authority of any agency or entity for
private employment in recruitment and certain enumerated offenses. (Trans Action Overseas
agency. (Art. 13(d), LC) placement activities as Corp. v. Secretary of Labor, G.R. No. 109583, 05 Sept.
a private recruitment 1997)
entity. (Art. 13(f), LC)
Thus, the Court concludes that the power to
NOTE: In other words, “license” is issued to a suspend or cancel any license or authority to recruit
person, partnership or corporation operating a Ees for overseas employment is concurrently vested
private employment agency. Whereas “authority” is with the POEA and the SOLE. (Ibid.)
issued to the employees, officers, agents or
representatives of said private employment agency. Q: Concerned Filipino contract workers in the
Middle East reported to the DFA that XYZ, a
Two Kinds of Illegal Recruiter private recruitment and placement agency, is
covertly transporting extremists to terrorist
1) Licensee – performs any of the prohibited training camps abroad. Intelligence agencies of
practices enumerated under Sec. 6 of R.A. the government allegedly confirmed the report.
8042, as amended by R.A. No. 10022. Upon being alerted by the DFA, the DOLE issued
orders cancelling the licenses of XYZ, and

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 LABOR LAW AND SOCIAL LEGISLATION
imposing an immediate travel ban on its
recruits for the Middle East. XYZ appealed to the
Office of the President to reverse and set aside
the DOLE orders, citing damages from loss of
employment of its recruits, and violations of due
process including lack of notice and hearing by
the DOLE.

The DOLE, in its answer, claimed the existence of

an emergency in the Middle East which required
prompt measures to protect the life and limb of
OFWs from a clear and present danger posed by
the ongoing war against terrorism.

Should the DOLE orders be upheld or set aside?

(2004 BAR)

A: The DOLE order cancelling the licenses of XYZ

should be set aside. A report that an agency is
covertly transporting extremists is not a valid
ground for cancellation of a Certificate of
Registration (Art. 247, LC). There was also failure of
due process as no hearing was conducted prior to
the cancellation. (Art. 245, LC)

As to the DOLE order imposing the travel ban, it

should be upheld because it is a valid exercise of
police power to protect the national interest (Sec. 3,
Art. XIII, 1987 Constitution) and on the rule making
authority of the SOLE. (Art. 5, LC; Phil. Association. of
Service Exporters v. Drilon, G.R. No. 81958, 30 June
1988)

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 II. PRE-EMPLOYMENT
Grounds for Cancellation and Suspension of License

LAND-BASED OVERSEAS WORKERS SEA-BASED OVERSEAS WORKERS

SERIOUS OFFENSES – SERIOUS OFFENSES –

CANCELLATION OF LICENSE CANCELLATION OF LICENSE

Attempting to deploy or deploying a seafarer who is

Deploying underage workers; below 18 years old or below the minimum age
requirement;

Engaging in acts of misrepresentation for the Engaging in acts of misrepresentation for the
purpose of securing a license or renewal thereof, purpose of securing a license or renewal thereof,
such as giving false information or documents; such as giving false information or documents;

Engaging in the recruitment or placement of Engaging in the recruitment or placement of

workers in jobs harmful to public health or morality workers in jobs harmful to public health or morality
or to dignity of the Republic of the Philippines; or to the dignity of the Republic of the Philippines;

Transfer or change of ownership of a single Transfer or change of ownership, directly or

proprietorship licensed to engage in overseas indirectly, of a single proprietorship licensed to
employment; engage in overseas employment;

Charging or accepting directly or indirectly any

amount greater than that specified in the schedule Charging or accepting directly or indirectly any
of allowable fees prescribed by the Secretary, or amount of money, goods or services, or any fee or
making a worker pay any amount greater than that bond for any purpose from an applicant seafarer;
actually received by him as a loan or advance.

Charging or collecting placement fee for

Charging, imposing or accepting, directly or
deployment to countries where the prevailing
indirectly, under any guise whatsoever, any amount
system, either by law, policy or practice do not
of money as payment for the insurance premium for
allow the charging or collection of placement and
compulsory insurance coverage;
recruitment fees; and

Allowing a non-Filipino citizen to head or manage a

--
licensed manning agency;

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 LABOR LAW AND SOCIAL LEGISLATION

Collecting any amount as payment for processing,

or documentation costs not prescribed by the rules,
-- or an amount greater than the actual
documentation costs, as covered by official receipts
issued by entities where payments were made; and

Falsifying or altering travel documents of an

-- applicant seafarer in relation to recruitment and
deployment.

Engaging in acts of misrepresentation for the

purpose of processing workers through a job order
that pertains to non-existent work, work different
--
from the actual overseas work, or work with a
different Er whether accredited or not with the
POEA;

Engaging in any acts of misrepresentation in

connection with recruitment and placement of
-- workers, such as furnishing or publishing any false
notice, information or document in relation to
recruitment or employment;

LESS SERIOUS OFFENSES – LESS SERIOUS OFFENSES –

SUSPENSION OR CANCELLATION SUSPENSION OR CANCELLATION

Failure to comply with the undertaking to provide Failure to comply with any of the undertakings
Pre-Departure Orientation Seminar to workers submitted to the Administration.

Non-compliance with any other undertaking in

Default on contractual obligations to the
connection with the issuance or renewal of the
principal/Er.
license

Withholding of seafarer's salaries or remittances,

Withholding of workers' salaries or remittances
SSS contributions and loan amortization or
without justifiable reasons or shortchanging of
shortchanging/reduction thereof without
remittances
justifiable reasons.

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 II. PRE-EMPLOYMENT

Obstructing or attempting to obstruct inspection by Obstructing or attempting to obstruct inspection by

the Secretary, the Administrator or their duly the Secretary, the Administrator or their duly
authorized representatives authorized representatives.

Appointing or designating agents, representatives Appointing or designating agents, representatives

or Ees without prior approval from the or Ees without notice to the Administration within
Administration the period prescribed under the Rules.

Substituting or altering to the prejudice of the Substituting or altering to the prejudice of the
worker, employment contracts approved and seafarer, employment contracts approved and
verified by the Department from the time of actual verified by the Administration, from the time of
signing thereof by the parties up to and including actual signing thereof by the parties up to and
the period of the expiration of the same without the including the period of expiration of the same,
approval of the Department without the approval of the Administration.

Withholding or denying travel or other pertinent

Withholding or denying travel or other pertinent
documents from an applicant seafarer for monetary
documents from workers for reasons other than
or financial considerations, or for any other
those authorized under existing laws and
reasons, other than those authorized under the LC
regulations.
and its implementing Rules and Regulations.

Allowing persons who are otherwise disqualified to Allowing persons who are otherwise disqualified
participate in the overseas employment program from participating in the overseas employment
under existing laws, rules and regulations to program under existing laws, rules and regulations
participate in the management and operation of the to participate in the management and operation of
agency the agency.

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

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Impose a compulsory and exclusive arrangement

whereby a seafarer is required to undergo health
examinations (PEME), training, seminar,
Deploying workers whose employment and travel
instruction or schooling of any kind only from
documents were not processed by the
specifically designated institutions, entities, or
Administration or those agencies authorized by it.
clinics, as the case may be, unless the cost is
shouldered by the principal/Er or licensed
manning agency.

Impose a compulsory and exclusive arrangement

Deploying workers to principals not accredited or whereby a seafarer is required to avail of a loan
registered by the Administration. from a specifically designated institution, entity, or
person.

Granting a loan to a seafarer with interest

Charging, imposing or accepting directly or
exceeding eight percent (8%) per annum which will
indirectly, any amount of money goods or services,
be used for payment of legal and allowable fees and
or any fee or bond for any purpose whatsoever
making the seafarer issue, either personally or
before employment is obtained for an applicant
through a guarantor or accommodation party, post-
worker.
dated checks in relation to the said loan.

Refuse to condone or renegotiate a loan incurred by

Collecting any fee from a worker without issuing
the seafarer after the latter's employment contract
the appropriate receipt clearly showing the amount
has been prematurely terminated through no fault
paid and the purpose for which payment was made
of his/her own.

Engaging in acts of misrepresentation in connection

with recruitment and placement of workers, such Failure to submit reports on serious incidents
as furnishing or publishing any false notice, involving piracy, death, missing seafarer, serious
information or document in relation to recruitment illness and injury requiring repatriation.
or employment

Engaging in recruitment activities in places other

Falsifying or altering travel documents of applicant
than that specified in the license without previous
worker in relation to recruitment activities
authorization from the Administration.

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 II. PRE-EMPLOYMENT

LIGHT OFFENSES – LIGHT OFFENSES –

REPRIMAND/SUSPENSION/CANCELLATION REPRIMAND/SUSPENSION

For the owner, partner, or officer/s of any licensed For the owner, partner, or officer/s of any licensed
agency to become an officer or member of the manning agency to become an officer or member of
Board of any corporation or partnership engaged the Board of any corporation or partnership
directly or indirectly in the management of a travel engaged directly or indirectly in the management of
agency a travel agency.

Inducing or attempting to induce an already Inducing or attempting to induce an already

employed worker to transfer from or leave his contracted seafarer to transfer from or leave
employment for another unless the transfer is his/her employment for another unless the transfer
designed to liberate a worker from oppressive is designed to liberate a seafarer from oppressive
terms and conditions of employment terms and conditions of employment.

Influencing or attempting to influence any person

or entity not to employ any seafarer who has not
Influencing or attempting to influence any person
applied for employment through his agency or who
or entity not to employ any worker who has not
has formed, joined or supported, or has contacted
applied for employment through his agency
or is supported by any union or seafarer's
organization.

Failure to deploy a worker within the prescribed Failure to actually deploy a contracted seafarer
period without valid reason within the prescribed period without valid reason.

Coercing workers to accept prejudicial Coercing a seafarer to accept prejudicial

arrangements in exchange for certain benefits that arrangements in exchange for certain benefits that
rightfully belong to the workers rightfully belong to them.

Disregard of orders, notices and other legal Disregard of orders, notices and other legal
processes issued by the Administration processes issued by the Administration.

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 LABOR LAW AND SOCIAL LEGISLATION

Failure to submit reports related to overseas

recruitment and employment within the specified
time as may be required by the Secretary or the
Failure to submit reports on the status of the
Administration Violation of other pertinent
employment of seafarers, placement vacancies,
provisions of the Code and other relevant laws,
remittance of foreign exchange earnings,
rules and regulations, guidelines and other
departures, and such other matters or information
issuances on recruitment and placement of workers
as may be required by the Secretary or the
for overseas employment and the protection of
Administration, such as resignation and separation
their welfare. (Sec. 1, Rule IV, Part VI, POEA Rules
from jobs of office staff members.
and Regulations Governing the Recruitment and
Employment of Land-Based Overseas Workers (R.A.
No. 8042), 04 Feb. 2022)

Violation of other pertinent provisions of the Code

and other relevant laws, rules and regulations,
guidelines and other issuances on recruitment and
placement of seafarer for overseas employment
--
and the protection of their welfare. (Sec. 123, Rule
III, Part V, Revised POEA Rules and Regulations
Governing the Recruitment and Employment of
Seafarers, 2016)

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 II. PRE-EMPLOYMENT

e) PROHIBITED PRACTICES (Art. 34, LC) (h) Failing to file reports on the status of
employment, placement vacancies, remittance
Illegal recruitment is not limited to performing acts of foreign exchange earnings, separation from
of recruitment without a license. It may also be jobs, departures and such other matters or
perpetrated by a non-licensee by committing any of information as may be required by the SOLE;
the prohibited acts provided in Art. 34 of the LC.
(i) Substituting or altering employment contracts
It shall be unlawful for any individual, entity, approved and verified by the DOLE from the
licensee, or holder of authority: time of actual signing thereof by the parties up
to and including the periods of expiration of the
(a) Charging or accepting, directly or indirectly, same without the approval of the SOLE;
any amount greater than that specified in the
schedule of allowable fees prescribed by the (j) Becoming an officer or member of the board of
SOLE, or to make a worker pay any amount any corporation engaged in travel agency or to
greater than that actually received by him as a be engaged directly or indirectly in the
loan or advance; management of a travel agency; and

(b) Furnishing or publishing any false notice or (k) Withholding or denying travel documents from
information or document in relation to applicant workers before departure for
recruitment or employment; monetary or financial considerations other
than those authorized under the LC and its IRRs.
(c) Giving any false notice, testimony, information (Art. 34, LC)
or document or commit any act of
misrepresentation for the purpose of securing a 3. ILLEGAL RECRUITMENT (Labor Code and the
license or authority under the LC; Migrant Workers and Overseas Employment Act
of 1995 (R.A. No. 8042), as amended by R.A. No.
(d) Inducing or attempting to induce a worker 10022)
already employed to quit his employment in
order to offer him to another unless the transfer
Illegal Recruitment
is designed to liberate the worker from
oppressive terms and conditions of
Any act of canvassing, enlisting, contracting,
employment;
transporting, utilizing, hiring, or procuring workers
and includes referring, contract services, promising
(e) Influencing or attempting to influence any
or advertising for employment abroad, whether for
person or entity not to employ any worker who
profit or not, when undertaken by non-licensee or
has not applied for employment through his
non-holder of authority. (Sec. 6, R.A. No. 8042, as
agency;
amended by R.A. No. 10022)

(f) Engaging in the recruitment or placement of

Any recruitment activities, including the prohibited
workers in jobs harmful to public health or
practices enumerated under Art. 34 of the Labor
morality or to the dignity of the Republic of the
Code, to be undertaken by non-licensed or non-
Philippines;
holders of authority, shall be deemed illegal and
punishable. (Art. 38(a), LC)
(g) Obstructing or attempting to obstruct
inspection by the SOLE or by his duly
authorized representatives;

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 LABOR LAW AND SOCIAL LEGISLATION
Persons responsible in illegal recruitment 4. Inducing Worker to Quit – To induce or
attempt to induce a worker already employed
The persons criminally liable for illegal recruitment to quit his employment in order to offer him to
are the principals, accomplices and accessories. In another, unless the transfer is designed to
case of juridical persons, the officers having liberate the worker from oppressive terms and
ownership, control, management or direction of conditions of employment;
their business who are responsible for the
commission of the offense and the responsible 5. Inducement Not to Employ – To influence or
employees/agents thereof shall be liable. attempt to influence any person or entity not to
The following are examples of employees held liable employ any worker who has not applied for
as principal in Illegal Recruitment: employment through his agency or who has
formed, joined or supported, or has contacted
1) Clerk; or is supported by any union or workers'
2) Secretary; organization;
3) Cashier;
4) Operations Manager; 6. Recruitment for Harmful Jobs – To engage in
5) Crewing Manager; the recruitment or placement of workers in jobs
6) General Manager; harmful to public health or morality or to the
7) Overseas Marketing Director or Manager; dignity of the Republic of the Philippines;
and
8) Vice-President or Treasurer or Assistant 7. Failure to submit reports - To fail to submit
General Manager reports on the status of employment, placement
vacancies, remittance of foreign exchange
Prohibited Acts in Recruitment and Placement earnings, separation from jobs, departures and
such other matters or information as may be
1. Overcharging – To charge or accept, directly or required by the SOLE;
indirectly, any amount greater than that
specified in the schedule of allowable fees 8. Contract Substitution – To substitute or alter
prescribed by the SOLE, or to make a worker to the prejudice of the worker, employment
pay or acknowledge any amount greater than contracts prescribed by the Department from
that actually received by him as a loan or the time of actual signing thereof by the parties
advance; up to and including the period of the expiration
of the same without the approval of the DOLE;
2. False Notice – To furnish or publish any false
notice or information or document in relation to 9. Involvement in Travel Agency – For an officer
recruitment or employment; or agent of a recruitment or placement agency
to become an officer or member of the Board of
3. Misrepresentation to Secure License – To give any corporation engaged in travel agency or
any false notice, testimony, information or insurance or to be engaged directly or indirectly
document or commit any act of in the management of a travel agency or
misrepresentation for the purpose of securing a insurance agency;
license or authority under the LC, or for the
purpose of documenting hired workers with 10. Withholding of Documents – To withhold or
the POEA, which include the act of reprocessing deny travel documents from applicant workers
workers through a job order that pertains to before departure for monetary or financial
nonexistent work, work different from the considerations, or for any other reasons, other
actual overseas work, or work with a different than those authorized under the LC and its IRR;
Er whether registered or not with the POEA;

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2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT
11. Failure to Deploy – To fail to actually deploy a recommendatory trainings mandated by
contracted worker without valid reason as principals where the latter shoulder the cost of
determined by the DOLE; such trainings;

12. Failure to Reimburse – To fail to reimburse 19. Violation of Suspension – For a suspended
expenses incurred by the worker in connection recruitment/manning agency to engage in any
with his/her documentation and processing for kind of recruitment activity including the
purposes of deployment, in cases where the processing of pending workers' applications;
deployment does not actually take place and
without the worker’s fault;
20. Collection of Insurance Premium – For a
13. Non-Filipino Manager – To allow a non- recruitment/manning agency or a foreign
Filipino citizen to head or manage a recruitment principal/ Er to pass on the OFW or deduct from
agency; his or her salary the payment of the cost of
insurance fees, premium or other insurance
14. Imposition of Excessive Interest – To grant a related charges, as provided under the
loan to an OFW with interest exceeding 8% per compulsory worker's insurance coverage. (Sec.
annum, which will be used for payment of legal 6, R.A. No. 8042, as amended by R.A. No. 10022)
and allowable placement fees and make the
migrant worker issue, either personally or Q: Juan informed Pedro that the former’s aunt in
through a guarantor or accommodation party, the U.S. was hiring a data encoder. Due to Juan’s
postdated checks in relation to the said loan; representations, Pedro forwarded his resume.
Juan requested Pedro to make referrals in which
15. Specifying a Loan Entity – To impose a the latter recommended five Filipinos. Despite
compulsory and exclusive arrangement the applicants' repeated inquiries, and the lapse
whereby an OFW is required to avail of a loan of a considerable length of time, appellant failed
only from specifically designated institutions, to secure overseas employment for them as
entities, or persons; promised. Are the elements of Illegal
Recruitment in Large Scale present?
16. Non-Renegotiation of Loan – To refuse to
condone or renegotiate a loan incurred by an A: YES. R.A. No. 8042, a non-licensee or non-holder
OFW after his employment contract has been of authority is liable for Illegal Recruitment when
prematurely terminated through no fault of his the following elements concur: (1) the offender has
or her own; no valid license or authority required by law to
enable him to lawfully engage in recruitment and
17. Specifying a Medical Entity – To impose a placement of workers; and (2) the offender
compulsory and exclusive arrangement undertakes any of the activities within the meaning
whereby an OFW is required to undergo health of “recruitment and placement” under Art. 13(b) of
examinations only from specifically designated the LC or any of the prohibited practices
medical clinics, institutions, entities or persons, enumerated under Art. 34 of the LC (now Sec. 6 of
except in the case of a worker whose medical R.A. No 8042). In the case of Illegal Recruitment in
examination cost is shouldered by the principal; Large Scale, a third element is added: that the
offender commits any of the acts of recruitment and
18. Specifying a Training Entity – To impose a placement against three or more persons,
compulsory and exclusive arrangement individually or as a group.
whereby an OFW is required to undergo
training, seminar, instruction or schooling of Here, Juan is a non-licensee or non-holder of
any kind only from specifically designated authority. And five complainants who corroborated
institutions, entities or persons, except for each other on material points, all positively

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 LABOR LAW AND SOCIAL LEGISLATION
identified Juan as the person who promised them a) ELEMENTS
overseas employment. Juan gave them the distinct
impression that appellant had the ability to facilitate To prove illegal recruitment, only two elements
their applications and, eventually, deploy them for need to be shown, viz:
employment abroad. (People of the Philippines V.
Oliver Imperio Y Antonio, G.R. No. 232623, 05 Oct. 1. The offender undertakes any of the activities
2020, as penned by J. Hernando) within the meaning of “recruitment and
placement” under Art. 13(b) of the LC, or any of
Q: A crew agreement was entered into by Nerry the prohibited practices enumerated under
Balatongan and Philimare Shipping and Art. 34 of the LC; and
Equipment Supply for the employment of the
former as a seaman on board the vessel "Santa See pages 13, and 27-29 for the enumeration
Cruz” which was approved by the National of the aforesaid activities and the prohibited
Seaman's Board (NSB). While on board vessel, practices.
the parties entered into a supplementary
contract of employment providing for accident 2. The offender has no valid license or authority
and death benefits. Balatongan met an accident required by law to enable him to lawfully
in Egypt, and subsequently at the Makati engage in recruitment and placement of
Medical Center. The medical certificate was workers. (People v Chua, G.R. No. 187052, 13
issued describing his disability as "permanent Sept. 2012)
in nature." He demanded payment for his claim
for total disability, as provided for in the b) TYPES
contract of employment, but his claim was
denied. Can the second contract of employment 1. Simple – It is committed where a licensee/non-
be enforced against Philimare despite the licensee or holder/non-holder of authority
absence of NSB verification or approval? undertakes either any recruitment activities
defined under Art. 13(b), or any prohibited
A: YES. The supplementary contract of employment practices enumerated under Sec. 6 of R.A. No.
was entered into between petitioner and private 8042, as amended by R.A. No. 10022.
respondent to modify the original contract of
employment. The reason why the law requires that Prescription of action: 5 years. (Sec. 12, R.A.
the POEA should approve and verify a contract No. 8042, as amended by R.A. No. 10022)
under Art. 34(i) of the LC is to ensure that the Ee
shall not be placed in a disadvantageous position NOTE: Where illegal recruitment is proved, but
and that the same are within the minimum the elements of large scale and syndicate are
standards of the terms and conditions of such absent, the accused can be only convicted of
employment contract set by the POEA. simple illegal recruitment. (People v. Segun, G.R.
No. 119076, 25 Mar. 2002)
However, there is no prohibition against stipulating
in a contract more benefits to the Ee than those 2. Illegal Recruitment as Economic Sabotage – It
required by law. Thus, in this case wherein a is economic sabotage when complex illegal
“supplementary contract” was entered into recruitment is committed.
affording greater benefits to the Ee than the
previous one, and although the same was not a. Syndicated – committed by a syndicate if
submitted for the approval of the POEA, the same carried out by a group of three (3) or more
should still be considered to be valid and persons in conspiracy or confederation
enforceable. (Seagull Maritime Corp. v. Balatongan, with one another;
G.R. No. 82252, 28 Feb. 1989)

U N IV E R S I T Y O F S A N T O T O M A S 30
2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT
b. Large Scale or qualified – committed Non-licensee or non-holder of authority
against three (3) or more persons
individually or as a group despite the lack It means any person, corporation or entity which
of necessary license from POEA. (People v. has not been issued a valid license or authority to
Alzona, G.R. No. 132029, 30 July 2004) engage in recruitment and placement by the SOLE,
or whose license or authority has been suspended,
Prescription of action: 20 years. (Sec. 12, R.A. revoked or cancelled by the POEA or the Secretary.
No. 8042, as amended by R.A. No. 10022) There is no need to show that the accused
represented himself as a licensed recruiter. (People
NOTE: “Illegal recruitment in large scale” pertains v. Ballesteros, G.R. Nos. 116905-908, 06 Aug. 2002)
to the number of victims, while “syndicated illegal
recruitment” pertains to the number of recruiters. Liability of the Officers

Illegal Recruitment as Economic Sabotage In case of juridical persons, the officers having
ownership, control, management or direction of
Illegal recruitment, when committed by a syndicate their businesses who are responsible for the
or in large scale, shall be considered an offense commission of the offense shall be criminally liable
involving economic sabotage. (Art. 38(b), LC) therefor. Failure to reimburse the expenses
incurred by the worker in connection with his
Illegal Recruitment in Large Scale documentation and processing for purposes of
deployment, in cases where the deployment does
In People v. Calonzo (G.R. Nos. 115150-55 27 Sept. not actually take place without the worker’s fault,
1996), illegal recruitment in large scale is amounts to illegal recruitment under Sec. 6(m) of
committed when a person: the law. (Sec. 6, R.A. No. 8042)

(a) undertakes any recruitment activity Liability of Employee

defined under Art. 13(b) or any prohibited
practice enumerated under Art. 34 of the An employee of a company or corporation engaged
LC; in illegal recruitment may be held liable as
principal, together with his employer, if it is shown
(b) does not have a license or authority to that he or she actively and consciously
lawfully engage in the recruitment and participated in illegal recruitment.
placement of workers; and
Thus, in cases of non-registration of agents or
(c) commits the same against three (3) or more representatives appointed by a licensed
persons, individually or as a group. recruitment agency, it must be proved that such
agents or representatives were aware of failure to
NOTE: Illegal Recruitment in Large Scale must be register their names with the POEA and that they
understood as referring to the number of actively engaged in recruitment despite this
complainants in each case. Not complaints. knowledge.

Illegal Recruitment committed by a Syndicate As a rule, the obligation to register its personnel
with the POEA belongs to the officers of the agency.
Illegal recruitment is committed by a syndicate if it A mere employee of the agency cannot be expected
is carried out by a group of three (3) or more to know the legal requirements for its operation.
persons conspiring and/or confederating with one (People v. Chowdury, G.R. No. 129577-80, 15 Feb.
another in carrying out any unlawful or illegal 2000)
transaction, enterprise or scheme. (People v.
Agustin, G.R. No. 113161, 29 Aug. 1995.)

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 LABOR LAW AND SOCIAL LEGISLATION
NOTE: Good faith is not a defense in illegal misappropriated, misapplied and converted the
recruitment. (Sec. 6, R.A. 8042) Illegal recruitment is money for her own personal use and benefit.
malum prohibitum. An affidavit of desistance does Can Dado file the cases of illegal recruitment and
not extinguish criminal liability. estafa simultaneously?

The Code applies to any recruitment or placement, A: YES, illegal recruitment and estafa cases may be
whether or not for profit. The reference in the Code filed simultaneously or separately. The filing of
that any person who offers employment to “two or charges for illegal recruitment does not bar the
more persons” as being engaged in recruitment and filing of estafa, and vice versa. Bugo’s acquittal in the
placement does not mean that there must be at least illegal recruitment case does not prove that she is
two persons involved as this reference is merely not guilty of estafa.
evidentiary. Any person may be charged with illegal
recruitment if they already charged fees even if they Illegal recruitment and estafa are entirely different
have not yet obtained employment for the applicant. offenses and neither one necessarily includes or is
necessarily included in the other. A person who is
c) ILLEGAL RECRUITMENT vs. ESTAFA convicted of illegal recruitment may, in addition, be
convicted of estafa under Art. 315(2) of the RPC. In
A person may be charged and convicted separately the same manner, a person acquitted of illegal
of Illegal Recruitment under the Labor Code and recruitment may be held liable for estafa. Double
Estafa under the RPC. (People vs. Turda, G.R. Nos. jeopardy will not set in because illegal recruitment
97044-46, 06 July 1994) is malum prohibitum, in which there is no necessity
to prove criminal intent, whereas estafa is malum in
ILLEGAL se, in the prosecution of which, proof of criminal
ESTAFA intent is necessary. (Sy v. People, G.R. No. 183879, 14
RECRUITMENT
Malum prohibitum Malum in se Apr. 2010)
It is not required that it
be shown that the Q: Toston was charged with illegal recruitment
Accused defrauded and estafa. Records reveal that Mary Ann dealt
recruiter wrongfully
another by abuse of with Toston in the latter's capacity as an Ee of
represented himself as
confidence or by Steadfast. The records reveal that Mary Ann was
a licensed recruiter.
means of deceit. found to be medically unfit for overseas
NOTE: It is enough that deployment, contrary to the representations
NOTE: It is essential made to Mary Ann by Gutierrez. However, the
the victims were
that the false statement prosecution did not present proof
deceived as they relied
or fraudulent that Toston knew about the result of Mary Ann's
on the
representation medical examination or that he was privy to
misrepresentation and
constitutes the very Gutierrez' concealment of this fact from Mary
scheme that caused
cause or the only Ann. Will the charges prosper?
them to entrust their
motive which induces
money in exchange of
the complainant to A: NO, the charges will not prosper. As to the charge
what they later
part with the thing of of illegal recruitment, Toston did not personally
discovered was a vain
value. represent himself as a licensee or holder of
hope of obtaining
employment abroad. authority but only as an Ee.

Q: Bugo, by means of false pretenses and As to the charge of estafa, the element of fraud by
fraudulent representation, convinced Dado to abuse of confidence or deceit with respect
give the amount of P120,000.00 for processing to Toston is negated by the fact that, at the time of
the latter’s papers so that he can be deployed to the act complained of, Toston was an Ee of a validly
Japan. Dado later on found out that Bugo had

U N IV E R S I T Y O F S A N T O T O M A S 32
2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT
licensed recruitment agency. (Toston y Hular v. agreement and violation of contracts of
People, G.R. No. 232049, 03 Mar. 2021) employment. (Sec. 10(a)(2), Rule V, Book I, IRR)

ANTI-TRAFFICKING IN PERSONS In applying for a license to operate a private

employment agency for overseas recruitment and
Trafficking in Persons placement, an applicant is required to submit a
verified undertaking. In that document, the agency
It refers to the recruitment, obtaining, hiring, assumed all responsibilities for the proper use of its
providing, offering, transportation, transfer, license and the proper implementation of the
maintaining, harboring, or receipt of persons with employment contracts with the workers it recruited
or without the victim's consent or knowledge, and deployed for overseas employment. (Royal
within or across national borders by means of Crown Internationale v. NLRC, G.R. No. 78085, 16 Oct.
threat, or use of force, or other forms of coercion, 1989)
abduction, fraud, deception, abuse of power or of
position, taking advantage of the vulnerability of the XPN: Where the workers themselves insisted for
person, or, the giving or receiving of payments or the recruitment agency to send them back to their
benefits to achieve the consent of a person having foreign employer despite their knowledge of its
control over another person for the purpose of inability to pay their wages, the agency is absolved
exploitation which includes at a minimum, the from liability. (Feagle Construction Corp. v. Gayda,
exploitation or the prostitution of others or other G.R. No. 82310, 18 June 1990)
forms of sexual exploitation, forced labor or
services, slavery, servitude or the removal or sale of Q: Santosa Datuman was deployed to Bahrain
organs. after paying the required placement fee.
However, her Er took her passport and instead
The recruitment, transportation, transfer, of working as a saleslady, she was forced to work
harboring, adoption, or receipt of a child for the as a domestic helper contrary to the agreed
purpose of exploitation or when the adoption is salary approved by POEA. She worked without
induced by any form of consideration for compensation for two years because of her Ers’
exploitative purposes shall also be considered as continued failure and refusal to pay her salary
'trafficking in persons' even if it does not involve despite demand. When she finally returned to
any of the means set forth in the preceding the Philippines, she filed a complaint against the
paragraph. (People v. Lalli y Purih, G.R. No. 195419, local agency that recruited her. Should the suit
12 Oct. 2011) prosper?

NOTE: Illegal Recruitment and Trafficking in A: YES. Under Sec. 1(f), Rule II, Book II of the 1991
Persons constitute different offenses. The POEA Rules and Regulations, the local agency shall
prohibition on double jeopardy does not apply to an assume joint and solidary liability with the
act or series of acts constituting different offenses. employer for all claims and liabilities which may
(Ibid.) arise in connection with the implementation of the
contract, including but not limited to payment of
4. LIABILITY OF LOCAL RECRUITMENT AGENCY wages, health and disability compensation, and
AND FOREIGN EMPLOYER repatriation. Private employment agencies are held
jointly and severally liable with the foreign-based
employer for any violation of the recruitment
Liability of the Local Recruitment Agency
agreement or contract of employment, to assure the
aggrieved worker of immediate and sufficient
GR: A local recruitment agency shall be jointly and
payment of what is due him. This is in line with the
solidarily liable with its principal or foreign-based
policy of the state to protect and alleviate the plight
employer for any violation of the recruitment

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 LABOR LAW AND SOCIAL LEGISLATION
of the working class. (Datuman v. First Cosmopolitan Liability of the Private Employment Agency and
Manpower, G.R. No. 156029, 14 Nov. 2008) the Principal or Foreign-based Employer is joint
and solidary
Liability if the recruitment or placement agency
is a juridical being They are jointly and solidarily liable for any
violation of the recruitment agreement and the
If the recruitment or placement agency is a juridical contracts of employment.
being, the corporate officers, directors or partners
as the case may be, shall themselves be jointly and This joint and solidary liability imposed by law
solidarily liable with the corporation or partnership against recruitment agencies and foreign employers
for the claims and damages. (Becmen Service is meant to assure the aggrieved worker of
Exporter and Promotion v. Sps. Cuaresma, G.R. Nos. immediate and sufficient payment of what is due
182978-79 & 184298-99, 07 Apr. 2009) him. (Becmen Service Exporter and Promotion v.
Cuaresma, supra.)
Liability of the Foreign Employer
The solidary liability of the principal and the
A foreign corporation which, though unlicensed recruitment agency exists for the whole duration of
agents, recruits workers in the country, may be sued the employment contract and shall not be affected
in and found liable by Philippine courts (e.g., direct by any substitution, amendment or modification
hiring by a foreign firm without participation of made locally or in a foreign country. (Sec. 10, R.A. No.
POEA). (Azucena, 2016) 8042, as amended)

a) SOLIDARY LIABILITY Local agency is solidarily liable with the foreign

principal. Severance of relations between the local
Solidary Liability agent and foreign principal does not affect the
liability of the foreign principal. The obligations
It refers to the liability of the principal/employer covenanted in the recruitmet agreement entered
and the recruitment/manning agency, for any and into by and between the local agent and its foreign
all claims arising out of the implementation of the principal are not coterminous with the term of such
employment contract involving Filipino workers for agreement so that if either or both of the parties
overseas deployment. If the recruitment/manning decide to end the agreement, the responsibilities of
agency is a juridical being, the corporate officers such parties towards the contracted employees
and directors and partners, as the case may be, shall under the agreement, do not at all end, but the same
themselves be jointly and severally liable with the extends up to and until the expiration of the
corporation or partnership for the aforesaid claims employment contracts of the employees. (Catan v.
and damages. NLRC, G.R. No. 77279, 15 Apr. 1988)

In overseas employment, either the local agency or Q: Mr. A signed a one-year contract with XYZ
the foreign employer may be sued by the OFW. This Recruitment Co. for deployment as welding
way, the OFW is assured that someone — the supervisor for DEF, Inc. located in Dubai. The
foreign employer's local agent — may be made to employment contract, which the POEA
answer for violations that the foreign employer may approved, stipulated a salary of $600.00 a
have committed. (Sameer Overseas Placement month. Mr. A had only been in his job in Dubai
Agency, Inc. v. Cabiles, G.R. No. 170139, 05 Aug. 2014.) for six (6) months when DEF, Inc. announced
that it was suffering from severe financial
losses, thus, intended to retrench some of its
workers, among them Mr. A. DEF, Inc. hinted,
however, that employees who would accept a
lower salary could be retained.

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 II. PRE-EMPLOYMENT
Together with some other Filipino workers, Mr. which she returned to the Philippines on 04 Feb.
A agreed to a reduced salary of $400.00 a month, 2000.
thus, continued with his employment.
Shortly after her return she filed a complaint
Assuming that the reduction was invalid, may before the NLRC against Sunace, one Perez, the
Mr. A hold XYZ recruitment Co. liable for Taiwanese broker, and the Er-foreign principal
underpayment of wages? Explain. (2019 BAR) alleging that she was jailed for three months and
that she was underpaid. Should Sunace be held
A: YES, Mr. A. may hold XYZ Recruitment Co. liable liable for the underpayment for the additional
for the payment of his wages under the rule that a two years that she worked for her Taiwanese Er
recruiter is solidarily liable for breach of the terms under the theory of imputed knowledge?
and conditions of the POEA-approved employment
contract. (Sec.1(f), Rule II, Book 11, POEA Rules and A: NO. The Theory of Imputed Knowledge ascribes
Regulations; Datuman v. First Cosmopolitan the knowledge of the agent, Sunace, to the principal
Manpower and Promotion Services, Inc., G.R. 156029, Taiwanese Er, not the other way around. The
14 Nov. 2008) knowledge of the principal-foreign Er cannot,
therefore, be imputed to its agent Sunace. There
b) THEORY OF IMPUTED KNOWLEDGE being no substantial proof that Sunace knew of and
consented to be bound under the two-year
A rule in insurance law that any information employment contract extension, it cannot be said to
material to the transaction, either possessed by the be privy thereto. As such, it and its owner cannot be
agent at the time of the transaction or acquired by held solidarily liable for and of Montehermozo’s
him before its completion, is deemed to be the claims arising from the two-year employment
knowledge of the principal, at least so far as the extension. (Sunace International Management
transaction is concerned, even though in fact, the Services, Inc. v. NLRC, supra.)
knowledge is not communicated to the principal at
all. (Leonor v. Filipinas Compania, 48 O.G. 243, 10 Jan. 5. TERMINATION OF CONTRACT OF MIGRANT
1950; Rovels Enterprises, Inc. v. Ocampo, G.R. No. WORKER
136821, 17 Oct. 2002)
R.A. No. 8042, as amended by R.A. No. 10022
The Theory of Imputed Knowledge teaches that the governs the money claims of OFWs, not the Labor
knowledge of the agent is knowledge of the Code.
principal, employer, not the other way around.
There being no substantial proof that the previous It is the LA or the NLRC which has jurisdiction over
agent knew of and consented to be bound under the illegal dismissal or money claims cases of OFWs.
employment contract extension, it cannot be said to
be privy thereto. (Sunace International Reliefs such as reinstatement with full backwages or
Management Services, Inc. v. NLRC, et al., G.R. No. separation pay are not applicable to OFWs because
161757, 25 Jan. 2006) of the contractual nature of their employment.

Q: Sunace International Management Services An OFW may however claim placement fee, salaries
(Sunace), deployed to Taiwan Montehermozo as he would have earned had he not been illegally
a domestic helper under a 12-month contract dismissed, moral and exemplary damages, and
effective 01 Feb. 1997. The deployment was with attorney’s fees.
the assistance of a Taiwanese broker, Edmund
Wang, President of Jet Crown International Co.,
Ltd. After her 12-month contract expired on 01
Feb. 1998, Montehermozo continued working
for her Taiwanese Er for two more years, after

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 LABOR LAW AND SOCIAL LEGISLATION
Entitlement to Salary for the Unexpired Portion herein; 2) The disease was contracted as a result of
the seafarer's exposure to the described risks; 3)
In case of termination of overseas employment The disease was contracted within a period of
without just, valid, or authorized cause as defined exposure and under such other factors necessary to
by law or contract, the worker shall be entitled to all contract it; and 4) There was no notorious
his salaries for the entire unexpired portion of the negligence on the part of the seafarer.
employment contract regardless of the duration of
his employment. In this case, the heirs established that Terry suffered
an illness during the term of his employment
Q: Terry was a seafarer engaged by ABC Corp. for contract. However, he failed to comply with the
and in behalf of its foreign principal, DEF Corp. procedures prescribed under the POEA-SEC,
as an Able Seaman on board the vessel MV Geest particularly Sec. 20-B(2), which requires the
Trader for a contract period of 10 months. Terry seafarer must submit himself to a post-employment
later on felt severe abdominal pain, backache, medical examination within three days upon his
chest pain and coughs. Due to the absence of return.
medical facilities at the port clinic, he did not
receive the proper medical assistance and did Pancreatic cancer is not an occupational disease.
not undergo any laboratory test. He was then Case law has held that for a disease not included in
repatriated to the Philippines due to his medical the list of compensable diseases to be compensable,
condition. Terry was referred to the company- the seafarer still has to establish, by substantial
designated physician and company specialists evidence that his illness is or was work-related.
and was advised to return for further treatment. Terry’s pancreatic cancer is not work-related and
However, Terry went home to Aklan and was therefore, not compensable because he or his heirs
confined twice in a clinic and was diagnosed failed to prove, by substantial evidence, its work-
with functional dyspepsia and then with relatedness, and his compliance with the
pancreatic cancer. After his discharge, Terry parameters that the law has set out with regard to
was bedridden at home until his death in April claims for disability and death benefits. (Marlow
2013. His death certificate indicated that he died Navigation Phils. V. Heirs of Antonio Beato, G.R. No.
due to cardio-respiratory failure with filed a 233897, 09 Mar. 2022, as penned by J. Hernando)
complaint for death benefits, payment for burial
expenses, reimbursement of medical expenses, NOTE: An OFW, having been illegally dismissed, is
airfare expense, damages and attorney's fees, entitled to her salary for the unexpired portion of
against DEF Corp. on the ground that the cause the employment contract. (Sameer Overseas
of his death, pancreatic cancer, is a work-related Placement v. Cabilles GR 170139, 05 Aug. 2014)
illness. Is the death of Terry compensable?

A: NO. To be entitled to benefits under Sec. 20-A, the B. EMPLOYMENT OF NON-RESIDENT ALIENS
seafarer must show that (1) he suffered an illness;
(2) during the term of his or her employment
contract; (3) he or she complied with the
Employment Permit of Non-resident Aliens
procedures prescribed under Sec. 20-A of the
applicable POEA-SEC; (4) his or her illness is one of
Any alien seeking admission to the Philippines for
the enumerated occupational diseases or that his
employment purposes and any domestic or foreign
illness or injury is otherwise work-related; and (5)
employer who desires to engage an alien for
he or she complied with the four conditions
employment in the Philippines shall obtain an
enumerated under Sec. 32-A of the POEA-SEC for an
employment permit from DOLE.
occupational disease or a disputably-presumed
work-related disease to be compensable: 1) The
seafarer's work must involve the risks described

U N IV E R S I T Y O F S A N T O T O M A S 36
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 II. PRE-EMPLOYMENT
An employment permit may be issued to: Persons Required to Obtain Alien Employment
Permit
1. A non-resident alien; or
GR: All foreign nationals who intend to engage in
2. The applicant employer, after a gainful employment in the Philippine shall apply for
determination of the non-availability of a Alien Employment Permit (AEP). (Sec. 1, DOLE D.O.
person in the Philippines who is competent No. 186-17)
and able and willing at the time of application
to perform the services for which the alien is NOTE: Gainful employment shall refer to a state or
desired. (Art. 40, LC) condition that creates an Er-Ee relationship
between the Philippine-based employer and the
foreign national where the former has the power to
NOTE: For an enterprise registered in preferred hire or dismiss the foreign national from
areas of investments, said permit may be issued employment, pays the salaries or wages thereof and
upon recommendation of the government agency has authority to control the performance or conduct
charged with the supervision of said registered of the tasks and duties. (Ibid.)
enterprise. (Ibid.)
XPNs: The following categories of foreign nationals
Prohibition and Penal Sanctions are exempt from securing an employment permit:

After the issuance of employment permit, the alien 1. All members of the diplomatic service and
shall not transfer to another job or change his or her foreign government officials accredited by and
employer without prior approval of the SOLE. with reciprocity arrangement with the
Philippines;
Any non-resident alien who shall take up
employment in violation of the Art. 41 of the LC and 2. Officers and staff of international organizations
its IRRs shall be punished in accordance with the of which the Philippine government is a
provision of Arts. 289 and 290 of the LC. In addition, member, and their legitimate spouses desiring
the alien worker shall be subject to deportation to work in the Philippines;
after service of his sentence. (Art. 41, LC)
3. Owners and representatives of foreign
The Alien Employment Permit (AEP) principals whose companies are accredited by
the POEA, who come to the Philippines for a
It is not an exclusive authority for a foreign national limited period and solely for the purpose of
to work in the Philippines. It is just one of the interviewing Filipino applicants for
requirements in the issuance of a work visa to employment abroad;
legally engage in gainful employment in the country.
The foreign national must obtain the required 4. Foreign nationals who come to the Philippines
Special Temporary Permit (STP) from the to teach, present and/or conduct research
Professional Regulation Commission (PRC) in case studies in universities and colleges as visiting,
the employment involves practice of profession and exchange or adjunct professors under formal
Authority to Employ Alien from the DOJ where the agreements between the universities and
employment is in a nationalized or partially colleges in the Philippines and foreign
nationalized industry and Department of universities or colleges; or between the
Environment and Natural Resources (DENR) in case Philippine government and foreign
of mining. (DOLE D.O. No. 186-17) government, provided that the exemption is on
a reciprocal basis;

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 LABOR LAW AND SOCIAL LEGISLATION
5. Permanent resident foreign nationals and supervisory, managerial or professional
probationary or temporary resident visa staff; does not include first line
holders under Sec. 13(a-f) of the Philippine supervisors unless employees
Immigration Act of 1940 (C.A. 613) and Sec. 3 of supervised are professionals; does not
the Alien Social Integration Act of 1995 (R.A. No. include employees who primarily
7919); perform tasks necessary for the
provision of the service; or
6. Refugees and stateless persons recognized by
the Department of Justice (DOJ); and c. Specialist - a natural person within the
organisation who possesses knowledge
7. All foreign nationals granted exemption by law. at an advanced level of expertise
(Sec. 2, DOLE D.O. No. 186-17) essential to the establishment or
provision of the service and/or
Persons Excluded from Securing an AEP possesses proprietary knowledge of the
organisation's service, research
The following are excluded from securing an AEP: equipment, techniques or management;
may include, but is not limited to,
1. Members of the governing board with voting members of a licensed profession.
rights only and do not intervene in the
management of the corporation or in the day to NOTE: All other intra-corporate
day operation of the enterprise; transferees not within these categories
as defined above are required to secure
2. President and treasurer, who are part-owner of an AEP prior to their employment in the
the company; Philippines.

3. Those providing consultancy services who do 5. Contractual service supplier who is a manager,
not have Ers in the Philippines; executive or specialist and an Ee of a foreign
service supplier which has no commercial
4. Intra-corporate transferee who is a manager, presence in the Philippines; and
executive or specialist;
a. One who enters the Philippines
a. Executive - a natural person within the temporarily to supply a service
organisation who primarily directs the pursuant to a contract between his/her
management of the organisation and employer and a service consumer in the
exercises wide latitude in decision Philippines;
making and receives only general
supervision or direction from higher b. must possess the appropriate
level executives, the board of directors, educational and professional
or stockholders of the business; an qualifications; and
executive would not directly perform
tasks related to the actual provision of c. must be employed by the foreign service
the service or services of the supplier for at least one year prior to the
organisation; supply of service in the Philippines.

b. Manager - a natural person within the 6. Representative of the Foreign Principal/Er

organisation who primarily directs the assigned in the Office of Licensed Manning
organization or department or Agency (OLMA) in accordance with the POEA
subdivision and exercises supervisory law, rules and regulations. (Sec. 3, Ibid.)
and control functions over other

U N IV E R S I T Y O F S A N T O T O M A S 38
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 II. PRE-EMPLOYMENT
NOTE: All foreign nationals excluded from securing Documentary Requirements
AEP shall secure a Certificate of Exclusion from the
Regional Office. (Sec. 4, Ibid.) A duly accomplished application form with the
following complete documentary requirements
Validity of AEP must be submitted:

GR: The AEP shall be valid for the position and the 1. Photocopy of Passport with valid visa, except
company for which it was issued for a period of one for temporary visitor's visa in case of renewal
(1) year. or Certificate of Recognition for Refugees or
Stateless Persons;
XPN: The employment contract, or other modes of
engagement provide otherwise, which in no case 2. Original copy of notarized appointment or
shall exceed three (3) years. (Sec. 10, D.O. 186-17) contract of Employment enumerating the
duties and responsibilities, annual salary, and
Renewal of AEP other benefits of the foreign national;

An application for renewal of AEP shall be filed not 3. Photocopy of Mayor's Permit to operate
earlier than 60 days before its expiration. In case the business, in case of locators in economic zones,
foreign national needs to leave the country or in Certification from the PEZA or the Ecozone
other similar circumstances that will hinder the Authority that the company is located and
filing of renewal within this prescribed period, the operating within the ecozone, while in case of a
application may be filed earlier. (Sec. 11, Ibid.) construction company, photocopy of license
from PCAB or D.O. 174-17 Registration should
Procedure in the Processing of Applications for be submitted in lieu of Mayor's Permit; and
AEP
4. Business Name Registration and Application
1. All applications for AEP shall be filed and Form with DTI or SEC Registration and GIS;
processed at the DOLE Regional Office or Field
Office having jurisdiction over the intended 5. If the position title of the foreign national is
place of work. included in the list of regulated professions, a
Special Temporary Permit (STP) from the PRC;
2. In the case of foreign nationals to be assigned in and
related companies, applications may be filed in
the Regional Office or Field Office having 6. If the Er is covered by the Anti-Dummy Law, an
jurisdiction over any of the applicant's intended Authority to Employ Foreign National (ATEFN)
places of work. from the DOJ or from the DENR in case of
mining.
3. Additional position of the foreign national in the
same company or subsequent assignment in Processing Periods
related companies during the validity or
renewal of the AEP will be subject for 1. Applications for new AEP - within three
publication requirement. A change of position (3) working days after publication and
or Er shall require an application for new AEP. payment of required fees and fines, if there
are any.
4. At any given time, only one AEP shall be issued
to a foreign national. (Sec. 5, D.O. 186-17) 2. Applications for renewal of AEP – within
one (1) day after receipt. (Sec. 8, D.O. 186-
17)

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 LABOR LAW AND SOCIAL LEGISLATION
Publication Requirement or without belief in its truth, or recklessly
whether it is true or false);
The DOLE Regional Office shall publish in a
newspaper of general circulation all applications for 2. Submission of falsified documents;
new AEPs, change or additional position in the same
company, or subsequent assignment in related 3. Conviction to a criminal offense or a fugitive
companies within two (2) working days from from justice in the country or abroad;
receipt of application.
4. Grave misconduct in dealing with or ill
The same shall be published on the DOLE website treatment of workers;
and posted in the PESO. Such publication and
posting shall be for a period of thirty (30) days and 5. Availability of a Filipino who is competent, able
shall contain the name, position, Er and address, a and willing to do the job intended for or being
brief description of the functions to be performed by performed by the foreign national based on
the foreign national, qualifications, monthly salary data in the PEIS, PRC Registry of Professional
range, and other benefits, if there are any. and TESDA Registry of Certified Workers;
It shall also indicate in the same notice of 6. Worked without valid AEP for more than a year;
publication that any person in the Philippines who or
is competent, able and willing at the time of
application to perform the services for which the 7. Application for renewal with an expired visa or
foreign national is desired may file an objection at with a temporary visitor's visa. (Sec. 12, DOLE
the DOLE Regional Office. (Sec. 7, D.O. 186-17) D.O. No. 186-17)

Objection NOTE: The RD shall issue an Order denying the

application for new or renewal of AEP which shall
Any objection or information against the have the effect of forfeiture of the fees paid by the
employment of the foreign national relative to labor applicant.
market test must be filed with the Regional Office
within thirty (30) days after publication. Grounds for Cancellation or Revocation of AEP

The DOLE Regional Office shall refer to the DOLE's 1. Non-compliance with any of the requirements
Philjobnet and PESO Employment Information or conditions for which the AEP was issued;
System (PEIS), the PRC Registry of Professionals,
and the Technical Education and Skills 2. Misrepresentation of facts in the application
Development Authority (TESDA) Registry of including fraudulent misrepresentation (i.e.,
Certified Workers to establish availability or non false statement that has a negative effect in the
availability of able and qualified Filipino worker. evaluation of the application made knowingly,
or without belief in its truth, or recklessly
Grounds for Denial of Application for New or whether it is true or false);
Renewal of AEP
3. Submission of falsified or tampered documents;
An application for AEP or the renewal thereof may
be denied by the Regional Director (RD) based on 4. Meritorious objection or information against
any of the following grounds: the employment of the foreign national;

1. Misrepresentation of facts in the application 5. Foreign national has been convicted of a

including fraudulent misrepresentation (i.e., criminal offense or a fugitive from justice;
false statement that has a negative effect in the
evaluation of the application made knowingly,

U N IV E R S I T Y O F S A N T O T O M A S 40
2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT
6. Er terminated the employment of foreign motion for reconsideration shall be allowed. (Sec.
national; and 16, DOLE D.O. No. 186-17)

7. Grave misconduct in dealing with or ill Q: The DOLE issued an alien employment permit
treatment of workers. (Sec. 13, DOLE D.O. No. for Earl Cone, a U.S. citizen, as sports consultant
186-17) and assistant coach for GMC. Later, the Board of
Special Inquiry of the Commission on
Q: What is the effect of denial, cancellation, or Immigration and Deportation approved Cone’s
revocation of AEP? application for a change of admission status
from temporary visitor to pre-arranged Ee. A
A: A foreign national whose AEP has been denied or month later, GMC requested that it be allowed to
cancelled is disqualified to reapply within a period employ Cone as full-fledged coach. The DOLE
of ten (10) years in case the grounds for denial or Regional Director granted the request.
cancellation is any of the following:
The Basketball Association of the Phils.
a. Conviction of criminal offense or fugitive appealed the issuance of said permit to the SOLE
from justice in the country or abroad; or who cancelled Cone’s employment permit
b. Grave misconduct in dealing with or ill because GMC failed to show that there is no
treatment of workers. person in the Philippines who is competent and
willing to do the services nor that the hiring of
A foreign national whose AEP has been denied or Cone would redound to the national interest. Is
cancelled due to misrepresentation of facts or the act of the SOLE valid?
submission of falsified documents with the intent to
deceive, conceal or omit to state material facts and, A: YES. GMC’s claim that hiring a foreign coach is an
by reason of such omission or concealment, the Er’s prerogative has no legal basis. Under Art. 40 of
Department was prompted to approve/issue the the LC, an Er seeking employment of an alien must
AEP that would not otherwise have been first obtain an employment permit from the DOLE.
approved/issued, shall be disqualified to reapply GMC’s right to choose who to employ is limited by
within a period of five (5) years. (Sec. 14, D.O. 186- the statutory requirement of an employment
17) permit. (GMC v. Torres, G.R. No. 93666, 22 Apr. 1991)

Er’s or foreign national's representatives, and/or

agents acting in behalf of the applicant found to have C. DISCRIMINATORY PRACTICES
filed fraudulent application for AEP for three (3)
counts shall be barred from filing application for a
period of five (5) years after due process. (Sec. 15,
The State shall afford protection to labor, promote
D.O. 186-17)
full employment, insure equal work opportuniites
regardless of sex, race or creed and regulate the
Appeal
relations between workers and Ers. The State shall
assure the rights of workers to self-organization,
The aggrieved foreign national or his authorized
collective bargaining, security of tenure, and just
representative may file an appeal with the SOLE
and humane conditions of work. (Art. 3, LC)
within ten (10) days after receipt of the copy of
denial/cancellation/revocation order.
Discrimination

The decision of the SOLE shall be final and executory

Discrimination is the unequal treatment of
unless a motion for reconsideration is filed within
employees, which is proscribed as an unfair labor
ten (10) days after receipt of the decision. No second
practice by Art. 248(e) (now 259) of the LC. It is the
failure to treat all persons equally when no
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 LABOR LAW AND SOCIAL LEGISLATION
reasonable distinction can be found between those 6. Forcibly lay off an Ee or worker because of
favored and those not favored. (International School old age; or
Alliance of Educators v. Quisumbing, G.R. No. 128845,
01 June 2000) 7. Impose early retirement on the basis of
such Ee’s or worker’s age; (Sec. 5, R.A. No.
In the workplace, where the relations between 10911)
capital and labor are often skewed in favor of
capital, inequality and discrimination by the NOTE: An Er may set age limitations in
employer are all the more reprehensible. (Ibid.) employment if:

Discriminatory Practices (a) Age is a BFOQ reasonably necessary in

the normal operation of a particular
1. Age; (R.A. No. 10911 or the Anti-Age business or where the differentiation is
Discrimination in Employment Act) based on reasonable factors other than
2. Gender and/or Marital Status; (R.A. No. age;
9710 or the Magna Carta of Women)
3. Health Condition; (R.A. No. 7277 or the (b) The intent is to observe the terms of a
Magna Carta for Disabled Persons) and bona fide seniority system that is not
4. Solo Parents. (Sec. 7, R.A. No. 8972, as intended to evade the purpose of this
amended by R.A. No. 11861) Act;

1. AGE (R.A. No. 10911 or the Anti-Age (c) The intent is to observe the terms of a
Discrimination in Employment Act) bona fide Ee retirement or a voluntary
early retirement plan consistent with
the purpose of this Act: Provided, that
PROHIBITED FORMS OF DISCRIMINATION
such retirement or voluntary
FOR AN EMPLOYER
retirement plan is in accordance with
the LC, as amended, and other related
1. Print or publish, or cause to be printed or
laws; or
published, in any form of media, including
the internet, any notice of advertisement
(d) The action is duly certified by the SOLE
relating to employment suggesting
in accordance with the purpose of R.A.
preferences, limitations, specifications, and
No 10911; (Sec. 6, Ibid.)
discrimination based on age;

PROHIBITED FORMS OF DISCRIMINATION

2. Require the declaration of age or birth date
FOR A LABOR CONTRACTOR OR
during the application process;
SUBCONTRACTOR

3. Decline any employment application

if any, to refuse to refer for employment or
because of the individual’s age;
otherwise discriminate against any individual
because of such person’s age; (Sec. 5(b), Ibid.)
4. Discriminate against an individual in terms
of compensation, terms and conditions or
PROHIBITED FORMS OF DISCRIMINATION
privileges of employment on account of
FOR A LABOR ORGANIZATION
such individual’s age;

1. To deny membership to any individual

5. Deny any Ee’s or worker’s promotion or
because of such individual’s age;
opportunity for training because of age;

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 II. PRE-EMPLOYMENT
2. To exclude from its membership any The following are acts of discrimination under the
individual because of such individual’s age; LC:
or
a. Payment of a lesser compensation,
3. To cause or attempt to cause an Er to including wage, salary or other form of
discriminate against an individual in remuneration and fringe benefits, to a
violation of this Act; (Sec. 5(c), Ibid.) and female Ee as against a male Ee, for work of
equal value; and
PROHIBITED FORMS OF DISCRIMINATION
FOR A PUBLISHER b. Favoring a male Ee over a female Ee with
respect to promotion, training
To print or publish any notice of advertisement opportunities, study, and scholarship
relating to employment suggesting preferences, grants solely on account of their sexes.
limitations, specifications, and discrimination based (Ibid.)
on age. (Sec. 5(d), Ibid.)
c. Stipulating as a condition of employment or
2. GENDER AND/OR MARITAL STATUS (R.A. No. continuation of employment that a woman
9710 or the Magna Carta of Women) Ee shall not get married, or stipulating
expressly or tacitly that upon getting
married, a woman Ee shall be deemed
Discrimination Against Women
resigned or separated, or to actually
dismiss, discharge, discriminate, or
Refers to any gender-based distinction, exclusion,
otherwise prejudice a woman Ee merely by
or restriction which has the effect or purpose of
reason of her marriage; (Art. 134, LC)
impairing or nullifying the recognition, enjoyment,
or exercise by women, irrespective of their marital
d. Denying any woman Ee the benefits
status, on a basis of equality of men and women, of
provided in the Code or to discharge any
human rights and fundamental freedoms in the
woman employed by him for the purpose of
political, economic, social, cultural, civil, or any
preventing her from enjoying any of the
other field.
said benefits;

It includes any act or omission, including by law,

e. Discharging such woman on account of her
policy, administrative measure, or practice, that
pregnancy, or while on leave of in
directly or indirectly excludes or restricts women in
confinement due to her pregnancy; and
the recognition and promotion of their rights and
their access to and enjoyment of opportunities,
f. Discharging or refusing the admission of
benefits, or privileges. (Sec. 4(b), R.A. No. 9710)
such woman upon returning to her work
for fear that she may again be pregnant; and
DISCRIMINATORY ACTS UNDER THE
(Art. 135, LC)
LABOR CODE

As long as a woman Ee’s ailment is related to her

Acts of Discrimination under the Labor Code
pregnancy, her sickness cannot be a ground for
termination because to do so will be a violation of
It shall be unlawful for any Er to discriminate
Art. 135 of the LC which prohibits an Er to discharge
against any woman Ee with respect to terms and
an Ee on account of pregnancy. (Del Monte
conditions of employment solely on account of her
Philippines, Inc. v. Velasco, G.R. No. 153477, 06 Mar.
sex. (Art. 133, LC)
2007)

43
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FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
Classification of Certain Women Workers 3. Expulsion or non-readmission of women
faculty due to pregnancy ouside of
Any woman who is permitted or suffered to work, marriage; (Sec. 13(c), R.A. No. 9710)
with or without compensation, in any night club,
cocktail lounge, massage clinic, bar or similar 4. Failure to provide a woman Ee a special
establishment, under the effective control or leave benefit of two (2) months with full
supervision of the employer for a substantial period pay based on her gross monthly
of time as determined by the Secretary of Labor and compensation following surgery caused by
Employment, shall be considered as an employee of gynecological disorders, provided that said
such establishment for purposes of labor and social woman Ee has rendered continuous
legislation. (Art. 136, LC) aggregate employment service of at least
six (6) months for the last twelve (12)
Measure or Practice of General Application as a months; and (Sec. 18, R.A. No. 9710)
Form of Discrimination
5. Failure of the State to ensure women
Any measure or practice of general application is migrant worker’s opportunity to undergo
considered as discrimination against women if: skills training before taking a foreign job,
gender-sensitive training and seminars,
1. It fails to provide for mechanisms to offset and equal opportunities based on merit and
or address sex or gender-based fitness.
disadvantages or limitations of women;
The Right to Choose Marriage
2. As a result, women are denied or restricted
in the recognition and protection of their The doctrine of management prerogative gives an
rights and in their access and enjoyment of employer the right to “regulate, according to his
opportunities, benefits, or privileges; or own discretion and judgment, all aspects of
employment, including hiring, work assignments,
3. Women, more than men, are shown to have working methods, the time, place and manner of
suffered the greater adverse effects of those work, work supervision, transfer of employees, lay-
measures or practices. (ibid) off of workers, and discipline, dismissal, and recall
of employees.”
DISCRIMINATORY PRACTICES UNDER THE
MAGNA CARTA OF WOMEN (R.A. No. 9710) However, in Capin-Cadiz vs. Brent Hospital and
Colleges, Inc. (G.R. No. 187417, 24 Feb. 2016), the
Discriminatory Practices under R.A. No. 9710 Court held that it is unlawful for Ers to require as a
condition for employment or continuation of
the following are forms of discrimination against employment that a woman employee shall not get
women in relation to employment: married as well as dismissal of a woman employee
by reason of her marriage.
1. Failure of the State to increase the
recruitment and training of women in It is unlawful for employers to require as a condition
government services that cater to women for employment or continuation of employment
victims of gender-related offenses; that a woman employee shall not get married. (Art.
134, LC) Illegal the dismissal of a woman employee
2. Discrimination in the employment in the because of a condition in her contract that she
field of military, police, and other similar remains single during her employment. (Philippine
services; Telegraph and Telephone Company v. NLRC, G.R. No.
118978, 23 May 1997)

U N IV E R S I T Y O F S A N T O T O M A S 44
2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT
The Right to Bear and Rear a Child Outside of Handicap
Marriage
It refers to a disadvantage for a given individual,
The Labor Code prohibits the discriminatory act of resulting from an impairment or a disability, that
discharging a woman on account of her pregnancy. limits or prevents the function or activity, that is
In the constitutional right to personal liberty and considered normal given the age and sex of the
privacy, the employee and other women similarly individual. (Sec. 4(d), Ibid.)
situated are free to be single mothers by choice. This
cannot be curtailed in the workplace through Sheltered Employment
discriminatory policies against pregnancy out of
wedlock. It refers to the provision of productive work for
persons with disability through workshops
3. HEALTH CONDITION (R.A. No 7277 or the providing special facilities, income-producing
Magna Carta for Disabled Persons) projects or homework schemes with a view to
giving them the opportunity to earn a living thus
enabling them to acquire a working capacity
Persons with disability (PWDs)
required in open industry. (Sec. 4(i), Ibid.)

Persons with disability or disable persons are those

Qualified Individual with a Disability
suffering from restriction of different abilities, as a
result of a mental, physical or sensory impairment,
An individual with a disability who, with or without
to perform an activity in the manner or within the
reasonable accommodations, can perform the
range considered normal for a human being. (Sec.
essential functions of the employment position that
4(a), R.A. No. 7277)
such individual holds or desires. However,
consideration shall be given to the employer's
Impairment
judgment as to what functions of a job are essential,
and if an employer has prepared a written
It is any loss, diminution, or aberration of
description before advertising or interviewing
psychological, physiological, or anatomical
applicants for the job, this description shall be
structure or function. (Sec. 4(b), Ibid.)
considered evidence of the essential functions of the
job. (Sec. 4(l), Ibid.)
Disability

Employment Entrance Examination

Disability shall mean:

Upon an offer of employment, a disabled applicant

(a) a physical or mental impairment that
may be subjected to medical examination, on the
substantially limits one or more
following occasions:
phychological, physiological or anatomical
function of an individual or activities of
1. All entering Ees are subjected to such an
such individual;
examination regardless of disability; and

(b) a record of such an impairment; or

2. Information obtained during the medical
condition or history of the applicant is
(c) being regarded as having such an
collected and maintained on separate
impairment. (Sec. 4(c), Ibid.)
forms and in separate medical files and is
treated as a confidential medical record.

Provided, however, that:

45
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FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
(a) Supervisors and managers may be DISCRIMINATORY ACTS DURING
informed regarding necessary EMPLOYMENT
restrictions on the work or duties of
the Ees and necessary 1. Using standards, criteria, or methods of
accommodations; administration that either effectively
discriminates on the basis of disability, or
(b) First aid and safety personnel may be perpetuate the discrimination of others
informed, when appropriate, if the who are subject to common administrative
disability might require emergency control;
treatment;
2. Providing less remuneration or benefits to
(c) Government officials investigating a qualified disabled Ee due to his disability,
compliance with this Act shall be than the amount to which a non-disabled
provided relevant information on person performing the same work is
request; and entitled;

(d) The results of such examination are 3. Favoring a non-disabled Ee over a qualified
used only accordance with this Act. disabled Ee with respect to promotion,
(Sec. 33, R.A. No. 7277) training opportunities, study and
scholarship grants, solely on account of the
Discrimination on Employment latter’s disability;

This law prohibits any entity, whether public or 4. Re-assigning or transferring a disabled Ee
private, to discriminate against a qualified PWDs in to a job position he cannot perform by
regard to job application procedures, the hiring, reason of his disability;
promotion, or discharge of employees, employee
compensation, job training, and other terms, 5. Failing to select or administer in the
conditions, and privileges of employment. (Sec. 32, effective manner employment tests which
Ibid.) accurately reflect the skills, aptitude or
other factor of the disabled applicant or Ee
DISCRIMINATORY ACTS DURING that such test purports to measure, rather
PRE-EMPLOYMENT than the impaired sensory, manual or
speaking skills of such applicant or Ee, if
1. Limiting, segregating or classifying a any; and
disabled job applicant in such a manner
that adversely affects his work 6. Excluding disabled persons from
opportunitites; and membership in labor unions or similar
organizations. (Sec. 32, Ibid.)
2. Screening out disabled persons through
qualification standards, employment tests DISCRIMINATORY ACTS IN
or other selection criteria; DISMISSING AN EMPLOYEE

XPN: Said qualification standards are Dismissing or terminating the services of a disabled
BFOQ. Ee by reason of his disability unless the Er can prove
that he impairs the satisfactory performance of the
work involved to the prejudice of the business
entities. Provided, however, That the Er first sought
provide reasonable accommodations for disabled
persons. (Sec. 32(g), Ibid.)

U N IV E R S I T Y O F S A N T O T O M A S 46
2023 GOLDEN NOTES
 II. PRE-EMPLOYMENT

4. SOLO PARENTS (Sec. 7, R.A. No. 8972, as (7) Parent left solo or alone with the
amended by R.A. No. 11861) responsibility of parenthood due to
abandonment of spouse for at least one (1)
year;
Work Discrimination Prohibited

(8) Unmarried mother/father who has

No Er shall discriminate against any solo parent Ee
preferred to keep and rear her/his
with respect to terms and conditions of employment
child/children instead of having others
on account of his/her status. (Sec. 7, R.A. No. 8972)
care for them or give them up to a welfare
institution;
Solo Parent

(9) Any other person who solely provides

any individual who falls under any of the
parental care and support to a child or
following categories:
children; and

(1) A woman who gives birth as a result of rape

(10) Any family member who assumes
and other crimes against chastity even
the responsibility of head of family as a
without a final conviction of the offender.
result of the death, abandonment,
Provided, that the mother keeps and raises
disappearance or prolonged absence of the
the child;
parents or solo parent. (Sec. 3, Ibid.)

(2) Parent left solo or alone with the

NOTE: A change in the status or circumstance of the
responsibility of parenthood due to death
parent claiming benefits under Solo Parents
of spouse;
Welfare Act of 2000, such that he or she is no longer
left alone with the responsibility of parenthood,
(3) Parent left solo or alone with the
shall terminate his or her eligibility for these
responsibility of parenthood while the
benefits. (Sec. 3(11), Ibid.)
spouse is detained or is serving sentence
for a criminal conviction for at least one (1)
Flexible Work Schedule
year;

The employer shall provide for a flexible working

(4) Parent left solo or alone with the
schedule for solo parents provided that the same
responsibility of parenthood due to
shall not affect individual and company
physical and/or mental incapacity of
productivity. Provided, further, that any employer
spouse as certified by a public medical
may request exemption from the above
practitioner;
requirements from the DOLE on certain meritorious
grounds. (Sec. 6, Ibid.)
(5) Parent left solo or alone with the
responsibility of parenthood due to legal
Maternity Leave for Solo Parents
separation or de facto separation from
spouse for at least one (1) year, as long as
The amount of daily allowance is equivalent to
he/she is entrusted with the custody of the
100% of the member’s ADSC for a compensable
children;
period of 120 days for solo parents under R.A. No.
8972 or Solo Parents’ Welfare Act.
(6) Parent left solo or alone with the
responsibility of parenthood due to
declaration of nullity or annulment of
marriage as decreed by a court or by a
church as long as he/she is entrusted with
the custody of the children;
47
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FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
XPN: Otherwise limited by law, contract, and
III. EMPLOYMENT PROPER principles of fair play and justice.

Q: Little Hands Garment Company, an

unorganized manufacturer of children’s apparel
with around 1,000 workers, suffered losses for
A. MANAGEMENT PREROGATIVE the first time in history when its US and
European customers shifted their huge orders
to China and Bangladesh. The management
GR: Management prerogative is the right of the Er to informed its Ees that it could no longer afford to
regulate all aspects of employment, such as: provide transportation shuttle services.
Consequently, it announced that a normal fare
1. Freedom to prescribe work assignments; would be charged depending on the distance
2. Working methods; traveled by the workers availing of the service.
3. Processes to be followed;
4. Regulation regarding transfer of Ees; Was the Little Hands Garments Company within
5. Supervision of their work, lay-off and its rights to withdraw this benefit which it had
discipline; and unilaterally been providing its Ees? (2005 BAR)
6. Dismissal and recall of work. (Goya, Inc. v.
Goya, Inc. Ees Union-FFW, G.R. No. 170054, 21 A: YES. This is a management prerogative which is
Jan. 2013) not due any legal or contractual obligation. The facts
of the case do not state the circumstances through
NOTE: It presupposes the existence of an Er-Ee which the shuttle service may be considered as a
relationship. (Goya, Inc. v. Goya, Inc, Ees Union-FFW, benefit that ripened into a demandable right.
ibid)
There is no showing that the benefit has been
So long as the company’s prerogatives are exercised deliberately and consistently granted, i.e., with the
in good faith for the advancement of the Er’s interest Er’s full consciousness that despite its not being
and not for the purpose of defeating or bound by law or contract to grant it, it just the same
circumventing the rights of the Ees under special granted the benefit.
laws or under valid agreements, the SC will uphold
them. (San Miguel Brewery Sales Force Union v. Ople, Limitations on Management Prerogative
G.R. No. 53515, 08 Feb. 1989)
The exercise of managerial prerogative is not
An Er is free to regulate, according to his best unlimited. It is circumscribed by limitations found
discretion and best business judgement, all aspects in law, a CBA, or the general principles of fair play
of employment, from hiring to firing, except in cases and justice.
of unlawful discrimination or those which may be
provided by law. (Philippine Telegraph and The exercise of management prerogative is limited
Telephone Co. v. NLRC, G.R. No. 118978, 23 May 1997) such that:

The SOLE is duly mandated to equally protect and 1. The Er must be motivated by good faith;
respect not only the laborer or worker’s side but and
also the management and/or Er’s side. The law, in
protecting the rights of the laborer, authorizes 2. It should not be resorted to circumvent the
neither oppression nor self-destruction of the =Er. law or must not have been the result or
(Colgate Palmolive, Phils., Inc v. Ople, G.R. No. 73681, malicious or arbitrary actions. (MERALCO v.
30 June 1988) Quisumbing, G.R. No. 127598, 22 Feb. 2000)

U N IV E R S I T Y O F S A N T O T O M A S 48
2023 GOLDEN NOTES
 III. EMPLOYMENT PROPER
It is the inherent prerogative of an Er to transfer and exercise of its police power. (ALU-TUCP vs. NLRC, G.
reassign its Ees to meet the requirements of its R. No. 120450, 10 Feb. 1999)
business. Be that as it may, the prerogative of the
management to transfer its Ees must be exercised Ineluctably, the exercise of management
without grave abuse of discretion. The exercise of prerogatives is not absolute. The prerogatives
the prerogative should not defeat an Ees's right to accorded to management cannot defeat the very
security of tenure. The Er’s privilege to transfer its purpose for which labor laws exist – to balance the
Ees to different workstations cannot be used as a conflicting interests of labor and management, not
subterfuge to rid itself of an undesirable worker. to tilt the scale in favor of one over the other, but to
(Veterans Security Agency v. Vargas, G.R. No. 159293, guarantee that labor and management stand on
16 Dec. 2005) equal footing when bargaining in good faith with
each other.
The employee's right to security of tenure takes
precedence over the employer's management A line must be drawn between management
prerogative. Thus, an employer's management prerogatives regarding business operations per se
prerogative includes the right to terminate the and those which affect the rights of Ees. In treating
services of an employee, but this management the latter, management should see to it that its Ees
prerogative is limited by the Labor Code, which are at least properly informed of its decisions and
provides that the employer can terminate an modes of actions. Such management prerogative
employee only for a just cause or when authorized may be availed of without fear of any liability so long
by law. This limitation on management prerogative as it is exercised in good faith for the advancement
is because no less than the Constitution recognizes of the Er’s interest and not for the purpose of
and guarantees an employee’s right to security of defeating or circumventing the rights of Ees under
tenure. (Art. 279 [now 294], LC; Sec. 3, Art. XIII, 1987 special laws or valid agreement and are not
Constitution) exercised in a malicious, harsh, oppressive,
vindictive or wanton manner or out of malice or
Management prerogative is circumscribed by spite. (PAL v. NLRC, G.R. No. 85985, 13 Aug. 1993)
limitations found in:
NOTE: It must be established that the prerogative
1. Law; being invoked is clearly a managerial one.
2. CBA;
3. Employment contract; Criterion to guide the exercise of management
4. Employer policy or practice; and prerogative
5. General principles of fair play and justice.
The only criterion to guide the exercise of
Management prerogative is inferior to the management prerogative is that the policies, rules,
State’s police power and regulations on work-related activities of the
employees must always be fair and reasonable and
Management prerogatives are inferior to the State the corresponding penalties, when prescribed,
police power. Such prerogatives and the exercise commensurate to the offense involved and to the
thereof should be: degree of the infraction.

1. Without abuse of discretion; and The company's management prerogative shall be

2. Done in good faith and with due regard to exercised in good faith for the advancement of the
the rights of labor. employer's interest and not for the purpose of
defeating or circumventing the rights of the
The Er’s inherent right to discipline is, however, employees under special laws or under valid
subject to reasonable regulation by the State in the agreements.

49
U N IV E R S I T Y O F S A N T O T O M A S
FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
Q: Is withholding an Ee’s salary a valid exercise Airborne’s office however, he failed to comply
of management prerogative? and went on absence without leave instead, thus
there was no constructive dismissal. Is Airborne
A: NO. Any withholding of an Ee’s wages by an Er correct?
may only be allowed in the form of wage deductions
under the circumstances provided in Art. 113 of the A: NO. Under law, the period of temporary off-detail
LC: 1) The worker is insured; 2) For union dues; and for security guards must not exceed six (6) months.
3) In cases authorized by law or regulation issued Beyond this, a security guard’s floating status shall
by the SOLE. In the absence of the following be tantamount to constructive dismissal. Also, the
circumstances, withholding thereof is thus security guard must be assigned to a specific or
unlawful. (SHS Perforated Materials, Inc. v. Diaz, G.R. particular client. A general return-to-work order
185814, 13 Oct. 2010) does not suffice. Here, the series of letters requiring
Padilla to report to the head office does not suffice.
Q: May a MERALCO Ee invoke the remedy of writ Jurisprudence is consistent in its disapproval of
of habeas data available where his Er decides to general return-to-work orders as a justification for
transfer his workplace on the basis of copies of failure to timely render assignments to security
an anonymous letter posted therein, imputing to guards. (Padilla v. Airborne, G.R. No. 210080, 22 Nov.
his disloyalty to the company and calling for him 2017)
to leave, which imputation it investigated but
fails to inform him of the details thereof? 1. DISCIPLINE

A: NO. The writs of amparo and habeas data will not

Components to the Right to Discipline
issue to protect purely property or commercial
concerns nor when the grounds invoked in support
1. Right to discipline;
of the petitions therefore are vague or doubtful.
2. Right to dismiss;
Employment constitutes a property right under the
3. Right to determine who to punish;
context of the due process clause of the
4. Right to promulgate rules and regulations;
Constitution. The writ of habeas data directs the
5. Right to impose penalty (proportionality
issuance of the writ only against public officials or
rule);
Ees, or private individuals or entities engaged in the
6. Right to choose which penalty to impose;
gathering, collecting, or storing of data or
and
information regarding an aggrieved party’s person,
7. Right to impose heavier penalty than what
family or home; and that MERALCO (or its officers)
the company rules prescribe. (Chan)
is clearly not engaged in such activities. (MERALCO
v. Lim, G.R. No. 184769, 05 Oct. 2010)
Employer’s Right to Discipline their Employees

Q: Padilla was hired by Airborne as a security

The Er has the prerogative to instill discipline in his
guard. He allegedly rendered continuous service
Ees and to impose reasonable penalties, including
for 24 years, but he was relieved from his post
dismissal, on erring Ees pursuant to company rules
and was advised to wait for his re-assignment
and regulations. (San Miguel Corp. v. NLRC, G.R. No.
order. Later, he received a letter from Airborne
78277, 12 May 1989)
directing him to report for assignment. He called
Airborne’s office but was told that he had no
Company policies and regulations are, unless shown
assignment yet. After more than six (6) months
to be grossly oppressive or contrary to law,
not having been deployed or re-assigned,
generally binding and valid on the parties. (China
Padilla filed his Complaint for illegal dismissal
Banking Corp. v. Borromeo, G.R. No. 156515, 19 Oct.
against Airborne. Airborne argued that Padilla
2004)
was placed on floating status for only two (2)
months; and he was directed to report to

U N IV E R S I T Y O F S A N T O T O M A S 50
2023 GOLDEN NOTES
 III. EMPLOYMENT PROPER
Limitation on the Employer’s Power To Q: A, a flight attendant of XYZ Airlines for over
Discipline 17 years was dismissed for committing serious
misconduct by removing company property
While management has the prerogative to discipline without authorization, particularly a 1.5L of
its Ees and to impose appropriate penalties on bottled water and a couple of magazines. Was A
erring workers, pursuant to company rules and illegally dismissed?
regulations, however, such management
prerogative must be exercised in good faith for the A: YES. The company laid down the penalties for
advancement of the Er’s interest and not for the violation of its policies. However, the evaluation of
purpose of defeating or circumventing the rights of an Ee's infraction should be dealt with fairness and
the Ees under special laws and valid agreements. reason. Simply put, all surrounding circumstances
(PLDT v. Teves, G.R. No. 143511, 15 Nov. 2010) must be considered, and the penalty must be
commensurate to the violation committed by an Ee.
The attainment of a harmonious labor- Termination of the services of an Ee should be the
management relationship and the existing state Er's last resort especially when other disciplinary
policy of enlightening workers concerning their actions may be imposed, considering the Ee's long
rights as employees demand no less than the years of service in the company, devoting time,
observance of transparency in managerial moves effort and invaluable service in line with the Er's
affecting employees’ rights. (Philippine Airlines. Inc. goals and mission.
v. NLRC, et al., G.R. No. 85985, 13 Aug. 1993)
During A’s span of employment of 17 years, she did
Rule on Proportionality not commit any infraction or was ever sanctioned
except in the incident subject of the present
Infractions committed by an employee should merit controversy. To impose a penalty as grave as
only the corresponding penalty demanded by the dismissal for a first offense and considering the
circumstance. The penalty must be commensurate value of the property allegedly taken would be too
with the act, conduct or omission imputed to the harsh under the circumstances. Therefore, A was
employee. (Holcim Philippines, Inc. v. Obra G.R. No. illegally dismissed from service. (Salvacion A.
220998, 08 Aug. 2016.) Lamadrid v. Cathay Pacific Airways Limited And
Vivian Lo, G.R. No. 200658, 23 June 2021, as penned
In Sagales v. Rustan's Commercial Corporation (G.R. by J. Hernando)
NO. 166554, 27 Nov. 2008), the dismissal of a Chief
Cook who tried to take home a pack of squid heads, 2. TRANSFER OF EMPLOYEES
which were considered as scrap goods and usually
thrown away, was found to be excessive. The
Transfer
Supreme Court took into consideration the fact that
the Chief Cook had been employed by the company
a movement from one position to another which is
for 31 years already and the incident was his first
of equivalent rank, level or salary, without break in
offense. Besides, the value of the squid heads was a
service.
negligible sum of P50.00 and the company
practically lost nothing since the squid heads were
Demotion
considered scrap goods and usually thrown away.
Moreover, the ignominy he suffered when he was
It involves a situation where an employee is
imprisoned over the incident, and his preventive
relegated to a subordinate or less important
suspension for one (1) month was enough
position constituting a reduction to a lower grade or
punishment for his infraction.
rank, with a corresponding decrease in duties and
responsibilities, and usually accompanied by a
decrease in salary.

51
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 LABOR LAW AND SOCIAL LEGISLATION
Promotion (1) when the transfer is unreasonable,
inconvenient or prejudicial to the
The advancement from one position to another with employee;
an increase in duties and responsibilities as
authorized by law, and usually accompanied by an (2) when the transfer involves a demotion in
increase in salary. rank or diminution of salaries, benefits and
other privileges; and
Conditions for a valid exercise by the Employer
of its right to transfer Employees (3) when the employer performs a clear act of
discrimination, insensibility, or disdain
The transfer should: towards the employee, which forecloses
any choice by the latter except to forego his
1. Not be unreasonable, inconvenient, or continued employment.
prejudicial to the Ee; and
Q: May the employer exercise his right to
2. Not involve a demotion in rank, diminution transfer an employee and compel the latter to
in salaries, benefits and other privileges accept the same if said transfer is coupled with
concerning the transfer. or is in the nature of promotion?

Employer’s Right to Transfer and Reassign A: NO. There is no law that compels an Ee to accept
Employees promotion. Promotion is in the nature of a gift or a
reward which a person has a right to refuse. When
In the pursuit of its legitimate business interests, an Ee refused to accept his promotion, he was
especially during adverse business conditions, exercising his right and cannot be punished for it.
management has the prerogative to transfer or While it may be true that the right to transfer or
assign Ees from one office or area of operation to reassign an Ee is an Er’s exclusive right and the
another provided there is no demotion in rank or prerogative of management, such right is not
diminution of salary, benefits and other privileges absolute. (Dosch v. NLRC and Northwest Airlines, G.R.
and the action is not motivated by discrimination, No. 51182, 05 July 1983)
bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is Q: Manalo is a faculty member of the
inherent in the right of Ers to control and manage Accountancy Department of Ateneo de Naga
their enterprises effectively. University's College of Commerce and also the
part-time Manager of the Ateneo de Naga Multi-
NOTE: The right of Ees to security of tenure does Purpose Cooperative. The Grievance Committee
not give them vested rights to their positions to the of the University found her in “fraud in issuance
extent of depriving management of its prerogative of official receipts, collection of cash without
to change their assignments or to transfer them. documented remittance to the cooperative, use
(Endico v. Quantum Foods Distribution Center, G.R. of inappropriate forms of documents cash
No. 161615, 30 Jan. 2009) receipts” and, thus, recommended her
dismissal.” Instead of dismissing Manalo, the
When transfer is deemed to be constructive University President transferred Manalo to
dismissal teach Economics in another Department. Was
Manalo constructively dismissed?
A transfer is deemed to be constructive dismissal
when three conditions concur: A: NO. Transferring Ees, to the extent that it is done
fairly and in good faith, is a valid exercise of
management prerogative and will not, in and of
itself, sustain a charge of constructive dismissal. In

U N IV E R S I T Y O F S A N T O T O M A S 52
2023 GOLDEN NOTES
 III. EMPLOYMENT PROPER
this case, the acts committed by Manalo run afoul meet the sales quota assigned to each of them
from the principles of integrity and objectivity constitutes a just cause for their dismissal,
governing ethics and education in the accountancy regardless of the permanent or probationary status
profession as mandated by the International of their employment.
Federation of Accountants. Relevant as it is, ethical
behavior takes on even greater significance in the Likewise, failure to observe prescribed standards of
education and training of individuals who are work or to fulfill reasonable work assignments due
prospective members of the profession. to inefficiency may constitute just cause for
Professionals who concurrently take on the role of dismissal. Such inefficiency is understood to mean
educators act as gatekeepers to the esteemed ranks failure to attain work goals or work quotas, either
of a profession or as channels of skills and by failing to complete the same within the allotted
knowledge. (Manalo v. Ateneo De Naga University, et reasonable period, or by producing unsatisfactory
al., G.R. No. 185058, 09 Nov. 2015) results.

Burden of Proving that the Transfer was This management prerogative of requiring
Reasonable standards may be availed of so long as they are
exercised in good faith for the advancement of the
The Er must be able to show that the transfer is not Er’s interest. (Leonardo v. NLRC, G.R. Nos. 125303 &
unreasonable, inconvenient, or prejudicial to the Ee; 126937, 16 June 2000)
nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other 4. BONUS
benefits. Should the Er fail to overcome this burden
of proof, the Ee’s transfer shall be tantamount to
Bonus
constructive dismissal. (Blue Dairy Corporation v.
NLRC, G.R. No. 129843, 14 Sept. 1999)
Refers to the payment in excess of regular or
guaranteed wages. It is granted to an Ee for his
3. PRODUCTIVITY STANDARD tangible contribution to the success of the Er’s
business, without which the Er may not realize
The employer has the prerogative to prescribe the bigger profits. The contribution may be in the form
standards of productivity which may be used as: of an Ee’s commitment to the job, his industry and
loyalty. (Metro Transit Org., Inc. v. NLRC, G.R. No.
(1) Incentive scheme - Employees who 116008, 11 July 1995)
surpass the productivity standards or
quota are usually given additional benefits; GR: The payment of bonus is a management
and function, not a demandable and enforceable
obligation, which cannot be enforced upon the Er
(2) Disciplinary scheme - Employees may be who may not be obliged to assume the onerous
sanctioned or dismissed for failure to meet burden of granting bonuses or other benefits aside
the productivity standards or quota. (Chan) from the Ee’s basic salaries or wages. (Philippine
National Construction Corporation v. NLRC, G.R. No.
Q: May an employer impose productivity 128345, 18 May 1999)
standards for its workers?
XPNs: Given for a long period of time, provided that:
A: YES. An Er is entitled to impose productivity
standards for its workers. In fact, non-compliance a. Consistent and deliberate – Er continued
may be visited with a penalty even more severe than giving benefit without any condition imposed
demotion. The practice of a company in laying off for its payment;
workers because they failed to make the work quota
has been recognized in this jurisdiction. Failure to b. Er knew he was not required to give benefit;
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 LABOR LAW AND SOCIAL LEGISLATION
c. Nature of benefit is not dependent on profit; Elimination or diminution of benefits may
constitute constructive dismissal or indicate
d. Made part of the wage or compensation agreed demotion.
and stated in the employment contract;
Constructive dismissal is an involuntary resignation
e. It was promised to be given without any resorted to when continued employment is
conditions imposed for its payment in which rendered impossible, unreasonable or unlikely;
case it is deemed part of the wage; and when there is a demotion in rank and/or a
diminution in pay; or when a clear discrimination,
f. It has ripened into practice. (Marcos v. NLRC, insensibility or disdain by an Er becomes
G.R. No. 111744, 08 Sept. 1995) unbearable to the Ee. (Phil. Wireless Inc. v. NLRC, G.R.
No. 112963, 20 July 1999).
NOTE: If one enters into a contract of employment
under an agreement that he shall be paid a certain Q: The projected bonus for the Ees of Suerte Co.
salary by the week or some other stated period and, was 50% of their monthly compensation.
in addition, a bonus, in case he serves for a specified Unfortunately, due to the slump in the business,
length of time, there is no reason for refusing to the president reduced the bonus to 5% of their
enforce the promise to pay the bonus, if the compensation. Can the company unilaterally
employee has served during the stipulated time, on reduce the amount of bonus? (2002 BAR)
the ground that it was a promise of a mere gratuity.
(Ibid) A: YES. The granting of a bonus is a management
prerogative, something given in addition to what is
Bonus Treated as Not Part of Wages ordinarily received by or strictly due the recipient.
An Er cannot be forced to distribute bonuses when
Bonus is not considered part of wages if it is paid it can no longer afford to pay. To hold otherwise
only upon realization of profits or amount of would be to penalize the Er for his past generosity.
production or output. (Atok Big Wedge Mining Co., (Producers Bank of the Phil. v. NLRC, supra)
Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No.
L-5276, 03 Mar. 1953) 5. CHANGE OF WORKING HOURS

Where the bonus is not payable to all but only to

Er’s Right to Change Working Hours
some Ees and only when their labor becomes more
efficient or more productive, it is only an
The working hours may be changed, at the
inducement for efficiency, a prize therefore, not a
discretion of the company, should such change be
part of the wage. (Poquiz, 2012)
necessary for its operations, and that Ees shall
observe such rules as have been laid down by the
Heacock Ruling
company. (Interphil Laboratories Union-FFW v.
Interphil Laboratories, Inc., G.R. No. 142824, 19 Dec.
“Even if a bonus is NOT demandable for not forming
2001)
part of the wage, salary, or compensation of the
employee, the same may nevertheless be granted on
Management retains the prerogative, whenever
equitable considerations” (Heacock Co. v. NLRC, G.R.
exigencies of the service so require, to change the
No. L-11135, 30 April, 1958)
working hours of its Ees. The exercise of
management prerogative, however, is not absolute
as it must be exercised in good faith and with due
regard to the rights of labor. (Royal Plant Workers
Union v. Coca-Cola Bottlers Phil., Inc., G.R. No.
198783, 15 Apr. 2013)

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 III. EMPLOYMENT PROPER
Q: May the normal hours fixed in Art. 83 of the rights of the Ees under special laws or under valid
LC be reduced by the Er? Explain. agreements, this court will uphold such exercise.
(Sime Darby Pilipinas v. NLRC, G.R. No. 119205, 15
A: YES. Art. 83 of the LC provides that the normal Apr. 1998)
hours of work of an Ee shall not exceed eight (8)
hours a day. This implies that the Er, in the exercise Flexible Working Arrangement (FWA)
of its management prerogatives, may schedule a
work shift consisting of less than eight (8) hours. It is anchored on a voluntary basis and conditions
And following the principle of “a fair day’s wage for mutually acceptable to both the employer and the
a fair day’s labor,” the Er is not obliged to pay an Ee, employees.
working for less than eight (8) hours a day, the
wages due for eight (8) hours. Types of Flexible Working Arrangements

Nonetheless, if by voluntary practice or policy, the Type Definition

Er, for a considerable period of time, has been The normal workweek
paying his Ees’ wages due for eight (8) hours work is reduced to less than
although the work shift is less than eight (8) hours six (6) days but the
(e.g., seven hours) it cannot later on increase the total number of work-
working hours without an increase in the pay of the Compressed Work hours is still 48 hours.
Ees affected. An Er is not allowed to withdraw a Week (CWW) The normal workday is
benefit which he has voluntarily given. increased to more than
eight (8) hours but not
Q: Sime Darby Pilipinas issued a memorandum to exceed twelve (12)
implementing a new work schedule. It hours.
eliminated the 30-minute paid “on call” lunch Normal work days per
break of its monthly salaried Ees and instead week are reduced but
provided for a 10-minute break time and one Reduction of
should not last for
hour lunch break. The Ees felt adversely affected Workdays
more than six (6)
by the memorandum and filed before the LA a months.
complaint for unfair labor practice. Ees are rotated or
alternately provided
The LA dismissed the complaint on the ground Rotation of Workers
work within the
that the change in the work schedule constituted workweek.
a valid exercise of management prerogative. Ees are required to go
on leave for several
Is changing the work schedule of the Ees a valid Forced Leave
days or weeks utilizing
exercise of management prerogative? their leave credits
Work schedule is not
A: YES. The right to fix the work schedules of the Ee
Broken-time continuous but the
rests principally on their Er. The petitioner, as the
Schedule work-hours within the
Er, cites as reason for the adjustment the efficient
day or week remain.
conduct of its business operations and improved
One where the ees
production. Management retains the prerogative,
agree to avail the
whenever exigencies of the service so require, to
holidays at some other
change the working hours its Ees. Flexi-holidays
days, provided there is
no diminution of
So long as such prerogative is exercised in good faith
existing benefits.
for the advancement of the Er’s interest and not for
See page 69-71 for further discussion on FWAs.
the purpose of defeating and circumventing the

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 LABOR LAW AND SOCIAL LEGISLATION
Work from Home (WFH) or Telecommuting 2. That there is a factual basis for believing that
Work Arrangement all or substantially all persons meeting the
qualification would be unable to properly
Establishments are highly encouraged to adopt a perform the duties of the job. (Star Paper v.
WFH or telecommuting arrangement when feasible. Simbol, G.R. No. 164774, 12 Apr. 2006)
Ees are provided with adequate support to perform
the assigned task or job. (Sec. 3, Labor Advisory No. NOTE: BFOQ is related to the Reasonable Business
17-B, s. 2020) Necessity Rule. There must be a business necessity
for ERs to require certain attributes possessed by a
Alternative Work Schemes person in relation to the job it is to be done or
performed. Otherwise, if you are discriminating
The Alternative Work Schemes/Flexible Work against people and the standard qualification is not
Arrangements are temporary in nature and shall be at all relevant to the job that is to be performed then
adopted for as long as the Public Health Crisis exists. one will be guilty of discrimination.
(Sec. 4, Ibid.)
The petitioner is only a non-teaching personnel; her
Entitlement of Separated Employees interaction with SSCW’s students is very limited. It
is thus quite impossible that her pregnancy out of
Ees who are separated from unemployment due to wedlock caused such a grave scandal, as claimed by
authorized causes shall be entitled to the final pay SSCW, as to warrant her dismissal.
without prejudice to other benefits provided for by
the law, company policy, or CBAs. (Sec. 6, Labor SSCW, as Er, undeniably has the right to discipline
Advisory No. 17, s. 2020) its Ees and, if need be, dismiss them if there is a valid
cause to do so. However, as already explained, there
6. BONA FIDE OCCUPATIONAL QUALIFICATIONS is no cause to dismiss the petitioner. Her conduct is
not considered by law as disgraceful or immoral.
Further, the respondents themselves have admitted
Bona Fide Occupational Qualification Rule
that SSCW, at the time of the controversy, does not
(BFOQ)
have any policy or rule against an Ee who engages
in pre-marital sexual relations and conceives a child
Where the job itself necessarily requires a
as a result thereof. There being no valid basis in law
particular question qualification, then the job
or even in SSCW’s policy and rules, SSCW’s dismissal
applicant or worker who does not possess it may be
of the petitioner is despotic and arbitrary and, thus,
disqualified on that basis. This will not be unlawful
not a valid exercise of management prerogative.
discrimination. (Azucena, 2016)
(Leus v. St. Scholastica’s College Westgrove, G.R. No.
187226, 28 Jan. 2015)
E.g., One whose job is to preach the teachings of a
religious sect must himself/herself be a member of
Q: Fil-Aire Aviation Company (FIL-AIRE) is a new
that sect; or where the job itself necessarily requires
airline company recruiting flight attendants for
a male, then the female is disqualified as when the
its domestic flights. It requires that the applicant
job is to haul or saw logs in logging operations.
be single, not more than 24 years old, attractive,
and familiar with three major Visayan dialects,
To justify a BFOQ, the Er must prove two factors:
viz: Ilongo, Cebuano, and Waray. Lourdes, 23
years old, was accepted as she possessed all the
1. That the employment qualification is
qualifications.
reasonably related to the essential operation
of the job involved; and
After passing the probationary period, Lourdes
disclosed that she got married when she was 18
years old, but the marriage was already in the

U N IV E R S I T Y O F S A N T O T O M A S 56
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 III. EMPLOYMENT PROPER
process of being annulled on the ground that her enforcement in the interest of fair play. (Duncan v.
husband was afflicted with a sexually Glaxo, G.R. No. 162994, 17 Sept. 2004)
transmissible disease at the time of the
celebration of their marriage. As a result of this 8. POST-EMPLOYMENT RESTRICTIONS
revelation, Lourdes was not hired as a regular
flight attendant. Consequently, she filed a
Types of Restrictive Covenants
complaint against FIL-AIRE, alleging that the
pre-employment qualifications violate relevant
1. Non-compete clause
provisions of the Labor Code and are against
When the Ee is prevented from directly
public policy. Is the contention of Lourdes
competing or working for a competitor of
tenable? Discuss fully. (2012, 1995 BAR)
his former Er, or when the Ee is prevented
from setting up a competing business.
A: YES. The contention of Lourdes is tenable. When
she was not hired as a regular flight attendant by
2. Non-solicitation clause
FIL-AIRE because she disclosed that she got married
When a duty is imposed on the Ee not to
when she was 18 years old, the airline company
approach his former Er’s customers or
violated the provision of the Labor Code, which
prospective customers, or when the Ee is
states:
prevented from taking customers/clients
of his former Er.
“It shall be unlawful for an employer to require as a
condition of employment or continuation of
3. Non-poaching clause
employment that a woman employee shall not get
When the Ee is prevented from enticing his
married, or to stipulate expressly or tacitly that
former Er’s staff away from the business,
upon getting married, a woman employee shall be
the aim is to prevent the Ee from taking key
deemed resigned or separated, or to actually
Ees with him to his new employment or
dismiss, discharge, discriminate or otherwise
business.
prejudice a woman employee merely by reason of
her marriage."
Factors to consider to enforce a restrictive
covenant
7. MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYERS 1. Whether the covenant protects a legitimate
business interest of the Er;
The prohibition against personal or marital
relationships with Ees of competitor companies 2. Whether the covenant creates an undue burden
upon Glaxo’s Ees is reasonable under the on the Ee;
circumstances because relationships of that nature
might compromise the interests of the company. In 3. Whether the covenant is injurious to the public
laying down the assailed company policy, Glaxo only welfare;
aims to protect its interests against the possibility
that a competitor company will gain access to its 4. Whether the time and territorial limitations
secrets and procedures. contained in the covenant are reasonable; and

While our laws endeavor to give life to the 5. Whether the restraint is reasonable from the
constitutional policy on social justice and the standpoint of public policy. (Rivera v. Solidbank
protection of labor, it does not mean that every Corp., G.R. No. 163269, 19 Apr. 2006)
labor dispute will be decided in favor of the
workers. The law also recognizes that management
has rights which are also entitled to respect and

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 LABOR LAW AND SOCIAL LEGISLATION
Non-Involvement Clause post-retirement competitive employment in
pension and retirement plans either incorporated in
A non-involvement clause is not necessarily void for employment contracts or in CBAs between the Er
being in restraint of trade if there are reasonable and the union of Ees, or separate from said contracts
limitations as to time, trade, and place. It was also or CBAs which provide that an Ee who accepts post
stated in this case that the Labor Law validity of a retirement competitive employment will forfeit
non-involvement clause depends upon the nature of retirement and other benefits or will be obliged to
work of the subject Ee. (Tiu v. Platinum Plans, Phils., reinstitute the same to the Er.
Inc., G.R. No. 163512, 28 Feb. 2007)
The strong weight of authority is that forfeitures for
Q: TRUE or FALSE. Answer TRUE if the statement engaging in subsequent competitive employment
is true, or FALSE if the statement is false. Explain included in pension and retirement plans are valid
your answer in not more than two (2) sentences. even though unrestricted in time or geography. A
post-retirement competitive employment
An employment contract prohibiting restriction is designed to protect the Er against
employment in a competing company within competition by former Ee who may retire and
one year from separation is valid. (2009 BAR) obtain retirement or pension benefits and, at the
same time, engage in competitive employment.
A: TRUE. An employment contract prohibiting (Rivera v. Solidbank Corp., supra)
employment in a competing company within a
reasonable period of one year from separation is
valid. The employer has the right to guard its trade B. LABOR STANDARDS
secrets, manufacturing formulas, marketing
strategies, and other confidential programs and
information.
1. CONDITIONS OF EMPLOYMENT
Q: Genesis Fulgencio had been working for
Solidbank Corporation since 1977. He later on a) COVERAGE
applied for retirement. Solidbank required
Genesis to sign an undated Undertaking where GR: Title I, Book III of the LC deals with hours of
he promised that “he will not seek employment work, weekly rest periods, holidays, service
with a competitor bank or financial institution incentive leaves and service charges. It covers all
within one (1) year from 28 Feb. 1995, and that Ees in all establishments, whether for profit or not.
any breach of the Undertaking or the provisions (Art. 82, LC)
of the Release, Waiver and Quitclaim would
entitle Solidbank to a cause of action against him XPNs: (G-F-M-O-M-P-W-D)
before the appropriate courts of law.” Equitable
Banking Corporation (Equitable) employed 1. Government Ees;
Genesis. 2. Field personnel;
3. Managerial Ees;
Is the post-retirement employment ban 4. Officers and members of the managerial staff;
incorporated in the Undertaking which Genesis 5. Members of the family of the Er who are
executed upon his retirement unreasonable, dependent on him for support;
oppressive, hence, contrary to public policy? 6. Persons in the personal service of another; and
7. Workers paid by results; (Secs. 1 and 2, Rule I,
A: NO. There is a distinction between restrictive Book III, IRR)
covenants barring an Ee to accept a post- 8. Domestic helpers.
employment competitive employment or restraint
on trade in employment contracts and restraints on

U N IV E R S I T Y O F S A N T O T O M A S 58
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 III. EMPLOYMENT PROPER
The aforementioned Ees are not entitled to rank and file Ees. (PMTI-ULGWF v. Ferrer-Calleja,
overtime pay, premium pay for rest days and G.R. No. 85915, 17 Jan. 1990)
holidays, night shift differential pay, holiday pay,
service incentive leave, and service charges. 1. Their primary duty consists of the
(Poquiz, 2012) management of the establishment in which
they are employed or of a department or
Q: Mrs. B, the personal cook in the household of subdivision thereof;
X, filed a monetary claim against her employer,
X, for denying her service incentive leave pay. X 2. They customarily and regularly direct the
argued that Mrs. B did not avail of any service work of two or more Ees therein; and
incentive leave at the end of her one (1) year of
service and hence, not entitled to the said 3. They have the authority to hire or fire Ees of
monetary claim. Assuming that Mrs. B is instead lower rank; or their suggestions and
a clerk in X's company with at least 30 regular recommendations as to hiring and firing and
employees, will her monetary claim prosper? as to the promotion or any other change of
Explain. (2019 BAR) status of other Ees, are given particular weight.
(Sec. 2(b), Rule I, Book III, IRR)
A: YES. The money claim will prosper. A clerk is not
one of those exempt employees under Art. 82 of the They are employed as such by virtue of their special
Labor Code. It shall apply to employees in all training or expertise, experience or knowledge and
establishments and undertakings whether for profit for positions which require the exercise of
or not, but not to government employees, independent judgment and discretion. They are not
managerial employees, field personnel, members of subject to the rigid observance of regular office
the family of the employer who are dependent on hours, as the true worth of their services do not
him for support, domestic helpers, persons in the depend so much on the time they spend in office, but
personal service of another, and workers who are more on the results of their accomplishments. For
paid by results as determined by the SOLE in these types of workers, it is not feasible to provide
appropriate regulations. (Art. 82, LC) fixed hourly rate of pay or maximum hours of labor.
(UPSU v. Laguesma, G.R. No. 122226, 25 Mar. 1998)
Government Employees
Officers or Members of Managerial Staff
The terms and conditions of their employment are
governed by the Civil Service Law. 1. Their primary duty consists of the
performance of work directly related to
In case of GOCCs with original charters, terms and management policies of their Er;
conditions of employment may be governed by such
legislated charters. Whereas, GOCCs without 2. They customarily and regularly exercise
original charters and created under the Corporation discretion and independent judgment;
Code are governed by the LC. (Poquiz, 2012)
3. They regularly and directly assist a proprietor
Managerial Employees or a managerial Ee whose primary duty
consists of the management of the
A managerial Ee is one who is vested with powers establishment in which he is employed or
or prerogatives to lay down or execute management subdivision thereof; or execute under general
policies and/or to hire, transfer, suspend, lay off, supervision work along specialized or
recall, discharge, assign or discipline Ees, or to technical lines requiring special training,
effectively recommend such managerial actions. All experience, or knowledge; or execute, under
Ees not falling within this definition are considered general supervision, special assignments, and
tasks; and

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 LABOR LAW AND SOCIAL LEGISLATION
4. They do not devote more than 20% of their As to inclusion of supervisors
hours worked in a work week to activities
Supervisors are
which are not directly and closely related to
members of the Supervisors are not
the performance of the work described above.
managerial staff. In managerial Ees under
(Sec. 2(c), Rule I, Book III, IRR)
effect, supervisor is a Book V. (Azucena,
manager for purposes 2016)
Officers and members of a managerial staff (such as
of Book III.
project engineers) are considered managerial Ees
for they customarily and regularly exercise
discretion and independent judgment, that is, their Domestic Servants or Persons in the Personal
powers are not subject to evaluation, review and Service of Another
final action by the department heads and other
higher executives of the company. (Franklin Baker These are those who:
Co. of the Philippines v. Trajano, G.R. No. 75039, 28
Jan. 1988) a. Perform such services in the Er's home which
are usually necessary or desirable for the
Test of Supervisory or Managerial Status maintenance and enjoyment thereof; or

It depends on whether a person possesses authority b. Minister to the personal comfort, convenience,
that is not merely routinary or clerical in nature but or safety of the Er as well as the members of
one that requires use of independent judgement. his Er's household. (Sec. 2(d), Rule I, Book III,
IRR)
Managerial Employees under Art. 82(2) vs. Art.
212(m) NOTE: They are not covered by this Title because
terms and conditions of employment are governed
Art. 82(2), Book III, Art. 212(m), Book V, by the provisions of R.A. No. 10361, otherwise
Labor Standards Labor Relations known as the Batas Kasambahay or Domestic
As to definition Workers Act.

Those whose primary A laundrywoman in staff houses of a company or

Vested with the
duty consists of the within the premises of the business of the Er, not
powers or prerogative
management of the actually serving the family of the Er, is a regular Ee.
to lay down and
establishment in which She is not included in the definition of domestic
execute management
they are employed or servants. (Apex Mining Co. Inc. v. NLRC, G.R. No.
policies, and/or to hire,
of a department or 94951, 22 Apr. 1991)
transfer, suspend, lay-
subdivision thereof,
off, recall, discharge,
and to the other Field Personnel
assign, or discipline
officers or members of
Ees.
the managerial staff. Field personnel refers to non-agricultural Ees who:

As to application
1. Regularly perform their duties away from the
principal place of business or branch office of
Used only for purposes
Used only for purposes the Er; and
of Book V (i.e., forming,
of Book III (i.e.,
joining and assisting of
working conditions, 2. Whose actual hours of work in the field cannot
unions, certification
rest periods, and be determined with reasonable certainty. (Sec.
election, and, collective
benefits) 2(d), Rule I, Book III, IRR)
bargaining)

U N IV E R S I T Y O F S A N T O T O M A S 60
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 III. EMPLOYMENT PROPER
They are exempted from the coverage due to the Members of the Family
nature of their functions which requires
performance of service away from the principal They are exempted from the coverage, for the
place of business. Hence, they are free from the support given by the Er may exceed the benefit for
personal supervision of the Er and the latter cannot which an Ee is entitled under appropriate labor
determine with reasonable certainty the actual provisions. To cover them under Art. 82 may create
number of hours of work expended for the Er's labor problems that would eventually break-up the
interest. family, which is the evil sought to be prevented.
(Poquiz, 2012)
The definition of a "field personnel" is not merely
concerned with the location where the Ee regularly Workers Paid by Results
performs his duties but also with the fact that the
Ee’s performance is unsupervised by the Er. In There are two categories of Ees paid by results:
order to conclude whether an Ee is a field Ee, it is
also necessary to ascertain if actual hours of work in (1) Those whose time and performance are
the field can be determined with reasonable supervised by the Er; and
certainty by the Er. In so doing, an inquiry must be
made as to whether or not the Ee’s time and NOTE: Here, there is an element of control
performance are constantly supervised by the Er. and supervision over the manner as to how
(Autobus Transport Systems Inc. v. Bautista, G.R. No. the work is to be performed. A piece-rate
156367, 16 May 2005) worker belongs to this category especially
if he performs his work in the company
e.g., Outside sales personnel, agents on commission premises.
basis, or insurance field agents (San Miguel Brewery,
Inc. v. Democratic Labor Union, G.R. No. L-18353, 31 (2) Those whose time and performance are
July 1963); meter readers, medical representatives. unsupervised.
(Duka, 2016)
NOTE: Here, the Er control is over the
Rule in case of Drivers/Bus Conductors result of the work. Workers on “pakyao”
and “takay” basis belong to this group.
It is of judicial notice that along the routes that are (Lambo v. NLRC, G.R. No. 111042, 26 Oct.
plied by these bus companies, there are its 1999)
inspectors assigned at strategic places who board
the bus and inspect the passengers, the punched Payment of this type of worker is determined by the
tickets, and the conductor's reports. There is also results of the work performed or the number of
the mandatory once-a-week car barn or shop day, units produced, not the number of hours used in the
where the bus is regularly checked as to its completion of the job, or the time spent in
mechanical, electrical, and hydraulic aspects, production. (Poquiz, 2012)
whether or not there are problems thereon as
reported by the driver and/or conductor. They too, Tailors and similar workers hired in the tailoring
must be at specific places at specified times, as they establishment, although paid weekly wages on
generally observe prompt departure and arrival piece-work basis, are Ees and not independent
from their point of origin to their point of contractors, and accordingly, as regular Ees paid on
destination. In each and every depot, there is always piece-rate basis, they are not entitled to overtime
the dispatcher whose function is precisely to see to pay, holiday pay, premium pay for holiday/rest day,
it that the bus and its crew leave the premises at and service incentive leave pay. (Villuga v. NLRC,
specific times and arrive at the estimated proper G.R. No. 75038, 23 Aug. 1993)
time. He cannot be considered field personnel.
(Autobus Transport System, Inc. v. Bautista, supra)

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An Ee who is engaged on a task or contract basis, Rationale of the eight (8)-Hour Labor
purely commission basis, or those paid by results, is
not automatically excluded by that fact alone. To be 1. To safeguard the health and welfare of the
excluded, the Ee must also fall under the laborer;
classification of field personnel.
2. To minimize unemployment by utilizing
b) HOURS OF WORK different shifts; (Manila Terminal Co., Inc. v.
CIR, G.R. No. L-4148, 16 July 1952) and
(1) NORMAL HOURS OF WORK AND HOURS
WORKED 3. To afford the Ees adequate time to lead richer
and more fruitful, meaningful lives and to be
GR: The normal hours of work of any Ee shall not able to participate intelligently in public
exceed eight (8) hours a day. (Art. 83, LC) concerns.

NOTE: There is no hard limit on the maximum hours Normal hours of work may be shortened or
of work that may be rendered by an Ee. However, compressed. Neither does it follow that a person
work rendered beyond the eight-hour limit would who does not observe normal hours of work cannot
not be considered normal. It would be overtime, and be deemed an Ee.
thus subject to additional pay to entitled Ees.
In Cosmopolitan Funeral Homes, Inc. v. Maalat (G.R.
XPNs: No. 86693, 02 July 1990), the Er similarly denied the
existence of an Er-Ee relationship, as the claimant
1. Health personnel – include resident according to it, was a "supervisor on commission
physicians, nurses, nutritionists, dietitians, basis" who did not observe normal hours of work.
pharmacists, social workers, laboratory The SC declared that there was an Er-Ee
technicians, paramedical technicians, relationship, noting that "the supervisor, although
psychologists, midwives, attendants and all compensated on a commission basis, is exempt from
other hospital or clinic personnel. (Art. 83, the observance of normal hours of work for his
LC); and compensation is measured by the number of sales
he makes." (Lazaro v. SSS, G.R. No. 138254, 30 July
2. Compressed workweek (CWW) – an 2004)
alternative arrangement whereby the normal
workweek is reduced to less than six (6) days The eight-hour work requirement does not,
but the total number of normal work hours however, preclude the Er in the exercise of its
per week shall remain at forty-eight (48) management prerogatives to reduce the number of
hours. The normal workday is increased to working hours, provided that there is no diminution
more than eight (8) hours without of existing benefits. (Poquiz, 2012)
corresponding overtime premium. (D.O. No.
02-04, s. 2004) The right to fix the work schedules of the Ee rests
principally on their Er. (Sime Darby Pilipinas, Inc. v.
NOTE: Department Orders providing for maximum NLRC, supra)
hours of work for bus drivers, movie workers, sea
farers, where there is a compressed work week Management is free to regulate, according to its own
arrangement in place, and children Ees are also discretion and judgment, all aspects of employment,
subjected to a maximum number of work hours per including hiring, work assignments, working
day. methods, time, place and manner of work, processes
to be followed, supervision of workers, working
regulations, transfer of Ees, work supervision, layoff
of workers and discipline, dismissal, and recall of

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workers. (Manila Jockey Club Ees Labor Union v. When Hours Worked are Compensable
Manila Jockey Club, Inc., G.R. No. 167760, 07 Mar.
2007) 1. Ee is required to be on duty or to be at a
prescribed workplace;
Work day
2. Ee is suffered or permitted to work;
Work day is the 24-hour period which commences
from the time the Ee regularly starts to work. 3. Rest periods of short duration during working
hours which shall not be more than 20
Illustration: If the worker starts to work at 8 am minutes; and
today, the work day is from 8 am today up to 8 am
tomorrow. (Azucena, 2016) 4. Meal periods of less than 20 minutes. (Sec. 7,
Rule I, Book III, IRR)
Part-Time Work
NOTE: Travel time, when beneficial to the Er, is
It is not prohibited to have normal hours of work of compensable. (Rada v. NLRC, G.R. No. 96078, 09 Jan.
less than eight (8) hours a day. What the law 1992)
regulates is work hours exceeding eight (8) – it
prescribes the maximu m but not the minimum. Principles in Determining Hours Worked

NOTE: Under Art. 124, as amended by R.A. No. 6727, 1. All hours which the Ee is required to give to his
wage proportionate to part-time work is Er regardless of whether or not such hours are
recognized. The wage and benefits of a part-time spent in productive labor or involve physical
worker are in proportion to the number of hours or mental exertion.
worked. E.g., If an Ee earns P300.00 for an eight-
hour work, he shall then get P150.00 for work done 2. Rest period is excluded from hours worked,
in four (4) hours. even if Ee does not leave his workplace, it
being enough that:
Broken Hours
a. He stops working;
Minimum normal eight (8) working hours fixed by b. May rest completely; or
law need not be continuous to constitute the legal c. May leave his workplace, to go
working day. It may mean broken hours of say, 4 elsewhere, whether within or outside
hours in the morning and 4 hours in the evening or the premises of the workplace.
variation thereof provided the total of 8 hours is
accomplished within the work day. (Chan, 2017) 3. All time spent for work is considered hours
worked if:
Hours Worked
a. The work performed was necessary;
Working time is one during which an Ee is actually
working. It may include an instance when an Ee is b. If it benefited the Er; or
not actually working but he is required to be present
in the Er’s premises. Thus, the fact that he is c. The Ee could not abandon his work at
required to be present although not actually doing the end of his normal working hours
any work, is still deemed working time. (Poquiz, because he had no replacement;
2012)
d. Provided, the work was with the
knowledge of his Er or immediate
supervisor.

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4. The time during which an Ee is inactive by main office providing customers information
reason of interruptions in his work beyond his technology assistance. On Saturdays, however,
control shall be considered working time: the company requires him to keep his cellular
phone open from 8:00 A.M. to 5:00 P.M. so that
1. If the imminence of the resumption of the Management could contact him in case of
the work requires the Ees presence at heavy workload or emergency problems
the place of work; or needing his expertise.

2. If the interval is too brief to be utilized May said hours on Saturdays be considered
effectively and gainfully in the Ees own compensable working hours “while on call”? If
interest. (Sec. 4, Rule I, Book III, IRR, LC) so, should said compensation be reported to
the Social Security System (SSS)? (2004 BAR)
Q: Can the number of hours of work be reduced
by an Er? A: YES. Said hours on Saturdays should be
considered as compensable working hours "while
A: YES. However, financial losses must be shown on call." Under the IRR of the LC, an employee who
before a company can validly opt to reduce the work is not required to leave word at his home or with
hours of its Ees because the Ees would suffer a company officials as to where he may be reached is
reduction in pay if their work hours are unilaterally not working while on call. But in the question, Gil
reduced by the Er. (Linton Commercial Co., Inc. v. Bates was required to keep his cell phone open
Heller, G.R. No. 163147, 10 Oct. 2007) from 8:00 A.M. to 5:00 P.M. Therefore, Bates should
be considered as working while on call if he cannot
WAITING TIME use effectively and gainfully for his own purpose
the time from 8:00 A.M. to 5:00 P.M. on Saturdays
It shall be considered as working time if: when he is required to keep his cellphone open.

1. Waiting is an integral part of this work; The compensation actually received by Bates for
working while on call on Saturdays should be
2. The Ee is required or engaged by the Er to reported to the SSS because under the Social
wait; or Security Law, compensation means "all actual
remuneration for employment."
3. When Ee is required to remain on call in the
Er’s premises or so close thereto that he Engaged to Wait vs. Waiting to be Engaged
cannot use the time effectively and gainfully
for his own purpose. (Sec. 5, Rule I, Book III, WAITING TO BE
ENGAGED TO WAIT
IRR, LC) ENGAGED
Waiting is an integral
Idle time is not
NOTE: An Ee who is not required to leave word at part of the job. The
working time. It is not
his home or with company officials where he may time spent waiting is
compensable.
be reached is not working while on call. (Sec. 5(b), compensable.
Rule I, Book III, IRR, LC)
The idle time that an employee may spend for
The controlling factor is whether waiting time resting and during which he may leave the spot or
spent in idleness is so spent predominantly for the place of work though not the premises of his
Er’s benefit or for the Ee’s. employer, is not counted as working time only
where the work is broken or is not continuous.
Q: Gil Bates, a computer analyst and (National Development Co. vs. Court of Industrial
programmer of Hard Drive Company, works Relations, G.R. No. L-15422, 30 Nov. 1962)
eight hours a day for five days a week at the

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Health Personnel in the Private Healthcare NOTE: All on-call workers engaged for their
Industry services who are outside the premises of the set or
location shall likewise be compensated in the event
Waiting time such as endorsement period, spent by of cancellation not less than 24 hours immediately
health personnel shall be considered as working preceding the scheduled shoot. (Ibid.)
time if:
PRELIMINARY AND POSTLIMINARY ACTIVITIES
a) he or she is required or engaged by the
employer to wait; Preliminary (before work) and postliminary
(after actual work) activities deemed performed
b) He or she is required to remain on call in during working hours and compensable
the employer's premises or so close thereto
that he cannot use the time effectively and 1. Where such activities are controlled by the Er
gainfully for his own purpose; or required by the Er; and

c) An employee is not required to leave word 2. Pursued necessarily and primarily for the Er's
at his home or with company officials benefit. (31 Am. Jur. 882-883)
where he may be reached is not working
while on call. (Sec. 7, DOLE D.O. No. 182-17 Ees are entitled to portal pay for time spent on
Guidelines Governing the Employment and incidental activities before or after the regular
Working Conditions of Health Personnel in working period. (CCHI, Labor Law Course, 318)
the Private Healthcare Industry)
Thirty (30)-minute assembly time
Seafarers
It is long practiced and institutionalized by mutual
Waiting time shall not be considered as consent of the parties under the CBA cannot be
compensable working time if: considered waiting time of the Ees if they are not
subject to the absolute control of the company
a) the seafarer is completely relieved from during this period. (Arica v. NLRC, G.R. No. 78210,
his/her duty; and 28 Feb. 1989)

b) can use the time effectively for his/her own 30-minute assembly time is not compensable
purpose. (Sec. 5, DOLE D.O. No. 129-13,
Rules and Regulations Governing the The 30-minute assembly time is NOT
Employment and Working Conditions of compensable, given the following reasons:
Seafarers Onboard Ships Engaged in
Domestic Shipping) 1. The assembly is routinary and non-
complicated;
Audio-Visual Production Workers
2. The Ees’ houses are situated on the same area
Waiting Time shall be considered as actual working as the workplace; and
time if:
3. The Ees were not subjected to disciplinary
a) The worker is required to standby; and action should they fail to report in the
assembly time.
b) Restricted to the confines of the workplace
premises. (DOLE-FDCP Joint Memorandum Therefore, the 30-minute assembly time was not
Circular No. 001-20) primarily intended for the interest of the Er, but

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ultimately for the Ees to indicate their availability or Travel away from home
unavailability for work during workdays. (Ibid.)
GR:
TRAVEL TIME 1. Travel that requires an overnight stay on
the part of the Ee when it cuts across the
Travel from home to work Ees workday is clearly working time.

GR: Normal travel from home to work is not 2. The time is not only hours worked on
working time. regular workdays but also during
corresponding working hours on non-
XPNs: working days. Outside of these regular
working hours, travel away from home is
1. Emergency call outside his regular working not considered working time.
hours where he is required to travel to his
regular place of business or some other XPN: During meal period or when Ee is permitted to
work site; sleep in adequate facilities furnished by the Er.

2. Done through a conveyance provided by “Facilities”

the Er;
Articles or services provided by the employer for
3. Done under the supervision and control of the benefit of the employee or his/her family but
the Er; and shall not include tools of the trade of articles or
services primarily for the benefit of the employer or
4. Done under vexing and dangerous necessary to the conduct of the employer's business.
circumstance. (Sec. 4(e), DOLE D.O. No. 126-13)

Travel that is all in a day’s work NOTE: The term shall include transportation
furnished to the employee between his home and
It is the time spent in travel as part of the Ees work where the travel time does not constitute
principal activity (e.g., Travel from job site to job site hours worked compensable under the LC and other
during the work day, must be counted as working law. (Sec. 4(e)(4), Ibid.)
hours).
SLEEPING TIME
Illustration:
A worker sleeping may be working. Whether
Travel from main workplace (5:00PM) to jobsite A sleeping time allowed an Ee will be considered as
(6:00PM) to jobsite B (7:00PM) to jobsite C part of his working time will depend upon the
(8:00PM) to main workplace (9:00PM) is express or implied agreement of the parties. In the
compensable. absence of an agreement, it will depend upon the
nature of the service and its relation to the working
But, if instead of travelling back to the main time.
workplace, Ee decides to go home from jobsite C,
travel time from 8 PM is no longer compensable, Sleeping time, when considered and
because it would already fall under the category of compensable
work to home travel.
1. it is subject to serious interruption; or
2. takes place under conditions substantially
less desirable than would be likely to exist
at the Ee’s home.

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Sleeping time, when NOT compensable When a CBA contains a reporting time-off provision
wherein Ees who have reported for work but are
Not working time if there is an opportunity for unable to continue because of emergencies such as
comparatively uninterrupted sleep under fairly typhoons, flood, earthquake, and transportation
desirable conditions. (Azucena, 2010) strike shall also mean to include brownout or power
outage because the key element of the provision is
POWER INTERRUPTIONS that Ees who have reported for work are unable to
continue working because of the incident. Hence,
Power interruptions NOT exceeding 20 minutes Ees who were prevented to continue their work due
are compensable to brownout should also be remunerated. (Supreme
Steel Corporation v. Nagkakaisang Manggagawa ng
Brownouts of short duration but not exceeding 20 Supreme Independent Union, G.R. No. 185556, 28
minutes shall be treated as worked or compensable Mar. 2011)
hours whether used productively by the Ees or not;
(DOLE P.I. 36-78) Time spent during which an Ee is inactive by reason
of interruptions beyond his control is working time,
Power interruptions exceeding 20 minutes may such as twenty-minute electric power failure or
not be compensable machine breakdowns. The pay for this non-
productive time is known as idle-time pay. Where
Brownouts running for more than 20 minutes may the work is broken or is not continuous, the idle
not be treated as hours worked provided that any of time that an Ee may spend for rest is not counted as
the following conditions are present: working time. (NDC v. CIR, G.R. No. L-53961, 30 June
1987)
1. The Ees can leave their workplace or go
elsewhere whether within or without the LECTURES, MEETINGS, TRAINING-PROGRAMS,
work premises; or and SIMILAR ACTIVITIES

2. The Ees can use the time effectively for Attendance at lectures, meetings, training programs
their own interest. (Durabuilt Recapping and similar activities need not be counted as
Plant v. NLRC, G.R. No. 76746, 27 July 1987) working time if the following criteria are met:

NOTE: In each case, the Er may extend the working 1. Attendance is outside of the Ee's regular
hours of his Ees outside the regular schedules to working hours;
compensate for the loss of productive man-hours
without being liable for overtime pay. (Chan, 2017) 2. Attendance is in fact voluntary; and

Industrial enterprises with one or two workshifts 3. The Ee does not perform any productive
may adopt any of the workshifts prescribed for work during such attendance. (Sec. 6, Rule I,
enterprises with three workshifts to prevent Book III, IRR, LC)
serious loss or damage to materials, machineries, or
equipment that may result in case of power ATTENDANCE IN
interruption. (DOLE P.I. 36, 1978) LABOR RELATIONS-ACTIVITIES

The days when work was not required and no work CBA Negotiations
could be done because of shutdown due to electrical
power interruptions, lack of raw materials and Compensable if:
repair of machines, are not deemed hours worked.
(Durabit Recapping Plant Company v. NLRC, supra) 1. There is an agreement for the
compensability in the parties’ ground rules;

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2. There is an established policy allowing XPN: Where the exigencies of the service require
compensability; and that such personnel work for six (6) days or 48
hours, they shall be entitled to an additional
3. When it is done during regular work hours compensation of at least 30% of their regular wage
with the agreement of the Er. for work on the 6th day. (Art. 83, LC)
Grievance Meeting
Health Personnel Covered by the 40-Hour
GR: Time spent in adjusting grievance between Er Workweek
and Ees during the time Ees are required by the Er
to be on the premises is compensable. 1. Those in cities and municipalities with a
population of at least one (1) million; or
XPN: When a bona fide union is involved and there
is a CBA, policy, and practice to contrary. 2. Those in hospitals and clinics with a bed
capacity of at least 100.
Strikes
NOTE: Art. 83(2) of the LC does not require
GR: Not compensable. hospitals to pay the Ees a full weekly salary with
paid two (2) days off. (San Juan de Dios Ees
XPN: If there is an agreement to allow “strike Association-AFW, et al. v. NLRC, G.R. No. 126383, 28
duration pay” provided under the company policy, Nov. 1997)
practice or CBA.
Resident physicians to be on duty beyond the
Hearing, Arbitration, Conciliation 40-hour workweek limitation

Not compensable because it is hardly fair for an Ee GR: The customary practice of requiring resident
or laborer to fight or litigate against his Er and physicians beyond the 40 hours of work per week is
eventually consider it as hours worked. (JP not permissible and violates the limitation under
Heilbronn Co. v. National Labor Union, G.R. No. L- Art. 83 of the LC.
5121, 30 Jan. 1953)
XPN: If there is a training agreement between the
SEMESTRAL BREAK OF TEACHERS resident physician and the hospital and the training
program is duly accredited or approved by
Semestral break of teachers are considered as appropriate government agency.
compensable hours worked for it is a form of an
interruption beyond their control. (University of SEAMEN or SEAFARERS
Pangasinan Faculty Union v. NLRC, G.R. Nos. 64821-
23, 29, Jan. 1993) Work Hours of Seaman

NOTE: Payment compensation is given only to Seamen are required to stay on board their vessels
regular full-time teachers. (Duka, 2016) by the very nature of their duties, and it is for this
reason that, in addition to their regular
HEALTH PERSONNEL compensation, they are given free living quarters
and subsistence allowances when required to be on
Hours of work of health personnel: board.
It could not have been the purpose of the law to
GR: Eight (8) hours for five (5) days (40-hour require their Ers to pay them overtime even when
workweek), exclusive of time for meals. they are not actually working, otherwise, every
sailor on board a vessel would be entitled to
overtime for 16 hours each day, even if he had spent

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all those hours resting or sleeping in his bunk, after (2) COMPRESSED WORK WEEK
his regular tour of duty.
Compressed Work Week (CWW)
The correct criterion in determining whether or not It is a scheme where the normal workweek is
sailors are entitled to overtime pay is not, therefore, reduced to less than six (6) days but the total
whether they were on board and cannot leave ship number of 48 work hours per week shall remain.
beyond the regular 8 working hours a day, but
whether they actually rendered service in excess of The normal workday is increased to more than eight
said number of hours. hours, but not to exceed 12 hours, without
corresponding overtime premium. The concept can
A laborer need not leave the premises of the factory, be adjusted accordingly depending on the normal
shop or boat in order that his period of rest shall not workweek of the company. (D.A. No. 02-04, s. 2004)
be counted, it being enough that he “cease to work,”
may rest completely and leave or may leave at his Requisites:
will the spot where he actually stays while working,
to go somewhere else, whether within or outside 1. The scheme is expressly and voluntarily
the premises of said factory, shop or boat. If these supported by majority of the Ees;
requisites are complied with, the period of such rest
shall not be counted. (Luzon Stevedoring Co. v. Luzon 2. In firms using substances, or operating in
Marine Department Union, G.R. No. L-9265, 29 Apr. conditions that are hazardous to health, a
1975) certification is needed from an accredited
safety organization or the firm’s safety
MAXIMUM HOURS OF WORK committee that work beyond 8 hours is within
the limit or levels of exposure set by DOLE’s
Certain workers may not be required to work occupational safety and health standards; and
beyond a certain number of work hours a day.
3. The DOLE Regional Office is duly notified.
1. Public Utility Bus drivers and conductors – 12 (Ibid.)
hours per 24-hour period. (D.O. 118- 12, s. 2012)
Valid CWW
2. Movie and television industry worker/ talent
– shall not exceed eight (8) hours in a day. The validity of the reduction of working hours can
be upheld when the arrangement is: (Te-H-N-C-S)
If required to work beyond eight (8) hours –
the maximum actual hours of work shall not 1. Temporary;
exceed 12 hours in any 24-hour period;
2. It is a more Humane solution instead of a
If aged 60 years old and above – shall not retrenchment of personnel;
exceed eight (8) hours per day;
3. There is Notice and consultations with the
NOTE: The hours of work of children in the workers and supervisors;
industry must be in accordance with R.A. No.
9231 and its IRR. (D.O. 65-04, s. 2004) 4. A Consensus is reached on how to deal with
deteriorating economic conditions; and
3. Seafarers onboard ships engaged in domestic
shipping – 14 hours per 24-hour period or 77 5. It is sufficiently proven that the company was
hours per seven (7) days. (D.O. 129-13, s. 2013) Suffering from losses.

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NOTE: Under the Bureau of Working Conditions’ termination of the services of its Ees. (D.A. 002-09, s.
bulletin, a reduction of the number of regular 2009)
working days (RWDs) is valid where the
arrangement is resorted to by the Er to prevent Types of FWAs
serious losses due to causes beyond his control,
such as: 1. Compressed Workweek - as discussed above;

(a) when there is a substantial slump in the 2. Reduction of Workdays - refers to one where
demand for his goods or services; or the normal workdays per week are reduced but
should not last for more than six months;
(b) when there is a lack of raw materials.
(Linton Commercial v. Hellera, supra) 3. Rotation of Workers - refers to one where the
Ees are rotated or alternately provided work
Q: Under what conditions may a "compressed within the workweek;
work week" schedule be legally authorized as
an exception to the "eight-hour a day" 4. Forced Leave - refers to one where the Ees are
requirement under the LC? (2005 BAR) required to go on leave for several days or
weeks utilizing their leave credits, if there are
A: A CWW schedule may be authorized under the any;
following conditions:
5. Broken-time schedule - refers to one where the
1. The Ee voluntarily agrees to it; work schedule is not continuous but the work-
hours within the day or week remain; and
2. There is no diminution in their weekly or
monthly take home pay or fringe benefits; 6. Flexi-holidays schedule - refers to one where
the Ees agree to avail the holidays at some other
3. The benefits are more than or at least days provided there is no diminution of existing
commensurate or equal to what is due to the benefits as a result of such arrangement.
Ees without the compressed work week;
Under these FWAs, the Ers and the Ees are
4. OT pay will be due and demandable when they encouraged to explore alternative schemes under
are required to work on those days which any agreement and company policy or practice in
should have ceased to be working days order to cushion and mitigate the effect of the loss
because of the compressed work week of income of the Ees. (D.A. 02-09, s. 2009)
schedule;
Administration of FWAs
5. No strenuous physical exertion or that they are
given adequate rest periods; and The parties shall be primarily responsible for the
administration of the FWAs. In cases there are
6. It must be for a temporary duration as differences in the interpretation, the guidelines are
determined by the DOLE. as follows:

Flexible Work Arrangements (FWAs) 1. The differences shall be treated as

grievances under the applicable grievance
These are alternative schedules or arrangements mechanism of the company
other than the standard and traditional workweeks.
2. Absent such grievance mechanism or
Flexible Work Arrangements are recommended inadequate mechanism, it shall be referred
over the outright closure of the business or the

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to the Regional office which has jurisdiction 6. Other work arrangements, including
over the workplace; and adjustment of wage and wage-related benefits
of the Ees. (D.A. 17-B-20, s. 2020)
3. The employers are required to keep and
maintain the documentary requirements Wages and Wage-Related Benefits
proving that the flexible work arrangement
was voluntarily adopted. (DOLE D.O. 002- Ers and Ees may agree voluntarily to temporarily
09) adjust Ees’ wage and wage-related benefits as
provided for in existing employment contract,
Notice Requirement company policy or CBA.

Prior to its implementation, the Er shall notify the The adjustments in wages and/or wage-related
DOLE through the Regional Office which has benefits shall not exceed six (6) months or the
jurisdiction over the workplace, of the adoption of a period agreed upon in the CBA, if any. After such
FWA. The notice shall be in the Report Form period, Ers and Ees shall review their agreement
attached to D.A. 02-09, s. 2009. and may renew the same. (Sec. 5, D.A. 17-20, s. 2020)

Alternative Work Arrangements Reporting Requirement

D.A. 17-B-20, s. 2020 was issued in order to to assist Ers shall report the adopted alternative working
Ers to resume their business operations while schemes and other work arrangements including
preserving the employment of their workers under the adjustment of wage and wage-related benefits of
the enhanced community quarantine, general the Ees, if any, and submit a duly certified copy of all
community quarantine or other quarantine agreements to the DOLE Regional Office having
arrangements. jurisdiction over their principal place of business.
(Sec. 6, D.A. 17-20, s. 2020)
Alternative Work Schemes
(3) MEAL PERIODS
Alternative Work Schemes/Flexible Work
Arrangements are temporary in nature and shall be Duration
adopted for as long as the Public Health Crisis exists.
(Sec. 4, Labor Advisory No. 17-B, s. 2020) Every Er shall give his Ees not less than 60 minutes
or one (1) hour time-off for regular meals. (Art. 85,
1. Transfer - Ees are transferred to another LC)
branch or outlet of the same Er;
As a general rule, Ees are entitled to at least one
2. Assignment - Ees are assigned to another hour time-off for regular meals which can be taken
function or position in the same or other branch inside or outside company premises.
or outlet of the same Er;
Rationale for Meal Breaks
3. Job rotation - Ees are alternately required to
work within the workweek; For a full one-hour undisturbed lunch break, the Ees
can freely and effectively use this hour not only for
4. Reduction of workdays - Normal workdays per eating, but also for their rest and comfort which are
week are reduced; conducive to more efficiency and better
performance in their work. Since the Ees are no
5. Partial closure - Some units or departments of longer required to work during this one-hour lunch
the establishment are continued while other break, there is no more need for them to be
units or departments are closed; and

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compensated for this period. (Sime Darby Pilipinas, serious loss which the Er would
Inc. v. NLRC, supra) otherwise suffer. (Sec. 7, Rule I, Book III,
IRR, LC)
Compensable Meal Period
NOTE: The meal hour was not one of complete rest
It is compensable where the lunch period or meal but a work hour because for its duration, the
time: laborers had to be on ready call. (Pan American
World Airways System v. Pan American Ees
1. Is predominantly spent for the Er’s benefit; or Association, supra)
2. When it is less than 60 minutes.
2. Not Compensable – Ee requested for the
NOTE: Where during a meal period, the laborers are shorter meal time so that they can leave work
required to stand by for emergency work, or where earlier than the previously established
the meal hour is not one of complete rest, such is schedule.
considered overtime. (Pan American World Airways
System v. Pan American Ees Association, G.R. No. L- Requisites: (S-A-D-B-O-T)
16275, 23 Feb. 1961) Rest periods or coffee breaks
running from 5 to 20 minutes shall be considered as a. Work of the Ees does not involve
compensable working time. (Sec. 7, Rule I, Book III, Strenuous physical exertion and they are
IRR, LC) provided with adequate coffee breaks in
the morning and afternoon;
Compensability of Meal Periods during
overtime work b. Ees voluntarily Agree in writing and are
willing to waive OT pay for the shortened
Meal periods provided during overtime work are meal period;
compensable since the one (1)-hour meal period
(non-compensable) is not given during OT work c. No Diminution in the salary and other
because the latter is usually for a short period and fringe benefits of the Ees which are
to deduct from the same would reduce to nothing existing before the effectivity of the
the Ees’ OT work. Thus, the one-hour break for shortened meal period;
meals during OT should be treated as compensable.
d. Value of the Benefits derived by the Ees
When shortened meal periods are compensable from the proposed work arrangements is
equal to or commensurate with the
1. Compensable – At the instance of Er, when: compensation due them for the
(O-P-E-N) shortened meal period as well as the OT
pay for 30 min. as determined by the Ees
a. Work is Non-manual in nature or does concerned;
not involve strenuous physical exertion;
e. Overtime pay will become due and
b. Establishment regularly Operates less demandable after the new time schedule;
than sixteen (16) hours a day; and

c. Work is necessary to prevent serious loss f. Arrangement is of Temporary duration.

of Perishable goods; and
NOTE: The implementing rules allow the mealtime
d. Actual or impending Emergency or there to be less than 60 minutes, under specified cases but
is urgent work to be performed on in no case shorter than 20 minutes. (Sec. 7, Rule I,
machineries and equipment to avoid Book III, IRR, LC)

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 III. EMPLOYMENT PROPER
If the so called “mealtime” is less than twenty (20) Purpose
minutes, it becomes only a rest period and is
considered working time. (Azucena, 2016) The philosophy behind the provision is to give
premium to night work when an Ee is supposed to
(4) NIGHT-SHIFT DIFFERENTIAL be sleeping. Working at night is violative of the law
of nature for it is the period for rest and sleep. An Ee
Night-Shift Differential (NSD) who works at night has less stamina and vigor, thus,
he can easily contract a disease. (Association of
Every Ee shall be paid a night shift differential of not International Shipping Lines, Inc. vs. United Harbor
less than 10% of his regular wage for each hour of Pilots' Association of the Philippines, Inc., G.R. No.
work performed between 10:00 PM and 6:00 AM. 172029, 06 Aug. 2008)
(Art. 86, LC)
Work done at night places has a greater burden on
GR: All Ees are entitled to NSD. the worker. It is more strenuous and onerous than
work done during the day. Therefore, it deserves
XPNs: (Go-Re-Do-Ma-Fi) greater or extra compensation. (Shell Co. v. NLU, G.R.
No. L-1309, 26 July 1948)
1. Those of the Government and any of its
political subdivisions, including GOCCs; Non-Waivability

2. Those of Retail and service establishments GR: Waiver of NSD is against public policy. (Mercury
regularly employing not more than five (5) Drug Co., Inc. v. Dayao, et al., G.R. No. L-30452, 30
workers; Sept. 1982)

3. Domestic helpers and persons in the personal XPN: Waiver is allowed if it will result in higher or
service of another; better benefits to Ees.

4. Managerial Ees as defined in Book Three of Burden of Proof of Payment

the Labor Code; and
The burden of proving that payment of NSD has
5. Field personnel and other Ees whose time been made rests upon the party who will suffer if no
and performance are unsupervised by the Er, evidence at all is presented by either party.
including those who are engaged on task or (National Semiconductor (HK) Distribution, Ltd. v.
contract basis, purely commission basis, or NLRC and Santos, G.R. No. 123520, 26 June 1998)
those who are paid a fixed amount for
performing work irrespective of the time Night Differential in Overtime Pay
consumed in the performance thereof. (Sec 1,
Rule II, Book III, IRR, LC) If work done between 10:00PM and 6:00AM is
overtime work, then the ten percent (10%) NSD
NOTE: Where the night-time work of an Ee overlaps should be based on the overtime rate.
with overtime work, the receipt of overtime pay
does not preclude the receipt of night differential When the tour of duty of an Ee falls at nighttime, the
pay. The latter is night pay, while the former is receipt of overtime pay will not preclude the right
payment beyond eight-hour work. (Poquiz, 2012) to night differential pay. The latter is payment for
work done during the night and the other is
payment for the excess of the regular eight-hour
work. (NARIC v. NARIC Workers Union, et al., G.R. No.
L-12075, 29 May 1959)

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(5) OVERTIME WORK mental, moral, and spiritual needs. They may have
more hours to devote to reading, amusement, and
It is the service rendered in excess of and in addition other recreational activities necessary for their
to eight (8) hours on ordinary working days. (Caltex well-being. Moreover, they could share longer hours
Regular Employees at Manila Office v. Caltex in the company of their family, attending to spiritual
Philippines, G.R. No. 111359, 15 Aug. 1995) or religious needs. Law on overtime will surely ease
unemployment problem, for Ers will be constrained
NOTE: It is not enough that the hours worked fall on to employ additional Ees to work in other shifts
disagreeable or inconvenient hours. The hours necessary for the operation of the business. (Shell
worked must be in excess of eight (8) hours worked Co. v. NLU, supra)
during the prescribe daily work period, or the forty
(40) hours worked during the regular work week Condition for Entitlement to Overtime Pay
from Monday to Friday.
Entitlement to overtime pay must first be supported
Overtime Pay by sufficient proof that said overtime work was
actually performed before an Ee may avail of said
It is the additional compensation of at least 25% on benefit. (Cagampan v. NLRC, G.R. Nos. 85122-24, 22
the regular wage for the service or work rendered Mar. 1991)
or performed in excess of eight (8) hours a day by
Ees or laborers in employment covered by the eight An Ee is entitled to overtime pay for work rendered
(8)-hour Labor Law. (Art. 87, LC) in excess of eight (8) hours, despite the fact that his
employment contract specifies a 12-hour workday
It is based on regular base pay excluding money at a fixed monthly salary rate that is above the legal
received by Ee in different concepts such as minimum rate. The provisions of the pertinent labor
Christmas bonus and other fringe benefits. It is laws prevail over the terms of the contract. (PESALA
computed by multiplying the overtime hourly rate v. NLRC, G.R. No. 105963, 22 Aug. 1996)
by the number of hours in excess of eight. (Azucena,
2016) Overtime Pay of Worker Aboard a Vessel

NOTE: Express instruction from the Er to the Ee to In National Shipyards and Steel Corporation v. CIR
render OT work is not required for the Ee to be (G.R. No. L-17068, 30 Dec. 1961), the Court held that
entitled to OT pay. It is sufficient that the Ee is the correct criterion in determining whether or not
permitted or suffered to work. (Azucena, 2016) sailors are entitled to overtime pay is not, therefore,
However, written authority after office hours whether they were on board and can not leave ship
during rest days and holidays are required for beyond the regular eight working hours a day, but
entitlement to compensation. whether they actually rendered service in excess of
said number of hours.
Rationale for Overtime Pay

Ee is made to work longer than what is

commensurate with his agreed compensation for
the statutory fixed or voluntarily agreed hours of
labor he is supposed to do. (PNB v. PEMA and CIR,
G.R. No. L-30279, 30 July 1982)

The reason the law requires additional

compensation for work beyond the normal working
day is to encourage Ers to dispense with such work,
thus providing Ees an opportunity to satisfy their

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Overtime Pay vs. Premium Pay Overtime Pay Rates

OVERTIME PAY PREMIUM PAY OVERTIME PAY RATES

During a
Additional Additional compensation of
regular
compensation for work 25% of the regular wage
working day
performed within 8
hours on days when
Additional normally he should not Rate of the first 8 hours worked
compensation for work be working (on non- on plus at least 30% of the
performed beyond 8 working days, such as regular wage (RW):
hours on ordinary days rest days and special
(within the worker’s days). But additional A. If done on a special
24-hour workday). compensation for work holiday OR rest day:
rendered in excess of 8 During a 30% of 130% of RW
hours during these holiday or
days is also considered rest day B. If done on a special
OT pay. holiday AND rest day:
30% of 150% of RW

C. If done on a regular
He shall be paid an
holiday:
additional
30% of 200% of RW
compensation of at
least 30% of his
regular wage.
Basis of Computation of Overtime Pay
He shall be entitled to
Regular wage which includes the cash wage only,
additional
without deduction on account of the facilities
compensation for work
provided by the Er. (Art. 90, LC)
performed on Sunday He shall be paid an
only when it is additional
Prima Facie Evidence of Overtime Pay
established as a rest compensation for the
day. overtime work in the
Q: Respondent security agency did not pay Zonio
amount equivalent to
for overtime work, work rendered on holidays
When the nature of the his regular wage plus
and rest days, as well as 13th month pay, service
work has no regular at least 25%. (Art. 87,
incentive leave, and night shift differential.
work days and no LC)
Zonio, along with some of his colleagues,
regular rest days, he
received a memorandum suspending them for
shall be paid an
sleeping while on duty. Zonio filed a complaint
additional
against respondents for illegal suspension and
compensation of at
nonpayment of overtime pay, holiday and rest
least 30% of his
day premiums pay, and night shift differentials
regular wage for work
pay. To support his allegations. Zonio submitted
performed on Sundays
in evidence photocopies of the entries in the
and holidays. (Art 93,
logbook, signed by incoming and outgoing
LC)
security guards and were not countersigned by
their supervisor or any authorized
representative. His claim was denied because

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the evidence Zonio adduced raises serious than eight hours at a specified wage per day,
doubt as to whether he actually rendered work without providing for a fixed hourly rate or that the
on a given date and time. daily wages include overtime pay, said wages
cannot be considered as including overtime
Did Zonio sufficiently prove his entitlement to compensation required under the Eight-hour Labor
monetary claims? Law. (Manila Terminal Co. v. CIR, supra)

A: YES. Admittedly, the logbook is only a personal XPNs:

record of Zonio and other security guards. It is not
verified or countersigned by respondents. Anyway, 1. When the alleged waiver of overtime pay is in
the fact that the entries are not verified or consideration of benefits and privileges which
countersigned will not militate against Zonio. The may be more than what will accrue to them in
entries in the logbook are prima facie evidence of overtime pay, the waiver may be permitted.
Zonio's claim. Prima facie evidence is such evidence (Azucena, 2016)
as, in the judgment of the law, is sufficient to
establish a given fact, or the group, or chain of facts 2. Compressed Workweek (CWW) arrangement.
constituting the party's claim or defense, and which
if not rebutted or contradicted, will remain Q: Socorro is a clerk-typist in Hospicio de San
sufficient. Evidence which, if unexplained or Jose, a charitable institution dependent for its
uncontradicted, is sufficient to sustain a judgment in existence on contributions and donations from
favor of the issue it supports, but which may be well-wishers. She renders work 11 hours a day
contradicted by other evidence. Respondents but has not been given OT pay since her place of
dispute the veracity of the entries in the logbook, work is a charitable institution. Is Socorro
yet, they did not proffer evidence to rebut them, or entitled to overtime pay? Explain briefly. (2002
show that they paid Zonio for the services he BAR)
rendered on the dates and the hours indicated in the
logbook. The best evidence for respondents would A: YES. Socorro is entitled to OT pay. She does not
have been the payrolls, vouchers, payslips, daily fall under any of the exceptions to the coverage of
time records, and the like, which are in their custody Art. 82, under the provisions of hours of work. The
and absolute control. However, respondents did not LC is equally applicable to non-profit institutions. A
present any of these. This failure gives rise to the covered Ee who works beyond eight (8) hours is
presumption that either they do not have them, or if entitled to OT compensation.
they do, their presentation is prejudicial to their
cause. (Reggie Orbista Zonio v. 1st Quantum Leap Q: Danilo Flores applied for the position of
Security Agency, Inc. and Romulo Q. Par, G.R. No. driver in the motor-pool of Gold Company, a
224944, 05 May 2021) multinational corporation. Danilo was informed
that he would frequently be working overtime
Waiver of Overtime Pay as he would have to drive for the company's
executives even beyond the ordinary 8-hour
GR: The right to overtime pay cannot be waived. work day. He was provided with a contract of
The right is intended for the benefit of the laborers employment wherein he would be paid a
and Ees. Any stipulation in the contract that the monthly rate equivalent to 35 times his daily
laborer shall work beyond eight hours without wage, regular sick and vacation leaves, 5 day-
additional compensation for the extra hours is leave with pay every month and time off with
contrary to law and null and void. (Azucena, 2016) pay when the company's executives using the
cars do not need Danilo's service for more than
The right of the laborer to overtime compensation eight hours a day, in lieu of overtime. Are the
cannot be waived expressly or impliedly. Where the above provisions of the contract of employment
contract of employment requires work for more in conformity with, or violative of, the law?

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 III. EMPLOYMENT PROPER
A: Except for the provision that Danilo shall have Overtime Pay in a CWW Scheme
time off with pay when the company's executives
using the cars do not need Danilo's service for more Any work performed beyond twelve (12) hours a
than eight (8) hours a day, in lieu of OT, the day or forty-eight (48) hours a week shall be subject
provisions of the contract of employment of Danilo to OT premium. (D.A. 02-04, s. 2004)
are not violative of any labor law because they
instead improve upon the present provisions of Built-in Overtime Pay or Composite/Package
pertinent labor laws. Pay

Q: The employment contract requires work for It is not per se illegal, but there should have been
more than eight (8) hours a day with a fixed express agreement to that effect. Such arrangement,
wage inclusive of OT pay. Is that valid? if there be any, must appear in the manner required
by law on how overtime compensation must be
A: NO. When the contract of employment requires determined. (Damasco v. NLRC, et al., G.R. No.
work for more than eight hours at specific wages 115755, 04 Dec. 2000)
per day, without providing for a fixed hourly rate or
that the daily wages include OT pay, said wages Requisites for a Valid Built-in Overtime Pay
cannot be considered as including OT (Base pay with Integrated Overtime Pay):
compensation. (Manila Terminal Co. v. CIR, et al.,
supra) 1. A clear written agreement knowingly and
freely entered into by the Ee; and
However, in cases of built-in OT pay in Government-
Approved Contracts. When the OT pay was already 2. The mathematical result shows that the
provided in the written contract with a built-in OT agreed legal wage rate and the overtime pay,
pay and signed by the director of the bureau of computed separately are equal or higher than
employment services and enforced by the Er, non- the separate amounts legally due. (Azucena,
payment of OT pay by the Er is valid. (Engineering 2016)
Equipment, Inc. v. Minister of Labor, G.R. No. L-64967,
23 Sept. 1985) Overload Work and Overtime Work
Distinguished
Overtime Rate Subject to Stipulation
Where a teacher is engaged to undertake actual
GR: The premium for work performed on the Ee’s additional teaching work after completing his
rest days or on special days or regular holidays are regular teaching load, such additional work is
included as part of the regular rate of the Ee in the referred to as overload.
computation of OT pay for any OT work rendered on
said days, especially if the Er pays only the When the overload is performed within eight (8)
minimum OT rates prescribed by law. hours normal working day, such overload pay is
considered part of the basic pay for the purpose of
XPN: Ees and Er may stipulate in their collective computing 13th month pay. "Overload work" is
agreement the payment of OT rates higher than sometimes misunderstood as synonymous to
those provided by law and exclude the premium "overtime work." The two terms are not the same.
rates in the computation of OT pay. Such agreement
may be considered valid only if the stipulated OT Overtime work is work rendered in excess of the
pay rates will yield to the Ees not less than the normal working hours of eight in a day. On the other
minimum prescribed by law. hand, since overload work may be performed either
within or outside eight hours in a day, overload
work may or may not be overtime work. (DOLE's

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 LABOR LAW AND SOCIAL LEGISLATION
Explanatory Bulletin on Inclusion of Teacher's Q: Is the foregoing enumeration exclusive?
Overload in Computing 13th Month Pay)
A: YES. In cases not falling within any of these
Emergency Overtime Work enumerated in this Section, no Ee may be made to
work beyond eight (8) hours a day against his will.
GR: The Ee may not be compelled to work more (Sec. 10, Rule I, Book III, IRR, LC)
than eight (8) hours a day.
Q: Is mandatory overtime involuntary
XPN: Compulsory Overtime. (Wa-D-U-P-Fa-C) servitude?

1. When the country is at War or when any other A: NO. The Ee may still refuse to render overtime
national or local emergency has been declared even if compelled, although not without disciplinary
by Congress or the Chief Executive; consequence for his refusal that could constitute
insubordination, a potential ground for termination
2. When overtime work is necessary to prevent of employment.
loss of life or property, or in case of imminent
Danger to public safety due to actual or Petitioner’s attempt to brush aside his refusal to
impending emergency in the locality caused by render overtime work as inconsequential when
serious accident, fire, floods, typhoons, Graphics, Inc.’s order for him to do so is justified by
earthquake, epidemic or other disaster or Graphics, Inc.’s contractual commitments to its
calamities; clients. Such an order is legal under Art. 89 of the
LC and the petitioner’s unexplained refusal to obey
2. When there is Urgent work to be performed on is insubordination that merits dismissal from
machines, installations, or equipment, in order service. (Realda v. New Age Graphics Inc., G.R. No.
to avoid serious loss or damage to the Er or 192190, 25 Apr. 2012)
some other causes of similar nature;
NOTE: The working hours may be changed, at the
3. When the work is necessary to prevent loss or discretion of the company, should such change be
damage to Perishable goods; necessary for its operations, and that employees
shall observe such rules as have been laid down by
4. When overtime work is necessary to avail of the company. Manila Jockey Employees’ Union v.
Favorable weather or environmental Manila Jockey Club (G.R. No. 167760, 7 Mar. 2007)
conditions where performance or quality of
work is dependent thereon; or Q: LKG Garments Inc. makes baby clothes for
export. As part of its measures to meet its
5. When the Completion or continuation of work orders, LKG requires its Ees to work beyond
started before the 8th hour is necessary to eight (8) hours everyday, from Monday to
prevent serious obstruction or prejudice to the Saturday. It pays its Ees an additional 35% of
business or operations of the Er. their regular hourly wage for work rendered in
excess of eight (8) hours per day. Because of
NOTE: The Ee may still refuse to render overtime additional orders, LKG now requires two (2)
even if compelled, although not without disciplinary shifts of workers with both shifts working
consequence for his refusal that could constitute beyond eight (8) hours but only up to a
insubordination, a potential ground for termination maximum of four (4) hours. Carding is an Ee who
of employment. An Ee may not be compelled to used to render up to six (6) hours of overtime
render overtime work; overtime work is voluntary. work before the change in schedule. He
(Art. 89, LC; Sec. 10, IRR, LC) complains that the change adversely affected
him because now he can only earn up to a
maximum of four (4) hours’ worth of overtime

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 III. EMPLOYMENT PROPER
pay. Does Carding have a cause of action against Offsetting of undertime work by overtime work,
the company? (2015 BAR) whether on the same or on another day is
prohibited by jurisprudence and by statute.
A: NO. A change in work schedule is a management (Azucena, 2016)
prerogative of LKG. Thus, Carding has no cause of
action against LKG if, as a result of its change to two Q: A case against an employer company was filed
(2) shifts, he now can only expect a maximum of charging it with having violated the prohibition
four (4) hours overtime work. Besides, Art. 87 of the against offsetting undertime for overtime work
LC does not guarantee Carding a certain number of on another day. The complainants were able to
hours of overtime work. In Manila Jockey Ees’ Union show that, pursuant to the Collective Bargaining
v. Manila Jockey Club, Inc. (supra), the SC held that Agreement (CBA), employees of the union had
the basis of overtime claim is an Ee’s having been been required to work “overtime” on Saturday
“permitted to work.” Otherwise, as in this case, such but were paid only at regular rates of pay on the
is not demandable. thesis that they were not required to complete,
and they did not in fact complete, the eight-hour
Q: After working from 10 A.M. to 5 P.M. on a work period daily from Monday through Friday.
Thursday as one of 5,000 employees in a beer Given the circumstances, the employer
factory, A hurried home to catch the early contended that the employees were not entitled
evening news and have dinner with his family. to overtime compensation, i.e., with premium
At around 10 P.M. of the same day, the plant rates of pay. Decide the controversy. (2003 BAR)
manager called and ordered A to fill in for C who
missed the second shift. (2010 BAR) A: Art. 88 of the LC provides that undertime work
on any particular day shall not be offset by overtime
(a) May A validly refuse the plant manager’s work on any other day. The CBA, the law between
directive? Explain. the parties and the Union has shown that the
employees are required to render overtime work on
A: YES. A may validly refuse to fill in for C. A may not Saturdays, thus the contention of the employer is
be compelled to perform overtime work not tenable. The employer cannot use the undertime
considering that the plant manager’s directive is not incurred from Monday through Friday to offset the
for an emergency overtime work, as contemplated overtime on Saturday. Hence, the employees are
under Art. 89 of the LC. entitled to overtime compensation, i.e., premium
rates of pay on Saturday.
(b) Assuming that A was made to work from
11 P.M. on Thursday until 2 A.M. on (6) COMPUTATION OF ADDITIONAL
Friday, may the company argue that, COMPENSATION (RATES ONLY)
since he was two (2) hours late in
coming to work on Thursday morning, For purposes of computing overtime and other
he should only be paid for work additional renumeration, the “regular wage” shall
rendered from 1 A.M. to 2 A.M.? Explain? include the cash wage only, without deduction on
account of facilities provided by the Er. (Art. 90, LC)
A: NO. Undertime is not offset by overtime. (Art. 88,
LC) c) REST PERIODS

Prohibition Against Offsetting Right to Weekly Rest Day (WRD)

Where a worker incurs undertime hours during his Every Er shall give his Ees a rest period of not less
regular daily work, said undertime hours should not than twenty-four (24) consecutive hours after every
be offset against the overtime hours on the same six (6) consecutive normal workdays. (Sec. 3, Rule
day or on any other day. (Art. 88, LC) III, Book III, IRR, LC)

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Rest day not necessarily Sunday or Holiday XPNs to XPN (no. 3): Er may schedule the
WRD of his choice for at least two (2) days in
All establishments and enterprises may operate or a month if the preference of the Ee will
open for business on Sundays and holidays inevitably result in:
provided that the Ees are given the weekly rest day
and the benefits provided under the law. (Sec. 2, a. Serious prejudice to the operations of
Rule III, Book III, IRR, LC) the undertaking; and

Scope of WRD b. The Er cannot normally be expected to

resort to other remedial measures.
It shall apply to all Ers whether operating for profit (Sec. 4(2), Rule III, Book III, IRR)
or not, including public utilities operated by private
persons. (Sec. 1, Rule III, Book III, IRR, LC) The Er is mandated to respect the choice of its Ee as
to their rest day based on religion.
Q: A Ladies Dormitory run or managed by a
charitable non-profit organization claims that it Right of the Ee to Know the Schedule of their
is exempt from the coverage of the Weekly Rest WRDs
Period provision of the Labor Code. Is the claim
valid? (1998 BAR) Er shall make known the rest period by means of:

A: NO. The claim is not valid. The provisions on 1. Written notice;

weekly rest periods in the LC cover every employer, 2. Posted conspicuously in the workplace; and
whether operating for profit or not. (Art. 91, LC) 3. At least one week before it becomes effective.
(Sec. 5, Rule III, Book III, IRR)
Weekly rest periods shall apply to all Employers
whether operating for profit or not, including public Emergency Rest Day Work
utilities operated by private persons. (Sec. 1, Rule III,
Book III, IRR) GR: The Ee cannot be compelled by the Er to work
on his rest day.
Person who determines the WRD
XPNs:
GR: Er shall determine and schedule the WRD of his
Ee. 1. In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
XPNs: (C-SO-R) earthquake, epidemic, or other disaster or
calamity to prevent loss of life and property, or
1. CBA; imminent danger to public safety;

2. Rules and regulations as the SOLE may 2. In cases of urgent work to be performed on the
provide; and machinery, equipment, or installation to avoid
serious loss which the Er would otherwise
3. Preference of Ee based on Religious grounds suffer;
– Ee shall make known his preference in
writing at least 7 days before the desired 3. In the event of abnormal pressure of work due
effectivity of the initial rest day so preferred. to special circumstances, where the Er cannot
(Sec. 4(1), Rule III, Book III, IRR, LC) ordinarily be expected to resort to other
measures;

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 III. EMPLOYMENT PROPER
4. To prevent loss or damage to perishable goods; A: NO. There is no need under the LC to schedule a
rest day. Under the Code, it requires an employer to
NOTE: Instead of ordinary loss, it must be provide each of his employees a weekly rest day
serious. There must be loss and not just after every six consecutive normal work days. Here,
damage. the work week is such that it is for five (5) days. The
Saturdays and Sundays when the employees are not
5. Where the nature of the work requires required to work more than satisfy the required
continuous operations and the stoppage of weekly rest day.
work may result in irreparable injury or loss to
the Er; and d) HOLIDAYS

6. Under other circumstances analogous or Legal Holiday

similar to the foregoing as determined by the
SOLE. (Art. 92, LC) It is a day designated or set apart by the legislature,
for a purpose within the meaning of the term
Q: Is the list exclusive? "holiday" to commemorate an important event.

A: YES. No Ee shall be required against his will to Regular Holidays (RHs)

work on his scheduled rest day except under
circumstances provided in Art. 92. Where an Ee GR: They are compensable whether worked or
volunteers to work on his rest day under other unworked subject to certain conditions. They are
circumstances, he shall express such desire in also called “legal holidays.”
writing, subject to the rule regarding additional
compensation. XPN: A legal holiday falling on a Sunday creates no
legal obligation for the Er to pay extra, aside from
Employee volunteers to work on his rest day the usual holiday pay, to its monthly-paid Ees.
under other circumstances (Wellington Investment and Manufacturing Corp. v.
Trajano et al., G.R. No. 114698, 03 July 1995)
He may be allowed to do so, provided he shall
express it in writing subject to additional Regular Holidays and Special Holidays
compensation. (Sec. 6(2), Rule III, Book III, IRR, LC)
HOLIDAY DATE
Q: Lawyer Antonio Martin recently formed a law
REGULAR HOLIDAYS
partnership with five other lawyer-friends of
(E.O. No. 292, as amended by R.A. No. 9849)
his. They hired two office secretaries, an
accounting clerk-cashier, one bookkeeper, and New Year’s Day January 1
two messengers. You are among three associate Araw ng Kagitingan Monday nearest April 9
attorneys. The workweek is Monday to Friday. Maundy Thursday Movable date
There is no vacation leave, but sick leave is 15
Good Friday Movable date
days for every year of continuous and
satisfactory service. Labor Day Monday nearest May 1
Independence Day June 12
Managing partner Martin is preparing a set of
National Heroes Day Last Monday of August
personnel policies in terms and conditions of
employment for the staff and has asked you to Eid’l Fitr Movable date
give him a brief memo on the questions listed Eid’l Adha Movable date
below. Should the law firm schedule a rest day Monday nearest
for the employees, including you? (1987 BAR) Bonifacio Day
November 30

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 LABOR LAW AND SOCIAL LEGISLATION

Christmas Day December 25 NOTE: Muslim holidays shall be officially observed

in the Provinces of Basilan, Lanao del Norte, Lanao
Monday nearest
Rizal Day del Sur, Maguindanao, North Cotabato, Sultan
December 30
Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and
SPECIAL (NON-WORKING) HOLIDAYS
Zamboanga del Sur, and in the Cities of Cotabato,
(E.O. No. 292, as amended by R.A. No. 9849, as
Iligan, Marawi, Pagadian, and Zamboanga and in
further amended by R.A. No. 10966)
such other Muslim provinces and cities as may
Monday nearest
Ninoy Aquino Day hereafter be created. Upon proclamation by the
August 21
President of the Philippines, Muslim holidays may
All Saints Day November 1 also be officially observed in other provinces and
Feast of Immaculate cities. (Art. 170, Ibid.)
December 8
Conception of Mary
Last day of the year December 31 Determination of Eid’l Fitr and/or Eid’l Adha

Other holidays declared by law and ordinance

The proclamation declaring a national holiday for
the observance of Eid’l Fitr and/or Eid’l Adha shall
NOTE: Every worker shall be paid his regular daily be issued:
wage during regular holidays; the computation of
which is determined by a legal formula which is not 1. After the approximate date of the Islamic
changed by the fact that there are two holidays holiday has been determined in accordance
falling on one day. (Asian Transmission Corp. v. Court with the:
of Appeals, G.R. No. 144664, 15 Mar. 2004)
a. Islamic Calendar (Hijra);
NOTE: For movable days, the President shall issue a b. Lunar Calendar; or
proclamation, at least six (6) months prior to the c. Upon astronomical calculations,
holiday concerned, the specific date that shall be whichever is possible or convenient;
declared as a non-working day. (R.A. No. 9492) and

NOTE: RH falling within temporary or periodic 2. The Office of Muslim Affairs shall inform the
shutdown and temporary cessation of work are Office of the President on which day the
compensable. However, if the temporary or periodic holiday shall fall. (Proc. 295, s. 2011)
shutdown and cessation of work is due to business
reverses, the Er may not pay the Ees during such A Christian Ee working within the Muslim area
period. cannot be compelled to work during Muslim
holiday
Muslim Holidays (MHs)
All workers, Muslims and Christians, working
1. Amun Jadid (New Year) – falls on the first day within the Muslim area are entitled to holiday pay
of the first lunar month of Muharram; on Muslim holidays. (SMC v. CA, G.R. No. 146775, 30
Jan. 2002)
2. Maulid-un-Nabi (Birthday of the Prophet
Muhammad) falls on the 12th day of the third Muslim Ee working outside the Muslim area
lunar month of Rabi-ul-Awwal; and cannot be compelled to work during the
observance of the MH
3. Lailatul Isra Wal Mi'raj (Nocturnal Journey
and Ascension of the Prophet Muhammad) – GR: Muslim Ees shall be excused from work during
falls on the 27th day of the seventh lunar month MH without diminution of salary or wages.
of Rajab. (Art. 169, P.D. 1083)

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 III. EMPLOYMENT PROPER
XPN: Those who are permitted or suffered to work the computation of 13th month pay. (Philippine
on MH are entitled to at least 100% basic pay + Duplicators, Inc. v. NLRC G.R. No. 110068, 15 Feb.
100% as premium of their basic pay. (Ibid.) 1995)

Rule as to payment of regular Muslim holidays Q: Nico is a medical representative engaged in

the promotion of pharmaceutical products and
There is no distinction between Muslims and non– medical devices for Northern Pharmaceuticals,
Muslims as regards payment of benefits for Muslim Inc. He regularly visits physicians' clinics to
holidays. Muslims throughout the Philippines are inform them of the chemical composition and
also entitled to holiday pay on Christian holidays benefits of his employer's products. At the end
declared by law as regular holidays. Wages and of every day, he receives a basic wage of Php
other emoluments granted by law are determined 700.00 plus a Php 150.00 “productivity
on the basis of the criteria laid down by laws and allowance.” For purposes of computing Nico's
certainly not on the basis of the worker's faith or 13th month pay, should the daily “productivity
religion. The law on holiday pay knows no religion. allowance” be included? (2018 BAR)
(Ibid.)
A: NO. The second paragraph of Sec. 5(a) of the
Holiday Swapping Revised Guidelines Implementing the 13th Month
Pay Law states that “employees who are paid a fixed
In the event the holiday falls on a Wednesday, the or guaranteed wage plus commission are also
holiday will be observed on the Monday of that entitled to the mandated 13th month pay, based on
week. their total earnings during the calendar year, i.e., on
both their fixed or guaranteed wage and
If the holiday falls on a Sunday, the holiday will be commission.”
observed on the Monday that follows.
Q: During the open forum following your lecture However, the Court in Philippine Duplicators, Inc. v.
before members of various unions affiliated NLRC (G.R. No. 110068, 15 Feb. 1995), declared the
with a labor federation, you were asked the aforesaid provision as null and void with respect to
following question: those medical representatives who do not obtain
productivity allowances by virtue of generated
Araw ng Kagitingan and Good Friday are among sales. Such allowances are in the nature of profit-
the 10 paid regular holidays under Art. 94 of the sharing bonuses or commissions that should be
LC. How much will an employee receive when properly excluded from the ambit of the term “basic
both holidays fall on the same day? (2005 BAR) salary” for purposes of computing 13th month pay
due to employees.
A: The employee will receive 200% of his regular
daily wage when both regular holidays fall on the e) SERVICE CHARGE (Art. 96 of the LC, as
same day and he does not work. The law provides amended by R.A. No. 11360)
that he shall receive his regular daily wage for each
regular holiday. The employee will receive 100% for These are charges collected by hotels, restaurants,
Araw ng Kagitingan and 100% for Good Friday. If he and similar establishments distributed completely
works on that day, he is entitled to 400% of his and equally among the covered workers except
regular daily wage, otherwise, there will be a managerial Ees. (Art. 96, LC, as amended by Sec. 1,
diminution of benefits. (Asian Transmission Corp. v. R.A. No. 11360)
Court of Appeals, G.R. No. 144664, 15 Mar. 2004)

NOTE: Medical representatives who do not obtain

prodictivity allowances by virtue of generated sales
are excluded from “basic salary” for the purposes of

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 LABOR LAW AND SOCIAL LEGISLATION
Covered Ees Rule if Service Charge Is Abolished

GR: All Ees are covered, regardless of their position, If it is abolished, the share of the covered Ees shall
designation, and employment status, irrespective of be considered integrated in their wages on the basis
the method by which their wages are paid. of the average monthly share of each Ees for the past
twelve (12) months immediately preceding the
NOTE: Applies only to hotels, restaurants, and abolition. (Sec. 5, Rule V, Book III, IRR, LC)
similar establishment collecting service charges.
NOTE: Service charges form part of the award in
XPN: Managerial Ees (Sec. 2, Rule VI, Book III, IRR, illegal dismissal cases.
LC)
Compliance with Minimum Wage
Distribution
Service charges paid to the covered Ees shall not be
Previously, all service charges collected by covered considered in determining the Er’s compliance with
Ers are required to be distributed at the rate of 85% the increased minimum wage. (Art. 96, LC, as
for all covered Ees and 15% for management. amended by Sec. 1, R.A. No. 11360)

R.A. No. 11360 amended Art. 96 of the LC wherein the f) OCCUPATIONAL SAFETY AND HEALTH
former provides that all service charges collected by STANDARDS LAW (R.A. No. 11058)
hotels, restaurants and similar establishments shall
be distributed completely and equally among the Occupational Safety and Health Standards Law
covered workers except managerial Ees. (OSHSL)

Frequency of Distribution Under this law, the Er is required to observe safety

standards and provide safety devices. On the part of
The period is not less than once every two (2) weeks the Ee, the Implementing Rules require proper use
or twice a month at intervals not exceeding 16 days. of these safeguards and devices. (Azucena, 2021)
(Sec. 4, IRR, R.A. No. 11360)
Coverage
Service Charge vs. Tips
GR: This Act shall apply to all establishments,
SERVICE CHARGE TIPS projects, sites, including Philippine Economic Zone
Voluntary payments Authority (PEZA) establishments, and all other
Collected by the places where work is being undertaken in all
made by the customers
management from the branches of economic activity
to the Ees for excellent
customers.
service.
XPN: Public sector. (Sec. 2, R.A. No. 11058)
Tips
(1) COVERED WORKPLACES (Sec. 3(c))
Tips are handled similarly as service charges.
Pooled tips should be monitored, accounted for, and Covered workplaces refer to establishments,
distributed in the same manner as the service projects, sites and all other places where work is
charges. being undertaken wherein the number of Ee, nature
of operations, and risk or hazard involved in the
A waiter must drop in a tip box the tips he received. business, as determined by the SOLE, require
Otherwise, he commits “tip pocketing,” a serious compliance with the provisions of this Act. (Sec.
offense of dishonesty that may cost them their job. 3(c), Ibid.)

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 III. EMPLOYMENT PROPER
(2) DUTIES OF EMPLOYERS, WORKERS, AND Worker’s Duties
OTHER PERSONS (Sec. 4)
Every worker shall:
Er’s Duties
1. Participate in ensuring compliance with
Every Er, contractor or subcontractor, if any, and OSH standards in the workplace.
any person who manages, controls or supervises the
work being undertaken shall: 2. Make proper use of all safeguards and
safety devices furnished for the worker's
1. Furnish the workers a place of employment protection and that of others and shall
free from hazardous conditions that are observe instructions to prevent accidents
causing or are likely to cause death, illness or imminent danger situation in workplace.
or physical harm to the workers;
3. Observe the prescribed steps to be taken in
2. Give complete job safety instructions or cases of emergency.
orientation to all the workers especially to
those entering the job for the first time, 4. Report to the supervisor any work hazard
including those relating to familiarization that may be discovered in the workplace.
with their work environment; (Sec. 4(b), Ibid.)

3. Inform the workers of the hazards Any Other Person’s Duties

associated with their work health risks
involved to which they are exposed to, It shall be the duty of any person, including the
preventive measures to eliminate or builder or contractor who visits, builds, renovates,
minimize the risks, and steps to be taken in or installs devices or conducts business in any
cases of emergency; establishment or workplace to comply with the
provisions of this Act and all other regulations
4. Use only approved devices and equipment issued by the SOLE. (Sec. 4(c), Ibid.)
for the workplace;
NOTE: Whenever two (2) or more undertakings are
5. Comply with OSH standards including engaged in activities simultaneously in one (1)
training medical examination and where workplace, it shall be the duty of ALL engaged to
necessary, provision of protective and collaborate in the application of OSH standards and
safety devices such as personal protective regulations. (Sec. 4(d), Ibid.)
equipment (PPE) and machine guards;
(3) WORKERS’ RIGHT TO KNOW (Sec. 5)
6. Allow workers and their safety and health
representatives to participate actively in The right to safety and health at work shall be
the process of organizing, planning, guaranteed. All workers shall be appropriately
implementing and evaluating the safety informed by the Er about all types of hazards in the
and health program to improve safety and workplace, provided access to training and
health in the workplace; and education on chemical safety, electrical safety
mechanical safety, and ergonomical safety. (Sec. 5,
7. Provide, where necessary, for measures to Ibid.)
deal with emergencies and accidents
including first-aid arrangements. (Sec.
4(a), Ibid.)

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 LABOR LAW AND SOCIAL LEGISLATION
(4) WORKERS’ RIGHT TO REFUSE UNSAFE NOTE: “Fair and reasonable value” shall not include
WORK (Sec. 6) any profit to the Er or to any person affiliated with
the Er. (Art. 97(f), LC)
The worker has the right of refusal to work without
threat or reprisal from the Er if, as determined by Twin Attributes of Wages
the DOLE, an imminent danger situation exists in
the workplace that may result in illness, injury, or 1. Cash wage takes the form of ready money paid
death and corrective actions to eliminate the danger by the Er for services rendered by the Ee.
have not been undertaken by the Er. (Sec. 6, Ibid.)
2. Facilities are articles or services customarily
(5) WORKERS’ RIGHT TO PERSONAL given for the benefit of the Ee and are
PROTECTIVE EQUIPMENT (PPE) (Sec. 8) voluntarily accepted by him.

Every Er, contractor or subcontructor, if any, shall NOTE: The term “wages” also covers all benefits of
provide his workers, free of charge, protective the Ee under the CBA such as severance pay,
equipment for their eyes, face, hands and feet, and educational allowance, accrued vacation leave
free, and lifeline, safety belt or harness, gas or dust earned but not enjoyed, as well as workmen's
respirators or masks, protective shields whenever compensation awards and unpaid salaries for
necessary by reason of the hazardous work process services rendered. (PNB v. Cruz, G.R. No. 80593, 18
or environment, chemical, radiological, mechanical Dec. 1989)
and other irritants or hazards capable of causing
injury or impairment in the function of any part of Agricultural Work
the body through absorption, inhalation or physical
contact. It refers to all farming activities in all its branches
and includes among others, the cultivation and
NOTE: The cost of the PPE shall be part of the safety tillage of the soil, production, cultivation, growing
and health program which is a separate pay item and harvesting of any agricultural or horticultural
pursuant to Sec. 20 of this Act. (Sec. 8, Ibid.) commodities, dairying, raising of livestock or
poultry, the culture of fish and other aquatic
products in farms or ponds, and any activities
2. WAGES
performed by a farmer or on a farm as an incident
to or in conjunction with such farming operations,
a) DEFINITIONS but does not include the manufacturing and/or
processing of sugar, coconut, abaca, tobacco,
“Wage” is the remuneration or earnings, however pineapple, aquatic or other farm products. (Art. 97
designated, capable of being expressed in terms of (d), LC)
money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of Barangay Micro Business Enterprise (BMBE)
calculating the same, payable by an Er to an Ee
under a written or unwritten contract of It refers to any business entity or enterprise
employment: engaged in the production, processing or
manufacturing of products or commodities,
1. For work done or to be done, or for services including agro-processing, trading, and services,
rendered or to be rendered; and whose total assets including those arising from
loans but exclusive of the land on which the
2. Includes fair and reasonable value of board, particular business entity's office, plant and
lodging, or other facilities customarily equipment are situated, shall not be more than
furnished by the Er to the Ee as determined by P3,000,000. (R.A. No. 9178)
SOLE.

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 III. EMPLOYMENT PROPER
(1) WAGE vs. SALARY Facilities as Part of Wages

WAGE SALARY “Facilities” shall include articles or services for the

benefit of the Ee or his family but shall not include
Applies to the
tools of the trade or articles or service primarily for
compensation for
Denotes a higher the benefit of the Er or necessary to the conduct of
manual labor, skilled,
degree of employment the Er’s business. (Sec. 5, Rule VII-A, Book III, IRR)
or unskilled, paid at
or a superior grade of
stated times, and
services and implies a Facilities are items of expense necessary for the
measured by the day,
position of office. laborer's and his family's existence and subsistence
week, month, or
so that by express provision of law, they form part
season.
of the wage and when furnished by the Er are
deductible therefrom, since if they are not so
Suggestive of a larger furnished, the laborer would spend and pay for
Indicates considerable
and more important them just the same. (Our Haus Realty Development
pay for a lower and less
service. (Gaa v. CA, G.R. Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014)
responsible character
No. L-44169, 03 Dec.
of employment.
1985) e.g., Rice ration, housing, recreational facilities,
medical treatment to dependents, school facilities,
cost of light, water, fuel, meals, or snacks (Atok Big
NOTE: In many situations, however, the words
Wedge Mutual Benefit Association v. Atok Big Wedge
"wages" and "salary" are synonymous. (Azucena,
Mining Co., G.R. No. L-7349, 19 July 1955; Mayon
2021)
Hotel v. Adana, G.R. No. 157634, 16 May 2005)

“Wage” Includes Sales Commissions

Facilities Exclude Profit

In as much as the words “wage,” “pay,” and “salary”

The value of facilities should not be more than the
have the same meaning, and commission is included
actual cost to the Er of the board, lodging, or other
in the definition of “wage,” the logical conclusion is,
facilities customarily furnished by him to his Ees.
in the computation of the separation pay, the salary
The "fair and reasonable value" does not include any
base should also include the earned sales
profit to the Er or to any persons affiliated with the
commissions. (Songco et al. v. NLRC, G.R. Nos. 50999-
Er.
51000, 23 Mar. 1990)

Significance of Determination of Facilities

(2) FACILITIES vs. SUPPLEMENTS Beneficial to Er or Ee

FACILITIES SUPPLEMENT It is significant to determine when articles or

As to their Nature services are beneficial to an Ee because those
Extra remuneration or articles or services which are advantageous to the
Items of expense
benefits Ee cannot be charged against the cash wage of an Ee.
As to their Inclusion to Wage Articles or tools of the trade that are primarily for
Forms part of the wage Independent of wage the benefit of the Er or necessary to the conduct of
As to their Deductibility his business cannot be deducted from the Er's
Deductible from the wages because they are not considered as facilities.
Not wage deductible
wage
To whose Benefit
For the benefit of the Granted for the
worker and his family convenience of the Er

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 LABOR LAW AND SOCIAL LEGISLATION
Requirements for Deducting Values for Since they are not considered as part of wages, their
Facilities value cannot be deducted from the cash wage of an
Ee.
1. Proof must be shown that such facilities are
customarily furnished by the trade; e.g., Vacation leave pay, overtime pay in excess of
the legal rate, profit-sharing benefits, sick pension,
NOTE: It is important to determine when retirement and death benefits, family allowances,
facilities are customarily furnished or not, for Christmas bonus, war-risk or cost-of-living bonuses
the fair and reasonable value of facilities not or other bonuses other than those paid as reward
customarily furnished cannot be charged for extra output or time spent on the jobs. (Atok Big
against the cash wage. Wedge Mining Co. v. Atok Big Wedge Mutual Benefit
Assoc., G.R. No. L-7349, 19 July 1955)
For example, a messenger who slept in the
office cannot be charged by the Er for housing Criterion in Determining Whether an Item is a
allowance because the office is not a regular Supplement or Facility
sleeping quarter. On the other hand, housing
quarters are common in a mining industry; The criterion is not so much with the kind of the
hence, the latter can charge its Ees for housing benefit or item (food, lodging, bonus, or sick leave)
quarter. (Mabeza v. NLRC, G.R. No. 118506, 18 given, but its purpose. (State Marine v. Cebu
Apr. 1997) Seamen’s Assoc., G.R. No. L-12444, 28 Feb. 1963)

2. The provision of deductible facilities must be If it is primarily for the Ee’s gain, then the benefit is
voluntarily accepted in writing by the Ee; and a facility; if its provision is mainly for the Er’s
advantage, then it is a supplement. Again, this is to
3. The facilities must be charged at fair and ensure that Ees are protected in circumstances
reasonable value. (ibid.) where the Er designates a benefit as deductible from
the wages even though it clearly works to the Er’s
NOTE: Where the facilities are given free of charge greater convenience or advantage.
by the Er and there is no prior agreement to deduct
the cost of said facilities from the wages of the Ees, Under the purpose test, substantial consideration
the Er cannot subsequently charge the cost of the must be given to the nature of the Er’s business in
facilities or otherwise avail of the order. (Sec. 2(g), relation to the character or type of work performed
Rule IV, DO 126-13) by the Ees involved. (Our Haus Realty Development
Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014)
Voluntary Acceptance of Facilities
Tips Not Part of Wages; Element of Compulsion
Acceptance of facilities is voluntary, for to compel in Tipping
the Ee to accept such facilities against his will would
be violative of the fundamental right of Ee to the free Wage is the remuneration directly paid by the Er to
disposal of his wage guaranteed under Art. 112. an Ee. On the other hand, tips are paid directly to an
(Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997) Ee by the customer; hence, they fall short of the
definition provided in Art. 97.
Supplements Not Part of Wages
Although a tip denotes a voluntary act, it lacks the
Supplements are extra remunerations or benefits essential element of a gift, that is, the free bestowing
given to or received by laborers over and above of a gratuity without consideration. Despite its
their ordinary earnings or wages. apparent voluntariness, there is an element of
compulsion in tipping. (Ace Navigation Co., Inc. v.
C.A., G.R. No. 140364. 15 Aug. 2000)

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 III. EMPLOYMENT PROPER
Status of Food and Lodging, or the Electricity and sufficient to allow deduction from Ee’s wages.
Water Consumed by a Hotel Worker (Mayon Hotel & Restaurant v. Adarna, G.R. No.
157634, 16 May 2005)
These are supplements. Considering, therefore, that
hotel workers are required to work different shifts Gratuity
and are expected to be available at various odd
hours, their ready availability is a necessary matter It is something given freely or without recompense;
in the operations of a small hotel. a gift; something voluntarily given in return for a
favor or services.
Furthermore, granting that meals and lodging were
provided and indeed constituted facilities, such Gratuity pay is not intended to pay a worker for
facilities could not be deducted without the Er actual services rendered. It is a money benefit given
complying first with certain legal requirements. to the workers whose purpose is to reward them in
(Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997) return for a satisfactory work and efficient service
to the company.
Q: Gamma Company pays its regular Ees
P350.00 a day and houses them in a dormitory While it may be enforced once it forms part of a
inside its factory compound in Manila. Gamma contractual undertaking, the grant of such benefit is
Company also provides them with three full not mandatory so as to be considered a part of labor
meals a day. In the course of a routine standard law unlike salary, cost-of-living-
inspection, a DOLE Inspector noted that the allowances, holiday pay, leave benefits, etc., which
workers' pay is below the prescribed minimum are covered by the Labor Code. (Azucena, 2016)
wage of P426.00 plus P30.00 allowance, and
thus required Gamma Company to pay wage b) PRINCIPLES
differentials.
(1) NO WORK, NO PAY
Gamma Company denies any liability,
explaining that after the market value of the “No Work, No Pay” Principle (Fair Day’s Wage
company-provided board and lodging are added for a Fair Day’s Labor)
to the Ees' P350 cash daily wage, the Ees'
effective daily rate would be way above the GR: If there is no work performed by the Ee, without
minimum pay required by law. The company the fault of the Er, there can be no wage or pay.
counsel further points out that the Ees are aware Burden of economic loss suffered by Ee shall not be
that their food and lodging form part of their shifted to the Er.
salary and have long accepted the arrangement.
Is the company's position legally correct? (2013 XPNs: When the laborer was able, willing and ready
BAR) to work but was:

A: NO. The following requisites were not complied 1. Prevented by management;

with: 2. Illegally locked out;
3. Illegally suspended;
1. Proof that such facilities are customarily 4. Illegally dismissed; and
furnished by the trade; 5. Illegally prevented from working. (Aklan
Electric Coop. v. NLRC, G.R. No. 129246, 10 Jan.
2. The provision of deductible facilities is 2000)
voluntarily accepted by the Ee; and,

3. The facilities are charged at a fair and

reasonable value. Mere availment is not

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 LABOR LAW AND SOCIAL LEGISLATION
(2) EQUAL PAY FOR EQUAL WORK or dismissed. Where the Ee's dismissal was for a just
cause, it would neither be fair nor just to allow the
“Equal Pay for Equal Work” Principle Ee to recover something he has not earned and
could not have earned. (PAL v. NLRC, G.R. No. 55159,
Persons who work with substantially equal 22 June 1989)
qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries. Thus, where the failure of workers to work was not
due to the Er's fault, the burden of economic loss
Ees holding the same position and rank are suffered by the Ees should not be shifted to the Er.
presumed to be performing equal work. The rule Each party must bear his own loss. (Azucena, 2021)
equal pay for equal work applies whether the Ee is
hired locally or abroad. (International School (4) NON-DIMINUTION OF BENEFITS
Alliance of Educators v. Quisumbing, G.R. No. 128845,
01 June 2000) GR: Nothing in the LC shall be construed to
eliminate or in any way diminish supplements, or
Application of Title other Ee benefits being enjoyed at the time of the
promulgation of the Code. (Art. 100, LC)
GR: The Title on Wages of the LC applies to all Ees.
Benefits being given to Ees cannot be taken back or
XPNs: reduced unilaterally by the Er because the benefit
1. Farm tenancy or leasehold; has become part of the employment contract,
whether written or unwritten.
2. Household or domestic helpers, including
family drivers and persons working in the XPNs:
personal service of another;
1. Correction of error;
3. Home workers engaged in needlework or in 2. Contingent benefit or conditional bonus;
any cottage industry duly registered in 3. Wage order compliance;
accordance with law; (Art. 98, LC) and 4. Benefits on reimbursement basis;
5. Reclassification of position;
4. Workers in any duly registered cooperatives 6. Negotiated benefits; and
when so recommended by the Bureau of
Cooperative Development and upon approval NOTE: Benefits initiated through negotiation
of the SOLE. between Er and Ees, such as those contained in
a CBA are not within the prohibition of Art. 100
NOTE: Workers of a registered BMBE are only because, as products of bilateral contract, they
exempted from the Minimum Wage Law, not from can only be eliminated or diminished
the Title on Wages of the LC. (R.A. No. 9178) bilaterally. (Azucena, 2016)

(3) FAIR WAGE FOR FAIR WORK 7. Productivity incentives

A fair day's wage for a fair day's labor continues to NOTE: If the error is not corrected in a
govern the relation between labor and capital and reasonable time, it ripens into a company
remains a basic factor in determining Ees' wages. policy and Ees can demand it as a matter of
right.
If there is no work performed by the Ee there can be
no wage or pay unless the laborer was able, willing
and ready to work but was prevented by
management or was illegally locked out, suspended

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There is diminution of benefits "when the protection to labor clauses enshrined in the
following requisites are present fundamental charter.

1. The grant or benefit is founded on a policy Thus, a change of method of payment of wages from
or has ripened into a practice over a long monthly to daily will not be allowed if it would
period of time; result in reduction of pay. However, if the method
introduced would augment the worker's pay it will
2. the practice is consistent and deliberate; be valid. Reclassification of position of Ees pursuant
to reorganization, without affecting their
3. the practice is not due to error in the compensation is not covered by the proscription.
construction or application of a doubtful or (Opinion of the SOLE, 07 Oct. 1975)
difficult question of law; and
An agreement reducing certain labor standards
4. the diminution or discontinuance is done benefits such as overtime and premium pay violates
unilaterally by the employer." (Nippon Art. 100. Provisions of existing laws are deemed
Paint Philippines, Inc. v. NIPPEA, G.R. No. part of a contract. (Republic Planters Bank v. NLRC,
229396) G.R. No. 117460, 06 Jan. 1997)

The Non-Diminution Rule, however, applies only if However, if there is an impelling reasonable
the benefit is based on an express policy, a written justification of the diminution or reduction because
contract, or has ripened into a practice. To be of an emergency, exigency, or business losses, such
considered a practice, it must be consistently and diminution or reduction would be valid, provided, it
deliberately made by the Er over a long period of is duly approved by the SOLE or his duly authorized
time. (Wesleyan University-Philippines v. Wesleyan representative pursuant to Art. 233. (Poquiz, 2012)
University-Faculty and Staff Assn., G.R. No. 181806,
12 Mar. 2014) Bonus Treated as Not Part of Wages
NOTE: With regard to the length of time, the Court
held that jurisprudence has not laid down any rule Bonus is not considered part of wages if it is paid
requiring a specific minimum number of years. only upon realization of profits or amount of
(Sevilla Trading Co. v. Semana, G.R. No. 152456, 28 production or output. (Atok Big Wedge Mining Co.,
Apr. 2004) Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No.
L-5276, 03 Mar. 1953)
However, in Supreme Steel Corp. v. NMS-IND-APL
(G.R. No. 185556, 28 Mar. 2011), the Court held that, Where the bonus is not payable to all but only to
“While it is true that jurisprudence has not laid some Ees and only when their labor becomes more
down any rule requiring a specific minimum efficient or more productive, it is only an
number of years in order for a practice to be inducement for efficiency, a prize therefore, not a
considered as a voluntary act of the Er, under part of the wage. (Poquiz, 2012)
existing jurisprudence on this matter, an act carried
out within less than a year would certainly not See pages 53-54 for further discussion on Bonus.
qualify as such.”
Stoplock Gate or Non-chargeability Clause
Purpose of Non-Diminution of Benefits
Having entered into an agreement with its Ees, an Er
The philosophy behind the law is to prohibit Ers may not be allowed to renege on its obligation
from reducing benefits already enjoyed by Ees. A under a CBA should, at the same time, the law grants
contrary rule will corrupt the Er's mind to abuse the Ees the same or better terms and conditions of
and exploit Ees, prostituting the social justice and employment. Ee benefits derived from law are
exclusive of benefits arrived at through negotiation

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and agreement unless otherwise provided by the 1. Enjoyment of the privilege of commutation of
agreement itself or by law. (Meycauayan College v. sick leave benefits into cash equivalent as a
Hon. Drilon G.R. No. 81144, 07 May 1990) company practice; (Davao Integrated Port
Stevedoring Services v. Abarquez, G.R. No.
Any allowance/wage granted under the collective 102132, 19 Mar. 1993)
bargaining agreement cannot be credited to similar
form of benefit that may thereafter be ordained by 2. Grant of resignation benefits to a Branch
the government through legislation. Such portion of Manager on the basis of company practice of
the contract is the "stoplock" gate or known in its applying expired CBA concluded by the
technical term as the “non-chargeability” clause. supervisory union; (Republic Planters Bank, v.
(Marcopper Mining Corp. v. NLRC, G.R. No. 103525, 29 NLRC, G.R. No. 79488, 30 Sept. 1988) and
Mar. 1996)
3. Giving of special bonus as the company's long
This doctrine was resounded in this manner: the and regular practice. (Meralco v. Quisumbing,
CBA provides, "It is hereby agreed that these salary G.R. No. 127598, 27 Jan. 1999)
increases shall be exclusive of any wage increase
that may be provided by the law as a result of any c) PAYMENT OF WAGES
economic change."
Forms of Payment
The Court ruled that the above provision in the CBA
is clear that the salary increases shall not include GR: As a general rule, wages shall be paid in legal
any wage increase that may be provided by law as a tender. (Sec. 1, Rule VIII, Book III, IRR of LC)
result of economic change. The CBA needs no
interpretation as it is not ambiguous. Thus, the wage No Er shall pay the wages of an Ee by means of:
increase granted by the petitioner to its Ees under
the CBA cannot be considered as creditable benefit. 1. Promissory notes;
(Mindanao Steel Corp. v. Minsteel Free Workers 2. Vouchers;
Organization, G.R. No. 130693, 04 Mar. 2004; UKCEU- 3. Coupons;
PTGWO v. Kimberly Clark Phils, G.R. No. 162957, 06 4. Tokens;
Mar. 2006) 5. Tickets;
6. Chits; or
Benefit Acquired Through Company Practice 7. Any object other than legal tender.

An Ee can demand as a matter of right benefits NOTE: This prohibition applies even when
granted by the Er for a considerable and long period expressly requested by the Ee.
of time, as the same may ripen into a company
practice. XPNs: Payment of wages by check or money order
shall be allowed if:
If it is a past error that is being corrected, no vested
right may be said arisen nor any diminution of 1. It is customary on the date of the effectivity of
benefit under Art. 100 of the Labor Code may be said the Code;
to have resulted by virtue of the correction. (Globe
Mackay v. NLRC, G.R. No. 74156, 29 June 1988) 2. Necessary because of special circumstances
as specified in the regulation issued by the
Instances of Violation of the Rule on Non- SOLE;
Diminution of Benefits
3. Stipulated in the CBA; (Art. 102, LC) or
Withdrawal of the following would amount to
diminution of Ee’s existing benefits: 4. Where the following conditions are met:

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a. There is a bank or other facility for XPNs:
encashment within a radius of one (1)
kilometer from the workplace; 1. On account of force majeure or circumstances
beyond the Er’s control, payment shall be
b. The Er or any of his agents or made immediately after such force majeure or
representatives does not receive any circumstances have ceased;
pecuniary benefit directly or indirectly
from the arrangement; 2. If engaged to perform a task which cannot be
completed in two (2) weeks shall be subject to
c. The Ees are given reasonable time the following conditions, in the absence of a
during banking hours to withdraw CBA or arbitration award:
their wages from the bank which time
shall be considered as compensable a. That payments are made at intervals not
hours worked if done during working exceeding 16 days, in proportion to the
hours; and amount of work completed;

d. The payment by check is with the b. That final settlement is made upon
written consent of the Ees concerned if completion of the work. (Art. 103, LC)
there is no collective agreement
authorizing the payment of wages by Place of Payment
bank checks. (Sec. 2, Rule VIII, Book III,
IRR of LC) GR: At or near the place of undertaking. (Art. 104,
LC)
Q: Benito is the owner of an eponymous clothing
brand that is a top seller. He employs a number XPN: Payment in a place other than the workplace
of male and female models who wear Benito's shall be permissible only under the following
clothes in promotional shoots and videos. His circumstances:
deal with the models is that Benito will pay them
with 3 sets of free clothes per week. Is this 1. When payment cannot be effected at or near
arrangement allowed? (2015 BAR) the place of work by reason of the
deterioration of peace and order conditions, or
A: NO. The arrangement is not allowed. The models by reason of actual or impending emergencies
are Benito’s employees. As such, their services are caused by fire, flood, epidemic or other
required to be paid only in legal tender, even when calamity rendering payment thereat
expressly requested by the employee otherwise impossible;
(Art. 102, LC). Hence, no lawful deal in this regard
can be entered into by and between Benito and his 2. When the Er provides free transportation to
models. The three (3) sets of clothes, regardless of the Ees back and forth; and
value, are in kind and are therefore not in the form
prescribed by law. 3. Under any other analogous circumstances;
Provided, that the time spent by the Ees in
Time of Payment collecting their wages shall be considered as
compensable hours worked.
GR: Wages shall be paid:
1. At least once every two (2) weeks; or NOTE: No Er shall pay his Ees in any bar, night or
2. Twice a month at intervals not exceeding 16 day club, drinking establishment, massage clinic,
days. dance hall, or other similar places or in places where
games are played with stakes of money or things
representing money except in the case of persons

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employed in said places. (Sec. 4, Rule VIII, Book III, Direct Payment of Wages
IRR of LC)
GR: Wages shall be paid directly to the workers to
Requisites of Payment Through Banks whom they are due. (Art. 105, LC)

1. Shall be made upon written permission of the XPNs:

majority of the Ees or workers concerned;
1. Payment through another person may be
2. With 25 or more Ees; and made in cases of force majeure which renders
the payment impossible, provided that such
3. Located within one (1) kilometer radius from person is under written authority given by the
a commercial, savings, or rural bank. (Sec. 7, worker for the purpose;
R.A. No. 6727)
2. Where the Er is authorized in writing by the Ee
NOTE: Payment shall be made within the period of to pay his wages to a member of his family;
payment of wages fixed by the Labor Code.
3. Where payment to another person of any part
Requisites of Payment Through Automated of the Ee's wages is authorized by existing law,
Teller Machine (ATM) including payments for the insurance
premiums of the Ee and union dues where the
1. The ATM system of payment is with the right to check-off has been recognized by the
written consent of the Ees concerned; Er in accordance with a collective agreement
or authorized in writing by the individual Ees
2. The Ees are given reasonable time to withdraw concerned; (Sec. 5, Rule VIII, Book III, IRR of LC;
their wages from the bank facility which time, Art. 105, LC) or
if done during working hours, shall be
considered compensable hours worked; 4. In case of death of the Ee, the Er may pay the
wages to the heirs without the necessity of
3. The system shall allow workers to receive intestate proceedings. When the heirs are of
their wages within the period or frequency age, they shall:
and in the amount prescribed under the Labor
Code, as amended; a. Execute an affidavit attesting to their
relationship to the deceased and the fact
4. There is a bank or ATM facility within a radius that they are his heirs to the exclusion of
of one (1) kilometer to the place of work; all other persons;

5. Upon request of the concerned Ees, the Er shall b. In case any of the heirs is a minor, such
issue a record of payment of wages, benefits affidavit shall be executed in his behalf by
and deductions for a particular period; his natural guardian or next of kin;

6. There shall be an additional expense and no c. Upon presentation of the affidavit to the
diminution of benefits and privileges because Er, he shall make payment to the heirs as
of the ATM system of payment; and representative of the SOLE. (Sec. 6, Rule
VIII, Book III, IRR of LC)
7. The Er shall assume responsibility in case the
wage protection provisions of law and Q: Petitioner Cathy was the Acting General
regulations are not complied with under the Manager of Metropolitan Tuguegarao Water
arrangement. (DOLE Labor Advisory, Series of District, a GOCC. In 2009, the Board of Directors
1996) of MTWD issued Board Resolution Nos. 2009-

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 III. EMPLOYMENT PROPER
0053 and 2009-0122, approving the payment of principles on solutio indebiti and unjust enrichment,
accrued Cost of Living Allowance (COLA) to "recipients — whether approving or certifying
qualified MTWD Ees for calendar years (CYs) officers or mere passive recipients," like petitioner
1992 to 1997 in the aggregate amount of Madera in this case, are all “liable to return the
P1,689,750.00. However, after post-audit, the disallowed amounts respectively received by them,
audit team issued Notice of Disallowance unless they are able to show that the amounts they
disallowing the payment of P1,689,750.00 for received were genuinely given in consideration of
lack of legal basis specifically since the COLA services rendered.”
was already deemed integrated into the basic
salary of the Ees pursuant to Sec. 12 of R.A. No. To emphasize, "payees who receive undue payment,
6758, otherwise known as the “Compensation regardless of good faith, are liable for the return of
and Position Classification Act of 1989,” and the the amounts they received.” As stated, as an
Department of Budget and Management exception to this rule, a payee or recipient may be
Corporate Compensation Circular No. 10. Is the excused from returning the disallowed amount
disallowance proper? when he or she has shown that he or she was
"actually entitled to what he or she received" or
A: YES. The Court finds that the grant of accrued "when undue prejudice will result from requiring
COLA for CYs 1992 to 1997 was correctly payees to return or where social justice or
disallowed because said allowance was deemed humanitarian considerations are attendant." (Ninia
already integrated in the compensation of P. Lumauan v. Commission on Audit, G.R. No. 218304,
government Ees under Sec. 12 of R.A. No. 6758. The 09 Dec. 2020, as penned by J. Hernando)
Court further declared that said provision was self-
executing, and thus the absence of any DBM d) PROHIBITIONS REGARDING WAGES
issuance was immaterial. The clear policy of Sec. 12
is "to standardize salary rates among government NON-INTERFERENCE IN DISPOSAL OF WAGES
personnel and do away with multiple allowances
and other incentive packages and the resulting Er shall not limit or interfere with the freedom of
differences in compensation among them." Thus, any Ee to dispose of his wages. He shall not force,
the general rule is that all allowances are deemed compel or oblige his Ees to purchase merchandise,
included in the standardized salary. However, there commodities or other property from any other
are allowances that may be given in addition to the person, or otherwise make use of any store services
standardized salary. of such Er or any other person. (Art. 112, LC)

Petitioner can be held personally liable for the Civil Code Provisions on Non-Interference in
disallowed benefit to the extent of the amount she Disposal of Wages
actually and individually received pursuant to our
ruling in Madera v. Commission on Audit (G.R. No. Art. 1705. The laborer's wages shall be paid in legal
244128, 08 Sept. 2020). Petitioner is only a recipient currency.
or a passive payee of the allowance. She thus falls
under category 2(c) of the rules on return which Art. 1706. Withholding of the wages, except for a
provides that “Recipients — whether approving or debt due, shall not be made by the Er.
certifying officers or mere passive recipients — are
liable to return the disallowed amounts respectively Art. 1707. The laborer's wages shall be a lien on the
received by them, unless they are able to show that goods manufactured or the work done.
the amounts they received were genuinely given in
consideration of services rendered.” Art. 1708. The laborer's wages shall not be subject
to execution or attachment, except for debts
Under the rules on return of disallowed amounts as incurred for food, shelter, clothing and medical
espoused in Madera, and applying the civil law attendance.

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Art. 1709. The Er shall neither seize nor retain any i. Deductions for value of meals and
tool or other articles belonging to the laborer. facilities freely agreed upon; (Azucena,
2016)
Q: Tarcisio was employed as operations
manager and received a monthly salary of ii. In case where the Ee is indebted to the Er
P25,000.00 through his payroll account with DB where such indebtedness has become
Bank. He obtained a loan from Roberto to due and demandable; (Art. 1706)
purchase a car. Tarcisio failed to pay Roberto
when the loan fell due. Roberto sued to collect iii. In court awards, wages may be subject of
and moved to garnish Tarcisio’s payroll account. execution or attachment, but only for
The latter vigorously objected and argued that debts incurred for food, shelter, clothing,
salaries were exempt from garnishment. Is and medical attendance; (Art. 1703)
Tarcisio correct? Explain your answer. (2017
BAR) iv. Taxes withheld pursuant to the Tax Code;

A: NO, Tarcisio is not correct. Under Art. 1708 of the v. Salary deduction of a member of a legally
NCC, only wages, which are the compensation paid established cooperative; (Sec. 59, R.A. No.
for manual skilled or unskilled labor, are exempt 6938)
from garnishment. Here, the subject of garnishment vi. Deductions for SSS, PhilHealth and Pag-
is Tarcisio’s salary as a managerial employee, which IBIG premiums;
is not considered as wages. Hence, Tarcisio’s salary
may be garnished. vii. Deductions for loss or damage; (Art. 114,
LC)
WAGE DEDUCTION
viii. Deductions made with the written
GR: No Er, in his own behalf or on behalf of any authorization of the Ee for payment to a
person, shall make any deduction from the wages of third person; (Sec. 13, Rule VIII, Book III,
his Ees. (Art. 113, LC) IRR of LC)

XPNs: ix. Deductions as disciplinary measures for

habitual tardiness; (Opinion dated 10
a. Where the worker is insured with his consent Mar. 1975 of the SOLE)
by the Er; and
x. Agency fees. (Art. 259(e), LC)
b. For union dues, in cases where the right of the
worker or his union to check off has been The law prohibits the Er from making deductions
recognized by the Er or authorized in writing from the wages of an Ee. The evil sought to be
by the individual worker concerned. (Art. 113, prevented is to forestall the commission of
LC) unwarranted practices of Ers by making
unnecessary deductions without Ee's knowledge or
NOTE: Art. 241(o) of the LC provides that authorization. (Galvadores v. Trajano, G.R. No.
special assessments may be validly checked- 70067, 15 Sept. 1986)
off if there is an individual written
authorization duly signed by every Ee. Deductions for Absences and Tardiness
(Principle of No-Work No-Pay)
c. In cases where the Er is authorized by law or
regulations issued by the SOLE: Deductions for unpaid absences are allowed. An Er
will not be liable for violation of the prohibition

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against wage deduction for absences or tardiness argued that the Ee was already estopped in
incurred by the Ee. complaining about the deduction. The Supreme
Court declared the employment contract illegal and
Check-off iniquitous, thus, null and void. (Commando Security
Agency v. NLRC, G.R. No. 95844, 20 July 1992)
It is a system by which union dues and other
assessments are deducted from the Ee's wage by the Reduction of Workdays; Effect on Wages
Er upon authorization from the worker or by
mandate of the law. (Poquiz, 2012) In situations where the Er has to reduce the number
of regular working days to prevent serious losses,
Duration of Check-Off such as when there is a substantial slump in the
demand for his goods or services or when there is
The Ees' check-off authorization even if declared lack of raw materials, the Er may deduct the wages
irrevocable, is good only as the Ees remain members corresponding to the days taken off from the
of the union concerned, because as such members workweek, consistent with the principle of “no
they were obliged to pay the corresponding dues work, no pay.” This is without prejudice to an
and assessments to their union. agreement or company policy which provides
otherwise. (Handbook on Workers’ Statutory
The moment they are separated from and left the Monetary Benefits, 2016)
union and joined another labor organization, they
were no longer obliged to pay said dues and PROHIBITION AGAINST DEPOSIT
assessments. There would be no longer any reason REQUIREMENT
or occasion for the company to continue making
deductions. (Phil. Federation of Petroleum Workers GR: While deductions from the Ees’ wages may be
v. CIR, G.R. No. L-26346, 27 Feb. 1971) made for cash bonds or deposits, the Er, however, is
not allowed to unilaterally impose upon its Ees the
Compulsory Check-Off giving of cash bonds or deposits.

Check-off may be enforced with the consent of the XPN: If the Er proved and established that it falls
Er or by authority in writing by the Ees. under any of the following:

When the union and the Er agree, the attitude of the a. That it is engaged in such trades, occupations
Ees is immaterial. When the Ees duly authorize the or business were the practice of making
check-off, the Er's consent is unnecessary, and its deductions or requiring deposits is a
recognition of the right is obligatory. (A.L. Ammen recognized one; or
Trans. Co. v. BITEMAA, 91 Phil 649, 25 July 1952)
b. That the cash bond or deposit is necessary or
Agency Fees desirable as determined by the DOLE
Secretary in appropriate rules and
It is an amount equivalent to the union dues, which regulations.
a non-union member pays to the union because he
benefits from the CBA negotiated by the union. In the case of Nina Jewelry v. Montecillo (G.R. No.
188169, 28 Nov. 2011), the court ruled that the
Deduction to Ensure Employment petitioners should first establish that the making of
deductions from the salaries is authorized by law, or
The employment contract provides for 25% regulations issued by the SOLE. Further, the posting
deduction from Ee's salary representing the Er's of cash bonds should be proven as a recognized
share in procuring job placement for him. The practice in the jewelry manufacturing business, or
provision in the contract was contested, but the Er alternatively, the petitioners should seek for the

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determination by the SOLE through the issuance of 4. Unlawful for any person to make any statement,
appropriate rules and regulations that the policy the report, or record filed or kept pursuant to the
former seeks to implement is necessary or desirable Code knowing such statement, report or record
in the conduct of business. to be false in any material aspect. (Art. 119, LC)

PROHIBITION ON WITHHOLDING OF WAGES Deposit for Loss or Damage

It shall be unlawful for any person, directly or GR: Er shall not require his worker to make deposits
indirectly, to withhold any amount from the wages from which deductions shall be made for the
of a worker. (Art. 116, LC) reimbursement of loss of or damage to tools,
materials, or equipment supplied by the Er. (Art.
Although management prerogative refers to the 114, LC)
right to regulate all aspects of employment, it
cannot be understood to include the right to XPN: Er is engaged in such trade or business where
temporarily withhold salary/wages without the the practice of making deductions or requiring
consent of the Er. To sanction such an interpretation deposits is a recognized one or is necessary or
would be contrary to Art. 166 of the Labor Code. desirable as determined by the SOLE in appropriate
(SHS Perforated Materials, Inc. v. Diaz, G.R. No. rules and regulations.
185814, 13 Oct. 2010)
Requisites for Payment of Loss and Damage
As an exception, Ers usually withhold the release of
the last salary and benefits of terminated or 1. It is clearly shown that the Ee is responsible for
resigning Ees prior to or pending their compliance the loss or damage;
with certain clearance procedure.
2. The Ee is given reasonable opportunity to
Clearance procedures are instituted to ensure that show cause why deduction should not be
the properties, real or personal, belonging to the Er made;
but are in the possession of the separated Ee, are
returned to the Er before the Ee’s departure. (Milan 3. The total amount of such deductions is fair and
v. NLRC and Solid Mills, Inc., G.R. No. 202961, 04 Feb. reasonable and shall not exceed the actual loss
2015) or damage; and

OTHER PROHIBITIONS 4. The deduction from the wages of the Ee does

not exceed 20% of his wages in a week. (Sec.
1. Inducing a worker to give up any part of his 11, Rule VIII, Book III, IRR of LC)
wages by force, intimidation, stealth, threat, or
by any other means whatsoever without his e) WAGE DISTORTION
consent; (Art. 116, LC)
(1) CONCEPT
2. To make deductions from wages for the benefit
of the Er or his representative as consideration Wage distortion is a situation where an increase in
of a promise of Employment or retention in prescribed wage results in the elimination or severe
employment; (Art. 117, LC) contraction of intentional quantitative differences
in wage or salary rates between and among Ee
3. Refusal by Er to pay or reduce wages or benefits groups in an establishment as to effectively
in discrimination of any Ee who has filed any obliterate the distinctions embodied in such wage
complaint or instituted any proceedings under structure based on skills, length of service or other
the code or has testified or about to testify; (Art. logical bases of differentiation. (Art. 124, LC)
118, LC) or

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It is the disappearance or virtual disappearance of Wage distortion is applied to voluntary and
pay differentials between lower and higher unilateral increases by the Er in fixing hiring rates
positions in an enterprise because of compliance which is inherently a business judgment
with a wage order. (P.I. Manufacturing v. P.I. prerogative, then the hands of the Er would be
Manufacturing Supervisors and Foreman, G.R. No. completely tied even in cases where an increase in
167217, 04 Feb. 2008) wage of a particular group is justified due to a re-
evaluation of the high productivity of a particular
NOTE: Wage distortion presupposes an increase in group, or as in the present case, the need to increase
the compensation of the lower pay class in an office the competitiveness of Bankard’s hiring rate. An Er
hierarchy without a corresponding raise for high would be discouraged from adjusting the salary
level Ees in the same region of the country, resulting rates of a particular group of Ees for fear that it
in the elimination or severe diminution of the would result to a demand by all Ees for a similar
distinction between the two groups or classes. increase, especially if the financial conditions of the
(Prubankers Association v. Prudential Bank & Trust business cannot address an across-the-board
Company, G.R. No. 131247, 25 Jan. 1999) increase. (Bankard Ees Union-Workers Alliance
Trade Unions v. NLRC, G.R. No. 140689, 17 Feb. 2004)
Elements of Wage Distortion
Causes
1. An existing hierarchy of positions with
corresponding salary rates; Wage distortions have often been the result of:

2. A significant change or increase in the salary 1. Government decreed increases in minimum

rate of a lower pay class without a wages;
corresponding increase in the salary rate of a
higher one; 2. Merger of two companies (with differing
classifications of Ees and different wage rates)
3. The elimination of the distinction between the where the surviving company absorbs all the
two (2) groups or classes; and Ees of the dissolved corporation; or

4. The wage distortion exists in the same region 3. The effectivity dates of wage increases given to
of the country. (Alliance Trade Unions v. NLRC, each of the two classes of Ees (rank-and-file and
G.R. No. 140689, 17 Feb. 2004) supervisory) had not been synchronized in
their respective CBAs. (Metro Transit Org., Inc.
In mandating an adjustment, the law did not require v. NLRC, G.R. No. 116008, 11 July 1995)
that there be an elimination or total abrogation of
quantitative wage or salary differences. A severe Where a significant change occurs at the lowest
contraction is enough. (Metrobank v. NLRC, G.R. No. level of positions in terms of basic wage without a
102636, 10 Sept. 1993) corresponding change in the other level in the
hierarchy of positions, negating as a result thereof
Wage distortion does not arise when a wage order the distinction between one level of position from
gives Ees in one branch of a bank higher the next higher level, and resulting in a parity
compensation than that given to their counterparts between the lowest level and the next higher level
in other regions occupying the same pay scale who or rank, between new entrants and old hires, there
are not covered by said wage order. In short, the exists a wage distortion. (Prubankers Association v.
implementation of wage orders in one region but Prudential Bank & Trust Company, G.R. No. 131247,
not in others does not in itself necessarily result in 25 Jan. 1999)
wage distortion. (Prubankers Association v.
Prudential Bank & Trust Company, G.R. No. 131247,
25 Jan. 1999)

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Cases NOT Representative of Wage Distortion Formula in determining “distortion adjustment”

1. Where the hierarchy of positions based on

skills, length of service and other logical bases
of differentiation was preserved; (Ibid.)
The above standard formula has been applied by the
2. A disparity in wages between Ees holding RTWPB to correct wage or pay-scale structures in
similar positions but in different regions; cases of wage distortion as an appropriate measure
acceptable to the parties. (Poquiz, 2018, citing
3. Where the disparity was simply due to the fact Metropolitan Bank and Trust Co. Employees Union
that the Ees had been hired on different dates ALU-TUCP v. NLRC, G.R. No. 102363, 10 Sept. 1993)
and were thus receiving different salaries;
(Manila Mandarin Ees Union v. NLRC, G.R. No. Advisory Formula in Correcting the Effects of the
108556, 19 Nov. 1996) Wage Order on the Existing Wage Structure
(Wage Distortion)
4. That an Ee was initially hired at a position level
carrying a hiring rate higher than the rates of 1. Pineda Formula;
others;

5. That an Ee failed to meet the cut-off date in the

grant of yearly CBA increase; or

6. That the Ee had been promoted while the 2. Pineda-Cruz-So Formula;

others were not.

Two (2) methods of adjusting minimum wage

The following are the methods of adjusting the

Where: Exponent is represented by n
minimum wage:

3. Percentile Approach;
1. floor wage method – involves the fixing of
a determinate amount to be added to the
prevailing statutory minimum wage rates.
On the other hand,

2. salary-ceiling method – the wage

adjustment was to be applied to employees 4. Philippine Construction Supply Formula;
receiving a certain denominated salary
ceiling. In other words, workers already
being paid more than the existing minimum
wage (up to a certain amount stated in the
Wage Order) are also to be given a wage
increase. (Norkis Free and Ind. Workers Where:
Union v. Norkis Trading Co., Inc., G.R. No.
157098, 30 June, 2005)

U N IV E R S I T Y O F S A N T O T O M A S 100
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 III. EMPLOYMENT PROPER
5. Jimenez, Ofreneo, Delas Alas Jr. (JODA) the hands of the Er would be completely tied even
Formula; in cases where an increase in wages of a particular
group is justified due to a re-evaluation of the high
productivity of a particular group or the need to
increase the competitiveness of Bankard’s hiring
rate.
Where:
An Er would be discouraged from adjusting the
salary rates of a particular group of Ees for fear that
Wa = old daily minimum wage
it would result to a demand by all Ees for a similar
increase, especially if the financial conditions of the
Wb = daily wage of employee
business cannot address an across-the-board
increase. (Bankard Ees Union-Workers Alliance
where Wb > Wa, or Wb is above Wa)
Trade Unions v. NLRC, G.R. No. 140689, 17 Feb. 2004)
Wc = new daily minimum wage
Negotiated Wage Increases to Correct Wage
= Wa + mandated wage increase
Distortion; Its Interest and Validity
6. Wirerope Formula; and
The law recognizes the validity of negotiated wage
increases to correct wage distortion. The legislative
intent is to encourage the parties to solve the
problem of wage distortion through voluntary
negotiations or arbitration, rather than strikes,
7. Bagtas Approach.
lockouts, or other concerted activities of the Ees or
the management.

Unilateral grant of wage increase on the part of an

Er is recognized as a means of correcting wage
Q: Bankard, Inc. approved a New Salary Scale distortions including wage adjustments under a
which increased the hiring rates of new Ees. The collective bargaining agreement. Recognition and
Bankard Ees Union pressed the company for an validation of wage increases given by Ers after
increase in the salary of its old regular Ees. The unilaterally or because of CBNs for the purpose of
company refused to do so. correcting wage distortions are in keeping with the
public policy of encouraging Ers to grant wage and
The union filed a Notice of Strike on the ground allowance increases to their Ees which are higher
of discrimination for it claimed that a wage than the minimum rates of increases prescribed by
distortion exists, and the company refused to statute or administrative regulation. (Associated
negotiate to correct the distortions. Is there a Labor Unions-TUCP vs. NLRC, et al., G.R. No. 109328,
wage distortion brought about by the New 16 Aug. 1994)
Salary Scale?
To compel Ers simply to add on legislated increases
A: NO. The union cannot legally obligate Bankard to in salaries or allowances without regard to what is
correct the alleged “wage distortion” as the increase already being paid would be to penalize Ers who
in the wages and salaries of the newly hired was not grant their workers more than the statutory
due to a prescribed law or wage order. If the prescribed minimum rates of increases. Clearly, this
compulsory mandate under Art. 124 to correct wage would be counter-productive so far as securing the
distortion is applied to voluntary and unilateral interest of labor is concerned. (Metro Bank & Trust
increases by the Er in fixing hiring rates which is Co. Ees Union v. NLRC, G.R. No. 102636, 10 Sept. 1993)
inherently a business judgment prerogative, then

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Settlement of Wage Distortion Q: How should a wage distortion be settled?

The application of wage increases brought about by A: Any dispute arising from wage distortion shall be
Wage Orders issued by the Board may result in resolved through the grievance procedure as
distortions in the wage structure within the provided in the applicable collective bargaining
establishment. The Er and the workers are agreement and, if the dispute remains unresolved,
mandated by law to resolve such wage distortion then through voluntary arbitration.
problems in the following manner:
In cases where there are no collective bargaining
ORGANIZED UNORGANIZED agreements or recognized labor unions, the
ESTABLISHMENT ESTABLISHMENT employers and workers shall endeavor to correct
(with union) (without union) such wage distortions. Any dispute arising
therefrom shall be settled through the National
The Er and the union The Er and the workers Conciliation and Mediation Board and, if it remains
shall negotiate to shall endeavor to unresolved after 10 calendar days of conciliation,
correct distortion. correct the distortion. the issue of wage distortion shall be referred to the
appropriate branch of the NLRC. (R.A. No. 6727,
Wage Rationalization Act, amending, among others,
Any dispute shall be Art. 124 of the LC)
Any dispute shall be
resolved through a
settled through the Non-Strikeablity of Wage Distortion
grievance procedure
NCMB.
under the CBA.
Wage Distortion is non-strikeable. The legislative
intent that solution of the problem of wage
If it remains If it remains distortions shall be sought by voluntary negotiation
unresolved, it shall be unresolved within 10 or arbitration, and not by strikes, lockouts, or other
dealt with through days it shall be referred concerted activities of the Ees or management, is
voluntary arbitration. to the NLRC. made clear in R.A. No. 6727 issued on 07 July 1989.
(Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No.
91980, 27 June 1991)
The NLRC shall
The dispute will be
conduct continuous
resolved within 10 f) MINIMUM WAGE LAW
hearings and decide
days from the time the
the dispute within 20
dispute was referred to Regional Minimum Wage
days from the time the
voluntary arbitration.
same was referred.
It refers to the lowest basic wage rates an Er can pay
his works, as fixed by the Regional Tripartite Wages
and Productivity Boards (RTWBPs), and which shall
The pendency of the dispute arising from a wage not be lower than the applicable statutory minimum
distortion shall not in any way delay the wage rates. (Sec. 4(k), Rule 1, NWPC Guidelines No.
applicability of any wage increase prescribed 01, s. 2007)
pursuant to the provisions of law or Wage order.
(Sec. 7, Chapter III, IRR of R.A. No. 6727) Statutory Minimum Wage

NOTE: Correction of wage distortion may be done It is the lowest wage rate fixed by law that an Er can
by re-establishing a substantial or significant gap pay his workers. (IRR, R. A. No. 6727) It is
(not precisely the same amount) between the wage compensation which is less than such minimum rate
rates of the differing classes of Ees. (Azucena, 2016) is considered an underpayment that violates the
law. (Azucena, 2016)

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 III. EMPLOYMENT PROPER
Purpose Minimum Wage Non-Negotiable and Non-
Waivable
The purpose of minimum wage law is “to set barrier
below which wages may not fall, in order to develop The minimum wage fixed by law is mandatory, thus,
competition on a high level of efficient rather than it is non-waivable and non-negotiable. The
competition on a low level of wages.” enactment is compulsory in nature to ensure decent
living conditions. (PAM Co. v. PAMEA-FFW, G.R. No.
The minimum must be fair and just. The “minimum L-35254, 29 Jan. 1973)
wage” can by no means imply only the actual XPNs to the Coverage of Minimum Wage
minimum. Some margin or leeway must be
provided over and above the minimum to take care 1. Household or domestic helpers, including
of contingencies, such as an increase of prices of family drivers and persons in the personal
commodities and increase in wants, and to provide service of another;
means for a desirable improvement in his mode of
living. (Atok Big Wedge Mining Co., Inc. v. Atok Big NOTE: Household or domestic workers are
Wedge Mutual Benefit Association, G.R. No. L-5276, only exempt from the minimum wage
03 Mar. 1953) prescribed by wage orders. R.A. No. 10361,
otherwise known as “Batas Kasambahay,”
Inability of an Employer to Pay is Immaterial which prescribes the minimum wage for
household or domestic helpers.
The Er cannot exempt himself from liability to pay
minimum wages because of poor financial condition 2. Homeworkers engaged in needle-work;
of the company, the payment of minimum wages not
being dependent on the Er’s ability to pay. 3. Workers employed in any establishment duly
registered with the National Cottage
If, in fact, the Er cannot pay a subsistence wage, then Industries and Development Authority
he should not continue his operation unless he provided that such workers perform the work
improves his methods and equipment so as to make in their respective homes;
the payment of the minimum wage feasible for him,
otherwise, the Er is wasting the toil of the workers 4. Workers in any duly registered cooperative
and the material resources used in the employment. when so recommended by the Bureau of
(Azucena 2021) Cooperative Development and upon approval
of the SOLE. (Sec. 3, Rule VII, Book III, IRR);
Non-Applicability of Estoppel
5. Ees of retail and service establishments
The acceptance of by an Ee of the wages paid him regularly employing not more than 10 Ees;
without objections does not give rise to estoppel (Sec. 4, R.A. No. 6727)
precluding him from suing for the difference
between the amount received and the amount he 6. Workers in a duly registered cooperative
should have received pursuant to a valid minimum when so recommended by the Bureau of
wage law. Cooperative Development and upon approval
of the SOLE; (Sec. 2, Rule VII, Book III, IRR)
In other words, the law gives the Ee the right to be
paid at least the minimum wage. Such legal right 7. Workers of a BMBE.
cannot be waived or given away even if he does not
complain at the time he receives a wage below the See page 86 for definition of BMBE
minimum. (Azucena, 2016)

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NOTE: Retail and service establishments must file XPNs:
an application for exemption with the duly
appropriate Regional Board. 1. Government Ees and any of its political
subdivisions, including GOCCs (with original
Additional Exemptions charter);

The NWPC Guidelines on Exemption from wage 2. Retail and service establishments regularly
orders adds categories of exemptible enterprises employing less than ten (10) workers;
such as
3. Domestic helpers and persons in the personal
1. distressed establishments, service of another;
2. new business enterprises, and
3. establishments adversely affected by 4. Ee engaged on task or contract basis or purely
natural calamities. commission basis;

Wage Orders issued by the wage boards under Arts. 5. Members of the family of the Er who are
99 and 122 may provide for other exemptions from dependent on him for support;
the Minimum Wage Law. (Azucena, 2016)
6. Managerial Ees and other members of the
g) HOLIDAY PAY managerial staff;

See pages 81-83 for further discussion on 7. Field personnel and other Ees whose time
holidays and performance are unsupervised by the Er;
and
Holiday Pay
8. Ees paid Fixed amount for performing work
Holiday Pay is a one-day pay given by law to an Ee irrespective of the time consumed in the
even if he does not work on a regular holiday. performance thereof. (Ibid.)
(Azucena, 2016)
Retail Establishments
The payment of the regular daily wage for any
unworked regular holiday. (Handbook on Workers’ They are engaged in the sale of goods to end users
Statutory Monetary Benefits, Bureau of Working for personal or household use. (e.g., Grocery)
Conditions, 2016)
Service Establishments
It is a premium given to Ees pursuant to the law
even if he has not been suffered to work on a regular They are engaged in the sale of services to
holiday. It is limited to the 12 regular holidays, also individuals for their own or household use. (e.g., TV
called legal holidays listed by law. The Ee should not repair shop)
have been absent without pay on the working day
proceeding the regular holiday. Exemption of Retail or Service Establishments

Persons entitled to Holiday Pay MINIMUM WAGE HOLIDAY PAY/SIL

GR: All Ees are entitled. (Sec. 1, Rule IV, Book III, IRR) Applies to Applies to
establishments establishments
employing not more employing less than 10
than 10 Ees. Ees.

U N IV E R S I T Y O F S A N T O T O M A S 104
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 III. EMPLOYMENT PROPER
Formula to Compute Wage on Holidays
Granted by the LC. May
Has to be obtained by be availed of without
1. Regular Holiday
applying for it with the the need of a prior
Regional Wage Board. application for
a. If it is Ee’s regular workday
exemption.

i. Unworked – 100%; or
Purpose of Holiday Pay
ii. Worked
To secure the payment of undiminished monthly 1. First 8 hours – 200%
income undisturbed by any work interruption. In 2. Excess of 8 hours – plus 30% of
other words, although the worker is forced to take a hourly rate on said day.
rest, he earns what he should earn, that is, his
holiday pay. (JRC v. NLRC, G.R. No. 65482, 01 Dec. b. If it is Ee’s rest day
1987)
i. Unworked – 100%; or
Holiday pay is primarily aimed at benefiting the
daily-paid workers whose income is circumscribed ii. Worked:
by the principle of “no-work, no pay.” Prior to the
enactment of the LC, daily paid workers were not 1. First 8 hours – plus 30% of
paid for unworked regular holidays. 200%

On the other hand, monthly-paid Ees do not suffer 2. Excess of 8 hours –plus 30% of
any reductions in pay for not working during such hourly rate on said day. (M.C.
holidays. The law on holiday pay is, thus, conceived No. 01, s. 2004)
to be the countervailing measure to partially offset
the disadvantages inherent in the daily Regular Holiday
compensation system of employment. (Poquiz, Unworked
2012)
100%
Regular Holiday vs. Special Holiday
Regular Worked
Workday First 8 hrs Excess of 8 hrs
REGULAR HOLIDAY SPECIAL HOLIDAY
plus 30% of
If unworked
200% hourly rate on
Compensable, subject
Not compensable said day
to certain conditions
Unworked
If worked
Additional 30%
Rate is 200% of the 100%
premium pay of 100%
regular rate
RW
Rest Day Worked
Not exclusive; law or
Limited to the 12 First 8 hrs First 8 hrs
ordinance may provide
holidays provided in plus 30% of
for other special plus 30% of
the LC. hourly rate on
holidays. 200%
said day

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2. For declared Special Holidays, such as Special 3. For those declared as special working
Non-Working Day, Special Public Holiday, holidays, the following rules shall apply:
Special National Holiday in addition to the 3
nationwide special non-working days: a. For work performed, an Ee is entitled
only to his basic rate.
a. If it is Ee’s regular workday:
b. No premium pay is required since work
i. Unworked – no pay unless there is a performed on said days is considered
favorable company policy, practice work on ordinary working days.
or CBA granting payment of wages
on special days even if unworked. Important condition that should be met in order
to avail/receive the Single Holiday Pay
ii. Worked
1. First 8 hours – plus 30% of The Ee should not have been absent without pay on
daily wage rate of 100% the working day immediately preceding the RH.
2. Excess of 8 hours – plus 30% of
hourly rate on said day Monthly Paid vs. Daily Paid Ees

b. If it is Ee’s rest day and worked: MONTHLY PAID EEs DAILY PAID EEs
i. First 8 hours – plus 50% of the
One whose wage or
daily rate of 100%
salary is being paid One whose wage or
ii. Excess of 8 hours - plus 30% of
every day of the month, salary is being paid
hourly rate on said day.
including rest days, only on those days he
Sundays, regular or actually worked,
Special Holiday
special days, although except in cases of
Unworked he does not regularly regular or special days,
GR: No Pay. work on these days. although he does not
regularly work on
XPN: favorable Not excluded from these days.
1. company policy benefit of holiday pay.
2. practice
3. CBA (In Re: United South Dock handlers, Inc., Opinion of
Regular the Bureau of Working Conditions, 23 Nov. 1987)
Workday
granting payment of wages on
special days even if unworked HOLIDAY PAY OF CERTAIN EMPLOYEES
Worked
First 8 hrs Excess of 8 hrs Private School Teachers (Faculty Members of
Colleges and Universities)
plus 30% of plus 30% of
daily wage rate hourly rate on
1. RH during semestral vacations – not
of 100% said day
entitled to holiday pay.
Unworked
2. RH during Christmas vacation – entitled to
None holiday pay.
Worked
Rest Day First 8 hrs First 8 hrs Christmas breaks do not represent a break in the
academic calendar. It is something that falls within
plus 50% of the plus 30% of
the semester. While a semestral break is a break in
daily rate of hourly rate on
the middle of the academic calendar.
100% said day

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 III. EMPLOYMENT PROPER
Hourly-Paid Teachers 4. The basic wage on the particular holiday, if
worked. (DOLE Explanatory Bulletin on Part-
No pay on regular holidays including Christmas and Time Employment, 02 Jan. 1996)
semestral vacations, but with pay on special public
holidays and other no-class days when classes are Piece-Rate Workers
called off or shortened on account of floods,
typhoons, rallies and the like, whether extension A piece-rate Ee is entitled to holiday pay.
days be ordered or not. (Jose Rizal College v. NLRC,
G.R. No. 65482, 01 Dec. 1987) Where a covered Ee is paid by results or output, his
holiday pay shall not be less than his average daily
In case of extensions, said faculty teachers shall earnings for the last seven (7) actual work days
likewise be paid their hourly rates should they teach immediately preceding the regular holiday.
during said extensions. (ibid.)
Provided, Holiday pay shall not be less than the
In the event extensions are called for, they are also statutory minimum wage rate. (Sec. 8, Rule IV, Book
entitled to their pay for the extended days. III, IRR)

Field Personnel Seasonal Workers

Field personnel are not entitled to holiday pay. Seasonal workers may not be paid the required
Holiday pay during off-season where they are not at
The law requires that the actual hours of work in the work. (Sec. 8, Rule IV, Book III, IRR)
field be reasonably ascertained. Field Personnel’s
actual hours of work in the field cannot be The employment relationship is deemed to be
determined with reasonable certainty. (Union of suspended during the off-season for seasonal
Filipro Ees v. Vivar, Jr., et al., G.R. No. 79255, 20 Jan. workers.
1992)
Workers having No Regular Work Days
Part-Time Worker
They shall be entitled to holiday pay. (Sec. 8, Rule IV,
If the work is partial, the pay should also be partial. Book III, IRR)
(Azucena, 2016)
Q: Are the school faculty who according to their
The amount of holiday pay of a part-timer is to be contracts are paid per lecture hour entitled to
determined on a case-to-case basis. The basis is any unworked holiday pay?
of the following, whichever yields the highest
amount: A:
1. If during RH, NO. Art. 94 of the LC is silent with
1. The regular wage per day; respect to faculty members paid by the hour
who because of their teaching contracts are
2. The basic wage on the working day preceding obliged to work and consent to be paid only for
the regular holiday if the Ee is present or on work actually done (except when an emergency
leave with pay on the last working day or a fortuitous event or a national need calls for
immediately prior to the regular holiday; the declaration of special holidays). (Jose Rizal
College v. NLRC, G.R. No. 65482, 01 Dec. 1987)
3. The average of his basic wages for the last
seven working days for Ees who are paid by 2. If during special public holidays, YES. The law
results; or and the IRR governing holiday pay are silent as
to payment on special public holidays. Be it

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 LABOR LAW AND SOCIAL LEGISLATION
noted that when a special public holiday is Concept of Successive Regular Holidays
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.

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
Conditions for an Ee to be Entitled to Two (2)
ordered. (Ibid.)
Successive Holiday Pays

Double Holiday Pay

On the day immediately preceding the first RH, he
must be:
If two regular holidays fall on the same day (such as
Maundy Thursday or Good Friday falling on Araw ng
1. Present (worked); or,
Kagitingan), the Ees should be paid 400% of the
basic wage for both holidays, provided he worked
2. On leave of absence (LOA) with pay. (Sec. 10,
on that day or was on leave of absence with pay or
Rule IV, Book III, IRR)
was on authorized absence on the day prior to the
regular holiday.
If the above stated conditions are not met

Holiday pay is a statutory benefit demandable

He must work on the first RH to be entitled to
under the law. Since a worker is entitled to the
holiday pay on the second RH. (ibid.)
enjoyment of 10 paid regular holidays (Art. 94, LC),
the fact that two holidays fall on the same date
Effects of absences
should not operate to reduce to nine the ten-holiday
pay benefits a worker is entitled to receive. (Asian
1. All covered Ees shall be entitled to holiday pay
Transmission Corp v. CA, G.R. No 144664, 25 Mar.
when they are on LOA with pay on the
2004)
workday immediately preceding the regular
holiday. Ees who are on LOA without pay on
When two RHs fall on the same day, the following
the day immediately preceding a regular
rates apply:
holiday may not be paid the required holiday
pay if they do not work on such regular
holiday.

2. Ers shall grant the same percentage of the

holiday pay as the benefit granted by
competent authority in the form of Ee’s
compensation or social security payment,
whichever is higher, if the Ees are not
reporting for work while on such leave
benefits.

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 III. EMPLOYMENT PROPER
3. Where the day immediately preceding the h) 13TH MONTH PAY
holiday is a non-work day in the establishment
or the scheduled rest day of the Ee, he/she 13th Month Pay or its Equivalent
shall not be deemed to be on LOA on that day,
in which case he/she shall be entitled to the It is a form of monetary benefit equivalent to the
holiday pay if he/she worked on the day monthly basic compensation received by an Ee,
immediately preceding the non-work day or computed pro-rata according to the number of
rest day. months within a year that the Ee has rendered
service to the Er. (DOLE’s BWC issues Q & A on 13th
4. Where there are two (2) successive regular month pay)
holidays, like Maundy Thursday and Good
Friday, an Ee may not be paid for both holidays “Its equivalent”
if he/she absents himself/herself from work
on the day immediately preceding the first Jurisprudence has interpreted the term “its
holiday, unless he/she works on the first equivalent” to approximate the legal requirement in
holiday, in which case he/she is entitled to all respects. If the grant is at variance with the law,
his/her holiday pay on the second holiday. it is regarded as a contractual obligation distinct
(Handbook on Workers’ Statutory Monetary from the legal obligation.
Benefits, Bureau of Working Conditions, 2016)
The grant must reflect the same intent as the law,
Effects of Business Closure on Holiday Pay namely, magnanimity. If the bonus is provided in
graduated amounts depending on the length of
1. In case of temporary or periodic shutdown and service of Ees, its purpose is to give bigger awards
temporary cessation of work of an to long-service Ees, which is a purpose not found in
establishment, as when a yearly inventory or the law. Hence the provision is meant to be in
when the repair or cleaning of machineries addition to the legal requirement. (United CNC
and equipment is undertaken, the regular Textile Workers Union vs. Valenzuela, G.R. No. 70763,
holidays falling within the period shall be 30 Apr. 1987; Universal Corn Products vs. NLRC, G.R.
compensated. No. L-60337, 21 Aug. 1987)

2. The regular holiday during the cessation of Formula and Computation of 13th Month Pay
operation of an enterprise due to business
reverses as authorized by the SOLE may not be
paid by the Er. (Sec. 7, Rule IV, Book III)

Deferment of Holiday Pay (for year 2020)

Where:
In various labor advisories issued by the DOLE in
2020, namely, Advisories 13A, 15, 20, 22, 25, 27, and
29, the DOLE authorized the deferment, not
NOTE: The minimum wage in NCR is Php 570.00.
exemption, of the payment of holiday pay on
(Wage Order No. NCR-23)
account of the national emergency arising from the
COVID-19 situation.
NOTE: As to the number of days worked per year,

In Advisory 31, the DOLE has ordered the Ers who

1. 393.80 – For those who are required to
chose to defer holiday payment to make payment of
work everyday, including Sundays or rest
those holiday pay on or before 31 Dec. 2020.
days, special days, and regular holidays;

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2. 313 – For those who do not work and are It does not include all allowances and monetary
not considered paid on Sundays or rest benefits which are not considered or integrated as
days; part of the regular or basic salary such as:

3. 261 – For those who do not work and are 1. Cash equivalent of unused vacation and sick
not considered paid on Saturdays and leave credits;
Sundays or rest days 2. Overtime pay;
3. Premium pay;
Illustration: 4. Night Shift Differential;
5. Holiday pay; and
Using the basic wage in the NCR at Php 570.00 per 6. Commissions
day and a six-day workweek or an equivalent
570×313 XPN: If it is an integral part of the basic salary.
Monthly Basic Salary of P14,867.50. (12 months):
(Philippine Duplicators, Inc. v. NLRC, G.R. No. 110068,
15 Feb. 1995)
January no absence P14,867.50
February no absence P14,867.50
These salary-related benefits should be included in
March no absence P14,867.50
the computation of the 13th moth pay if by
company
April no salary individual or collective agreement, company
shutdown
practice or policy, the same are treated as part of the
company
May no salary basic salary of the Ees.
shutdown
5 days leave Time of payment of 13th month pay
June P14,867.50
w/pay
company Under PD 851, all Ers are required to pay all their
July no salary
shutdown rank-and-file Ees, a 13th month pay not later than
company Dec. 24 of every year.
August no salary
shutdown
10 days leave Absence of CBA provision not a bar in giving 13 th
September P9,167.50
w/o pay month pay
October no absence P14,867.50
1 day leave w/o The absence of an express provision in the CBA
November P14,297.50
pay obligating the Er to pay the members of a union 13 th
December no absence P14,867.50 month pay is immaterial. Notwithstanding
Total basic salary earned therefore the absence of any contractual agreement,
P112,670.00
for the year the payment of a 13th month pay, being a statutory
grant, is mandatory and is deemed incorporated in
P112,670.00
= Php 9,389.17 is the proportionate 13th the CBA.
12 months
month pay (2022 Handbook on Worker’s Statutory
Monetary Benefits) Nature of 13th Month Pay

Basic Salary Such is in the nature of additional income granted to

Ees who are not receiving the same. (Agabon v.
Includes all remunerations or earnings paid by the NLRC, G.R. No. 158693, 17 Nov. 2004)
Er to an Ee for services rendered including cost-of-
living allowances. It is based on wage but not part of wage. (Central
Azucarera de Tarlac v. Central Azucarera de Tarlac
Labor Union-NLU, G.R. No. 188949, 26 July 2010)

U N IV E R S I T Y O F S A N T O T O M A S 110
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 III. EMPLOYMENT PROPER
Minimum Period of Service Required b. Ers already paying their Ees 13th month pay
or more in a calendar year in its equivalent
It is imposed as a “minimum service requirement” at the time of the issuance of the Revised
that the Ee should have worked for at least one (1) Guidelines;
month during a calendar year. (No. X(A), DOLE
Handbook on Workers Statutory Monetary Benefits) c. Ers of those who are paid on purely basis of:
i. Commission;
Persons Covered by PD 851
NOTE: Bus drivers and conductors who are
1. Ees paid a fixed or guaranteed minimum wage,
in case their commission be less than the
GR: All rank-and-file Ees are covered by PD 851 statutory minimum, are entitled to a 13th-
regardless of the amount of basic salary that they month pay equivalent to 1/12 of their total
receive in a month, if their Ers are not otherwise earnings during the calendar year.
exempted from paying the 13th month pay. Such (Philippine Agricultural Commercial and
Ees are entitled to the 13th month pay regardless Industrial Workers Union v. NLRC, G.R. No.
of said designation of employment status, and 107994, 14 Aug. 1995)
irrespective of the method by which their wages
are paid. ii. Boundary; or
iii. Task; and
Provided, that they have worked for at least one iv. Fixed amount for performing a specific
month, during a calendar year. (Revised Guidelines work irrespective of the time
on the Implementation of the 13th Month Pay Law) consumed in the performance thereof.

XPNs: XPN: Where the workers are paid on a

a. Government Ees; piece-rate basis, in which case, the Er shall
b. Ees paid purely on commission basis; be covered by the Revised Guidelines
c. Ees already receiving 13th month pay; insofar as the workers are concerned.
d. Managers; and
e. Seafarers. NOTE: Piece-Rate Workers refer to those
who are paid a standard amount for every
NOTE: Managerial Ees may receive 13th month pay piece or unit of work produced that is more
if they are granted under an employment contract or less regularly replicated without regard
or a company policy or practice. (Chan, 2019) to the time spent in producing the same.

2. Ers d. Distressed Ers:

i. Currently incurring substantial losses;
GR: All Ers are covered by PD 581. or

XPNs: ii. In the case of non-profit institutions

and organizations, where their income,
a. The Government and any of its political whether from donations,
subdivisions, including GOCCs; contributions, grants, and other
earnings from any source, has
XPN to this XPN: Corporations operating consistently declined by more than
essentially as private subsidiaries of the 40% of their normal income for the last
Government. two (2) years, subject to the provision
of Sec. 7 of P.D. 851.

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 LABOR LAW AND SOCIAL LEGISLATION
Domestic workers or kasambahays irrespective of the method by which their wages are
paid. (Jackson Building-Condominium Corp. v. NLRC,
Previously, not covered by 13th month pay law are G.R. No. 112546, 14 Mar. 1996)
Ers of household helpers and persons in the
personal service of another in relation to such Equivalent forms of the 13th month pay
workers. However, the Batas Kasambahay or
Domestic Workers Act is now explicit in its 1. Christmas Bonus;
commandment that a domestic worker or 2. Midyear Bonus;
kasambahay is entitled to 13th month pay as 3. Profit Sharing Scheme; and
provided by law. (Sec. 25, Art. IV, R.A. No. 10361, 4. Other Cash bonuses amounting to not less than
otherwise known as the “Domestic Workers Act”) 1/12 of its basic salary

Options of covered Ers NOTE: It must always be in the form of a legal

tender.
1. Pay 1/2 of the 13th month pay required before
the opening of the regular school year and the Things Not Proper Substitutes For 13 th Month
other half on or before the 24th day of Pay
December of every year.
1. Free rice;
2. In any establishment where a union has been 2. Electricity;
recognized or certified as the CB agent of the 3. Cash and stock dividends; and
Ee, the periodicity or frequency of payment of 4. Cost-of-living Allowance. (Sec. 3, P.D. 85)
the 13th month pay may be the subject of
agreement. Q: Concepcion Textile Co. included the OT pay,
night-shift differential pay, and the like in the
Other types of employment entitled to 13 th computation of its Ees’ 13th month pay.
month pay Subsequently, with the promulgation of the
decision of the SC in the case of SMC v. Inciong
1. Part-time Ee; (Item 5(b), Revised Guidelines of (G.R. No. L-49774, 24 Feb. 1981) holding that
PD 851) these other monetary claims should not be
2. Extras; included in the computation of the 13 th Month
3. Casual Ee; and Pay, Concepcion Textile Co. sought to recover
4. Seasonal Ee. (BWC Opinion, 19 Dec. 1987) under the principle of solutio indebiti the
overpayment of the Ees’ 13th month pay, by
Q: What would be your advice to your client, a debiting against future 13th month payments
manufacturing company, who asks for your whatever excess amounts it had previously
legal opinion on whether or not the 13th Month made.
Pay Law covers a casual Ee who is paid a daily
wage? (1998 BAR) a) Is the Company's action tenable?
A: NO. The Company's action is not tenable. The
A: I will advise the manufacturing company to pay principle of solutio indebiti which is a civil law
the casual Ee 13th Month Pay if such casual Ee has concept is not applicable in labor law. (Davao Fruits
worked for at least one month in a calendar year. Corp. v. NLRC, et al., G.R. No. 85073, 24 Aug. 1993)
The law on 13th Month Pay provides that Ees are After the 1981 SMC ruling, the Court decided the
entitled to the benefit of said law regardless of their case of Philippine Duplicators Inc. v. NLRC (G.R. No.
designation or employment status. 110068, Nov. 15, 1995. Accordingly, management
may undertake to exclude sick leave, vacation leave,
NOTE: Ees are entitled to the 13th month pay maternity leave, premium pay for regular holiday,
benefits regardless of their designation and night differential pay, and cost of living allowance.

U N IV E R S I T Y O F S A N T O T O M A S 112
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 III. EMPLOYMENT PROPER
b) With respect to the payment of the 13th month have rendered service for at least one (1)
pay after the SMC ruling, what arrangement, if month within a year;
any, must the Company make in order to exclude
from the 13th month pay all earnings and 4. Resigned or Separated Ees – If resigned or
remunerations other than the basic pay? separated from work before the time of
payment of 13th month pay, entitled to
A: The company should include sales commissions monetary benefits in proportion to the length
based on the settled rule. (Songco v. NLRC, G.R. of time he started working during the calendar
No. L-50999, 23 Mar. 1990) year up to the time of resignation or
termination of service (Pro-rated 13th month
Adjudicated Claims pay); (Sec. 6, DOLE Revised Guidelines on 13th
Month Pay) and
Non-payment of the 13th month pay provided by
P.D. 851 and the rules of NLRC shall be treated as 5. Ees who are paid a fixed or guaranteed wage
money claims cases. plus commission – also entitled to the 13th-
month pay, based on their earnings during the
NOTE: Difference of opinion on how to compute the calendar year (i.e., on both their fixed or
13th month pay is non-strikeable and a strike held guaranteed wage and commission).
on that ground is illegal. (Isalama Machine Works
Corp. v. NLRC, G.R. No. 10016, 02 Mar. 1995) NOTE: In the consolidated cases of Boie Takeda
Chemicals, Inc. v. Dionisio de la Serna, (G.R. No.
The following Ees may or may not be entitled to 92174, 10 Dec. 1993), and Philippine Fuji Xerox
13th month pay Corporation v. Cresenciano Trajano and Philippine
Fuji Xerox Ees Union, (G.R. No. 102552, 10 Dec. 1993),
1. Ee paid by results - Entitled to 13th month pay; the Court ruled that commissions, while included in
the generic term wage, are not part of "basic
NOTE: Ees paid a fixed or guaranteed wage salary/wage" and therefore, should not be included
plus commission are also entitled to the in computing the 13th month pay. Thus:
mandated 13thmonth pay, based on their total
earnings during the calendar year, i.e., on both In remunerative schemes consisting of a fixed or
their fixed or guaranteed wage and guaranteed wage plus commission, the fixed or
commission. guaranteed wage is patently the “basic salary” for
this is what the Ee receives for a standard work
2. Those with Multiple Ers - Government Ees period. Commissions are given for extra efforts
working part time in a private enterprise, exerted in consummating sales or other related
including private educational institutions, as transactions. They are, as such, additional pay,
well as Ees working in two or more private which this Court has made clear do not form part of
firms, whether full or part time basis, are the “basic salary.” (Boie-Takeda Chemicals Inc v.
entitled to the required 13th month pay from Dela Serna, 10 Dec. 1993; Handbook on Workers’
all their private Ers regardless of their total Statutory Monetary Benefits, Bureau of Working
earnings from each or all their Ers; (Revised Conditions, 2016)
Guidelines on the Implementation of 13th Month
Pay Law) Q: Dennis was a taxi driver who was being paid
on the “boundary” system basis. He worked
3. Private School Teachers, including faculty tirelessly for Cabrera Transport Inc. for
members of universities and colleges - fourteen (14) years until he was eligible for
Entitled regardless of the number of months retirement. He was entitled to retirement
they teach or are paid within a year, if they benefits. During the entire duration of his
service, Dennis was not given his 13th month

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 LABOR LAW AND SOCIAL LEGISLATION
pay or his service incentive leave pay. (2012 Q: TRX, a local shipping firm, maintains a fleet of
BAR) motorized boats plying the island barangays of
AP, a coastal town. At day's end, the boat
a) Is Dennis entitled to 13th month pay and operators/crew members turn over to the boat
service incentive leave (SIL) pay? Explain. owner their cash collections from cargo fees and
passenger fares, less the expenses for diesel
A: NO. A taxi driver paid under the “boundary fuel, food, landing fees and spare parts.
system” is not entitled to a 13th month pay and a
SIL pay. Hence, his retirement pay should be Fifty percent (50%) of the monthly income or
computed solely on the basis of his salary. earnings derived from the operations of the
Specifically, Sec. 3(e) of the Rules and Regulations boats are given to the boatmen by way of
Implementing P.D. 851 excludes from the compensation. Deducted from the individual
obligation of 13th Month Pay “Employers of those shares of the boatmen are their cash advance
who are paid on… boundary” basis. On the other and peso value of their absences, if any. Are
hand, Sec. 1(d), Rule V, Book III of the Omnibus these boatmen entitled to overtime pay, holiday
Rules provides that those “employees whose pay, and 13th month pay? (2004 BAR)
performance is unsupervised by the employer” are
not entitled to SIL. A taxi driver paid under the A: NO, if the boatmen are considered employees,
Boundary System is an “unsupervised” employee. like jeepney drivers paid on a boundary system
because they are workers who are paid by results.
NOTE: A taxi driver is an “unsupervised employee” Said workers, under the LC are not entitled, among
and if paid under the “boundary system” is not others, to overtime pay and holiday pay.
entitled to a 13th month pay and a SIL. (Sec. 3 (e) of
the Rules and Regulations Implementing P.D. 851 In accordance with the IRR of the 13th Month Pay
and, Sec. 1(d), Rule V, Book III of the Omnibus Rules) Law, however, the boatmen are entitled to the 13th
month pay. Workers who are paid by results are to
b) Since he was not given his 13th month pay be paid their 13th month pay.
and SIL pay, should Dennis be paid upon
retirement, in addition to the salary equivalent NOTE: Boatmen are considered employees paid on
to 15 days for every year of service, the a boundary system and are not entitled to Holiday
additional 2.5 days representing one-twelfth pay and overtime pay but are entitled to 13th month
(1/12) of the 13th month pay as well as the five pay. (Azucena, Vol. 1, 2016)
(5) days representing the service incentive
leave for a total of 22.5 days? Explain. Application of Pro-Ration of 13th Month Pay

A: NO. Since he is not entitled to 13th month pay GR: Pro-ration of 13th month pay applies only in
and SIL, his retirement pay should be computed cases of resignation or separation from work.
solely on the basis of his salary. (R&E Transport v. Computation should be based on length of service
Latag, G.R. No. 155214, 13 Feb. 2004; 2009-2017 UST and not on the actual wage earned by the worker.
FCL Bar Q&A) (Honda Phils. v. Samahan ng Manggagawa sa Honda,
G.R. No. 145561, 15 June 2005)
NOTE: Taxi drivers do not receive fixed wages thus,
the basis for computing their benefits should be the XPN: Ees who are paid a guaranteed minimum wage
average daily income and retirement pay should be or commissions earned are entitled to 13th Month
computed on the sole basis of his salary. (R&E Pay based on total earnings. (Philippine Agricultural
Transport v. Latag, G.R. No. 155214, 13 Feb. 2004) Commercial and Industrial Workers Union v. NLRC,
G.R. No. 107994, 14 Aug. 1995)

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 III. EMPLOYMENT PROPER
14th Month Pay Not Legally Demandable Agreements, the grant of 14th, 15th and 16th month
bonuses has become more than just an act of
GR: The granting of 14th month pay is a generosity on the part of ETPI, but a contractual
management prerogative and is not legally obligation it has undertaken. (ETPI v. ETEU, G.R. No.
demandable. It is basically a bonus and is gratuitous 185665, 08 Feb. 2012)
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
75289, 31 Aug. 1989) Commission in relation to 13th month pay

XPN: A bonus, however, becomes a demandable or a. The salesman’s commissions, comprising a pre-
enforceable obligation when it is made part of the determined percent of the selling price of the
wage or salary or compensation of the Ee. If it is goods sold by each salesman, were properly
additional compensation which the Er promised included in the term basic salary for purposes of
and agreed to give without any conditions imposed computing their 13th month pay. These
for its payment, such as success of business or commissions are not overtime payments, nor
greater production or output, then it is part of the profit-sharing payments nor any other fringe
wage. But if it is paid only if profits are realized or if benefit. Thus, the salesmen's commissions,
a certain level of productivity is achieved, it cannot comprising a pre-determined percent of the
be considered part of the wage. selling price of the goods sold by each salesman,
were properly included in the term “basic salary”
XPN to the XPN: Where it is not payable to all but for purposes of computing their 13th -month
only to some Ees and only when their labor becomes pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No.
more efficient or more productive, it is only an 110068, 15 Feb. 1995)
inducement for efficiency, a prize therefore, not a
part of the wage. (Metro Transit Organization, Inc. v. b. The so-called commission received by medical
NLRC, G.R. No. 116008, 11 July 1995) representatives of Boie Takeda Chemicals or by
the rank-and-file Ees of Phil. Fuji Xerox were
Q: ETPI (company) entered into a collective excluded from the term basic salary because
bargaining agreement with ETEU (union). A side these were paid as productivity bonuses. Such
agreement of the said CBA provided that bonuses closely resemble profit sharing,
company confirms that the 14th, 15th and payments and have no clear, direct, and
16th month bonuses (other than 13th month pay) necessary relation to the amount of work
are granted. The company then planned to defer actually done by each individual Ee. (Boie-
the payment of the 14th, 15th and 16th month Takeda Chemicals, Inc. v. Dela Serna, G.R. No.
bonuses due continuing deterioration of 92174, 10 Dec. 1993)
company’s financial position. The union
opposed and filed a preventive mediation Productivity Bonus v. Sales Commissions
complaint before the NCMB. May the company
validly postpone the payment of said bonuses? A productivity bonus is something extra for which
no specific additional services are rendered by any
A: NO. A reading of the provision reveals that the Ee and hence not legally demandable, absent a
same provides for the giving of 14th, 15th and contractual undertaking to pay it.
16th month bonuses without qualification. There
were no conditions specified in the CBA Side Sales commissions, on the other hand, such as those
Agreements for the grant of the benefits contrary to paid in Duplicators, are intimately related to or
the claim of ETPI that the same is justified only directly proportional to the extent or energy of an
when there are profits earned by the company. In Ee's endeavors. Commissions are paid upon the
fine, the payment of these bonuses was not related specific results achieved by a salesman-Ee. It is a
to the profitability of business operations. Verily, by percentage of the sales closed by a salesman and
virtue of its incorporation in the CBA Side operates as an integral part of such salesman's basic

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FACULTY OF CIVIL LAW
 LABOR LAW AND SOCIAL LEGISLATION
pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No. employed in GOCCs with original charters
110068, 15 Feb. 1995) or created under special laws;

3. LEAVES 2. Domestic helpers and persons in the

personal service of another;

a) SERVICE INCENTIVE LEAVE 3. Managerial Ees, if they meet all of the

following conditions:
Service Incentive Leave (SIL)
a. Their primary duty is to manage the
It is a five-day leave with pay for every Ee who has establishment in which they are
rendered at least one year of service whether employed or of a department or
continuous or broken. (Art. 95, LC) subdivision thereof;

Purpose of the law b. They customarily and regularly direct the

work of two or more Ees therein; and
The stipulation in the contract for the allowance of
a vacation to Ees is merely a recognition by
c. They have the authority to hire or fire
management and labor that a short interval of other Ees of lower rank; or their
complete rest and relaxation from daily routine
suggestions and recommendations as to
with the benefit of full pay is essential to the mental hiring, firing, and promotion, or any
and physical well-being of the workmen. (Bencio v. other change of status of other Ees are
Joseph Bouder, Inc., 24 So. 2d 398; A.L.R. 2d 352; given particular weight.
Sunripe Coconut Products v. NLU, 97 Phil. 691, 18 Oct.
1955) 4. Field personnel and those whose time and
performance is unsupervised by the Er,
“At least 1 year of service” including those who are engaged on:

Service for not less than 12 months, whether a. Task or contract basis;
continuous or broken, reckoned from the date the b. Purely commission basis; or
Ee started working, including authorized absences c. Those who are paid a fixed amount for
and paid regular holidays unless the working days performing work irrespective of the
in the establishment as a matter of practice or
time consumed in the performance
policy, or that provided in the employment contract thereof;
is less than 12 months, in which case said period
shall be considered as one year. (Sec. 3, Rule V, Book 5. Those who are already enjoying this
III, IRR) benefit;

Right to SIL 6. Those enjoying vacation leave with pay of

at least five (5) days; and
GR: Every Ee who has rendered at least one (1) year
of service shall be entitled to a yearly SIL of five (5)
7. Those employed in establishments
days with pay. Leave pay means an Ee gets paid
regularly employing less than 10 Ees. (Sec.
despite absence from work. (Azucena, 2016)
1, Rule V, Book III, IRR)

XPNs:
NOTE: Ees engaged on task or contract basis or paid
1. Government Ees, whether employed by the on purely commission basis are not automatically
National Government or and any of its exempted from the grant of SIL, unless they fall
political subdivisions, including those under the classification of field personnel.

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 III. EMPLOYMENT PROPER
If required to be at specific places at specific times, Entitlement of Ees With Salaries Above
Ees including drivers cannot be said to be field Minimum Wage To SIL
personnel despite the fact that they are performing
work away from the principal office of the Ee; as Ees with salaries above minimum wage are entitled
such they are entitled to SIL. (Autobus Transport to SIL. The difference between the minimum wage
Systems v. Bautista, G.R. No. 156367, 16 May 2005) and the actual salary received by the Ees cannot be
deemed as their 13th month pay and SIL pay as such
Teachers of Private Schools on Contract Basis difference is not equivalent to or of the same import
are Entitled to SIL as the said benefits contemplated by law. (JPL
Marketing Promotions v. CA, G.R. No. 151966, 08 July
In Cebu Institute of Technology v. Ople (G.R. No. 2005)
70203, 18 Dec. 1987), teaching personnel cannot be
deemed as field personnel which refers to “non- Burden of Proof of Employers
agricultural Ees who regularly perform their duties
away from the principal place of business or branch One of those excluded from the obligation to grant
office of the Er and whose actual hours of work in SIL are “establishments regularly employing less
the field cannot be determined with reasonable than ten workers.” When an Er claims that it falls
certainty.” (Art. 82(3), LC) within the exception, it is the Er’s duty, not of the
Ees, to prove that there are less than ten Ees in the
Part-time Workers are Entitled to the Full company. If it fails to discharge its task, the Er must
Benefit of the Yearly 5-Day SIL be deemed to be covered by the rule,
notwithstanding the Ees’ failure to allege the exact
A part-time worker is entitled to SIL whether the number of Ees in the corporation. (Murillo, et al. v.
service within 12 months is continuous or broken or Sun Valley Realty, Inc., G.R. No. 67272, 30 June 1988)
where the working days in the employment Entitlement of Terminated Ees to SIL
contract as a matter of practice or policy is less than
12 months. The availment and commutation of the 1. Illegally dismissed Ees – Entitled to SIL until
same can be proportionate to the daily work actual reinstatement; (Integrated Contractor
rendered and the regular daily salary. (DOLE’s and Plumbing Works, Inc. v. NLRC, G.R. No.
Explanatory Bulletin on Part-time Employment, 02 152427, 09 Aug. 2005) and
Jan. 1996)
2. Legally dismissed Ees – The Ee who had not
Entitlement of Piece-Rate Workers To SIL been paid SIL from the outset of employment
is entitled only to such pay after a year from
Piece-rate workers are entitled to the full benefit of commencement of service until termination of
the yearly five-day SIL. Under the SIL Law, the employment or contract. (JPL Marketing
exclusion from its coverage of workers who are paid Promotions v. CA, G.R. No. 151966, 08 July 2005)
on a purely commission basis is only with respect to
field personnel. Ees engaged on task or Commutability of SIL to monetary equivalent
contract basis or paid on purely commission basis
are not automatically exempted from the grant of GR: It is commutable if not used or exhausted at the
SIL, unless they fall under the classification of field end of the year. (Sec. 5, Rule V, IRR) It is aimed
personnel. (Serrano v. Severino Santos, G.R. No. primarily at encouraging workers to work
187698, 09 Aug. 2010) continuously and with dedication to the company.

XPN: R.A. No. 10361 grants SIL to domestic

workers. Their SIL need not be converted to cash or
carried over to succeeding years. (Art. 139, LC)

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Basis for cash conversion Full pay which consists
Daily maternity benefit of basic salary and
The basis shall be the salary rate at the date of equivalent to 100% of allowances as may be
commutation. The availment and commutation of her ADSC provided under
the SIL may be on a pro-rata basis. existing guidelines

Prescription of SIL Applicability

Applying Art. 306 of the LC in light of the peculiarity The expanded maternity leave applies to all
of SIL, the three (3)-year prescriptive period qualified female workers regardless of civil status,
commences, not at the end of the year when the Ee employment status, and the legitimacy of her child.
becomes entitled to the commutation of his SIL, but (Sec. 3, R.A. No. 11210)
from the moment the employer refuses to
remunerate its monetary equivalent if the employee Maternity leave shall be granted to a qualified
did not make use of said leave credits but instead female worker in every instance of pregnancy,
chose to avail of its commutation or upon miscarriage, or emergency termination of
termination of the Ees’ services, as the case may be. pregnancy regardless of frequency. (Sec. 4, Rule IV,
(Autobus Transport Systems v. Bautista, G.R. No. IRR of R.A. No. 11210)
156367, 16 May 2005)
Period in General
b) MATERNITY LEAVE
All covered female workers in government and the
105-Day Expanded Maternity Leave Law private sector, including those in the informal
economy, regardless of civil status or the legitimacy
R.A. No. 11210 or the Expanded Maternity Leave of her child, shall be granted 105 days maternity
Law (EMLL) was signed into law on 20 Feb. 2019 leave with full pay and an option to extend for an
and took effect on 11 Mar. 2019. additional 30 days without pay. Provided, that in
case the worker qualifies as a solo parent under the
Differences between Maternity Leave under the "Solo Parents’ Welfare Act", the worker shall be
SSS and the Expanded Maternity Leave Law granted an additional 15 days maternity leave with
full pay. (Sec. 3, R.A. No. 11210)
MATERNITY LEAVE
EMLL
(Sec. 14-A of Covered female workers
(R.A. No. 11210)
R.A. No. 8282)
Minimum of 105 days Under the EMLL, maternity leave applies to all
60 days for normal for live childbirth, qualified female workers in the:
delivery; regardless of mode of
delivery 1. Public sector;
78 days for caesarean 2. Private sector; and
delivery 60 days for miscarriage 3. Informal economy;
or ETP
Regardless of the civil NOTE: Informal economy refers to the self-
Child must be employed, occasionally or personally hired,
status or legitimacy of
legitimate subcontracted, paid and unpaid family
the child
Regardless of workers in household, incorporated, and
Limited to 4 unincorporated enterprises, including home
frequency of
childbirths workers, micro-entrepreneurs and producers,
pregnancy
and operators of sari-sari store (Sec. 3, R.A. No.
11210);

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4. Voluntary contributors to the SSS; and b. Employed female workers shall receive
5. National athletes. (Sec. 1, Rule III, IRR of R.A. No. full pay which consists of:
11210)
i. SSS maternity benefit computed
NOTE: National athletes are those athletes based on their average monthly
including salary credit; and
ii. Salary differential to be paid by the
a. PWDs who are Filipino citizens, members Er, if any.
of the national training pool, recognized
and accredited by the Philippine Olympic 3. An “option” to extend for an additional 30 days
Committee (POC) and the Philippine without pay in case of live childbirth, provided
Sports Commission (PSC) that:
a. The Er shall be given due notice;
b. Athletes with disabilities (AWDs) who are
recognized and accredited by the National b. The same must be in writing;
Paralympic Committee of the Philippines
and the PSC and whohave represented the c. It must be given at least 45 days before
country in international sports the end of the female worker’s maternity
competitions. (Sec. 1(l), Rule II, IRR of R.A. leave; and
No. 11210)
d. No prior notice is necessary in the event
Benefits Granted Under the EMLL of a medical emergency, a subsequent
notice to the Er shall suffice.
The benefits under the new law are as follows:
4. Paid maternity leave, allowances, and benefits
1. Paid leave benefit granted to a qualified female granted to female national athletes;
worker in the public sector, for the duration of:
5. Health care services for pre-natal, delivery,
a. 105 days with full pay for live postpartum, and pregnancy-related
childbirth, regardless of the mode of conditions granted to female workers,
delivery, and an additional 15 days particularly those who are neither voluntary
paid leave if the female worker nor regular members of the SSS, as governed
qualifies as a solo parent under R.A. No. by the existing rules and regulations of the
8972 or the “Solo Parents’ Welfare Act PhilHealth. (Sec. 2, Rule III, IRR of R.A. No.
of 2000;” or 11210)

b. 60 days with full pay for miscarriage Pregnancy

and emergency termination of
pregnancy (ETP). Refers to the period from the conception up to the
time before actual delivery or birth of a child. (Sec.
2. Paid leave benefit granted to a qualified female 1(m), Rule II, IRR of R.A. No. 11210)
worker in the private sector covered by the
SSS, including those in the informal economy, Miscarriage and Emergency Termination of
for the duration of: Pregnancy

a. Same as those provided under 1(a) or “Miscarriage” refers to pregnancy loss before the
1(b); 20th week of gestation. (Sec. 1(k), Rule II, IRR of R.A.
No. 11210)

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“Emergency termination of pregnancy” (ETP) refers NOTE: The above period of extended maternity
to pregnancy loss on or after the 20th week of leave without pay shall not be considered as gap in
gestation, including stillbirth. (Sec. 1(c), Rule II, IRR the service. (Ibid.)
of R.A. No. 11210)
Frequency of the Grant
Q: Is the option of the 30-day extension without
pay available to all qualified female workers? Maternity leave shall be granted to a qualified
female worker in every instance of pregnancy,
A: NO. The 30-day extension without pay is only miscarriage, or ETP, regardless of frequency. (Sec. 4,
available in cases of live childbirth. Hence, if a Ibid.)
female worker suffers miscarriage or ETP, she is not
entitled to such extension. Grant of Maternity Leave Benefits after
Termination of Employment.
Manner of Enjoyment of the Benefit
Maternity leave with full pay shall also be granted
Enjoyment of maternity leave cannot be deferred even if the childbirth, miscarriage, or ETP occurs not
but should be availed of either before or after the more than 15 calendar days after the termination of
actual period of delivery in a continuous and an Ee’s service, as her right thereto has already
uninterrupted manner, and such that: accrued. However, such period is not applicable
when the employment of the pregnant woman
a. In cases of live childbirth, 105 days maternity worker has been terminated without just cause.
leave with full pay shall be granted; or (Sec. 5, Rule IV, Ibid.)

b. In cases of miscarriage or emergency Maternity Leave of a Female Worker with

termination of pregnancy, 60 days maternity Pending Administrative Case
leave shall be granted. (Sec. 2, Rule IV, Ibid.)
The maternity leave benefits granted under R.A. No.
NOTE: in all the above instances, the maternity 11210 and its IRR shall be enjoyed by a female
leave can be credited as combinations of prenatal worker in the public sector and in the private sector
and postnatal leave as long as it does not exceed 105 even if she has a pending administrative case. (Sec.
days or 60 days, as the case may be. In no case shall 6, Ibid.)
postnatal leave be less than 60 days. (Ibid.)
Non-Diminution of Benefits
Extended Maternity Leave
Nothing shall be construed as to diminish existing
In cases of live childbirth, an additional maternity maternity benefits currently enjoyed whether or
leave of 30 days, without pay, can be availed of, at not these are granted under CBAs or present laws if
the option of the female worker, provided that the the same are more beneficial to the female worker.
employer shall be given due notice. (Sec. 3, Ibid.)
Any other working arrangement which the female
Due notice to the employer must be in writing and worker shall agree to, during the additional
must be given at least 45 days before the end of the maternity leave period, shall be allowed provided
female worker's maternity leave. However, no prior that the female worker consented to in writing and
notice shall be necessary in the event of a medical shall primarily uphold her maternal functions and
emergency but subsequent notice shall be given to the requirements of postnatal care. (Sec. 7, Ibid.)
the employer. (Ibid.)

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Security of Tenure Notice of Pregnancy and Application for
Maternity Leave
Those who avail of the benefits whether in the
public or private sector, shall be assured of security The female worker shall:
of tenure. As such, the exercise of this option by
them shall not be used as basis for demotion in 1. Give prior notice to the head of agency of her
employment or termination. (Sec. 8, Ibid.) pregnancy and her availment of maternity
The transfer to a parallel position or reassignment leave at least 30 days in advance, whenever
from one organizational unit to another in the same possible, specifying the effective date of the
agency or private enterprise shall be allowed leave; and
provided that it shall not involve a reduction in rank,
status, salary, or otherwise amount to constructive 2. Use the prescribed civil service form in the
dismissal. (Ibid.) filing of the maternity leave application,
supported by a medical certificate. (Sec. 2, Rule
Non-Discrimination V, Ibid.)

No employer whether in the public or private sector In case the Employee Qualifies as a Solo Parent
shall discriminate against the employment of under the Solo Parents’ Welfare Act
women in order to avoid the benefits provided for
in this Rules. (Sec. 9, Ibid.) The Ee shall be paid an additional maternity benefit
of 15 days. An additional maternity leave of 30 days,
MATERNITY LEAVE FOR FEMALE WORKERS IN without pay, can be availed of, at the option of the
THE PUBLIC SECTOR female worker. Provided that,

Any pregnant female worker in the government 1. the head of the agency shall be given due
service, regardless of employment status and length notice, in writing, 45 days before the end of
of service is eligible. (Sec. 4, R.A. No. 11210; Sec. 1, her maternity leave; and
Rule V, IRR of R.A. No. 11210)
2. That no prior notice shall be necessary in
“Female workers in the public sector” the event of a medical emergency but
subsequent notice shall be given to the
Those women in government service who hold head of the agency. (Sec. 4, R.A. No. 11210)
public office by virtue of an appointment issued by
the propert appointing officer or authority or by NOTE: Maternity leave of sixty (60) days, with full
way of election in: pay, shall be granted for miscarriage or emergency
termination of pregnancy.
1. National Government Agencies (NGAs);
2. LGUs; Maternity Leave in the teaching profession
3. GOCCs;
4. State Universities and Colleges (SUCs); and Female teachers may also avail of maternity leave
5. Local Universities and Colleges (LUCs). even during long vacations, i.e., summer and
(Sec. 1(h), Rule II, IRR of R.A. No. 11210) Christmas vacations, in which case both the
maternity leave benefits and the proportional
“Employment status in the public sector” vacation pay (PVP) shall be granted. (Sec. 3, Rule V,
IRR of R.A. No. 11210)
It refers to the status of appointment. It may be
permanent, temporary, coterminous, fixed term,
casual, contractual, substitute, or provisional. (Sec.
1(e), Ibid.)

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Extended Maternity Leave workers in the informal economy. They can claim
maternity leave benefits from the SSS if they have
In cases of live childbirth, the female worker has the remitted to the SSS at least three (3) monthly
option to extend her maternity leave for an contributions in the 12-month period immediately
additional 30 days without pay, or use her earned preceding the semester of her childbirth,
sick leave credits for extended leave with pay. In miscarriage, or ETP. (Sec. 1, Rule VII, IRR of R.A. No.
case the sick leave credits are exhausted, the 11210)
vacation leave credits may be used. (Sec. 4, Ibid.)
MATERNITY LEAVE FOR FEMALE WORKERS IN
Manner of payment of Maternity Leave Benefits THE PRIVATE SECTOR

The female worker shall be entitled to full pay Eligibility

during maternity leave which shall be paid by the
agency. She shall have the option to receive full pay To qualify for the grant of maternity leave benefit,
either through lump sum payment or regular the female worker must meet the following
payment of salary through agency payroll. A requirements:
clearance from money, property and work-related
accountabilities shall be secured by the female Ee. 1. She must have at least 3 monthly contributions
(Sec. 5, Ibid.) in the 12-month period immediately
preceding the semester of childbirth,
Consecutive pregnancies and multiple miscarriage, or ETP; and
childbirths
2. She shall have notified her Er of her pregnancy
In case of overlapping maternity benefit claims (e.g., and the probable date of her childbirth, which
one miscarriage or emergency termination of notice shall be transmitted to the SSS in
pregnancy after the other or followed by live accordance with the rules and regulations it
childbirth), the Ee shall be granted maternity may provide. (Sec. 1, Rule VI, IRR of R.A. 11210)
benefits for the two contingencies in a consecutive
manner. The female worker shall be paid only one NOTE: The failure of the pregnant female worker to
maternity benefit, regardless of the number of notify the Er shall not bar her from receiving the
offspring, per childbirth/delivery. (Sec. 6, Ibid.) maternity benefits, subject to guidelines to be
prescribed by the SSS. (Sec. 2(c), Ibid.)
Q: Can local elected and appointed officials, like
barangay officials, avail of the extended “Employment status in the private sector”
maternity leave?
Refers to the type of employment which may be
A: YES. The coverage of R.A. No. 11210 includes regular, probationary, casual, project, or seasonal.
female workers in the public sector, including the (Sec. 1(f), Rule II, Ibid.)
LGUs. Their entitlement to maternity leave benefits
is also granted under the Local Government Code of Amount of Benefit
1991 and its IRR, and CSC-DBM Joint Circular No. 1,
s. 2004 (Leave Benefits of Barangay Officials). The qualified Ee must receive full payment of the
benefit which shall be advanced by the Er within 30
Q: Can contract of service and job order workers days from the filing of the maternity leave
in government avail of maternity leave under application. (Sec. 3, Rule VI, IRR of R.A. 11210)
R.A. No. 11210?
In the case of self-employed female members,
A: YES. Female contract of service and job order including those in the informal economy, OFWs and
workers in the government are classified as female

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voluntary SSS members, the SSS shall directly pay registers capital deficiency, i.e. negative
the maternity benefit. (Ibid.) net worth as of the last full accounting
period immediately preceding
SSS Reimbursement application for exemption.

The SSS shall immediately reimburse the Er the c. For Non-stock, non-profit
maternity benefits advanced to the employed organizations
female member, only to the extent of 100% of her
average daily salary credit (ADSC) for 105 days, 120 When the accumulated net losses for the
days or 60 days, as the case may be, upon receipt of last two (2) full accounting periods
satisfactory and legal proof of such payment (Sec. 4, immediately preceding application for
Ibid.) exemption amounts to 20% or more of
the fund balance/members' contribution
NOTE: Average daily salary credit (ADSC) is the at the beginning of the period or when an
result obtained by dividing the sum of the six (6) establishment registers capital
highest monthly salary credits in the twelve-month deficiency, i.e. negative fund
period immediately preceding the semester of balance/members; contribution as of the
contingency by one hundred eighty (180). (Sec. last full accounting period or interim
1(vi), SSS Circular No. 2019-009) period, if any, immediately preceding
application for exemption.
Salary differential
d. For banks and quasi-banks
GR: Ers from the private sector shall pay for the
difference between the full salary and the actual When there is a certification from the
cash benefits received from the SSS. (Sec. 5, Ibid.) Bangko Sentral ng Pilipinas that it is
under receivership or liquidation as
XPNs: provided in Sec. 30 of RA 7653, otherwise
known as the New Central Bank Act.
1. Those operating distressed establishments;
2. Those retail/service establishments and other
a. For corporation/cooperative enterprises employing not more than 10
workers;
When the actual net loss amounts to 25%
of total assets or when the 3. Those considered as micro-business
corporation/cooperative registers enterprises and engaged in the production,
capital deficiency, i.e. negative processing, or manufacturing of products or
stockholders' equity immediately commodities including agro-processing,
preceding the application for exemption. trading, and services, whose total assets are
not more than three million pesos; and
b. For sole proprietorship and
partnership 4. Those who are already providing similar or
more than the benefits herein provided under
When the accumulated net losses for the an existing CBA or company policy. (Ibid.)
last two (2) full accounting periods
immediately preceding application for NOTE: The XPNs shall be subject to an annual
exemption amounts to 20% or more of submission of justification by the Er claiming
the total invested capital at the beginning exemption for the approval of the DOLE. (Ibid.)
of the period under review or when the
sole proprietorship or partnership

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Bar to Recovery of Sickness Benefits Rules shall be filed before the Social Security
Commission (SSC). (Sec. 9, Ibid)
The payment of daily SSS maternity benefits shall
be a bar to recovery of sickness benefits provided Any dispute, controversy, or claim arising out of or
under R.A. No. 11199 or the Social Security Act of relating to the payment of salary differential shall
2018, for the same period for which daily maternity be filed before the DOLE Field/Provincial/Regional
benefits have been received. (Sec. 6, Ibid.) Office having jurisdiction over the workplace and
shall be subject to existing enforcement
Consecutive Pregnancies and Multiple mechanisms of the DOLE. (Ibid.)
Childbirths
MATERNITY LEAVE FOR FEMALE WORKERS IN
In cases of consecutive pregnancies resulting in THE INFORMAL ECONOMY
overlapping maternity leaves and in cases of
multiple childbirths, the following rules shall “Female workers in the informal economy”
govern:
Those self-employed, occasionally or personally
a. In case of the overlapping of two (2) hired, subcontracted, paid and unpaid family
maternity benefit claims, the female member workers in household incorporated and
shall be granted maternity benefits for the unincorporated enterprises, including home
two contingencies in a consecutive manner. workers, micro-entrepreneurs and producers, and
However, the amount of benefit operators of sari-sari stores. (Sec. 1(i), Rule II, Ibid.)
corresponding to the period where there is
an overlap shall be deducted from the Coverage
current maternity benefit claim; and
Condition: She must have remitted to the SSS at
b. The female member shall be paid only one least three (3) monthly contributions in the 12-
maternity benefit, regardless of the number month period immediately preceding the semester
of offspring per childbirth or delivery. (Sec. 7, of her childbirth, miscarriage, or ETP.
Ibid.)
Manner of payment: The SSS shall directly pay the
Liability of the Employer maternity benefit.
NOTE: In the case of self-employed female
The Er shall pay to the SSS damages equivalent to members, including OFWs and voluntary SSS
the benefits which she would otherwise have been members, the SSS shall directly pay the maternity
entitled to any of the following instances: benefit.

a. Failure of the Er to remit to the SSS the ALLOCATION OF MATERNITY LEAVE CREDITS
required contributions for the female
worker; or Allocation to the Child’s Father or Alternative
Caregiver
b. Failure of the Er to transmit to SSS the female
worker’s notification on the fact of In case of live childbirth, a qualified female worker
pregnancy and probable date of childbirth. entitled to maternity leave benefits may, at her
(Sec. 8, Ibid.) option, allocate up to 7 days of said benefits to the
child’s father, whether the same is married to the
Dispute Resolution female worker. (Sec. 1, Rule VIII, Ibid.)

Any dispute, controversy, or claim as regards the In case of death, absence, or incapacity of the child’s
grant of SSS maternity leave benefit under this father, the female worker may allocate to an

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alternate caregiver, who may be any of the following Allocation of Maternity Leave Credits for Female
upon the election of the mother taking into account Workers in the Public Sector
the best interests of the child:
In case the female worker opts to allocate, she shall
a. A relative within the fourth degree of submit a written notice to the head of agency or the
consanguinity; or head of agency's authorized representative, with
her application for maternity leave. (Sec. 3, Ibid.)
b. The current partner, regardless of sexual
orientation or gender identity of the female The allocated maternity leave may be enjoyed by
worker sharing the same household. (Ibid.) the child's father or the alternate caregiver either in
a continuous or in an intermittent manner not later
The option to allocate maternity leave credits shall than the period of the maternity leave availed of.
not be applicable in case the female worker suffers (Ibid.)
miscarriage or ETP. (Ibid.)
In case full pay has been given to the female worker,
NOTE: The allocated benefit granted to the child's the child's father or the alternate caregiver, as the
father under this law is over and above that which case may be, shall only be excused from work (leave
is provided under R.A. No. 8187, or the "Paternity without pay). (Ibid.)
Leave Act of 1996." (Ibid.)
NOTE: The leave without pay shall not be
Allocation for the SSS-Covered Female Ees considered as a gap in the service. (Ibid.)

In case the female worker avails of the option to Death or Permanent Incapacity of the Female
allocate, the SSS shall pay her the amount of the Worker
maternity benefit corresponding to the period not
allocated. (Sec. 2, Ibid.) The balance of her maternity leave benefits, if any,
shall accrue to the child's father or to a qualified
As applicable, the father or, in his death, absence, or alternate caregiver as provided in the above
incapacity, the alternate caregiver shall be granted paragraphs subject to the following conditions:
by his employer a leave with pay equivalent to a
period from 1 to 7 days, which may be enjoyed a. That the maternity leave benefits have
either in a continuous or in an intermittent manner not yet been commuted to cash, if
not later than the period of the maternity leave applicable; and
availed of. (Ibid.)
b. That a certified true copy of the death
The female Ee shall notify her Er of her option to certificate or medical certificate or
allocate with her application for maternity leave. abstract is provided to the employers of
The father or alternate caregiver, as the case may be, both the female worker and the child's
shall notify the Er concerned of his or her availment father or alternate caregiver. (Sec. 4,
of the allocated leave and the inclusive dates thereof Ibid.)
(Ibid.)
In case the maternity leave benefits of the deceased
NOTE: This written notice to the employers shall be or permanently incapacitated female worker have
required even if the child's father or the alternate already been paid to the latter in full, the child's
caregiver is employed in the public sector. (Ibid) father or alternate caregiver shall be entitled to
enjoy the remaining unexpired leave credits of the
female worker, if there be any, without pay. (Ibid.)

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NOTE: such leave without pay shall not be to effectively lend support to his wife in her period
considered as a gap in the service of the child's of recovery and/or in the nursing of the newly-born
father or alternate caregiver, in both the public and child. (Sec. 3, R.A. No. 8187; Sec. 1, Revised IRR of R.A.
private sector. (Ibid.) No. 8187)

MATERNITY LEAVE FOR FEMALE NATIONAL Non-commutation of benefits

ATHLETES
In the event that the paternity leave benefit is not
Maternity Leave for Female National Athletes availed of, said leave shall not be convertible to
cash. (Sec. 7, IRR of R.A. No. 8187)
In the event that a national athlete who is in the
roster of national athletes of the National Sports Concept of paternity leave benefits
Association (NSA) to which she is affiliated becomes
pregnant, she will be referred to: Every married male Ee in the private and public
sectors shall be entitled to a paternity leave of seven
1. a physician of the Philippine Sports days with full pay for the first four (4) deliveries
Commission (PSC); or of the legitimate spouse with whom he is
2. an obstetrician-gynecologist to determine cohabiting. (Sec. 2, R.A. No. 8187)
her fitness to continue training. (Sec. 1, Rule
IX, Ibid.) NOTE: If the spouses are not physically living
together because of the workstation or occupation,
She will be allowed to participate in all team-related the male Ee is still entitled to the paternity leave
activities, unless the physician advises that benefit. (Handbook on Workers’ Statutory Monetary
participation is not medically safe or should be Benefits, Bureau of Working Conditions, 2020)
limited. Upon medical advice, she shall go on
maternity leave until cleared to return to training. Conditions for Entitlement to Paternity Leave
(Ibid.)
1. He is a married male Ee at the time of the
She shall continue receiving her allowance and be delivery of his child;
entitled to the same benefits while on maternity
leave prior to childbirth and up to six (6) months 2. He is cohabiting with his spouse at the time
after, unless she can resume sooner as advised by she gives birth or suffers a miscarriage;
her physician, in which case, she will continue to
receive the same allowances and benefits she NOTE: “spouse” refers to the lawful wife who
received prior to and during the pregnancy. (Ibid.) is a woman is is legally married to the male
Ee concerned. (Sec. 1(d), Revised IRRs of R.A.
NOTE: a female national athlete employed in the No. 8187)
public sector shall not receive double compensation
or benefits. (Ibid.) 3. He has applied for paternity leave within a
reasonable period of time from the expected
c) PATERNITY LEAVE date of delivery by his pregnant spouse, or
within such period as may be provided by
Paternity Leave company rules or by collective bargaining
agreement; and
It refers to the leave benefits granted to a married
male Ee allowing him not to report for work for 7 4. His wife has given birth or suffered a
days but continue to earn compensation on the miscarriage. (Sec. 3, IRR of R.A. No. 8187)
condition that his spouse has delivered a child or
suffered a miscarriage for purposes of enabling him

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NOTE: In case of miscarriage, prior application for advised Tammy to be on full bed rest for six (6)
leave shall not be required. (Sec. 4, Revised IRRs of weeks. Meanwhile, the biopsy of the sample
R.A. No. 8187) tissue taken from the mass in Tammy's uterus
showed a beginning malignancy that required
Crediting of Existing Benefits an immediate series of chemotherapy once a
week for four (4) weeks.
1. If the existing paternity leave benefit under the
collective bargaining agreement, contract, or What can Roger, Tammy's second husband and
company policy is greater than seven (7) the father of her two (2) younger children, claim
calendar days as provided for in R.A. No. 8187, as benefits under the circumstances? (2013
the greater benefit shall prevail. BAR)

2. If the existing paternity leave benefit is less than A: Under R.A. No. 8187 or the Paternity Leave Act of
that provided in R.A. No. 8187, the Er shall 1996, Roger can claim paternity leave of seven (7)
adjust the existing benefit to cover the days with full pay if he is lawfully married to Tammy
difference. (Sec. 9, Revised IRR of R.A. No. 8187) and cohabiting with her at the time of the
miscarriage.
NOTE: Where a company policy, contract, or CBA
provides for an emergency or contingency leave Q: Mans Weto had been an Ee of Nopolt
without specific provisions on paternity leave, the Assurance Company for the last ten (10) years.
Er shall grant to the Ee seven (7) calendar days of His wife of six (6) years died last year. They had
paternity leave. (Handbook on Workers’ Statutory four (4) children. He then fell in love with Jovy,
Monetary Benefits, Bureau of Working Conditions, his co-Ee, and they got married. In October this
2020) year, Weto's new wife is expected to give birth to
her first child. He has accordingly filed his
The allocated benefit granted to the child's father application for paternity leave, conformably
under the 105-Day Expanded Maternity Leave Law with the provisions of the Paternity Leave Law
is over and above that which is provided under R.A. which took effect in 1996.
No. 8187, or the "Paternity Leave Act of 1996."
The HRD manager of the assurance firm denied
Availment of the Paternity Leave may be After his application, on the ground that Weto had
the Delivery already used up his entitlement under the law.
Weto argued that he has a new wife who will be
Paternity leave may be availed after the delivery giving birth for the first time, therefore, his
without prejudice to an Er’s policy of allowing the entitlement to paternity leave benefits would
Ee to avail of the benefit before or during the begin to run anew. Whose contention is correct,
delivery, provided that the total number of days Weto or the HRD manager? (2005 BAR)
shall not be more than seven (7) days for each
covered delivery. (Handbook on Workers’ Statutory A: The contention of Weto is correct. The law
Monetary Benefits, 2020) provides that every married male is entitled to a
paternity leave of 7 days for the first 4 deliveries of
Q: Because of the stress in caring for her four (4) the legitimate spouse with whom he is cohabiting
growing children, Tammy suffered a with. The fact that Jovy is his second wife and that
miscarriage late in her pregnancy and had to Weto had four children with his first wife is
undergo an operation. In the course of the immaterial. The important fact is that this is the first
operation, her obstetrician further discovered a child of Jovy with Weto. The law did not distinguish,
suspicious-looking mass that required the therefore, we should not distinguish.
subsequent removal of her uterus
(hysterectomy). After surgery, her physician

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The paternity leave was intended to enable the NOTE: this definition shall only apply for purposes
husband to effectively lend support to his wife in her of availing the benefits under this Act. (Ibid.)
period of recovery and/or in the nursing of the
newly born child. (Sec. 3, RA. No. 8187) To deny Spouse
Weto this benefit would be to defeat the rationale
for the law. Moreover, the case of Weto is a gray area It refers to a husband or wife by virtue of a valid
and the doubt should be resolved in his favor. marriage or a partner in a common-law relationship
as defined under Art. 147 of the Family Code. (Sec.
d) SOLO PARENT LEAVE (R.A. No. 8972, as 3(f), Ibid.)
amended by R.A. No. 11861)
Categories of Solo Parent
The Expanded Solo Welfare Act
A solo parent refers to any individual who falls
R.A. No. 11861 or the Expanded Solo Welfare Act under any of the following categories:
lapsed into law on 04 June 2022.
(a) A parent who provides sole parental care
Parental Leave and support of the child or children due to:

It refers to leave benefits granted to a solo parent to (1) Birth as a consequence of rape, even
enable the performance of parental duties and without final conviction. Provided
responsibilities where physical presence is
required or beneficial to the child (Sec. 3(e), R.A. No. i. That the mother has the sole
8972, as amended by R.A. No. 11861) parental care and support of the
child or children; and
In addition to leave privileges under exiting laws, a
forfeitable and noncumulative parental leave of not ii. That the solo parent under this
more than seven (7) working days with pay every category may still be
year shall be granted to any solo parent employee, considered a solo parent under
regardless of employment status, who has rendered any of the categories in this
service of at least six (6) months. (Sec. 8, Ibid.) section;

NOTE: the parental leave benefit may be availed of (2) Death of the spouse;
by the solo parent employees in the government
and the private sector. (Ibid.) (3) Detention of the spouse for at least 3
months or service of sentence for a
Children or Dependents criminal conviction;

They refer to: (4) Physical or mental incapacity of the

spouse as certified by a public or
1. Those living with and dependent upon the private medical practitioner;
solo parent for support who are unmarried,
unemployed and 22 years old or below; or (5) Legal separation or de facto separation
for at least 6 months, and the solo
2. those over 22 years old but who are unable parent is entrusted with the sole
to fully take care or protect themselves parental care and support of the child
from abuse, neglect, cruelty, exploitation, or children;
or discrimination because of a physical or
mental disability or condition. (Sec. 3(b), (6) Declaration of nullity or annulment of
R.A. No. 8972, as amended by R.A. No. 11861) marriage, as decreed by a court

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 III. EMPLOYMENT PROPER
recognized by law, or due to divorce, mental disability or condition, they shall be
subject to existing laws, and the solo entitled to the benefits of this Act in
parent is entrusted with the sole addition to the benefits granted to them by
parental care and support of the child R.A. No. 9257 or the Expanded Senior
or children; or Citizens Act of 2003.

(7) Abandonment by the spouse for at (f) A pregnant woman who provides sole
least six (6) months; parental care and support to the unborn
child or children. (Sec. 4, Ibid.)
(b) Spouse or any family member of an OFW, or
the guardian of the child or children of an Work Discrimination
OFW. Provided
No Er shall discriminate against any solo parent Ee
(1) That the said OFW belongs to the with respect to terms and conditions of employment
low/semi-skilled worker category and on account of his or her status. Ers may enter into
is away from the Philippines for an agreements with their solo parent Ees for a
uninterrupted period of 12 months; telecommuting program, as provided in R.A. No.
and 11165 or the Telecommuting Act. (Sec. 7, Ibid.)

(2) That the OFW, his or her spouse, NOTE: That said solo parent employees shall be
family member, or guardian of the given priority by their employer. (Ibid.)
child or children of an OFW falls under
the requirements of this section; Non-Conversion of Parental Leave

(c) Unmarried mother or father who keeps and If the parental leave is not availed of, said leave shall
rears the child or children; not be convertible to cash unless specifically agreed
upon previously. However, if said leave were denied
(d) Any legal guardian, adoptive or foster an Ee because of non-compliance with the
parent who solely provides parental care provisions of these Rules by an Er, the
and support to a child or children; aforementioned leave may be used a basis for the
computation of damages. (Sec. 20, Art. V, IRR of R.A.
(e) Any relative within 4th civil degree of No. 8972)
consanguinity or affinity of the parent or
legal guardian who assumes parental care Limitation and Termination of the Benefits of a
and support of the child or children as a Solo Parent
result of the death, abandonment,
disappearance or absence of the parents or 1. Only a solo parent exercising sole
solo parent for at least six (6) months; or parental care and support of the child or
children is entitled to claim the benefits
NOTE: In cases of solo grandparents who of solo parent under this Act;
are senior citizens but who have the sole
parental care and support over their 2. The solo parent shall not lose his or her
grandchildren who are unmarried, or status as solo parent if the other parent
unemployed and twenty-two (22) years old provides occasional assistance and/or
or below, or those twenty-two (22) years seasonal gifts that do not meet the legal
old or over but who are unable to fully take requirement of support under the Family
care or protect themselves from abuse, Code;
neglect, cruelty, exploitation, or
discrimination because of a physical or

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3. Absence of a valid and legal marriage e) LEAVE BENEFITS FOR WOMEN WORKERS
between the mother and father of a child UNDER MAGNA CARTA OF WOMEN (R.A. No.
or dependent does not automatically 9710) and ANTI-VIOLENCE AGAINST WOMEN
entitle either individual to the benefits AND THEIR CHILDREN OF 2004 (R.A. No. 9262)
under this Act if the factual
circumstances demonstrate that parental LEAVE BENEFITS FOR WOMEN WORKERS
care and support are shared; and UNDER MAGNA CARTA OF WOMEN

4. When a solo parent ceases to be such by A woman Ee having rendered continuous aggregate
reason of change of status and employment service of at least six (6) months for
circumstances, the said solo parent shall the last 12 months shall be entitled to a special leave
be ineligible to avail of the benefits under benefit (SLB) of two (2) months with full pay based
this Act. (Sec. 16, R.A. No. 8972, as on her gross monthly compensation following
amended by R.A. No. 11861) surgery caused by gynecological disorders. (Sec. 18,
R.A. No. 9710)
Flexible Work Schedule
Conditions for Entitlement
It refers to a work arrangement granted to solo
parent employee to vary the arrival and departure Any female Ee in the public and private sector
time in the workplace without affecting the core regardless of age and civil status shall be entitled to
work hours as defined by the employer. (Sec. 3(c), a special leave of two (2) months with full pay based
R.A. No. 8972, as amended by R.A. No. 11861) on her gross monthly compensation subject to
existing laws, rules and regulations due to surgery
The Er shall provide for a flexible work schedule for caused by gynecological disorders under such terms
solo parents. Provided, that the same shall not affect and conditions:
individual and company productivity: Provided,
further, that any Er may request exemption from the 1. She has rendered at least six (6) months
above requirements from the DOLE on certain continuous aggregate employment service
meritorious grounds. for the last 12 months prior to surgery;

In the case of Ees in the government service, flexible 2. She has filed an application for special leave;
working hours will be subject to the discretion of and
the head of the agency. In no case shall the weekly
working hours be reduced in the event the agency 3. She has undergone surgery due to
adopts the flexible working hours schedule format gynecological disorders as certified by a
(flexi-time). In the adoption of flexi-time, the core competent physician. (Sec. 2, D.O. 112-A-12)
working hours shall be prescribed taking into
consideration the needs of the service. (Sec. 16, Art. Application for special leave
V, IRR, of R.A. No. 8972)
The female Ee shall file her application for leave
Crediting of Existing Leave with her Er within a reasonable period of time from
the expected date of surgery, or within such period
If there is an existing or similar benefit under a as may be provided by company rules and
company policy, or a CBA or a collective negotiation regulations or by CBA. (Sec. 3, Ibid.)
agreement, the same shall be credited as such. If the
same is greater than the seven (7) days provided for
in R.A. No. 8972, the greater benefit shall prevail.
(Sec. 21, Art. V, IRR of R.A. No. 8972)

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 III. EMPLOYMENT PROPER
When application is not necessary the SLB and the maternity benefit. (Sec. 9, D.O. 112-
A-12)
In cases requiring emergency surgical procedure,
prior application for leave shall not be necessary The worker is not required to consume the
provided: entire period of special leave

1. That the employer shall be notified verbally Q: Atty. Panga-Vega, Secretary of the House of
or in written form within a reasonable Representatives Electoral Tribunal, applied for
period of time; and the special leave benefit under R.A. No. 9710 as
she was under going to undergo hysterectomy. A
2. that after the surgery or appropriate month later, after the procedure, she presented
recuperating period, the female employee a medical certificate that she was already fit to
shall immediately file her application using work and sought to resume her duties and
the prescribed form. (Ibid.) functions. However, the HRET directed Panga-
Vega to consume her 2-month special leave. Is
Gross monthly compensation Panga-Vega required to consume the entire 2-
month special leave?
Refers to the monthly basic pay plus mandatory
allowances fixed by the regional wage boards. (Sec. A: NO. She is not required to consume the entire
7(L), IRR of R.A. No. 9710) two-month special leave, as the rules on maternity
leave can apply suppletorily. Similar to the special
Gynecological Disorders leave benefit under R.A. No. 9710, a maternity leave
under the Omnibus Rules on Leave seeks to protect
Refer to disorders that would require surgical the health and welfare of women, specifically of
procedures such as, but not limited to, dilatation working mothers, as its primary purpose is to afford
and curettage and those involving female them some measures of financial aid, and to grant
reproductive organs such as the vagina, cervix, them a period of rest and recuperation in
uterus, fallopian tubes, ovaries, breast, adnexa and connection with their pregnancies. Nothing in RA
pelvic floor, as certified by a competent physician. No. 9710 and the CSC Guidelines bar this more
For purposes of the Act and these Rules and humane interpretation of the provision on special
Regulations, gynecological surgeries shall also leave benefit. (HRET v. Panga-Vega, G.R. No. 228236,
include hysterectomy, ovariectomy, and 27 Jan. 2021)
mastectomy. (Sec. 7(M), Ibid.)
Special Leave Benefit (SLB) vs. SSS Sickness
Frequency of Availment Benefit

A female Ee can avail of the special leave benefit for SPECIAL LEAVE SSS SICKNESS
every instance of surgery due to gynecological BENEFIT BENEFIT
disorder for a maximum total period of two (2) Granted in accordance
months per year. (Sec. 6, D.O. 112-A-12) with the SSS law or RA
Granted in accordance
1161 as amended by
with R.A. No. 9710.
NOTE: SLB and SSS maternity benefit are mutually RA 8282. (Sec. 7, D.O.
exclusive, as such a female Ee may avail the special 112-A-12)
leave benefit in case she undergoes surgery caused
by gynecological disorder even on maternity leave. SLB vs. Existing Statutory Leaves
However, where the woman Ee undergone surgery
due to gynecological disorder during her maternity The SLB cannot be taken from statutory leaves (i.e.,
leave, she is entitled only to the difference between five-day SIL, Leave for Victims of VAWC, Parental
Leave for Solo Parents). The benefit is in addition to

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 LABOR LAW AND SOCIAL LEGISLATION
the leave benefits granted by existing laws. (Sec. 8, an immediate series of chemotherapy once a
D.O. 112-A-12) week for four (4) weeks. What benefits can
Tammy claim under existing social legislation?
NOTE: If there are existing or similar benefits under (2013 BAR)
a company policy or CBA providing similar or equal
benefit to what is mandated by law, the same shall A: Assuming she is employed, Tammy is entitled to
be considered as compliance unless the company a special leave benefit of two months with full pay
policy, practice or CBA provides otherwise. (Sec. 10, (Gynecological Leave) pursuant to R.A. No. 9710 or
DO 112-A-12) the Magna Carta of Women. She can also claim
Sickness Leave Benefit in accordance with the SSS
Mode of Payment Law as SLB and SSS maternity benefit are mutually
exclusive. (Sec. 9, D.O. 112-A-12)
The SLB is a leave privilege. The woman Ee shall not
report for work for the duration of the leave but she LEAVE BENEFITS FOR WOMEN WORKERS
will still receive her salary covering said period. The UNDER VAWC
Er, in its discretion, may allow said Ee to receive her
pay for the period covered by the approved leave Violence Against Women and Their Children
before or during the surgery. The computation of
her pay shall be based on her prevailing salary at the It refers to any act or a series of acts committed by
time of the surgery. (Sec. 11, D.O. 112-A-12) any person against a woman who is his wife, former
wife, or against a woman with whom the person has
Non-Commutation of the Benefit or had a sexual or dating relationship, or with whom
he has a common child, or against her child whether
The SLB shall be non-cumulative and non- legitimate or illegitimate, within or without the
convertible to cash unless otherwise provided by a family abode, which result in or is likely to result in
CBA. (Sec. 12, D.O. 112-A-12) physical, sexual, psychological harm or suffering, or
economic abuse including threats of such acts,
Crediting of Existing or Similar Benefits battery, assault, coercion, harassment or arbitrary
deprivation of liberty. (Sec. 3(a), R.A. No. 9262)
The existing or similar benefits under a company
policy or CBA shall be considered as compliance, Leave Entitlement
unless the company policy, practice, or CBA
provides otherwise. In case the company policy, It allows the victim of violence, which may be
practice or CBA provides lesser benefits, the physical, sexual, or psychological, to apply for the
company shall grant the difference. (Sec. 10, D.O. issuance of a protection order. If such victim is an
112-A-12) Ee, she is entitled to a paid leave of up to 10 days in
addition to other paid leaves under the LC, other
Q: Because of the stress in caring for her four (4) laws, and company policies.
growing children, Tammy suffered a
miscarriage late in her pregnancy and had to The Ee has to submit a certification from the Punong
undergo an operation. In the course of the Barangay or Kagawad, prosecutor, or clerk of court
operation, her obstetrician further discovered a that an action under R.A. No. 9262 has been filed and
suspicious-looking mass that required the is pending.
subsequent removal of her uterus
(hysterectomy). After surgery, her physician For government Ees, in addition to the certification,
advised Tammy to be on full bed rest for six (6) the Ee concerned must file an application for leave
weeks. Meanwhile, the biopsy of the sample citing R.A. No. 9262 as basis.
tissue taken from the mass in Tammy's uterus
showed a beginning malignancy that required

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 III. EMPLOYMENT PROPER
NOTE: Ee can file for an extended leave from her Er Bereavement Leave
if the ten-day leave is not enough and when the
necessity arises as specified in the protection order Bereavement leave and other death benefits are
issued by the barangay or court. granted to an Ee to give aid to, and if possible, lessen
the grief of, the said Ee and his family who suffered
Penalties for Violation the loss of a loved one. (Continental Steel
Manufacturing Corp. v. Montaño, G.R. No. 182836, 13
Any Er who shall prejudice the right of the person Oct. 2009)
under this section shall be penalized in accordance
with the provisions of the Labor Code and Civil Compassionate
Service Rules and Regulations. Likewise, an Er who
shall prejudice any person for assisting a co-Ee who The feeling or showing sympathy and sadness for
is a victim under this Act shall likewise be liable for the suffering or bad luck of others and wanting to
discrimination. help them. (Cambridge (n.d.)) Granted because of
unusual distressing circumstances affecting an
Noncumulative/ Non-Conversion to Cash individual i.e. leave. (Merriam-Webster (n.d))

The availment of the 10-day leave shall be at the Leave

option of the woman Ee, which shall cover the days
that she has to attend to medical and legal concerns. Time permitted away from work, esp. for a medical
Leaves not availed of are noncumulative and not condition or illness or for some other special
convertible to cash. purpose. (Cambridge (n.d.))

Q: Can an Ee apply for the 10-day leave from her “GARDEN LEAVES”
Er just because of a black eye or any
manifestation of abuse? The practice of the Er directing an Ee not to attend
work during the period of notice of resignation or
A: NO. The 10-day leave under the VAWC may only termination of the employment is colloquially
be availed of if the victim has applied for any known as “garden leave” or “gardening leave.” The
protection order with the intention to file a case Ee might be given no work or limited duties, or be
against the assailant. required to be available during the notice period to,
for example, assist with the completion of work or
f) COMPASSIONATE LEAVES ensure the smooth transition of work to their
successor, otherwise, the Ee is given no work and is
Compassionate leave directed to have no contact with clients or
continuing Ees. During the period of garden leave,
Time permitted away from work given as a feeling Ees continue to be paid their salary and any other
or showing of sympathy and sadness for the contractual benefits as if they were rendering their
suffering or bad luck of employees and wanting to services to the employer. (Mejila v. Wrigley
help them. It is granted because of unusual Philippines, Inc., G.R. Nos. 199469 & 199505, 11 Sept.
distressing circumstances affecting an employee. 2019)

NOTE: The term “Compassionate leave” has not yet

been defined under the Philippine laws and
jurisprudence.

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4. SPECIAL GROUPS OF EMPLOYEES 6. R.A. No. 7322 or “An Act Increasing

Maternity Benefits in Favor of Women
Workers in the Private Sector”
a) WOMEN
7. R.A. No. 7877 or “Anti-Sexual Harassment
Other Laws protecting women Workers
Act”

1. The State recognizes the role of women in 8. R.A. No. 8042 or the “Migrant Workers and
nation-building and shall ensure the Overseas Filipinos Act of 1995” – which
fundamental equality before the law of women prescribes as a matter of policy, the
and men. (Sec. 14, Art. II, 1987 Constitution) deployment of migrant workers, with
emphasis on women, only in countries where
2. The State shall protect working women by their rights are secure. (Philippine Telegraph
providing safe and healthful working and Telephone Co. v. NLRC, G.R. No. 118978, 23
conditions, taking into account their maternal May 1997)
functions, and such facilities and opportunities
that will enhance their welfare and enable 9. R.A. No. 11210 or the “105-Day Extended
them to realize their full potential in the
Maternity Leave Law”
service of the nation. (Sec. 14, Art. XIII, 1987
Constitution)
10. R.A. No. 9710 or “the Magna Carta of
3. R.A. No. 6725 or “An Act Strengthening the Women;” and
Prohibition on Discrimination against
Women with Respect to Terms and 11. R.A. No. 9262 or the “Anti-Violence against
Conditions of Employment” – which explicitly Women and Children”
prohibits discrimination against women with
respect to terms and conditions of State Policy on Non-Discrimination Against
employment, promotion, and training Women
opportunities.
The State condemns discrimination against women
4. R.A. No. 6955 or “An Act to Declare Unlawful in all its forms and pursues by all appropriate means
the Practice of Matching Filipino Women for and without delay the policy of eliminating
Marriage to Foreign Nationals on Mail discrimination against women in keeping with the
Order Basis” – which bans the “mail-order- Convention on the Elimination of All Forms of
bride” practice for a fee and the export of Discrimination Against Women (CEDAW) and other
female labor to countries that cannot international instruments consistent with
guarantee protection to the rights of women Philippine law. The State shall accord women the
workers. rights, protection, and opportunities available to
every member of society. (Sec. 2, R.A. No. 9710 or the
5. R.A. No. 7192 or “Women in Development Magna Carta of Women)
and Nation Building Act” – affords women
equal opportunities with men to act and to The State shall take steps to review and, when
enter into contracts, and for appointment, necessary, amend and/or repeal existing laws that
admission, training, graduation, and are discriminatory to women within three (3) years
commissioning in all military or similar from the effectivity of this Act. (Sec. 12, R.A. No.
schools. 9710)

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Facilities for Women under the Labor Code c. Discrimination in hiring – favoring a
male applicant with respect to hiring
The SOLE shall establish standards that will ensure where the particular job can equally be
the safety and health of women employees. In handled by a woman;
appropriate cases, he shall, by regulations, require
any employer to: d. Discrimination in dismissal – favoring a
male Ee over a female Ee with respect to
(a) Provide seats proper for women and dismissal of personnel or the application
permit them to use such seats when they of the “last in, first out principle” or other
are free from work and during working retrenchment policy of the Er. (Poquiz,
hours, provided they can perform their 2012)
duties in this position without detriment to
efficiency; 2. Stipulating, whether as a condition for
employment or continuation of employment:
(b) To establish separate toilet rooms and
lavatories for men and women and provide a. That a woman Ee shall not get married;
at least a dressing room for women; or
b. That upon marriage, such woman Ee
shall be deemed resigned or separated.
(c) To establish a nursery in a workplace for (Art. 134, LC) and
the benefit of the women employees
therein; and 3. Dismissing, discriminating or otherwise
prejudice a woman Ee by reason of her being
(d) To determine appropriate minimum age married. (Ibid.)
and other standards for retirement or
termination in special occupations such as Standard of Reasonable Test
those of flight attendants and the like. (Art.
130, LC) Under the standard reasonable test, the Er has the
burden of proof to prove the existence of a
(1) DISCRIMINATION reasonable business necessity that would justify an
employment policy. (Star Paper Corp. v. Simbol, G.R.
1. Discrimination with respect to the terms and No. 164774, 12 Apr. 2006)
conditions of employment solely on account of
sex. Expanded Breastfeeding Promotion Act of 2009

a. Discrimination in pay – Payment of a Nursing Ees shall be granted break intervals in

lesser compensation including wage, addition to the regular time-off for meals to
salary or other forms of remuneration breastfeed or express milk. These intervals, which
and fringe benefits, to a female Ee as shall include the time it takes an Ee to get to and
against a male Ee; from the workplace lactation station, shall be
counted as compensable hours worked. (Sec. 12, IRR
b. Discrimination in employment of R.A. No. 10028)
opportunity – favoring a male Ee over a
female Ee with respect to promotion, The DOLE may adjust the same provided hat such
assignment, transfer, training intervals shall not be less than a total of 40 minutes
opportunities, study and scholarship for every eight (8)-hour working period. (Ibid.)
grants solely on account of their sexes
(Art. 134, LC);

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Q: Can an individual, the sole proprietor of a department, one of them may be reassigned to
business enterprise, be said to have violated the another department.
Anti-Sexual Harassment Act of 1995 if he clearly
discriminates against women in the adoption of NOTE: The XPN of BFOQ occurs when the Er can
policy standards for employment and prove that reasonable demands of the business
promotions in the enterprise? Explain. (2003 require a distinction based on marital status and
BAR) there is no better or acceptable policy which would
better accomplish the business purpose.
A: When an Er discriminates against women in the
adoption of policy standards for employment and There must be a finding of any BFOQ to justify an
promotion in his enterprise, he is not guilty of Er’s no-spouse employment rule. There must be a
Sexual Harassment. Instead, the Er is guilty of compelling business necessity for which no
discrimination against women Ees which is alternative exists other than the discriminating
declared to be unlawful by the Labor Code. practice.

For an Er to commit Sexual Harassment, he—as a See pages 56-57 for further discussion on BFOQ
person of authority, influence or moral
ascendancy—should have demanded, requested or Importance of the BFOQ
otherwise required a sexual favor from his Ee
whether the demand, request or requirement for 1. To ensure that the Ee can effectively perform
submission is accepted by the object of said act. his work;
2. So that the no-spouse employment rule will
See pages 43-45 for further discussion on not impose any danger to business.
discrimination against women
Q: Glaxo, a company which has a policy against
(2) STIPULATION AGAINST MARRIAGE Ees having relationships with the Ees of its
competitors, employed Tecson as a medical
It shall be unlawful for the Er to: representative. Tecson married Bettsy, a Branch
coordinator in one of Glaxo’s competitors.
1. Require as a condition of employment or Tecson was then transferred to another area but
continuation of employment that a woman Ee he did not accept such transfer. Is the policy of
shall not get married; Glaxo valid and reasonable so as to constitute
the act of Tecson as willful disobedience?
2. Stipulate expressly or tacitly that upon getting
married, a woman Ee shall be deemed resigned A: YES. The prohibition against personal or marital
or separated; or relationships with Ees of competitor companies
upon Glaxo’s Ees is reasonable under the
3. Actually dismiss, discharge, discriminate or circumstances because relationships of that nature
otherwise prejudice a woman Ee merely by might compromise the interest of the company.
reason of her marriage. (Art. 134, LC) Glaxo does not impose an absolute prohibition
against relationships between its Ees and those of
No-Spouse Employment Policy competitor companies. Its Ees are free to cultivate
relationships with and marry persons of their own
It is a policy banning spouses from working in the choosing. What the company merely seeks to avoid
same company. Generally, spouses are allowed to is a conflict of interest between the Ee and the
work in the same company, provided it is not in the company that may arise out of such relationships.
same department, where there is direct supervision Furthermore, the prohibition forms part of the
or control. In case spouses are in the same employment contract and Tecson was aware of such
restrictions when he entered into a relationship

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 III. EMPLOYMENT PROPER
with Bettsy. (Duncan Assoc. Of Detailman-PTGWO v. 3. Discharge such woman on account of her
Glaxo Wellcome Phil. Inc., G.R. No. 162994, 17 Sept. pregnancy, or while on leave or in confinement
2004) due to her pregnancy; and

Q: May a woman worker be dismissed on the 4. Discharge or refuse the admission of such
ground of dishonesty for having written ‘’single” woman upon returning to her work for fear
on the space for civil status on the application that she may again be pregnant. (Art. 135, LC)
sheet, contrary to the fact that she was married?
Discharging a woman due to pregnancy
A: Art. 136 (now Art. 134) of the LC explicitly
prohibits discrimination merely by reason of The following are prohibited acts in connection with
marriage of a female Ee. The policy of not accepting the pregnancy of a woman Ee:
or disqualifying from work any woman worker who
contracts marriage is afoul of the right against 1. To discharge her on account of her pregnancy;
discrimination provided to all women workers by
our labor laws and by our Constitution. (PT&T Co. v. 2. To discharge her while she is on leave due to
NLRC, G.R. No. 118978, 23 May 1997) her pregnancy;

Q: An international flight stewardess of PAL was 3. To discharge her while she is confined due to
discharged from service, on account of her her pregnancy;
marriage. PAL contends that Art. 134 of the
Labor Code applies only to women Ee in 4. To discharge her upon returning to work for
ordinary occupations. Is the termination legal? fear that she may again be pregnant; (Art. 135,
LC)
A: NO. The termination is not legal and the policy of
PAL against marriage is patently illegal. Requiring 5. To refuse her admission upon returning to
that prospective flight attendants must be single work for fear that she may again be pregnant;
and that they will be automatically separated from (Sec. 13, Rule XII, Book III, Rules to Implement
the service once they marry was declared void, it the LC)
being violative of the clear mandate in Art. 134 of
the LC with regard to discrimination against 6. Expulsion and non-readmission of women
married women. Art. 134 is not intended to apply faculty/female student due to pregnancy
only to women employed in ordinary occupations, outside of marriage. (Sec. 13(c), R.A. No. 9710)
or it should have categorically expressed so. The
sweeping intendment of the law be it on special or Series of absences due to pregnancy and its
ordinary occupations. (Zialcita et. al., v. PAL, RO4-3- related ailments not a ground to dismiss Ee
3398-76, 20 Feb. 1997)
The court agreed that in concluding that
(3) PROHIBITED ACTS respondent’s sickness was pregnancy-related and
therefore, the petitioner cannot terminate
It shall be unlawful for any Er to: respondent’s services because in doing so,
petitioner will be violating Art. 137 (now Art. 135)
1. Deny any woman Ee benefits provided by law; of the LC. (Del Monte Philippines, Inc. v. Velasco, G.R.
No. 153477, 06 Mar. 2007)
2. Discharge any woman for the purpose of
preventing her from enjoying any of the Q: Can an Er dismiss an Ee on the ground of
benefits provided by law; deliberately concealing her pregnancy and
incurring absences without official leave?

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A: NO. Her absence was justified considering that Working Child
she had just delivered a child, which can hardly be
considered a forbidden act, a dereliction of duty; Any child engaged as follows:
much less does it imply wrongful intent on the part
of the Ee. (Lakpue Drug, Inc. v. Belga, G.R. No. 166379, 1. When the child is below 18 years of age in a
20 Oct. 2005) work or economic activity that is not child
labor; or
Penalty for commission of the prohibited acts
mentioned 2. When the child is below 15 years of age:
a. In work where he/she is directly under
The offender would be subject to the penalties the responsibility of his/her parents or
provided under Art. 287 of the LC, the general legal guardian and where only members
penalty clause under said code. of the child’s family are employed; or

Fine: Not less than P1,000 nor more than P10,000; b. In public entertainment or information.
or (Ibid.)

Imprisonment: not less than three (3) months or Instances when the State can intervene on
more than three years, or both, at the discretion of behalf of the child
the court.
1. When the parent, guardian, teacher or person
Persons covered under the classification of having care or custody of the child fails or is
certain women workers unable to protect the child against abuse,
exploitation and discrimination; or
Any woman who is permitted or suffered to work:
2. When such acts are committed against the
1. With or without compensation; child by the said parent, guardian, teacher or
person having care and custody over the
2. In any night club, cocktail lounge, massage child. (Sec. 2, R.A. No. 7610)
clinic, bar or similar establishment;
Employment of Children
3. Under the effective control or supervision of
the Er for a substantial period of time; and 1. No person under 18 years of age is allowed to
be employed in an undertaking which is
4. Shall be considered as an Ee of such hazardous or deleterious in nature.
establishment for purposes of labor and
social legislation. (Art. 136, LC) 2. No Er shall discriminate against any person
with respect to terms and conditions of
b) MINORS employment on account of his age. (Art. 138,
LC)
Child Labor
Children below fifteen (15) years of age shall not be
Any work or economic activity performed by a child employed except:
that subjects him or her to any form of exploitation
or is harmful to his or her health and safety or 1) When a child works directly under the sole
physical, mental, or psychosocial development. (Sec. responsibility of his/her parents or legal
2, DOLE D.O. No. 65-04) guardian and where only members of
his/her family are employed. Such
employment must:

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a. neither endangers his/her life, 12, R.A. No. 7610, as
safety, health, and morals, nor amended by R.A. No. 9231)
impairs his/her normal
development; and NOTE: where any such child may be
employed, the employer shall first secure,
b. That the parent or legal guardian before engaging such child, a work permit
shall provide the said child with from the DOLE which shall ensure
the prescribed primary and/or observance of the above requirements.
secondary education; or (Ibid.)

2) Where a child's employment or NOTE: For purposes of this Article, the term "child"
participation in public entertainment or shall apply to all persons under 18 years of age.
information through cinema, theater, radio,
television or other forms of media is Prohibition on the Employment of Children in
essential. Provided that: Certain Advertisements

a. The employment contract is No child below 18 years of age shall be employed as

concluded by the child's parents or a model in any advertisement directly or indirectly
legal guardian, with the express promoting
agreement of the child concerned,
if possible, and the approval of the 1. alcoholic beverages;
DOLE; and 2. intoxicating drinks;
3. tobacco and its byproducts;
b. The following requirements in all 4. gambling or any form of violence; or
instances are strictly complied 5. pornography.
with:
Hours of Work of a Working Child
i. The Er shall ensure the
protection, health, safety, 1. Below 15 years of age – may be allowed to
morals, and normal work for not more than 20 hours a week.
development of the child;
NOTE: The work shall not be more than
ii. The Er shall institute four (4) hours at any given day;
measures to prevent the
child's exploitation or 2. 15 years of age but below 18 – shall not be
discrimination taking into allowed to work for more than 8 hours a
account the system and day, and in no case beyond forty (40) hours
level of remuneration, and a week;
the duration and
arrangement of working 3. Below 15 years of age – shall not be
time; and allowed to work between 8:00 P.M. and
6:00 A.M. of the following day; and
iii. The Er shall formulate and
implement, subject to the 4. 15 years of age but below 18 – shall be
approval and supervision of allowed to work between ten o'clock in the
competent authorities, a evening and six o'clock in the morning of
continuing program for the following day. (Sec. 2-A, Ibid.)
training and skills
acquisition of the child. (Sec.

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NOTE: Sleeping time as well travel time of a child d. Involves the use of dangerous
engaged in public entertainment or information machinery, equipment and tools such
from his/her residence to his/her workplace shall as power-driven or explosive power-
not be included as hours worked without prejudice actuated tools; or
to the application of existing rules on employees
compensation. (Sec. 15, DOLE D.O. No. 65-04) e. Exposes the child to physical danger
such as, but not limited to the
Prohibition Against Worst Forms of Child Labor dangerous feats of balancing, physical
strength or contortion, or which
No child shall be engaged in the worst forms of child requires the manual transport of heavy
labor. The phrase “worst forms of child labor” shall loads; or
refer to any of the following:
f. Is performed in an unhealthy
1. All forms of slavery (Anti-Trafficking of Persons environment exposing the child to
Act of 2003) or practices similar to slavery hazardous working conditions,
such as sale and trafficking of children, debt elements, substances, co-agents or
bondage and serfdom and forced or processes involving ionizing, radiation,
compulsory labor, including recruitment of fire, flammable substances, noxious
children for use in armed conflict; components and the like, or to extreme
temperatures, noise levels, or
2. The use, procuring, offering of a child for vibrations; or
prostitution, for the production of
pornography or for pornographic g. Is performed under particularly
performances; difficult conditions; or

3. The use, procuring, offering or exposing of a h. Exposes the child to biological agents
child for illegal or illicit activities, including the such as bacteria, fungi, viruses,
production and trafficking of dangerous drugs protozoans, nematodes and other
and volatile substances prohibited under parasites; or
existing laws;
i. Involves the manufacture or handling
4. Work which, by its nature or circumstances in of explosives and other pyrotechnic
which it is carried out, is hazardous or likely to products. (Sec. 12-D, R.A. No. 9231); and
be harmful to the health, safety or morals of
children, such that it: 5. Employing child models in all commercials or
advertisements promoting alcoholic
a. Debases, degrades or demeans the beverages, intoxicating drinks, tobacco and its
intrinsic worth and dignity of a child as by-products and violence. (Sec. 14, RA 7610)
a human being; or
Persons Who Can File a Complaint For Unlawful
b. Exposes the child to physical, Acts Committed Against Children
emotional or sexual abuse, or is found
to be highly stressful psychologically or 1. Offended party;
may prejudice morals; or
2. Parents or guardians;
c. Is performed underground,
underwater or at dangerous heights; or 3. Ascendants or collateral relatives within the
3rd degree of consanguinity;

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4. Officer, social worker or representative of a 1. Will be engaged in public entertainment or
licensed child-caring institution; information regardless of his/her role in a
project. This includes projects which are non-
5. Officer or social worker of DSWD; profit, advocacy materials or political
advertisements; or
6. Barangay chairman of the place where the
violation occurred, where the child is residing 2. Is a foreign national and will be engaged in
or employed; or, public entertainment in the PH;

7. At least three concerned, responsible citizens 3. Will be engaged as regular extra or as part of a
where the violation occurred. (Sec. 27, R.A. No. crowd and is included in the script or
7610, as amended by R.A. No. 9231) storyboard;

Jurisdiction Over Offenses Punishable Under 4. Has been selected for a project after
R.A. No. 9231 undergoing auditions, workshops or VTR
screenings; or
The Family Courts shall have original jurisdiction
over all cases involving offenses punishable under 5. Has been selected as semi-finalist in a singing,
this Act. (Sec. 16-A, R.A. No. 7610, as amended by R.A. dance or talent contest for a television show.
No. 9231) (DOLE Circular No. 2, s. 2018)

Normal Development of the child When a Working Child Permit is Not Required

It refers to physical, emotional, mental, and spiritual If a child below 15 years of age:
growth of a child within a safe and nurturing
environment where he/she is given adequate 1. A spot extra or is cast outright on the day of
nourishment, care and protection and the filming or taping of a project;
opportunity to perform tasks appropriate at each 2. Will join auditions or VTR screenings;
stage of development. 3. Part of the audience of a live television show
unless the child’s participation is expected;
1. The child is provided with at least the 4. Picked or chosen as contestant from the
mandatory elementary or secondary audience of a live television show;
education; and 5. A contestant for a TV show but has not yet
been selected as a semi-finalist;
2. The Er secures a work permit for the child. 6. A recipient of gift-giving activities in TV;
(Secs. 8 to 12, Ibid.) 7. A participant in school-related performance;
8. A participant in sports activities, trainings, or
Duty of The Employer Before Engaging a Minor workshops; or
Into Employment 9. Will be featured in a documentary material.
(Ibid.)
The Er shall first secure a work permit from the
DOLE which shall ensure observance of the Issuance of Work Certificates or Permits to
requirements. (Sec. 12, R.A. No. 7160) Children At Least 15 But Below 18 Years of Age,
Not Required
When a Working Child Permit is Required
The issuance of a DOLE Certificate to youth aged 15
If a child below 15 years of age: to below 18 years of age is not required by law. No
Er shall deny the opportunity to any such youth
applying for employment merely on the basis of lack

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of work permit or certificate of eligibility for Hazardous Workplaces
employment. Any young person aged 15 to below 18
years of age may present a copy of this DOLE 1. Nature of work exposes the workers to
advisory to any Er, job provider, government dangerous environmental elements,
authority, or his/her representative when seeking contaminants or work conditions;
employment or anytime during employment. (DOLE
D.A. No. 01-08) 2. Workers are engaged in construction work,
logging, firefighting, mining, quarrying,
Regulation of Working Hours of a Child blasting, stevedoring, dock work, deep-sea
fishing, and mechanized farming;
It includes:
3. Workers are engaged in the manufacture or
1. All time during which a child is required to be handling of explosives and other pyrotechnic
at a prescribed workplace; and products; or
2. All time during which a child is suffered or
permitted to work. 4. Workers use or are exposed to heavy or
power-driven tools.
Rest periods of short duration during working
hours shall be counted as hours worked. (Sec. 3, Non-Hazardous Work
Chapter 1, Ibid.)
It is any work or activity in which the Ee is not
Ownership, Usage and Administration of the exposed to any risk which constitutes an imminent
Working Child’s Income danger to his safety and health.

The wages, salaries, earnings and other income of Hazardous Work and Activities
the working child shall belong to him/her in
ownership and shall be set aside primarily for The following work and activities are hereby
his/her support, education or skills acquisition and declared hazardous to persons below 18 years of
secondarily to the collective needs of the family age:
provided, that not more than 20% of the child's
income may be used for the collective needs of the 1. Work which exposes children to physical,
family. (Sec. 12-B, R.A. No. 7610) psychological or sexual abuse;

Trust Fund to Preserve Part of the Working e.g., lewd shows (stripteasers, burlesque
Child’s Income dancers, and the like), cabarets, bars (KTV,
karaoke bars), dance halls, bath houses and
The parent or legal guardian of a working child massage clinics, escort service, or gambling
below 18 years of age shall set up a trust fund for at halls and places
least 30% of the earnings of the child whose wages
and salaries from work and other income amount to 2. work underground, under water, at
at least P200,000.00 annually, for which he/she dangerous heights or at unguarded
shall render a semi-annual accounting of the fund to heights of two meters and above, or in
the DOLE. The child shall have full control over the confined places;
trust fund upon reaching the age of majority. (Sec.
12-C, R.A. No. 7610) e.g., mining, deep sea fishing/diving,
installing and repairing of telephone,
telegraph and electrical lines; cable fitters,
painting buildings, window cleaning, or
fruit picking involving climbing

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3. Work with dangerous machinery, NOTE: Persons between 15 and 18 years of age
equipment and tools, or which involves may be allowed to engage in domestic or
manual handling or transport of heavy household service, subject in all cases to the
loads; limitations prescribed in Nos. 1 to 5 above. (Sec. 4,
Ibid.)
e.g., logging, construction, quarrying,
operating agricultural machinery in Q: You were asked by a paint manufacturing
mechanized farming, metal work and company regarding the possible employment as
welding, driving or operating havy a mixer of a person aged 17, who shall be
equipment, operating or setting motor- directly under the care of the section supervisor.
driven machines, operating power-driven What advice would you give? Explain briefly.
tools, stevedoring, working in airport (2002 BAR)
hangars, working in warehouses, or
working in docks A: The paint manufacturing company cannot hire a
person who is aged 17. Art. 137(c) of the LC provides
4. Work in unhealthy environment which that a person below 18 years of age shall not be
may expose children to hazardous allowed to work in an undertaking which is
processes; hazardous or deleterious in nature as determined
by the SOLE. Paint manufacturing has been
e.g., manufacture or handling of classified by the SOLE as hazardous work.
pyrotechnics, tanning, pesticide spraying,
blacksmithing, hammersmiths, forging, Q: A spinster schoolteacher took pity on one of
extracting lard and oil, tiling and greasing her pupils, a robust and precocious 12-year-old
of heavy machinery, fiber and plastic boy whose poor family could barely afford the
preparing, bleaching, dyeing, and finishing cost of his schooling. She lives alone at her house
of textiles using chemicals, embalming and near the school after her housemaid left. In the
as undertakers, painting and as finishers in afternoon, she lets the boy do various chores as
metal craft industries, applying of cleaning, fetching water and all kinds of errands
adhesive/solvent in footwear, handicraft, after school hours. She gives him rice and Php
and woodwork industries, brewing and 30.00 before the boy goes home at 7 every night.
distilling of alcoholic beverages, recycling The school principal learned about it and
of batteries and containers or materials charged her with violating the law which
used or contaminated with chemicals, prohibits the employment of children below 15
working in abattoirs or slaughterhouses, years of age. In her defense, the teacher stated
garbage collecting, handling of animal that the work performed by her pupil is not
manure in poultry houses or as fertilizers in hazardous, and she invoked the exception
farming, working in hospitals or other provided in the Department Order of DOLE for
health care facilities, assisting in the engagement of persons in domestic and
laboratories and x-ray work, welding, household service. Is her defense tenable?
working in furnaces and kilns, in (2004 BAR)
discotheques, or in video arcades
A: NO. Under Art. 137 of the LC on “minimum
5. Work under particularly difficult employable age,” no child below 15 years of age
conditions such as work for long hours or shall be employed except when he works directly
during the night, or work where the child under the sole responsibility of his parents or
is unreasonably confined to the premises guardian, the provisions of the alleged department
of the Er. (Sec. 3, D.O. No. 04 Series of 1999) order of DOLE to the contrary notwithstanding. A
mere department order cannot prevail over the
express prohibitory provisions of the LC.

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Q: Iya, 15 years old, signed up to model a A: NO. He should not be prohibited from being hired
clothing brand. She worked from 9am to 4 pm and from performing as a singer. Under Sec. 12(2),
on weekdays and 1pm to 6pm on Saturdays for Art. VIII of R.A. No. 7610, as amended by R.A. No.
two (2) weeks. She was issued a child working 7658, this constitutes an exception to the general
permit under R.A. No. 9231. Which of the prohibition against the employment of children
following statements is the most accurate? below 15 years of age, provided that the following
(2012 BAR) requirements are strictly complied with:

a) Working permit for Iya’s employment is 1. The Er shall ensure the protection, health
not required because the job is not safety and morals of the child;
hazardous;
2. The Er shall institute measures to prevent the
b) Her work period exceeds the required child’s exploitation or discrimination taking
working hours for children aged 15 years into account the system and level of
old; remuneration, and the duration and
arrangement of working time; and
c) To require a 15-year-old to work without
obtaining the requisite working permit is 3. The Er shall formulate and implement,
a form of child labor; subject to the approval and supervision of
competent authorities, a continuing program
d) Iya, who was engaged in a work that is not for training and skill acquisition of the child.
child labor, is a working child. Moreover, the child must be directly under
the sole responsibility of his parents or
A: d). Iya, who was engaged in a work that is not guardian and his employment should not in
child labor, is a working child. (Sec. 12-A) any way interfere with his schooling.

Q: Determine whether the following minors c. A 15-year-old girl working as a library

should be prohibited from being hired and from assistant in a girls' high school.
performing their respective duties indicated
hereunder: (2006 BAR) A: NO. She should not be prohibited from working
as a library assistant because the prohibition in the
a. A 17-year-old boy working as miner at the LC against employment of persons below 18 years
Walwadi Mining Corporation. of age merely pertains to employment in an
undertaking which is hazardous or deleterious in
A: YES. He should be prohibited from being hired nature as identified in the guidelines issued by the
and from performing the duties of a miner because SOLE. Working as a library assistant is not one of
such constitutes hazardous work as it is a work undertakings identified to be hazardous under D.O.
underground under D.O. No. 04 Series of 1999. Art. No. 04 Series of 1999.
137(c) of LC expressly prohibits the employment of
persons under 18 years of age in an undertaking d. A 16-year-old girl working as model
which is hazardous or deleterious in nature as promoting alcoholic beverages.
determined by the SOLE.
A: YES. She should be prohibited from working as a
b. An 11-year-old boy who is an model promoting alcoholic beverages. R.A. No. 7610
accomplished singer and performer in categorically prohibits the employment of child
different parts of the country. models in all commercials or advertisements
promoting alcoholic beverages and intoxicating
drinks, among other things.

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 III. EMPLOYMENT PROPER
e. A 17-year-old boy working as a dealer in a worker is clearly not included. (Atienza v. Saluta,
casino. (2006 BAR) G.R. No. 233413, 17 June 2019)

A: YES. He should be prohibited from working as a Debt bondage

dealer in casino, because Art. 137(c) of the LC
prohibits the employment of persons below 18 It refers to the rendering of service by the domestic
years of age in an undertaking which is hazardous worker as security or payment for a debt where the
or deleterious in nature identified in the guidelines length and nature of service is not clearly defined or
issued by the SOLE. Working as a dealer in a casino when the value of the service is not reasonably
is classified as hazardous under D.O. No. 04 Series of applied in the payment of the debt. (Sec. 4, R.A. No.
1999 as it exposes children to physical, 10361)
psychological or sexual abuses.
Children under Foster Family Arrangement
c) KASAMBAHAYS
Those children who are living with a family or
Persons covered by R.A. No. 10361 otherwise household of relative/s and are provided access to
known as “Batas Kasambahay” education and given an allowance incidental to
education (i.e., “baon,” transportation, school
All kasambahay engaged in domestic work, whether projects, and school activities).
on a live-in or live-out arrangement, such as, but not
limited to, the following: NOTE: The foster family and foster care
arrangements should be in compliance with the
1. General househelp; procedures and requirements as prescribed by R.A.
2. Nursemaid or Yaya; No. 10165 or the Foster Care Act of 2012.
3. Cook;
4. Gardener; Q: Soledad, a widowed schoolteacher, takes
5. Laundry person; under her wing one of her students, Kiko, 13
6. Working children or domestic workers 15 years old, who was abandoned by his parents
years old and above but below 18 years of age; and has to do odd jobs in order to study. She
or allows Kiko to live in her house, provides him
7. Any person who regularly performs domestic with clean clothes, food, and a daily allowance of
work in one household on an occupational 200 pesos. In exchange, Kiko does routine
basis (live-out arrangement). (Sec. 4(d), R.A. housework, consisting of cleaning the house and
No. 10361) doing errands for Soledad.

Persons NOT Covered by Batas Kasambahay One day, a representative of the DOLE and the
DSWD came to Soledad's house and charged her
1. Service providers; with violating the law that prohibits work by
2. Family drivers; minors. Soledad objects and offers as a defense
3. Children under foster family arrangement; and that she was not requiring Kiko to work as the
4. Any other person who performs work chores were not hazardous. Further, she did not
occasionally or sporadically and not on an give him chores regularly but only
occupational and regular basis. (Sec. 2, Rule 1, intermittently as the need may arise. Is
IRR of R.A. No. 10361) Soledad's defense meritorious? (2015 BAR)

NOTE: Sec. 4(d) of the Kasambahay Law pertaining A: YES, Soledad’s defense is meritorious. Sec. 4(d) of
to who are included in the enumeration of domestic the Kasambahay Law (R.A. No. 10361) provides that
or household help cannot also be interpreted to the term “Domestic Worker” shall not include
include family drivers because the latter category of children who are under foster family arrangement

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and those who are provided access to education and Modes of Hiring a Kasambahay
given an allowance incidental to education (i.e.,
“baon”, transportation, school projects and school An Er can hire directly or indirectly through private
activities). employment agencies (PEAs) registered with the
DOLE regional offices. (Sec. 1, Rule II, IRR of R.A. No.
Examples of Persons Performing Work 10361) The Er, whether the kasambahay is hired
Occasionally or Sporadically and Not on an through a PEA or a third party, shall shoulder the
Occupational Basis expenses for hiring. The kasambahay shall not be
charged of any cost of the recruitment, placement,
1. A janitress doing irregular laundry work for a or finder’s fee. (Sec. 2, Rule II, IRR of R.A. No. 10361)
household during rest day;
2. A construction worker doing casual NOTE: The Er, whether directly hired or through
gardening job for a household; or PEA, shall pay the expenses that are directly used for
3. A hospital nurse or a student doing baby- the transfer of the kasambahay from place of origin
sitting job. (Q&A on Batas Kasambahay, DOLE) to the place of work. The Er can be reimbursed of the
deployment expenses when the kasambahay
Employable Age for a Kasambahay unreasonably leaves the Er within six (6) months
from the time he/she started work. (Sec. 3, Rule II,
15 years old and above. IRR of R.A. No. 10361)

NOTE: The employment of children 15 years old If a kasambahay is hired thru a PEA, the agency is
and above but below 18 years of age may be made allowed to collect Service Fee from the Er.
under the following conditions:
Pre-Employment Requirements
1. They shall not be allowed to work for more
than eight (8) hours a day, and in no case Prior to the execution of the employment contract,
beyond 40 hours a week; the Er may require the following from the
kasambahay:
2. They shall not be allowed to work between
10 P.M. to 6 A.M. of the following day; 1. Medical certificate or health certificate issued
by a local government health officer;
3. They shall not be allowed to do hazardous 2. Barangay and police clearance;
work or likely to be harmful to the health, 3. NBI clearance; and
safety or morals of children, as defined 4. Duly authenticated birth certificate or, if not
under existing laws and regulations; and available, voter’s ID baptismal record, or
passport showing the kasambahay’s age. (Sec.
4. They shall not be denied access to education 12, R.A. No. 10361)
and training. (Sec. 2, Rule VI, IRR of R.A. No.
10361) NOTE: All expenses made pursuant to the availment
of pre-employment requirements, should be
The consent of the parent/guardian of working shouldered by the Er. The foregoing requirements
children is required in the employment contract. are mandatory when the employment of the
kasambahay is facilitated through a private
Employer’s Household employment agency.

Household refers to the immediate family members It is not a requirement for a kasambahay to be
or other occupants of the house who are directly and trained and certified by TESDA prior to
regularly provided services by the kasambahay. employment. However, the kasambahay is
(Sec. 4(f), R.A. No. 10361) encouraged to undergo competency assessment

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 III. EMPLOYMENT PROPER
and be certified by TESDA. Training is not a Domestic worker and the employer are not
requirement for competency assessment. (Q&A on deprived from agreeing to the following:
Batas Kasambahay, DOLE)
(a) Offsetting a day of absence with a particular
Recruitment and Finder’s Fees rest day;
(b) Waiving a particular rest day in return for an
Regardless of whether the domestic worker was equivalent daily rate of pay;
hired through a private employment agency or a (c) Accumulating rest days not exceeding 5 days;
third party, no share in the recruitment or finder’s or
fees shall be charged against the domestic worker (d) Other similar arrangements. (Sec. 21, R.A. No.
by the said private employment agency or third 10361)
party. (Sec. 13, R.A. No. 10361)
NOTE: If the kasambahay is below 18 years old, the
Contract between the Er and Kasambahay employment contract shall be signed by his/her
Should be Written and Should Contain parent or lawful guardian on his/her behalf. (Sec. 5,
Conditions Set by Law Rule II, IRR of R.A. No. 10361)

The Er and the kasambahay shall enter into a Registration of the Kasambahay
written contract of employment in a language or
dialect understood by them. The Er is required to register the kasambahay in the
Registry of Domestic Workers in the barangay
NOTE: The contract need not be notarized. The where the Er resides. For this purpose, the DILG, in
Punong Barangay or his/her designated officer may coordination with the DOLE, shall formulate a
attest to the contract and serve as witness to its registration system. (Sec. 17, R.A. No. 10361)
execution.
NOTE: The registration of the kasambahay is free of
Contents of the Employment Contract charge.

1. Duties and responsibilities of the kasambahay Domestic Workers Cannot Acquire Regularity of
which include the responsibility to render Employment under RA 10361
satisfactory service at all times;
2. Period of employment; GR: All the indicia of regularity of employment
3. Compensation; remain absent in the employment of domestic
4. Authorized deductions; helpers. (Chan, 2017)
5. Hours of work and proportionate additional
payment; XPN: The mere fact that the househelper is working
6. Rest days and allowable leaves; within the premises of the business of the Er and in
7. Board, lodging and medical attention; relation to or in connection with the business, as in
8. Agreements on deployment expenses, if any; staff houses for its guest or even for its officers and
9. Loan agreement, if any; Ees, warrants the conclusion that such househelper
10. Termination of employment; and is and should be considered as a regular Ee.
11. Any other lawful condition agreed upon by (Remington Industrial Sales Corp. v. Castaneda, G.R.
both parties. (Sec. 5, Rule II, IRR of R.A. No. No. 169295-96, 20 Nov. 2006)
10361)
NOTE: Such a case must be based on its factual
antecedents.

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Q: Linda was employed by Sectarian University Other Rights and Privileges of a Kasambahay
(SU) to cook for the members of a religious order
who teach and live inside the campus. While 1. Freedom from Er’s interference in wage
performing her assigned task, Linda disposal;
accidentally burned herself. Because of the 2. Standard of treatment;
extent of her injuries, she went on medical leave. 3. Board, lodging, and medical attendance;
Meanwhile, SU engaged a replacement cook. 4. Right to privacy;
Linda filed a complaint for illegal dismissal, but 5. Access to outside communication;
her Er SU contended that Linda was not a regular 6. Access to education and training;
Ee but a domestic househelp. Decide. (2014 7. Right to be provided a copy of the
BAR) employment contract;
8. Right to Certificate of Employment;
A: The Er's argument that Linda was not a regular 9. Right to form, join, or assist labor
Ee has no merit. The definition of domestic servant organization;
or househelper contemplates one who is employed 10. Right to terminate employment based on just
in the Er’s home to minister exclusively to the cause; and
personal comfort and enjoyment of the Er’s family. 11. Right to exercise religious beliefs and cultural
The Supreme Court already held that the mere fact practices. (Sec. 1, Rule IV, IRR of RA 10361)
that the househelper is working in relation to or in
connection with its business warrants the Basic Necessities of a Kasambahay
conclusion that such househelper or domestic
servant is and should be considered as a regular Ee. 1. At least three (3) adequate meals a day, taking
(Apex Mining Co., Inc. v. NLRC, G.R. No. 94951, 22 Apr. into consideration the kasambahay’s religious
1991) Here, Linda was hired not to minister to the beliefs and cultural practices;
personal comfort and enjoyment of her Er's family
but to attend to other Ees who teach and live inside 2. Humane sleeping condition that respects the
the campus. person’s privacy for live-in arrangement; and

Mandatory Benefits of a Kasambahay 3. Appropriate rest and basic medical

assistance, including first-aid medicine, in
1. Monthly minimum wage; case of illness and injuries sustained during
2. Daily rest period of eight (total) hours; service without loss of benefits. (Sec. 12, Rule
3. Weekly rest period of 24 (uninterrupted) IV, IRR of R.A. No. 10361)
hours;
4. Five days annual service incentive leave with NOTE: For the Kasambahay under live-out
pay; arrangement, he/she shall be provided space for
5. 13th month pay; rest and access to sanitary facility.
6. SSS benefit;
7. PhilHealth benefit; and Though not part of the “basic necessities” required
8. Pag-IBIG benefit. to be provided by the Er to the kasambahay,
shampoo, soap, toothpaste etc. may be provided
gratuitously.

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Monthly Minimum Wage of a Kasambahay RTWPB shall coordinate with TESDA on the wage
review and adjustment based on the kasambahay’s
MONTHLY MINIMUM competency level, in line with the thrust to
WAGE IN CITIES AND OTHER professionalize the domestic service sector.
1ST CLASS MUNICIPALITIES
MUNICIPALITIES Payment of Wages
NCR
P6,000 Wages shall be in cash and be paid at least once a
CAR month. (Secs. 3-4, Rule IV, IRR of R.A. No. 10361)
P4,500
I NOTE: The Er shall, at all times, provide the
P5,000 kasambahay with a copy of the pay slip every pay
II day containing the amount paid and all deductions
P5,000 made, if any. The copies of the pay slip shall be kept
by the Er for a period of three (3) years. (Sec. 26,
III
R.A. No. 10361)
P5,000 P4,500
IV - A
Payment of wages by means of promissory,
P5,000 P4,000
voucher, coupon, token, ticket, chit, or anything
IV - B
other than the cash wage is prohibited. (Sec. 3, Rule
P4,500
IV, IRR of R.A. No. 10361)
V
P4,000 Daily Rest Period
VI
P4,500 The kasambahay is entitled to a total daily rest
VII period of at least eight (8) hours. (Sec. 3, R.A. No.
P5,500 P4,500 10361)
VIII
P5,000 P4,500 Prohibition of Work Beyond 16 Hours
IX
P4,000 P3,500 The Er cannot require the kasambahay to work
X beyond 16 hours at any given workday in return for
P4,500 P3,500 an equivalent hourly rate. The eight-hour rest
XI period must be observed.
P4,500
XII NOTE: This provision of special law is inconsistent
P4,500 P4,000 with Art. 1695 of the Civil Code which prohibits
XIII more than ten (10) hours of work of a househelper.
P4,000 Nevertheless, applying the rules on statutory
construction, in case of conflict between a general
Current Monthly Minimum Wage for Domestic law and special law, the special law prevails.
Workers (Kasambahay) as per National Wages and
Productivity Commission website 24 Consecutive Hours of Rest in A Week

The law provides a mechanism for increasing the Kasambahays are also entitled to at least 24
minimum wage of the kasambahay. The Regional consecutive hours of rest in a week. The Er and the
Tripartite Wages and Productivity Boards (RTWPB) kasambahay shall agree in writing on the schedule
may review, and if proper, determine and adjust the of the weekly rest day. The Er shall respect the
minimum wage. (Sec. 24, R.A. No. 10361) The

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preferred weekly rest day of the kasambahay on SSS, PhilHealth, and PAG-IBIG
religious grounds. (Sec. 21, Ibid.)
The kasambahay is covered by SSS, PhilHealth and
Q: Can the Er shorten the 24-hour rest day Pag-IBIG after one (1) month of service.
period of the kasambahay
Q: Supposing that in exchange for non-
A: NO. However, the kasambahay and the Er may membership, the kasambahay agrees with the Er
agree to shorten the rest day, provided the Er pays to receive the premiums and contributions in
for the hours worked during the shortened rest day. addition to his/her salary. Is this allowed?
(Q&A on Batas Kasambahay, DOLE)
A: NO. Under the SSS, PhilHealth, and PAG-IBIG
Five (5)-Day Annual SIL laws, the Er has the obligation to register the
kasambahay and deduct and remit the required
The kasambahay can avail the five (5)-day annual premiums and contributions. The Er shall incur
SIL after one (1) year of service. certain liabilities, including criminal prosecution, if
he fails or refuses to comply with his/her
NOTE: Any unused portion of the SIL shall not be obligations. (Q&A on Batas Kasambahay, DOLE)
cumulative or carried over to the succeeding years.
Unused leaves shall not be convertible to cash. In Case a Kasambahay Avails of Certain Loan
Privileges from PAG-IBIG Fund Which Require
Other Agreements that the Er and the the Payment of Additional or Upgraded
Kasambahay Can Enter into Relative to the Contributions
Latter’s Weekly Rest Day and SIL
Said additional or upgraded contributions shall be
1. Offsetting a day of absence with a particular shouldered solely by the kasambahay. (Sec. 9, Art. IV,
rest day; IRR of R.A. No. 10361)
2. Waiving a particular rest day in return for an
equivalent daily rate of pay; Er’s Liability in Case the Kasambahay Refuses to
3. Accumulating rest days not exceeding 5 days; Be a Member of SSS, PhilHealth, and PAG-IBIG
4. Adding the accumulated rest days (max. of 5
days) to the five-day SIL; and The Er is still liable under the SSS, PhilHealth, and
5. Waiving a particular SIL in return for an PAG-IBIG laws in case the kasambahay refuses
equivalent daily rate of pay. membership with those agencies, because it is
mandatory and non-negotiable. (Q&A on Batas
13th month pay Kasambahay, DOLE)

The kasambahay is entitled to 13th month pay after Person Liable to Pay the SSS premium,
one (1) month of service. PhilHealth and PAG-IBIG Contributions of the
Kasambahay
Computation of the 13thmonth Pay
GR: The Er shall pay the SSS premium, PhilHealth,
In computing the 13th month pay, the total basic and PAG-IBIG contributions of the kasambahay
wage received in a given calendar year shall be
divided by 12. The amount derived shall be paid not XPN: If the wage of the kasambahay is P5,000.00 or
later than December 24 or upon separation from more, the kasambahay will pay his/her share in the
employment. (Sec. 8, Rule IV, IRR of R.A. No. 10361) premiums/contributions. (Sec. 9, Rule IV, IRR of R.A.
No. 10361)

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Provisions Protecting Ers of a Kasambahay 2. Gross or habitual neglect or inefficiency by
the kasambahay in the performance of duties;
1. Prohibition against privileged information;
3. Fraud or willful breach of the trust reposed by
2. Er may require certain pre-employment the Er on the kasambahay;
documents prior to engagement;
4. Commission of a crime or offense by the
3. Ers are assured of quality services through kasambahay against the person of the Er or
DOLE-TESDA training, assessment, and any immediate member of the Er’s family;
certification of kasambahay;
5. Violation by the kasambahay of the terms and
4. Forfeiture of 15-day unpaid salary should the conditions of the employment contract and
kasambahay leave the residence of the Er other standards set forth under the law;
without any justifiable reason; and
6. Any disease prejudicial to the health of the
5. Right to terminate the employment on kasambahay, the Er, or member/s of the
justifiable grounds. (Q&A on Batas household; and
Kasambahay, DOLE)
7. Other causes analogous to the foregoing. (Sec.
Grounds for Termination of Contract by the 34, R.A. No. 10361)
Kasambahay
NOTE: Neither the domestic worker nor the Er may
1. Verbal or emotional abuse of the kasambahay terminate the contract before the expiration of the
by the Er or any member of the household; term except for grounds provided for in Secs. 33
and 34 of the Batas Kasambahay.
2. Inhuman treatment including physical abuse
of the kasambahay by the Er or any member of The domestic worker and the Er may mutually
the household; agree upon written notice to pre-terminate the
contract of employment to end the employment
3. Commission of a Crime or offense against the relationship. (Sec. 32, Ibid.)
kasambahay by the Er or any member of the
household; Termination of Contract If the Duration of
Service Is Not Determined in the Contract
4. Violation by the Er of the terms and conditions
of the employment contract and other The kasambahay or the Er may terminate the
standards set forth under the law; contract any time if the duration of service is not
determined in the contract. Either the Er or the
5. Any disease prejudicial to the health of the kasambahay may give notice to end the working
kasambahay, the Er, or member/s of the relationship five (5) days before the intended date
household; and of the termination of service. (Sec. 32, R.A. No.
10361)
6. Other causes analogous to the foregoing. (Sec.
33, R.A. No. 10361) Effect of Unjust Dismissal by the Er

Grounds for Termination of Contract by the Er The kasambahay shall receive the following if
he/she is unjustly dismissed by the Er:
1. Misconduct or willful disobedience by the
kasambahay of the lawful order of the Er in 1. Outright payment of earned wage; and
connection with the former’s work;

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2. Indemnity benefit in the form of wage b. The kasambahay abandons the job without
equivalent to 15 days work. (Q&A on Batas justifiable cause, voluntarily resigns, commits
Kasambahay, DOLE) theft or any other analogous acts prejudicial
to the Er or his/her family; or
Liabilities of a Kasambahay Who Leaves
His/Her Er without Justifiable Reason c. The kasambahay is physically or mentally
incapable of discharging the minimum
1. Forfeiture of wage equivalent to 15 days requirements of the job, as specified in the
work; and employment contract. (Sec. 4, Rule III, IRR of
R.A. No. 10361)
2. Reimbursement of the deployment expenses,
if the employment contract is terminated NOTE: The Er shall be entitled to a refund of 75%
within 6 months from employment. (Sec. 32, of the deployment expenses or fees paid to the PEA,
R.A. No. 10361) if the latter failed to provide a qualified
replacement after a lapse of one (1) month from
Q: Can the Er inspect the belongings of the receipt of the request for replacement.
kasambahay before he/she leaves the
household in case of termination of Responsibilities of the PEA under the Law
employment?
1. Ensure that the kasambahay is qualified as
A: NO. The Er cannot inspect the belongings of the required by the Er;
kasambahay. However, the Er and the kasambahay
can agree in their employment contract that an 2. Secure the best terms and conditions of
inspection can be made before he/she leaves the employment for the kasambahay;
household. (Q&A on Batas Kasambahay, DOLE)
3. Ensure that the employment agreement
Q: If there is non-payment or underpayment of between the kasambahay and the Er
wage and other labor-related concerns, where stipulates the terms and conditions of
can the kasambahay seek assistance? employment and all the benefits in
accordance with the IRR;
A: The kasambahay can go to a Kasambahay Desk
Officer situated in their respective barangays or the 4. Provide a pre-employment orientation
nearest DOLE field/provincial/regional office. briefing to the kasambahay and the Er about
(Q&A on Batas Kasambahay, DOLE) their rights and responsibilities in accordance
with the IRR;
Replacement of Kasambahay Hired through
PEAs 5. Ensure that the kasambahay is not charged or
required to pay any recruitment or placement
Within one (1) month from the day the fees;
Kasambahay reported for work, the Er shall be
entitled to a qualified replacement at no additional 6. Keep copies of employment contracts and
cost of any if the ff. grounds occurred: agreements pertaining to recruited
kasambahay, which shall be made available
a. The kasambahay is found to be suffering from during inspections or whenever required by
an incurable or contagious disease, or mental the DOLE or local government officials;
illness as certified by a competent or
government physician; 7. Assist the kasambahay in filing his/her
complaints or grievances against the Ers;

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8. Cooperate with government agencies in Q: Albert, a 40-year-old Er, asked his domestic
rescue operations involving abused or helper, Inday, to give him a private massage.
exploited kasambahay; and When Inday refused, Albert showed her Art. 141
of the Labor Code, which says that one of the
9. Assume joint and solidary liability with the Er duties of a domestic helper is to minister to the
for payment of wages, wage-related and other Er’s personal comfort and convenience. Is
benefits, including monthly contribution for Inday’s refusal tenable? (2009 BAR)
SSS, PhilHealth, and Pag-IBIG membership.
(Sec. 3, Rule III, IRR of R.A. No. 10361) A: YES. Inday’s refusal to give her Er a “private
massage” is in accordance with law because the
Unlawful Acts under the Batas Kasambahay nature of the work of a domestic worker must be in
connection with household chores. Massaging is not
1. Employment of children below 15 years of a domestic work.
age;
2. Withholding of the kasambahay’s wages; Q: NBC has a rest house and recreational facility
3. Interference in the disposal of the in the highlands of Tagaytay City for the use of
kasambahay’s wages; its top executives and corporate clients. The rest
4. Requiring kasambahay to make deposits for house staff includes a caretaker, two cooks and
loss or damage; a laundrywoman. All of them are reported to the
5. Placing the kasambahay under debt bondage; SSS as domestic or household Ees of the
and resthouse and recreational facility and not of
6. Charging another household for temporarily NBC. Can NBC legally consider the caretaker,
performed tasks. (Sec. 1, Rule XII, IRR of R.A. No. cooks and laundrywoman as domestic Ees of the
10361) rest house and not of NBC? (2000 BAR)

NOTE: Unlawful acts are punishable with an A: NO, they are not domestic Ees. They are the Ees
administrative fine ranging from P10,000 to of NBC because the rest house and recreational
P40,000 to be imposed by the DOLE Regional facility are business facilities which are for use of
Offices. NBC’s top executives and clients. (Traders Royal
Bank v. NLRC, G.R. No. 127864, 22 Dec. 1999)
Other Remedies for Unlawful Acts
NOTE: A househelp, a laundrywoman, a driver,
The aggrieved party may file the appropriate civil or houseboy or gardener working in staff houses of a
criminal action before the regular courts. company who attends to the needs of the company’s
guests is not a househelper or domestic servant. He
Remedy for Abused or Exploited Kasambahay is an industrial worker who must be paid the
industrial rate.
The law mandates the conduct of immediate rescue
of abused or exploited kasambahay by the municipal d) HOMEWORKERS
or city social welfare officer or a social welfare
officer from DSWD, in coordination with the Homeworkers
concerned barangay officials. (Sec. 1, Rule X, IRR of
R.A. No. 10361) They are those who perform in or about his own
home any processing or fabrication of goods or
The law sets out that crimes or offenses committed materials, in whole or in part, which have been
under the Revised Penal Code and other criminal furnished directly or indirectly, by an Er and sold
laws shall be filed with the regular courts. (Sec. 3, thereafter to the latter.
Rule X, IRR of R.A. No. 10361)

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NOTE: D.O. No. 05-92, DOLE (04 Feb. 1992) 1. Delivers or causes to be delivered, any goods,
amended Rule XIV of the IRR. articles or materials to be processed or
fabricated in or about a home and thereafter to
Industrial Homework be returned or to be disposed of or distributed
in accordance with his directions; or
It is a system of production under which work for an
Er or contractor is carried out by a homeworker at 2. Sells any goods, articles, or materials to be
his/her home. Materials may or may not be processed or fabricated in or abut a home and
furnished by the Er or contractor. then repurchases them after such processing
or fabrication, either by himself or through
It differs from regular factory production some other person. (Sec. 2(d), D.O. No. 05-92)
principally in that it is a decentralized form of
production where there is ordinarily very little Duty of the Er in Case He Contracts with Another
supervision or regulation of methods of work. in the Performance of His Work
(Sec. 2(a), DOLE D.O. No. 05-92)
It shall be the duty of the Er to provide in such
Home contract that the Ees or homeworkers of the
contractor and the latter’s subcontractor shall be
It means any room, house, apartment or other paid in accordance with the LC. (Sec. 11, D.O. No. 05-
premises used regularly, in whole or in part, as 92)
dwelling place, except those situated within the
premises or compound of an employer, contractor Liability of the Er if the Contractor or
or subcontractor and the work performed therein is Subcontractor Fails to Pay the Wages or
under the active or personal supervision by or for Earnings of his Ees
the latter. (Sec. 2(c), Ibid.)
Er shall be jointly and severally liable with the
Househelpers vs. Homeworkers (2017 BAR) contractor or subcontractor to the workers of the
latter to the extent that such work is performed
HOUSEHELPERS HOMEWORKERS under such contract, in the same manner as if the
Ees or homeworkers were directly engaged by the
Performs in or about his Er. (Sec. 11, D.O. No. 05-92)
own home any
processing or Right of Industrial Homeworkers to Form Labor
Ministers to the fabrication of goods or Organizations
personal needs and materials, in whole or in
comfort of his Er in the part, which have been D.O. No. 05-92 (04 Feb. 1992), replacing Rule XIV of
latter’s home furnished directly or the IRR Book III of the LC, authorizes the formation
indirectly, by an Er and and registration of labor organization of industrial
sold thereafter to the homeworkers. It also makes explicit the Ers duty to
latter. pay and remit SSS, PhilHealth and ECC premiums.
(Secs. 3, DOLE D.O. No. 05-92)

Er of a Homeworker
Payment for Homework

Includes any person, natural or artificial who, for his

Immediately upon receipt of the finished goods and
account or benefit, or on behalf of any person
articles, the Er is required to pay the homeworker
residing outside the country, directly or indirectly, for the work performed less corresponding
or through an Ee, agent contractor, subcontractor or
homeworkers’ share of SSS, MEDICARE, and ECC
any other person: premium contributions, which shall be remitted by

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the contract/subcontractor or Er to the SSS with the 4. The deduction is made at such rate that the
Ers’ share. (Sec. 6, DOLE D.O. No. 05-92) amount deducted does not exceed 20% of the
homeworker’s earnings in a week. (Sec. 8, D.O.
However, where payment is made to a contractor or No. 05-92)
subcontractor, the homeworker shall likewise be
paid immediately after the goods or articles have Q: Josie is the confidential secretary of the
been collected from the workers. (Ibid.) Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
Conditions for Payment of Work where the Chairman of the Board can still have
access to her services, the bank allows her to
The Er may require the homeworker to redo the work in her residence during her leave. For this
work which has been improperly executed without purpose, the bank installed a fax machine in her
having to pay the stipulated rate again. residence, and gave her a cellphone and a
An Er, contractor, or subcontractor need not pay the beeper. Is Josie a homeworker under the law?
homeworker for any work which has been done on Explain. (2000 BAR)
goods and articles which have been returned for
reasons attributable to the fault of the homeworker. A: NO. She is actually an office worker. She is not an
(Sec. 9, D.O. No. 05-92) industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
Prohibitions for Homework which work, when finished, will be returned to or
repurchased by said contractor. (Art. 155, LC)
The following shall be prohibited as homework:
e) NIGHT WORKERS
1. Explosives, fireworks and similar articles;
2. Drugs and poisons; and Night Work
3. Other articles, the processing of which
requires exposure to toxic substances. (Sec. 13, Night work is at least seven (7) consecutive hours of
D.O. No. 05-92) work between 10:00 PM and 6:00 AM. (Sec. 2, D.O.
No. 119-12)
Conditions for Deduction from Homeworker’s
Earnings Night Worker

GR: The Er, contractor or subcontractor shall not Any employed person whose work covers the
make any deduction from the homeworker’s period from ten o’clock in the evening to six o’clock
earnings for the value of materials which have been the following morning, provided that the worker
lost, destroyed, soiled or otherwise damage. performs no less than 7 consecutive hours of work.
(Sec. 2, D.O. No. 119-12)
XPN: Unless the following conditions are met:
NOTE: R.A. No. 10151 inserted Chapter V (Arts.
1. The homeworker is clearly shown to be 154-161) under Book 3, Title III of the LC.
responsible for the loss or damage;
Persons Covered by the Provisions on Night
2. The homeworker is given reasonable Work
opportunity to show cause why deductions
should not be made; GR: All persons who shall be employed or permitted
or suffered to work at night.
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual loss XPN: Those employed in agriculture, stock raising,
or damages; and fishing, maritime transport and inland navigation,

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during a period of not less than seven (7) to work, or to secure employment during such
consecutive hours, including the interval from period. (Sec. 5, D.O. No. 119-12)
midnight (12am) to five o’clock in the morning
(5am), to be determined by the SOLE after Separation from Employment of a Worker
consulting the workers’ representatives/ labor Found Medically Unfit for Night Work
organizations and Ers. (Art. 154, LC as added by RA
10151 approved on June 21, 2011) (Art. 154, LC as The provisions of D.O. No. 119-12 allow the
added by R.A. No. 10151 approved on 21 June 2011) application of Art. 298 to a worker who is found
unfit for night work if his transfer to another
Right of the Workers to Health Assessment (daytime) job is not practicable. Art. 298 authorizes
the separation of an Ee suffering from a disease. For
GR: At their request, workers shall have the right to an Ee found unfit for night work, the Er’s ultimate
undergo health assessment without charge and to recourse, therefore, may be employment
receive advice on how to reduce or avoid health termination based on an authorized cause.
problems associated with their work: (Azucena, 2016)

1. Before taking up an assignment as a night Temporarily Unfit for Night Work

worker;
A night worker certified as temporarily unfit for
2. At regular intervals during such an night work for a period of not less than six (6)
assignment; and months shall be given the same protection against
dismissal or notice of dismissal as other workers
3. If they experience health problems during who are prevented from working for health reasons.
such an assignment which are not caused by (Sec. 5, D.O. No. 119-12)
factors other than the performance of night
work. (Art. 155, LC) Employability of Women for Night Work

NOTE: Findings of such assessments shall not be Measures shall be taken to ensure that an
transmitted to others without the workers’ consent alternative to night work is available to women
and shall not be used to their detriment. workers who would otherwise be called upon to
perform such work:
XPN: Finding of unfitness for night work. (Art. 155,
LC) 1. Before and after childbirth, for a period of at
least 16 weeks, which shall be divided
Worker Found to be Medically Unfit for Night between the time before and after childbirth;
Work
2. For additional periods, in respect of which a
Night workers who are certified by competent medical certificate is produced stating that
physician as unfit for night work due to health said additional periods are necessary for the
reasons shall be transferred, whenever practicable, health of the mother or child:
to a similar job for which they are fit to work.
a. During pregnancy;
If such transfer to a similar job is not practicable, or
the workers are unable to render night work for a b. During a specified time beyond the
continuous period of not less than 6 months upon period, after childbirth is fixed pursuant
the certification of a competent public health to number 1, the length of which shall be
authority, these workers shall be granted the same determined by the DOLE after consulting
company benefits as other workers who are unable the labor organizations and Ers. (Art. 158,
LC)

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During the periods referred in Art. 158: or resting quarters in the establishment, and
transportation from the work premises to the
1. A woman worker shall not be dismissed or nearest point of their residence subject to
given notice of dismissal, except for just or exceptions and guidelines to be provided by
authorized causes provided for in the Code the DOLE. (Art. 156, LC)
that are not connected with pregnancy,
childbirth and childcare responsibilities. f) APPRENTICES AND LEARNERS

2. A woman worker shall not lose the benefits Apprentice

regarding her status, seniority, and access to
promotion which may attach to her regular A person undergoing training for an approved
night work position. (Ibid.) apprenticeable occupation during an established
period assured by an apprenticeship agreement.
Pregnant Women and Nursing Mothers May Be (Sec. 4(k), R.A. No. 7796)
Allowed to Work at Night
Apprenticeship
They are allowed only if a competent physician,
other than the company physician, shall certify their Training within employment with compulsory
fitness to render night work, and specify, in the case related theoretical instructions involving a contract
of pregnant Ees, the period of the pregnancy that between an apprentice and an Er on an approved
they can safely work. (Ibid.) apprenticeable occupation for a duration not
exceeding six (6) months. (Sec. 4(j), R.A. No. 7796)
Protection of Night Workers
Learner
The law protects the night workers by requiring:
A person hired as a trainee in industrial occupations
1. The provision of certain facilities such as which are non-apprenticeable and which may be
sleeping or lactation quarters and means of learned through practical training on the job not
transport; exceeding three (3) months, whether or not such
practical training is supplemented by theoretical
2. Conduct of medical examination to determine instructions. (Sec. 1, Rule VII, Book II, Omnibus Rules
fitness for night work; and, Implementing the Labor Code)

3. Observance of legal process to decide Learnership

appropriate action where a worker is found
unfit for night work. Such process includes Any practical training on a learnable occupation
transfer of worker to day work, if practicable, which may or may not be supplemented by related
and, only as a last recourse separation from theoretical instructions for a period not exceeding
employment. three (3) months. (TESDA Circular, No. 120, Series of
2020)
Mandatory Facilities
Qualifications of an Apprentice
1. Suitable first-aid facilities, including
arrangements where such workers, where 1. Must be at least fifteen (15) years of age;
necessary, can be taken immediately to a place provided that those who are at least fifteen
for appropriate treatment. but not more than eighteen (18) years of
age may be eligible for apprenticeship only
2. Safe and healthful working conditions and in non-hazardous occupations
adequate or reasonable facilities, i.e., sleeping

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2. Be physically fit for the occupation in which approved by TESDA or in non-apprenticeable
the apprentice intends to be trained; occupations. (Ibid.)

3. Possess good moral character, vocational Wages of Apprentices

aptitude, and capacity for apprenticeship as
determined by the enterprise; Wage shall not start below 75% of the applicable
minimum wage, benefits entitled to an apprentice
4. Have the ability to comprehend and follow under existing laws and other benefits depending
oral and written instructions; on the enterprise’s capability, be it in cash or in kind
that an apprentice may enjoy. (Ibid.)
5. Not be a graduate of any apprenticeship
program of the registered company Wages of Learners
provider; and
Wage shall not start below 75% of the applicable
6. Have met the specific requirements of the minimum wage, benefits entitled a learner under
Training Regulations. (Ibid.) existing laws, including accident and disability
insurance policy and other benefits depending on
Qualifications of Ers/Enterprises the enterprise’s capability, be it in cash or in kind
that a learner may enjoy. (Ibid.)
1. Any entity, whether or not organized for
profit, may establish or sponsor Working Conditions of Apprentices and
apprenticeship or learnership programs Learners
and employ apprentices/learners.
1. Apprentices and learners who are below 18
2. Any enterprise with ten (10) or more years of age shall not be allowed to work for
regular workers and is duly registered with more than 8 hours a day, and in no case
the appropriate government authorities. beyond 40 hours a week. They shall not be
allowed to work between 10 P.M. and 6
3. The number of apprentices to be accepted A.M. of the following day. They shall not
by the participating enterprise shall not be also be engaged in hazardous workplaces
more than twenty percent (20%) of its total and conditions.
regular workforce. (Ibid.)
2. Apprentices and learners who are 18 years
NOTE: Only Ers in highly technical industries may of age and above can work overtime,
employ apprentices and only in apprenticeable provided there is no available regular
occupations approved by TESDA. (Ibid.) worker on the job. The time spent on
overtime work shall be duly credited to
Qualifications of a Learner their training hours based on the approved
Training Plan. An apprentice or learner
Any unemployed person who is fifteen (15) years may render training beyond the normal
old and above may apply for Learnership with any daily training hours provided the following
participating enterprise. Those below eighteen (18) minimum requirements are present:
years of age may only be employed in non-
hazardous occupations. (Ibid.) a. The night training is rendered
within the required period
Learners may be hired in semi-skilled and other consistent with existing laws,
industrial occupations which are rules, and regulations;
registered/recognized learnable occupations as

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b. The apprentice/learner shall be (2) a record of such an impairment; or
paid a night shift differential of not
less than 10% of the minimum (3) being regarded as having such an
wage in the region for each hour of impairment. (Sec. 4(c), Ibid.)
work performed between 10 P.M.
and 6 A.M. Handicap

c. The apprentice/learner shall be It refers to a disadvantage for a given individual

entitled to an Overtime Pay, if resulting from an impairment or a disability, that
applicable; limits or prevents the functions or activity, that is
considered normal given the age and sex of the
d. The apprentice/learner should not individual. (Sec. 4(d), Ibid.)
be below 18 years old; and
Qualified Disabled Employee
e. The minimum requirements above
are agreed or may be improved by It provides for Equal Opportunity for Employment
the company, the training by stating that no disabled person shall be denied
provider, and the labor union. access to opportunities for suitable employment.

g) PERSONS WITH DISABILITIES A qualified disabled Ee shall be subject to the same

terms and conditions of employment and the same
R.A. No. 7277 or the Magna Carta for Disabled compensation, privileges, benefits, fringe benefits,
Persons ensures equal opportunities for disabled incentives or allowances as a qualified able-bodied
persons and prohibits discrimination against them. person. (Sec. 5, R.A. No. 7277)

Persons with Disability (PWDs) A qualified individual with disability is an individual

with disability who, with or without reasonable
Those whose earning capacity is impaired by: accommodation, can perform the essential
1. Physical deficiency; functions of the employment position that such
2. Age; individual holds or desires. (Sec. 4(l), R.A. No. 7277)
3. Injury;
4. Disease; NOTE: Consideration shall be given to the Er’s
5. Mental deficiency; or judgment as to what functions of job are essential,
6. Illness. and if an Er has prepared a written description
before advertising or interviewing applicants for
Impairment the job. (Sec. 4(l), R.A. No. 7277)

Refers to any loss, diminution or aberration of Employment of PWDs

psychological, physiological, or anatomical
structure of function. (Sec. 4(b), R.A. 7277) 1. When their employment is necessary to
prevent curtailment of employment
Disability opportunities; and

(1) a physical or mental impairment that 2. When it will not create unfair competition in
substantially limits one or more labor costs or lower working standards. (Art.
psychological, physiological or anatomical 79, LC)
function of an individual or activities of
such individual;

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Employment Period of PWD cannot be found through open employment;
(Sec. 6, R.A. No. 7277)
There is no minimum or maximum duration. It
depends on the agreement, but it is necessary that 3. Apprenticeship - PWD may be hired as
there is a specific duration stated. apprentices or learners if their disability is not
such as to effectively impede the performance
PWDs Can Be a Regular Employees of job operations in the particular occupations
for which they are hired (Art. 81, LC);
PWDs can be a regular Ee if work is usually
necessary or desirable in the usual business of the 4. Vocational rehabilitation - To develop the
Er. (Bernardo v. NLRC, G.R No. 122917, 12 July 1999) skills and potentials of disabled workers and
enable them to compete in the labor market;
Persons Who May Employ PWDs (Sec. 9, R.A. No. 7277);

Ers in all industries, provided, the disability is not 5. Vocational guidance and counselling – The
such as to effectively impede the performance of job DSWD shall implement measures providing
operations in the particular occupation for which and evaluating vocational guidance and
they are hired. (Sec. 7, R.A. No. 7277) counselling to enable disabled persons to
secure, retain and advance in employment.
Not All Workers with a Disability are Considered (Sec. 10, R.A. No. 7277);
Disabled Workers
Wage Rate (2013 BAR)
The mere fact that a worker has a disability does not
make him a disabled worker because his disability GR: Handicapped workers are entitled to not less
may not impair his efficiency or the quality of his than 75% of the applicable adjusted minimum
work. If despite his disability he can still efficiently wage. (Art. 80, LC)
perform his work, he would be considered a
qualified disabled worker entitled to the same XPN: All qualified handicapped workers shall
treatment as qualified able-bodied workers. receive the full amount of the minimum wage rate
(Bernardo v. NLRC, G.R No. 122917, 12 July 1999) prescribed herein pursuant to R.A. No. 7277. (Wage
Order No. NCR-18, Effective 04 Oct. 2013)
RIGHTS AND PRIVILEGES OF PWDs
NOTE: Generally, if a PWD is hired as an apprentice
1. Equal opportunity for employment - No PWD or learner, he shall be paid not less than 75% of the
shall be denied access to opportunities for applicable minimum wage.
suitable employment. Five percent (5%) of all
casual emergency and contractual positions in XPN: If the PWD, however is hired as a learner and
the DSWD, Health, Education, Culture and employed in piece or incentive-rate jobs during the
Sports, and other government agencies, offices training period, he shall be paid 100% of the
or corporations engaged in social applicable minimum wage. (Chan, 2017)
development shall be reserved for PWDs (Sec.
5, R.A. No. 7277);

XPN: BFOQ

2. Sheltered employment - The Government

shall endeavor to provide them work if
suitable employment for disabled persons

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 III. EMPLOYMENT PROPER
(1) DISCRIMINATION provide reasonable accommodations for
persons with disability;
(a) MAGNA CARTA FOR DISABLED PERSONS
(R.A. No. 7277) 5. Failing to select or administer in the most
effective manner employment tests which
The following constitutes acts of discrimination: accurately reflect the skills, aptitude or other
factor of the applicant or Ee with disability that
1. Limiting, segregating, or classifying a job such test purports to measure, rather than the
applicant with disability in such a manner that impaired sensory manual or speaking skills of
adversely affects his work opportunities; such applicant or Ee, in any; and

GR: Using qualification standards, 6. Excluding PWD from membership in labor

employment tests or other selection criteria unions or similar organizations. (Sec. 32, R.A.
that screen out or tend to screen out a PWD; No. 7277)

XPN: Such standards, tests or other selection (b) MENTAL HEALTH ACT (R.A. No. 11036)
criteria are shown to be job-related for the
position in question and are consistent with Mental Health Promotion and Policies in the
business necessity Workplace

2. Utilizing standards, criteria, or methods of Ers shall develop appropriate policies and programs
administration that: on mental health issues, correct the stigma and
discrimination associated with mental conditions,
a. Have the effect of discrimination on the identify and provide support for individuals with
basis of disability; or mental health conditions to treatment and
psychosocial support. (Sec. 25, R.A. No. 11036)
b. Perpetuate the discrimination of others
who are subject to common Duties and Responsibilities of the DOLE and the
administrative control. CSC

3. Providing less compensation, by reason of his The DOLE and CSC shall:
disability, that the amount to which a non-
disabled person performing the same work is (a) Develop guidelines and standards on
entitled; appropriate and evidence-based mental
health programs for the workplace; and
4. Favoring a non-disabled Ee over a qualified Ee
with disability with respect to promotion, (b) Develop policies that promote mental
training opportunities, study and scholarship health in the workplace and address stigma
grants, solely on account of the latter’s and discrimination suffered by people with
disability; mental health conditions.

GR: Dismissing or terminating the services of Non-discriminatory policies and practices

an Ee with disability by reason of his disability
1. There shall be no discrimination in any form
XPN: The Er can prove that he impairs the against workers who are at risk of developing
satisfactory performance of the work involved or who are found to have mental health
to the prejudice of the business entity; condition. Workers shall not be discriminated
provided, however, that the Er first sought to against from hiring, promotion, and/or other
benefits of employment because of their

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condition provided, however, that such Basis: Magna Carta for Disabled Persons
conditions shall not interfere with the
worker’s performance od their job or unduly Persons with Disability vs. Differently Abled
affect his own safety or that of his co-workers,
clients, and the general public. PWDs DIFFERENTLY ABLED
Covers all activities or
2. A worker shall not be terminated from work Covers only workers.
endeavors.
on the basis of actual, perceived or suspected
mental health condition unless the condition Refers to all suffering
progresses to such severity that it affects from restriction of
his/her own safety or safety of co-workers and different abilities as a
work performance and productivity upon the Earning capacity is result of mental,
certification issued by a competent public impaired by age or physical, sensory
health authority with expertise on mental physical, mental impairment to perform
health. (D.O. No. 208-20) deficiency, or injury an activity in the
manner or within
(2) INCENTIVES FOR EMPLOYERS range considered for
human being.
Incentives for Employers Who Are Employing
Disabled Workers Basis: Loss/ Basis: Range of activity
impairment of earning which is normal for a
1. Entitled to an additional deduction, from their capacity. human being.
gross income, equivalent to 25% of the total
Restriction due to
amount paid as salaries and wages to disabled Loss due to injury or
impairment of mental,
persons; physical or mental
physical, and/or
defect or age.
sensory defect.
NOTE: Such entities must present proof If hired, entitled to
certified by DOLE that disabled persons are 75% of minimum
If qualified, entitled to
under their employment, and the disabled Ee wage.
all terms and
is accredited with the DOLE and the DOH as to
conditions as qualified
his disability, skills, and qualifications. Subject to definite
able-bodied person.
periods of
2. Private entities that improve or modify their employment.
physical facilities in order to provide
reasonable accommodation for disabled No restrictions on
Employable only when
persons shall also be entitled to an additional employment.
necessary to prevent
deduction from their net taxable income,
curtailment of
equivalent to 50% of the direct costs of the Must get equal
employment
improvements or modifications. (Sec. 8, R.A. opportunity and no
opportunity.
No. 7277) unfair competition.

The financial incentive, if any, granted by law Q: Ana Cruz has a low IQ. She has to be told at
to SPQ Garments whose cutters and sewers in
least three times before she understands her
its garments-for-export operations are 80%
daily work assignment. However, her work
staffed by deaf and deaf-mute workers is
output is at least equal to the output of the least
additional deduction from its gross income
efficient worker in her work section. Is Mr. Cruz
equivalent to 25% of amount paid as salaries
a handicapped worker? Explain. (2000 BAR)
to persons with disability (2013 BAR).

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 III. EMPLOYMENT PROPER
A: NO. Low IQ does not make the worker the refusal to grant the sexual favor results
“handicapped” in the contemplation of law. in limiting, segregating or classifying the Ee
Handicap means such physical or mental infirmity which in a way would discriminate, deprive
that impairs capacity to work. The deficiency may or diminish employment opportunities or
also be due to age or injury. (Article 78, LC) otherwise adversely affect said Ee (Quid
Pro Quo Sexual Harassment);
5. SEXUAL HARASSMENT IN THE WORK
ENVIRONMENT b. The above acts would impair the Ees’ rights
or privileges under existing labor laws; or

a) SEXUAL HARASSMENT ACT (R.A. No. 7877) c. The above acts would result in an
intimidating, hostile, or offensive
Requisites (Demand-IAM-WET) environment for the Ee. (Hostile
Environment Harassment).
1. Act is committed in a Work, Education, or
Training-related environment; IN AN EDUCATION OR TRAINING-RELATED
ENVIRONMENT
2. The doer, the harasser, is any person who has
Authority, Influence or Moral ascendancy Elements
over another; and
a. Sexual harassment is employed:
3. Doer Demands or requests, or requires a i. Against one who is under the care,
sexual favor from the victim. custody or supervision of the
offender; or
NOTE: It does not matter whether such
demand is accepted or not. (Sec. 3, R.A. No. ii. Against one whose education,
7877) training, apprenticeship or tutorship
is entrusted to the offender;
NOTE: Based on the Congressional deliberations,
Anti-Sexual Harassment Law aims to punish the b. When sexual favor is made a condition to
harasser without regard to gender. (Azucena, 2016) the giving of a passing grade, or the
granting of honors and scholarships, or
Kinds
the payment of a stipend, allowance or
other benefits, privileges, or
1. Quid Pro Quo (“This for that”) – doer asks for considerations; or
something in exchange for something; and
2. Hostile Environment c. When sexual advances result in an
intimidating, hostile or offensive
IN A WORK-RELATED OR EMPLOYMENT environment for the student, trainee or
ENVIRONMENT apprentice.

Elements
NOTE: While the provision states that there must be
a “demand, request or requirement of a sexual
a. The sexual favor is made as a condition in
favor”, it is not necessary that it be articulated in a
the hiring or in the employment, re-
categorical manner. It may be discerned, with equal
employment or continued employment of
certitude, from the acts of the offender.
said individual, or in granting said
individual favorable compensation, terms,
conditions, promotions, or privileges; or

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Likewise, it is not essential that the demand, request NOTE: Administrative sanctions taken against
or requirement be made as a condition for the alleged harasser shall not be a bar to
continued employment or for promotion to a higher prosecution in the proper courts for unlawful
position. It is enough that the respondent’s acts acts of Sexual Harassment.
result in creating an intimidating, hostile or
offensive environment for the Ee. (Domingo v. The said rules and regulations issued shall
Rayala, G.R. No. 155831, 18 Feb. 2008) include, among others, guidelines on proper
decorum in the workplace and educational or
Beso-beso Fashion training institutions;

In the case of Aquino v. Acosta (A.M. No. CTA-01-1, 02 2. Create a committee on decorum and
Apr. 2002), the Supreme Court absolved Judge investigation of cases on Sexual Harassment;
Acosta of liability under the Sexual Harassment law and
in greeting complainant with a kiss on the cheek in
a ‘beso-beso’ fashion, where most of the kissing 3. The Er or head of office, education or training
incidents were done on festive and special institution shall disseminate, or post a copy of
occasions. The Court held that what respondent this Act for the information of all concerned.
judge committed were casual gestures of friendship (Sec. 4, R.A. No. 7877)
and camaraderie, nothing more, nothing less, and
that there is no indication that respondent was EXTENT OF LIABILITY OF THE EMPLOYER OR
motivated by malice or lewd design. However, the HEAD OF OFFICE
Court admonished Judge Acosta not to commit
similar acts against complainant or other female Ees Er shall may be solidarily liable for damages arising
of the CTA, otherwise, his conduct may be construed from the acts of Sexual Harassment committed in
as tainted with impropriety. the employment, education, or training
environment, provided that:
Duties of the Er or head of office in a work-
related, education or training environment 1. The Er or head of office, educational or
training institution is informed of such acts
a. Prevent or deter the commission of acts of by the offended party; and
Sexual Harassment; and
2. No immediate action is taken thereon. (Sec. 5,
b. Provide the procedures for the resolution, R.A. No. 7877)
settlement or prosecution of acts of Sexual
Harassment. (Sec. 4, R.A. No. 7877) An Independent Action for Damages may be
filed
Duty of the Er or head of office towards these
end Nothing under this Act shall preclude the victim of
work, education or training-related sexual
1. Promulgate appropriate rules and regulations harassment from instituting a separate and
in consultation with and jointly approved by independent action for damages and other
the Ee or students or trainees, through their affirmative relief. (Sec. 6, R.A. No. 7877)
duly designated representatives, prescribing
the procedure for the investigation or Sexual Three-Fold Liability Rule in Sexual Harassment
Harassment cases and the administrative Cases
sanctions therefore.
An act of sexual harassment may give rise to civil,
criminal, and administrative liability on the part of

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 III. EMPLOYMENT PROPER
the offender, each proceeding independently of the Q: Pedrito Masculado, a college graduate from
others. the province, tried his luck in the city and landed
a job as a utility/maintenance man at the
Prescription of Action warehouse of a big shopping mall. After working
as a casual Ee for 6 months, he signed a contract
Any action arising from the violation of the for probationary employment for 6 months.
provisions of this act shall prescribe in 3 years. (Sec. Being well-built and physically attractive, his
7, R.A. No. 7877) supervisor, Mr. Hercules Barak, took special
interest to befriend him.
Q: A Personnel Manager, while interviewing an
attractive female applicant for employment, When his probationary period was about to
stared directly at her for prolonged periods, expire, he was surprised when one afternoon
albeit in a friendly manner. After the interview, after working hours, Mr. Barak followed him to
the manager accompanied the applicant to the the men’s comfort room. After seeing that no one
door, shook her hand and patted her on the else was around, Mr. Barak placed his arm over
shoulder. He also asked the applicant if he could Pedrito’s shoulder and softly said: “You have
invite her for dinner and dancing at some future great potential to become a regular Ee and I
time. Did the Personnel Manager, by the above think I can give you a favorable
acts, commit sexual harassment? Reason. (2000 recommendation. Can you come over to my
BAR) condo unit on Saturday evening so we can have
a little drink? I’m alone, and I’m sure you want
A: YES. The Personnel Manager is in a position to to stay longer with the company.”
grant or not to grant a favor (a job) to the applicant.
Under the circumstances, inviting the applicant for Is Mr. Barak liable for sexual harassment
dinner or dancing creates a situation hostile or committed in a work-related or employment
unfriendly to the applicant's chances for a job if she environment? (2000 BAR)
turns down the invitation. (Sec. 3(a)(3), R.A. No.
7877) A: YES. The elements sexual harassment are all
present. The act of Mr. Barak was committed in a
Q: In the course of an interview, another female workplace. Mr. Barak, as supervisor of Pedrito
applicant inquired from the same Personnel Masculado, has authority, influence and moral
Manager if she had the physical attributes ascendancy over Masculado.
required for the position she applied for.
Given the specific circumstances mentioned in the
The Personnel Manager replied: "You will be question, like Mr. Barak following Masculado to the
more attractive if you will wear micro-mini comfort room, etc. Mr. Barak was requesting a
dresses without the undergarments that ladies sexual favor from Masculado for a favorable
normally wear." Did the Personnel Manager, by recommendation regarding the latter's
the above reply, commit an act of sexual employment. It is not impossible for a male, who is
harassment? a homosexual, to ask for a sexual favor from
another male.
A: YES. The remarks would result in an offensive or
hostile environment for the Ee. Moreover, the Q: Nena worked as an Executive Assistant for
remarks did not give due regard to the applicant’s Nesting, CEO of Nordic Corporation. One day,
feelings, and it is a chauvinistic disdain of her honor, Nesting called Nena into his office and showed
justifying the finding of Sexual Harassment. her lewd pictures of women in seductive poses
(Villarama v. NLRC, G.R. No. 106341, 02 Sept. 1994) which Nena found offensive. Nena complained
before the General Manager who, in turn,
investigated the matter and recommended the

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dismissal of Nesting to the Board of Directors. work, regardless of the term or duration of
Before the Board of Directors, Nesting argued, agreement; (Sec. 3(b), R.A. No. 11313)
that since the Anti-Sexual Harassment Law
requires the existence of "sexual favors," he NOTE: For the purpose of this law, a person
should not be dismissed from the service since who is detailed to an entity under a
he did not ask for any sexual favor from Nena. Is subcontracting or second agreement shall be
Nesting correct? (2018 BAR) considered an Ee.

A: NO. Nesting’s argument on lack of sexual favor is 3. Er - refers to a person who exercises control
incorrect. While his actions require further proof of over an Ee; (Sec. 3(c), R.A. No. 11313)
being a “sexual favor” in terms of criminal liability
under R.A. 7877, his employment may still be NOTE: For the purpose of this law, the status
terminated under Art. 297 of the Labor Code. or conditions of the Ee’s employment or
engagement shall be disregarded.
In Villarama v. NLRC and Golden Donuts (G.R. No.
106341, 02 Sept. 1994), the Supreme Court held 4. Gender - a set of socially ascribed
that a managerial employee is bound by more characteristics, norms, roles, attitudes, values,
exacting work ethics, with a high standard of and expectations identifying the social
responsibility. Sexual harassment of a subordinate behavior of men and women, and the relations
amounts to “moral perversity” which provides a between them; (Sec. 3(d), R.A. No. 11313)
justifiable ground for dismissal due to lack of trust
and confidence. 5. Gender-based online sexual harassment - an
online conduct targeted at a particular person
Under the Safe Spaces Act, the crime of gender- that causes or likely to cause another mental,
based sexual harassment in the workplace includes emotional or psychological distress, and fear
“a conduct of sexual nature and other conduct- of personal safety, sexual harassment acts
based on sex affecting the dignity of a person, which including unwanted sexual remarks and
is unwelcome, unreasonable, and offensive to the comments, threats, uploading, or sharing of
recipient, whether done verbally, physically or one’s photos without consent, video and audio
through the use of technology such as text recordings, cyberstalking and online identity
messaging or electronic mail or through any other theft; (Sec. 3(e), R.A. No. 11313)
forms of information and communication systems.”
6. Gender identity and/or expression - the
b) SAFE SPACES ACT (Art. IV of R.A. No. 11313 personal sense of identity as characterized,
Only; Exclude Liability of Employers) among others, by manner of clothing,
inclinations, and behavior in relation to
Definition of Terms masculine or feminine conventions. A person
may have a male or female identity with
1. Catcalling – the unwanted remarks directed physiological characteristics of the opposite
towards a person, commonly done in the form sex in which case this person is considered
of wolf-whistling and misogynistic, transgender; (Sec. 3(f), R.A. No. 11313)
transphobic, homophobic, and sexist slurs;
(Sec. 3(a), R.A. No. 11313) 7. Stalking - a conduct directed at a person
involving the repeated visual or physical
2. Ee - refers to a person, who in exchange for proximity, non-consensual communication, or
remuneration, agrees to perform specified a combination thereof that cause or will likely
services for another person, whether natural cause a person to fear for one’s own safety or
or juridical, and whether private or public, the safety of others, or to suffer emotional
who exercises fundamental control over the distress. (Sec. 3(h), R.A. No. 11313)

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8. Cyberstalking - a form of stalking that is 13. Transphobic remarks or slurs - any
committed through an electronic medium in statements in whatever form or however
which online communication takes place. (Sec. delivered, that are indicative of fear, hatred or
4(c), IRR of R.A. No. 11313) aversion towards persons whose gender
identity and/or expression do not conform
9. Homophobic remarks or slurs - any with their sex assigned at birth. (Sec. 4(o), IRR
statements in whatever form or however of R.A. No. 11313)
delivered, which are indicative of fear, hatred,
or aversion towards persons who are Gender-Based Sexual Harassment (GBSH) in the
perceived to be or actually identify as lesbian, Workplace
gay, bisexual, queer, pansexual and such other
persons of diverse sexual orientation, gender The crime of GBSH in the workplace includes the
identity or expression, or towards any person following:
perceived to or actually have experienced
same-sex attraction; (Sec. 4(i), IRR of R.A. No. 1. An act or series of acts involving any
11313) unwelcome sexual advances, requests or
demand for sexual favors or any act of sexual
10. Misogynistic remarks or slurs - any nature, whether done verbally, physically or
statements in whatever form or however through the use of technology such as text
delivered, that are indicative of the feeling of messaging or electronic mail or through any
hating women or the belief that men are other forms of information and
inherently better than women; (Sec. 4(l), IRR of communication systems, that has or could
R.A. No. 11313) have a detrimental effect on the conditions of
an individual’s employment or education, job
11. Public spaces - streets and alleys, roads, performance or opportunities;
sidewalks, public parks, buildings, schools,
churches, public washrooms, malls, internet 2. A conduct of sexual nature and other conduct-
shops, restaurants and cafes, transportation based on sex affecting the dignity of a person,
terminals, public markets, spaces used as which is unwelcome, unreasonable, and
evacuation centers, government offices, offensive to the recipient, whether done
common carriers, public utility vehicles verbally, physically or through the use of
(PUVs) as well as private vehicles covered by technology such as text messaging or
app-based transport network services, other electronic mail or through any other forms of
recreational spaces such as, but not limited to, information and communication systems;
cinema halls, theaters and spas, bars and clubs,
resorts and water parks, hotels and casinos, 3. A conduct that is unwelcome and pervasive
and all other areas, regardless of ownership, and creates an intimidating, hostile or
openly accessible or offered to be accessed by humiliating environment for the recipient.
the public. (Sec. 4(m), IRR of R.A. No. 11313) (Sec. 16, R.A. No. 11313)

12. Sexist remarks or slurs - statements in NOTE: GBSH may also be committed between
whatever form or however delivered, that are peers and those committed to a superior
indicative of prejudice, stereotyping, or officer by a subordinate, or to a teacher by a
discrimination on the basis of sex, typically student, or to a trainer by a trainee. (Ibid.)
against women. (Sec. 4(n), IRR of R.A. No.
11313) Workplaces include all sites, locations, spaces,
where work is being undertaken by an Ee
within or outside the premises of the usual

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place of business of the Er. (Sec. 18, IRR of R.A. 4. Provide and disseminate, in consultation with
No. 11313) all persons in the workplace, a code of conduct
or workplace policy which shall:
Duties of Employers
a. Expressly reiterate the prohibition on
Ers or other persons of authority, influence or moral GBSH;
ascendancy in a workplace shall have the duty to
prevent, deter, or punish the performance of acts of b. Describe the procedures of the internal
gender-based sexual harassment in the workplace. mechanism created under Sec. 17(c) of
Towards this end, the Er or person of authority, this Act; and
influence or moral ascendancy shall:
c. Set administrative penalties. (Sec. 17, R.A.
1. Disseminate or post in a conspicuous place a No. 11313)
copy of this Act to all persons in the workplace;
NOTE: In case of non-compliance in the
2. Provide measures to prevent gender-based public sector by the Er of their duties herein
sexual harassment in the workplace, such as provided, an Ee may file an administrative
the conduct of anti-sexual harassment complaint with the CSC.
seminars;
In case the Er is a presidential appointee,
3. Create an independent internal mechanism or elective official or official of the AFP, an
a Committee on Decorum and Investigation administrative complaint may be filed with
(CODI) to investigate and address complaints appropriate offices with such jurisdictions,
of gender-based sexual harassment which such as the Office of the President or Office of
shall: the Ombudsman. (Sec. 19, IRR, of R.A. No.
11313)
a. Adequately represent the management,
the Ees from the supervisory rank, the Duties of Ees and Co-workers
rank-and-file Ees, and the union, if any;
Ees and co-workers shall have the duty to:
b. Designate a woman as its head and not
less than half of its members should be 1. Refrain from committing acts of GBSH;
women;
2. Discourage the conduct of GBSH in the
c. Be composed of members who should be workplace;
impartial and not connected or related to
the alleged perpetrator; 3. Provide emotional or social support to
fellow Ees, co-workers, colleagues or
d. Investigate and decide on the complaints peers who are victims of gender-based
within 10 days or less upon receipt sexual harassment; and
thereof;
4. Report acts of GBSH witnessed in the
e. Observe due process; workplace. (Sec. 18, R.A. No. 11313)

f. Protect the complainant from retaliation; Liability of Ers

and
In addition to liabilities for committing acts of
g. Guarantee confidentiality to the greatest GBSH, Ers may also be held responsible for:
extent possible;

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1. Non-implementation of their duties under In other words, labor legislation focuses on the
Sec. 17 of the law, as provided in the penal rights of a worker in the workplace. It refers to labor
provisions; or statutes like Labor Relations Law and Labor
Standards. On the other hand, social legislation
2. Not taking action on reported acts of GBSH refers to Social Security Laws.
committed in the workplace. (Sec. 19, IRR
of R.A. No. 11313) Social legislation is a broad term and may include
not only laws that give social security protection,
Independent Action for Damages but also those that help the worker secure housing
and basic necessities. The Comprehensive Agrarian
Nothing shall preclude the victim of work- Reform Law (CARL) could also be considered a
related GBSH from instituting a separate and social legislation.
independent action for damages and other
affirmative relief. (Sec. 23, IRR of R.A. No. 11313) 1. SSS LAW (R.A. No. 8282, as amended by R.A.
No. 11199)

C. SOCIAL WELFARE LEGISLATION Declaration of Policy

It is the policy of the State to establish, develop,

Social Legislations promote, and perfect a sound and viable tax-exempt
social security system suitable to the needs of the
Social legislations are laws, rules, and regulations people throughout the Philippines which shall
that promote welfare of all sectors of society. Social promote social justice through savings, and ensure
Legislation includes laws that provide particular meaningful social security protection to members
kinds of protection or benefits to the society, in and their beneficiaries against the hazards of
furtherance of social justice. Not all social disability, sickness, maternity, old age, death, and
legislations are labor laws. (Duka, 2019) other contingencies resulting in loss of income or
financial burden. Towards this end, the State shall
Q: Is there any distinction between labor endeavor to extend social security protection to
legislation and social legislation? Explain. (1995 Filipino workers, local or overseas, and their
BAR) beneficiaries. (Sec. 2, R.A. No. 11199)

A: YES. Labor Legislation is limited in scope and NOTE: The enactment of the SSS law is a legitimate
deals with the rights and duties of Ees and Ers. exercise of police power. It affords protection to
Social Legislation is more encompassing as it labor and is in full accord with the constitutional
includes subjects such as agrarian relations, mandate on the promotion of social justice. The
housing and human settlement, protection of funds contributed to the System created by the law
women and children, etc. are not public funds, but funds belonging to the
members which are merely held in trust by the
NOTE: All labor laws are social legislation, but not Government. (Roman Catholic Archbishop of Manila
all social legislation is labor law. v. SSS, G.R. No. L-15045, 20 Jan. 1961)

SSS premiums are not taxes

The funds contributed to the System belong to the

members who will receive benefits, as a matter of
right, whenever the hazards provided by the law
occur. (CMS Estate, Inc. v. SSS, G.R. No. 26298, 28 Sept.
1984)
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Benefits Received Under SSS Law are Not Part of 2. The separated Ee shall be credited with all
the Estate of a Member contributions paid on his/her behalf and is
entitled to the social security benefits in
Benefits receivable under the SSS Law are in the accordance with issued guidelines and the
nature of a special privilege or an arrangement provisions of the Social Security Act of 2018.
secured by the law pursuant to the policy of the
State to provide social security to the workingman. 3. The separated Ee may continue to pay
The benefits are specifically declared not his/her contributions voluntarily to maintain
transferable and exempt from tax, legal processes, his/her right to full benefit. (Sec. 11, R.A. No.
and liens. (SSS v. Davac, et al., G.R. No. L-21642, 30 11199)
July 1966)
4. Any contribution paid in advance by the Er
Effective date of SSS Coverage but not due shall be credited or refunded to
said Er. (Sec. 22, R.A. No. 11199)
Effective Date of SSS Coverage
On the first day of The above rule recognizes the “once a member,
Er
operation always a member” principle.
On the first day of
Ee Legal Compensation
employment
Upon registration with
the SSS; registration It is clear in Art. 113 of the LC that no employer, in
Self-employed his own behalf or on behalf of any person, shall
shall mean payment of
first contribution make any deduction from the wages of his
First day of employees, except in cases where the employer is
Sea-based OFW authorized by law or regulations issued by the
employment
Based on the provisions SOLE, among others. The Omnibus Rules
Land-based OFW of the Agreement and Implementing the LC, meanwhile, provides that
covered under BLAs its implementing deductions from the wages of the employees may be
arrangement made by the employer when such deductions are
Land-based OFW Applicable month and authorized by law, or when the deductions are with
NOT covered under year of the first the written authorization of the employees for
BLAs contribution payment payment to a third person. Thus, any withholding of
Voluntary coverage Applicable month and an employee's wages by an employer may only be
of land-based year of the first allowed in the form of wage deductions under the
overseas Filipinos contribution payment. circumstances provided in Art. 113 of the LC, as well
as the Omnibus Rules implementing it. Further, Art.
(Rule 15, IRR, R.A. No. 11199)
116 of the LC clearly provides that it is unlawful for
any person, directly or indirectly, to withhold any
Q: What is the effect of separation of Ee on
amount from the wages of a worker without the
the obligation to contribute and remit?
worker's consent. (PLDT v. Estrañero, G.R. No.
192518, 15 Oct. 2014)
A: The effects are as follows:

Effect of the interruption of business or

1. His Er’s obligation to contribute arising from
professional income
that employment shall cease at the end of the
month of separation.
1. If the self-employed member realizes no
income in any given month, he/she shall not be
required to pay his/her contributions for that
month.

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 III. EMPLOYMENT PROPER
NOTE: No self-employment income, no is an occasional or sporadic Ee. Therefore, he is not
obligation to pay. a kasambahay who is entitled to SSS coverage. (Sec.
2, R.A. No. 10361)
2. A self-employed member may be allowed to
continue paying contributions under the same a) COVERAGE
rules and regulations applicable to a separated
Ee member. COMPULSORY COVERAGE

3. No retroactive payment of contributions shall a. All Ees not over 60 years of age and their
be allowed. (Sec. 11, R.A. No. 11199) Ers;
b. Domestic helpers whose income is not less
Q: A textile company hires 10 carpenters to than P1,000/month and not over 60 years
repair the roof of its factory which was of age and their Ers;
destroyed by typhoon “Bening.” Are the
carpenters subject to compulsory coverage The minimum wage of domestic workers is now
under the SSS Law? Why? P1,500 to P2,500 in NCR pursuant to Sec. 24 of
R.A. No. 10361 or Batas Kasambahay Law.
A: NO. The employment is purely casual and not for
the purpose of the occupation or business of the Er. Per R.A. No. 10361, a domestic worker who has
Their engagement is occasioned by the passage of rendered at least one (1) month of service shall
the typhoon; they are not hired on a regular basis. be covered by the Social Security System (SSS),
the Philippine Health Insurance Corporation
Q: Don Luis, a widower, lived alone in a house (PhilHealth), and the Home Development
with a large garden. One day, he noticed that the Mutual Fund or Pag-IBIG, and shall be entitled
plants in his garden needed trimming. He to all the benefits in accordance with the
remembered that Lando, a 17-year-old out-of- pertinent provisions provided by law.
school youth, had contacted him in church the
other day looking for work. He contacted Lando The following rules shall govern the covered
who immediately attended to Don Luis’ garden Ees with private benefit plans:
and finished the job in three days. (2014 BAR)
i. The benefit already earned by the Ees
a. Is there an Er-Ee relationship between Don under private benefit plans existing at
Luis and Lando? the time of the approval of the SSS Act
shall not be discontinued, reduced or
A: YES. There is an Er-Ee relationship between Don otherwise impaired;
Luis and Lando. Firstly, Lando, who was looking for
work finally rendered personal services for Don ii. Private benefit plans which are existing
Luis. Secondly, Lando could not have been the and in force at the time of compulsory
master of his time, means and methods under the coverage shall be integrated with the
circumstances. plan of the SSS, and if the Er's
contribution to his/her private plan is
b. Does Don Luis need to register Lando more than that required of him/her in
with the SSS? the SSS Act:

A: NO. Don Luis does not need to register Lando 1. He/She shall pay to the SSS only
with the SSS because he is a purely casual Ee, hence the contribution required of
outside SSS coverage. Neither should he report him/her;
Lando for SSS coverage under the Batas
Kasambahay Law because, although a gardener, he

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 LABOR LAW AND SOCIAL LEGISLATION
2. He/She shall continue his/her “employee”;
contribution to such private plan
less his/her contribution to the SSS 4. Professional athletes, coaches,
so that the Er's total contribution trainers, and jockeys; and
to his/her benefit plan and to the
SSS shall be the same as his/her 5. Individual farmers and fisherman.
contribution to his/her private (Sec. 9-A, R.A. No. 11199)
benefit plan before the compulsory
coverage. d. All sea-based and land-based Overseas
Filipino Workers (OFWs) not over 60 years
iii. Any changes, adjustments, of age.
modifications, eliminations or
improvements in the benefits to be NOTE: Land-based OFWs are compulsory
available under the remaining private members of the SSS and are considered in
plan shall be subject to agreements the same manner as self-employed
between the Ers and Ees concerned; persons, until a Bilateral Labor Agreement
(BLA) shall have been entered into. (Sec. 9-
iv. The private benefit plan which the Er B(c), R.A. No. 11199)
shall continue for his/her Ees shall
remain under the Er's management NOTE: Manning agencies are agents of
and control unless there is an existing their principals and are considered as Ers
agreement to the contrary; and of sea-based OFWs. (Sec. 9-B(b), R.A. No.
11199)
v. Nothing in the SSS Act shall be
construed as a limitation to the right of Exclusions from coverage
Ers and Ees to agree on and adopt
benefits which are over and above The following are excluded from compulsory
those provided under the SSS Act. (Sec. coverage under the SSS Act:
9, R.A. No. 11199; Sec. 2, Rule 13, IRR of
R.A. No. 11199) 1. Services where there is no Er-Ee relationship
in accordance with existing labor laws, rules,
c. Self–employed persons as may be regulations, and jurisprudence;
determined by the Commission.
2. Services performed in the employ of the
NOTE: A self-employed person is one Philippine Government or instrumentality or
whose income is not derived from agency thereof;
employment, as well as those mentioned in
Sec. 9-A of the law (Sec. 8(s), R.A. No. 3. Services performed in the employ of a foreign
11199): government or international organization, or
their wholly-owned instrumentality; and
1. All self-employed professionals;
4. Such other services performed by temporary
2. Partners and single proprietors of and other Ees which may be excluded by
business; regulation of the Commission. (Sec. 8, (j), R.A.
No. 11199)
3. Actors and actresses, directors,
scriptwriters, and news NOTE: Ees of bona fide independent contractors
correspondents who do not fall shall not be deemed Ees of the Er engaging the
within the definition of the term service of said contractors.

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Q: The owners of FALCON Factory, a company d. Self-employed who realizes no income for a
engaged in the assembling of automotive certain month; and
components, decided to have their building
renovated. Fifty (50) persons, composed of e. Filipino permanent migrants, including
engineers, architects, and other construction Filipino immigrants, permanent residents
workers, were hired by the company for this and naturalized citizens of their host
purpose. The work was estimated to be countries. (Sec. 9-B(g), R.A. No. 11199)
completed in 3 years. The workers contended
that since the work would be completed after BY AGREEMENT
more than 1 year, they should be subject to
compulsory coverage under the Social Security GR: Any foreign government, international
Law. Do you agree with their contention? organization, or their wholly owned instrumentality
Explain your answer fully. (2002 BAR) employing workers in the Philippines or employing
Filipinos outside of the Philippines.
A: NO. Under Sec. 8(j) of R.A. No. 1161, as amended,
employment of purely casual and not for the XPN: Those already covered by their respective civil
purpose of the occupation or business of the Er is service retirement systems.
excepted from compulsory coverage. An
employment is purely casual if it is not for the b) DEPENDENTS AND BENEFICIARIES
purpose of occupation or business of the Er.
DEPENDENTS
In the problem given, Falcon Factory is a company
engaged in the assembly of automotive components. The dependents shall be the following:
The 50 persons (engineers, architects, and
construction workers) were hired by Falcon Factory 1. The legal spouse entitled by law to receive
to renovate its building. The work to be performed support from the member;
by these 50 people is not in connection with the
purpose of the business of the factory. Hence, the 2. The legitimate, legitimated or legally adopted,
employment of these 50 persons is purely casual. and illegitimate child who is
They are, therefore, excepted from the compulsory
coverage of the SSS law. a. Unmarried;
b. not gainfully employed; and
VOLUNTARY COVERAGE c. has not reached 21 years of age; or
d. if over 21 years of age, he is congenitally
a. Spouses who devote full time to managing or while still a minor has been
the household and family affairs; permanently incapacitated and
incapable of self-support, physically or
XPN: They are also engaged in other mentally; and
vocation or employment which is subject to
mandatory coverage. (Sec. 9(b), R.A. No. 3. The parent who is receiving regular support
11199) from the member. (Sec. 8(e), R.A. No. 11199)

b. An OFW upon the termination of his/her

employment overseas (Sec. 9-B(f), R.A. No.
11199);

c. A covered Ee who was separated from

employment who continues to pay his/her
contributions;

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BENEFICIARIES Q: John died in an accident while performing his
duties as an electrician on board a vessel. At the
Primary Beneficiaries time of his demise, he was childless and
unmarried, predeceased by his adoptive parent
The primary beneficiaries of the member are the Cornelio during his minority, and survived only
following: by his biological parent Bernardina. Bernardina
filed a claim for death benefits, but the SSS
1. The dependent spouse, until he or she rejected her claim because she is no longer
remarries; and considered a primary beneficiary, because she
is no longer John’s legitimate parent due to his
2. The dependent legitimate, legitimated, or legal adoption by Cornelio. Is the SSS correct?
legally adopted children and the
illegitimate children. (Sec. 12, IRR of the A: NO. The term "parents" in the phrase "dependent
R.A. No. 11199) parents" ought to be taken in its general sense and
cannot be unduly limited to "legitimate parents.”
NOTE: Where there are legitimate or The phrase "dependent parents" should, therefore,
illegitimate children, the former shall be include all parents, whether legitimate or
preferred. Dependent illegitimate illegitimate and whether by nature or by adoption.
children shall be entitled to 50% of the When the law does not distinguish, one should not
share of the legitimate, legitimated or distinguish. Plainly, "dependent parents" are
legally adopted children. In the absence of parents, whether legitimate or illegitimate,
the dependent legitimate, legitimated or biological or by adoption, who are in need of
legally adopted children of the member, support or assistance.
his/her dependent illegitimate children
shall be entitled to 100% of the benefits. The biological parent has the right to the benefits
(Ibid.) stemming from John’s death as a dependent parent
given the adoptive parent’s untimely demise during
Secondary Beneficiaries John’s minority. It is true that the adoption decree
severed the relation between John and his biological
In the absence of primary beneficiaries, the parent, effectively divesting the latter’s status of a
secondary beneficiaries are as follows: legitimate parent, and consequently, that of being a
secondary beneficiary. However, it should be noted
1. Dependent parents; or that parental authority should be deemed to have
2. In the absence of dependent parents, any reverted in favor of the biological parent upon death
other person/s designated and reported of the adoptive parent during the adoptee’s
by the member to the SSS. (Sec. 8(k), R.A. minority.
No. 11199)
Thus, the death benefits under the Ees’
NOTE: The person designated by the Compensation Program shall accrue solely to the
member shall be someone who has a right surviving biological parent, John’s sole remaining
to claim for support from the deceased beneficiary. (Bartolome v. SSS, G.R. No. 192531, 12
member under the Family Code, including Nov. 2014)
dependent children who have reached the
age of majority. (Sec. 13, IRR of R.A. No. Dependent for support
11199)
The entitlement to benefits as a primary beneficiary
requires not only legitimacy but also dependence
upon the member Ee. (SSS v. Favila, G.R. No. 170195,
28 Mar. 2011)

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 III. EMPLOYMENT PROPER
NOTE: The Court defined a “dependent” as one who does not rest on real and substantial distinctions. It
derives his or her main support from another. is too sweeping because the proviso effectively
Meaning, relying on, or subject to, someone else for disqualifies the dependent spouses—whose
support; not able to exist or sustain oneself, or to respective marriages to the retired SSS member
perform anything without the will, power, or aid of were contracted after the latter’s retirement—as
someone else. primary beneficiaries and unfairly lumps all these
marriages as sham relationships or were contracted
Dependent Spouse solely for the purpose of acquiring benefits accruing
upon the death of the other spouse.
He or she is the the legitimate spouse dependent for
support upon the member or pensioner. If a wife is The proviso runs afoul of the due process clause as
already separated de facto from her husband, she it outrightly deprives the surviving spouses, whose
cannot be said to be "dependent for support" upon respective marriages to the retired SSS members
the husband, absent any showing to the contrary. were contracted after the latter’s retirement, of
Conversely, if it is proved that the husband and wife their survivor’s benefits. There is outright
were still living together at the time of his death, it confiscation of benefits due such surviving spouses
would be safe to presume that she was dependent without giving them an opportunity to be heard.
on the husband for support, unless it is shown that (Dycaico v. SSS, G.R. No. 161357, 30 Nov. 2005)
she is capable of providing for herself. (SSS v. Aguas,
G.R. No. 165546, 27 Feb. 2006) NOTE: The reckoning point in determining the
beneficiaries of the deceased should be the time of
Q: Bonifacio and Elena Dycaico lived together as the latter’s death. (SSS v. De Los Santos, G.R. No.
husband and wife without the benefit of 164790, 29 Aug. 2008)
marriage. In June 1989, Bonifacio was
considered retired and began receiving his Qualification of Spouse-Beneficiary
monthly pension from the SSS. Bonifacio
married Elena on 06 Jan. 1997. He continued to To ensure a uniform implementation of the Dycaico
receive the monthly pension until he passed v. SSS case (G.R. No. 161357, 30 Nov. 2005), the SSS
away on 19 June 1997. Elena filed with the SSS issued the following guidelines:
an application for survivor’s pension, but it was
denied on the ground that under Sec. 12-B(d) of 1. The spouse must have been legally married to
the SSS Law, the primary beneficiaries who are the retiree-pensioner at the time of death.
entitled to survivor’s pension are those who
qualify as such as of the date of retirement of the 2. If the marriage was celebrated after the
deceased member. Hence, Elena, who was not retirement of the member, any of the following
then the legitimate spouse of Bonifacio as of the circumstances is present:
date of his retirement, could not be considered
his primary beneficiary. Is Elena entitled to a. The spouses were living together as
claim survivor’s pension? husband and wife without legal
impediment to marry each other prior to
A: YES. The proviso as of the date of his retirement the retirement of the member; or
in Sec. 12-B (d) of R.A. No. 8282, which qualifies the
term primary beneficiaries, is unconstitutional for it b. The surviving spouse was reported as
violates the due process and equal protection beneficiary-spouse in the SSS Forms prior
clauses of the Constitution. The classification of to the retirement of the member; or
dependent spouses on the basis of whether their
respective marriages to the SSS member were c. A child was born during the existence of the
contracted prior to or after the latter’s retirement marriage between the retiree-pensioner
for the purpose of entitlement to survivor’s pension and the surviving spouse; or

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d. Before marriage, a child was born during 164790, 29 Aug. 2008)
the time the spouses were living together
as husband and wife without legal Q: Rodolfo, an SSS member, was survived by the
impediment to marry each other; or following: his legal wife Editha, who was now
cohabiting with another man; another wife
e. The marriage between the surviving Yolanda, whom Rodolfo married and with whom
spouse and retiree-pensioner is he had four illegitimate children, who are now
established to have been contracted not for over 21 years old; and another common-law
any fraudulent purpose. In this regard, the wife, Gina, with whom he had two illegitimate
SSS Branch concerned shall conduct an minor children. All wives filed a claim before the
appropriate investigation to satisfy this SSS for death benefits. Who among the claimants
requirement; and are qualified and/or disqualified as
beneficiaries?
3. The spouse must have been dependent for
support upon the retiree-pensioner during the A: Yolanda is disqualified because the marriage
existence of marriage. (SSS Office Order No. between her and Rodolfo was null and void because
2010-02) of a prior subsisting marriage contracted with
Editha.
Q: Antonio and Gloria de los Santos, both
Filipinos, got married in 1964. In 1983, Gloria Editha is disqualified, because even if she was the
left Antonio and went to the United States. legal wife, she was not qualified to the death
In 1986, she filed for divorce against Antonio in benefits since she herself admitted that she was not
California. The divorce was granted. dependent on her deceased husband for support
inasmuch as she was cohabiting with another man.
In 1987, Antonio married Cirila de los Santos.
For her part, Gloria married Larry Thomas Gina is disqualified, being a common-law wife.
Constant, an American citizen, in the US. In 1999,
Antonio died of respiratory failure. Cirila Since the wives are disqualified and because the
applied for and began receiving his SSS pension deceased has no legitimate child, it follows that the
benefit. dependent illegitimate minor children of the
deceased shall be entitled to the death benefits as
On 21 Dec. 1999, Gloria filed a claim for primary beneficiaries. The SSS Law is clear that for
Antonio’s death benefits with the SSS. Her claim a minor child to qualify as a “dependent,” the only
was denied on the ground that she was not a requirements are that he/she must be below 21
qualified beneficiary of Antonio. She contended years of age, not married nor gainfully employed.
that her marriage to Larry Constant was not the
subsequent marriage contemplated under SSS Yolanda’s children are disqualified for being over 21
Law that would disqualify her as a beneficiary; years old.
that the decree of divorce issued by a foreign
state involving Filipino citizens has no validity In this case, the minor illegitimate children of Gina
and effect under Philippine law. Is Gloria still are the only qualified beneficiaries of Rodolfo.
qualified as a primary beneficiary of Antonio (Signey v. SSS, G.R. No. 173582, 28 Jan. 2008)
under the SSS Law?
Social Security Law is Not a Law on Succession
A: NO. Although Gloria was the legal spouse of the
deceased, she is still disqualified to be his primary It is not the heirs of the Ee but the designated
beneficiary under the SSS Law for she fails to fulfill beneficiaries who are to receive the social security
the requirement of dependency upon her deceased benefits. It is only when the beneficiary is the estate,
husband Antonio. (SSS v. De Los Santos, G.R. No. or when there is no designated beneficiary, or if the

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 III. EMPLOYMENT PROPER
designation of beneficiary is void, that the Social SICKNESS BENEFITS
Security System is required to pay the Ee’s heirs.
(Ungos, 2013) Sickness benefit

c) BENEFITS It is a daily cash allowance paid by the Er to the

member who is unable to work due to sickness or
Benefits under the SSS Act injury for each day of compensable confinement or
a fraction thereof, or by the SSS, if such person is
a. Sickness Benefits; unemployed or is self-employed, an OFW, or
b. Permanent Disability Benefits; Voluntary Member (VM) who has been previously
c. Maternity Leave Benefits; covered either as employed, self-employed, OFW
d. Retirement Benefits; and non-working spouse. (Sec. 1, Rule 25, IRR, R.A.
e. Death Benefits; No. 11199)
f. Funeral Benefits; and
g. Unemployment Insurance or Involuntary Qualifying conditions (Un-P-U-N)
Separation Benefits.
1. The member is Unable to work due to sickness
Non-transferability of Benefits or injury and is confined either in a hospital or
at home for at least four (4) days.
Benefits payable are not transferable and no power
of attorney or other document executed by those 2. The member has Paid at least 3 months of
entitled thereto in favor of any agent, attorney or contributions within the 12-month period
any other person for the collection thereof on their immediately before the semester of sickness
behalf shall be recognized, except when the payees or injury.
are physically unable to collect personally such
benefits. (Sec. 15, R.A. No. 11199) 3. The member has Used all company sick leaves
with pay for the current year and has duly
Q: On her way home from work, Mikaela, a notified his Er.
machine operator in a sash factory, decided to
watch a movie in a movie house. However, she 4. The member must Notify the SSS by filing a
was stabbed by an unknown assailant. When she sickness benefit application if he is separated
filed a claim for benefits under the law, it was from employment, a self-employed or
denied on the ground that her injury is not voluntary member, including OFW-member.
work-connected. Is the denial legal? Why? (Sec. 2, Rule 25, IRR, R.A. No. 11199)

A: NO. It is not necessary for the enjoyment of NOTE: No contributions paid retroactively by self-
benefits under the SSS Law that the injury be work- employed, voluntary member, or OFWs shall be
connected. What is important is membership in the used in determining his/her eligibility to sickness
SSS and not the causal connection of the work of the benefit wherein the date of payment is within or
Ee to his injury or sickness. after the semester of contingency.

NOTE: Claims based on work-connected injuries or

occupational diseases are covered by the State
Insurance Fund.

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Notification Requirement (Sec. 14, R.A. No. 11199)

Sickness or OFWs are given 35 calendar days in filing sickness

Confinement injury that benefits. This applies only for confinement
elsewhere, as occurred elsewhere as defined by the SSS. (Sec. 3, Rule 25, IRR,
Hospital
may be while working R.A. No. 11199)
Confinement
defined by the or within the
SSS premises of Amount of Benefit
the Er
Notification by Ee to Er The amount of the member’s daily Sickness Benefit
allowance is equivalent to 90% of his Average Daily
Salary Credit. (ADSC). (Sec. 14, R.A. No. 11199)
The Ee shall
notify the Er of
Limitations on the Grant of Sickness Benefit
the sickness or
injury in the
Not 1. A member may be granted a maximum
prescribed Not necessary
necessary sickness benefit of 120 days in one calendar
manner within
year;
5 calendar days
after the start
2. The sickness benefit shall be paid for not more
of confinement
than 240 days on account of the same illness or
confinement;
Notification by Er to SSS
3. An unused portion of the allowable 120 days
The Er shall sickness benefit cannot be carried forward nor
The Er shall
inform the added to the total number of compensable
notify the SSS of
SSS of such days allowable in the following year; and
The Er shall in such sickness
confinement
turn notify the or injury in the
in the 4. Compensable confinement shall begin only
SSS within 5 prescribed
prescribed after all sick leaves of absence with full pay to
calendar days manner within
manner the credit of Ee-member shall have been
after receipt of 5 calendar days
within one 1 exhausted, if applicable. (Sec. 14, R. A. No.
notice from Ee. after onset of
year from 11199; Sec. 6, Rule 25, IRR, R. A. No. 11199)
sickness or
date of
injury
discharge. Compensable Confinement

(Sec. 3 and 4, Rule 25, IRR, R.A. No. 11199) 1. It begins on the 1st day of sickness; and

Rule on Notification of Self-employed Member 2. Payment of such allowances shall be promptly

made by the Er:
GR: The unemployed or SE member, land-based
OFW, or voluntary member including non-working a. Every regular payday or on the 15 th and
spouse, shall directly notify the SSS of the last day of each month; and
confinement in the prescribed manner within five
(5) calendar days after the start of confinement. b. In case of direct payment by the SSS - as
long as such allowances are due and
XPN: When such confinement is in a hospital, payable. (Sec. 14(b), R. A. No. 11199)
notification to the SSS in the prescribed manner
shall be within one (1) year from date of discharge.

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Requirements for an Er to claim reimbursement Requisites
of the sickness benefit
1. Sickness/injury and disability are not related.
1. 100% of daily benefits shall be reimbursed by 2. Member meets all the qualifying conditions for
SSS if the following requirements are satisfied: the grant of sickness and disability benefits.
(Sec. 6(xii), Rule 25, IRR, R. A. No. 11199)
a. Receipt of SSS of satisfactory proof of such
payment and legality thereof; and Q: Because of the stress in caring for her four (4)
b. The Er has notified the SSS of the growing children, Tammy suffered a
confinement within five (5) calendar days miscarriage late in her pregnancy and had to
after receipt of the notification from the undergo an operation. In the course of the
Ee member. operation, her obstetrician further discovered a
suspicious-looking mass that required the
2. Er shall be reimbursed only for each day of subsequent removal of her uterus
confinement starting from the 10th calendar (hysterectomy). After surgery, her physician
day immediately preceding the date of advised Tammy to be on full bed rest for six (6)
notification to the SSS if the notification to the weeks.
SSS is made beyond five (5) calendar days after
receipt of the notification from the Ee member. Meanwhile, the biopsy of the sample tissue
(Sec. 14(c), R.A. No. 11199) taken from the mass in Tammy's uterus showed
a beginning malignancy that required an
Reimbursement by SSS immediate series of chemotherapy once a week
for four (4) weeks. What benefits can Tammy
GR: SSS shall reimburse the Er or pay the claim under existing social legislation? (2013
unemployed member only for confinement within BAR)
one year immediately preceding the date the claim
for benefit or reimbursement is received by the SSS. A: Assuming she is employed, Tammy is entitled to
a special leave benefit of two months with full pay
XPN: Confinement in a hospital, in which case the (Gynecological Leave) pursuant to R.A. No. 9710 or
claim for benefit or reimbursement must be filed the Magna Carta of Women. She can also claim
within one year from the last day of confinement. Sickness Leave benefit in accordance with the SSS
(Sec. 14(c), R.A. No. 11199) Act.

Instances when the Er or the unemployed PERMANENT DISABILITY BENEFITS

member is not entitled to reimbursement
Permanent disability benefit
1. Where the Er failed to notify the SSS of the
confinement; It is a cash benefit granted to a member who
becomes permanently disabled, either partially or
2. In the case of the unemployed, where he failed totally. (Sec. 1, Rule 23, IRR, R.A. No. 11199)
to send the notice directly to the SSS except
when the confinement is in a hospital; and Permanent Total Disability (PTD)

3. Where the claim for reimbursement is made The following are deemed permanent total
after one year from the date of confinement. disabilities:
(Sec. 14, R.A. No. 11199)
1. Complete loss of sight of both eyes;
NOTE: Sickness and disability benefits may be 2. Loss of two limbs at or above the ankle or
availed of simultaneously. wrists;

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3. Permanent complete paralysis of two limbs; 3. If less than 36 monthly contributions, he is
4. Brain injury resulting to incurable imbecility granted a lump sum amount. (Sec. 13-A, R.A.
or insanity; and No. 11199)
5. Such cases as determined and approved by
the SSS. (Sec. 13-A(d), R.A. No. 11199) Amount of Benefits

Permanent Partial Disability (PPD) 1. The minimum monthly Disability Pension is:

If disability occurs after 36 monthly contributions a. P1,000 if the member has less than ten
have been paid prior to the semester of disability, Credited Years of Service (CYS);
the benefit shall be the monthly pension for b. P1,200 if with at least 10 CYS; and
permanent total disability payable not longer than c. P2,400 with at least 20 CYS.
the period designated in the schedule in Sec. 3, Rule
23 of the IRR of R.A. No. 11199. The monthly pension 2. If qualified, the member is granted a monthly
benefit shall be given in lump sum if it is payable for Disability Pension, plus P5,000 monthly
less than 12 months. Supplemental Allowance. (Sec. 7, Rule 23, IRR,
R. A. No. 11199)
NOTE: For the purpose of adjudicating retirement,
death and permanent total disability pension 3. Dependent’s Pension (for total disability),
benefits, contributions shall be deemed paid for the which is 10% of the member’s basic monthly
months during which the member received partial pension, or P250, whichever is higher. (Sec. 12-
disability pension. A, R.A. No. 11199)

Types of permanent disability benefits NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to
1. Percentage of the lump sum benefit – dependent’s pension. No substitution is
available if the permanent partial disability allowed.
occurs before 36 monthly contributions have
been paid prior to the semester of disability; 4. Plus P1,000 additional benefit effective
January 2017. (Sec. 12 (c), R.A. No. 11199)
2. Monthly pension – available if the permanent
partial disability occurs after 36 contributions, 5. 13th month pension, which is payable every
payable in accordance with the schedule. (Sec. December to total disability pensioners; for
13-A, R. A. No. 11199) partial disability pensioners, 13th month
pension shall be paid provided that pension
NOTE: The monthly pension benefit for PPD will be duration is at least 12 months. (Sec. 8, Rule 23,
given in lump sum if it is payable in less than 12 IRR, R. A. No. 11199)
months. (Ungos, 2013)
Effect of the Death of a Pensioner with PTD
Qualifying Conditions
1. Primary beneficiaries are entitled to receive
1. The member has paid at least one month monthly pension as of the date of disability.
contribution before the semester of disability.
2. If there are no primary beneficiaries and the
2. To qualify for a monthly disability pension, the pensioner dies within 60 months from the
member must have paid at least 36 monthly start of his monthly pension – secondary
contributions prior to the semester of beneficiaries shall be entitled to a lump sum
disability. benefit equivalent to the total monthly
pensions corresponding to the balance of the

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 III. EMPLOYMENT PROPER
five-year guaranteed period excluding the 3. 60 days for miscarriage or emergency
dependents’ pension. (Sec. 13-A, R.A. No. termination of pregnancy (ETP). (R.A. No.
11199) 11210 or the Expanded Maternity Leave Law)

Effect of Retirement or Death of a Pensioner NOTE: The Maternity Benefit is granted regardless
with a Partial Disability of member’s civil status and frequency of
pregnancy.
If the pensioner with partial disability retires or
dies, the disability pension shall cease upon his Q: A, single, has been an active member of the
retirement or death. (Sec. 13-A, R.A. No. 11199) SSS for the past 20 months. She became
pregnant out of wedlock and on her 7th month
MATERNITY LEAVE BENEFITS of pregnancy, she was informed that she would
have to deliver the baby through caesarean
Maternity benefit section because of some complications. Can A
claim maternity benefits? If yes, how many days
Maternity Leave Benefit is a daily cash allowance can she go on maternity leave? If not, why is she
granted to female members who gave birth via not entitled? (2010 BAR)
normal delivery or caesarean section or suffered
miscarriage, regardless of civil status or legitimacy A: YES. The Expanded Maternity Leave Law applies
of the child. (Sec. 1, Rule 26, IRR, R.A. No. 11199) to all female workers regardless of civil status, as
long as the requirements under the law on notices
Qualifying conditions and payment, among others, have been satisfied.

1. The member has paid at least three (3) Since there is no indication that A is a solo parent,
monthly contributions within the 12-month she is entitled to 100% of her average salary credit
period immediately preceding the semester of for 105 days.
her childbirth or miscarriage.
NOTE: The suggested answer is updated to conform
2. If employed, she must have notified her Er of with prevailing law.
her pregnancy and the probable date of her
childbirth. Q: Luisa is an unwed mother with three children
from different fathers. In 2004, she became a
3. She must directly notify the SSS if she is member of the SSS. That same year, she suffered
unemployed, a self-employed or voluntary a miscarriage of a baby out of wedlock from the
member, non-working spouse, including OFW- father of her third child. She wants to claim
member. (Sec. 14-A, R.A. No. 11199) maternity benefits under the SSS Act. Is she
entitled to claim? (2015 BAR)
Amount of Benefit
A: YES. Provided that Luisa has reported to her Er
The amount of daily allowance is equivalent to her pregnancy and date of expected delivery and
100% of the member’s ADSC for a compensable paid at least 3 monthly contributions during the 12-
period of: month period immediately preceding her
miscarriage, then she is entitled to maternity
1. 105 days for normal or caesarian section benefits under the Expanded Maternity Leave Act,
delivery; regardless of frequency. As to the fact that she got
pregnant outside wedlock, as in her past three
2. 120 days for solo parents under R.A. No. 8972 pregnancies, this will not bar her claim because the
or Solo Parents’ Welfare Act; or SSS is non-discriminatory.

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NOTE: The suggested answer is updated to conform XPNs:
with prevailing law. i. An underground mineworker or
surface mineworker – At least 60 years
RETIREMENT BENEFITS old; and
NOTE: Effective 27 Apr. 2016
Retirement benefit
ii. In the case of a racehorse jockey – At
The Retirement Benefit is a monthly pension or least 55 years old. (Sec. 2, Rule 21, IRR
lump sum granted to a member who can no longer of R. A. No. 11199)
work due to old age. (Sec. 1, Rule 21, IRR, R. A. No.
11199) NOTE: Effective 24 May 2016

Types of retirement benefit Requisites for entitlement to lump sum benefit

1. Monthly Pension – Lifetime cash benefit paid 1. At least sixty (60) years old at the time of
to a retiree who has paid at least 120 monthly retirement;
contributions to the SSS prior to the semester 2. Does not qualify for pension benefits under
of retirement. par. (a) of Sec. 12-B;
3. Must be separated from employment; and
2. Lump Sum Amount – Granted to a retiree who 4. Is not continuing payment of contribution to
has not paid the required 120 monthly the SSS on his own. (Sec. 5, Rule 21, IRR, R. A. No.
contributions. 11199)

Qualifying conditions Amount of Benefit

1. A member must have at least 120 monthly 1. If qualified, the member is granted a monthly
contributions prior to semester of retirement; Retirement Plan Pension.
and
2. The retiree has the option to receive the first
2. Age Requirement: 18th months pension in lump sum, discounted
at a preferential rate to be determined by the
a. Optional Retirement – Has reached 60 SSS. This option can be exercised only upon
years old and separated from employment application of the first retirement claim, and
or has ceased to be self-employed. the Dependent’s Pension is excluded from the
advanced 18 months pension. (Sec. 3, Rule 21,
XPNs: IRR of R. A. No. 11199)
i. An underground mineworker whose
date of actual retirement is not earlier 3. The minimum monthly Retirement Pension is:
than 13 Mar. 1998 but not later than 27
Apr. 2016 – at least 55 years old; and a. P1,200 if the member has 120 months
contribution or at least ten (10) CYS; or
ii. An underground or a surface b. P2,400 if with at least 20 CYS.
mineworker whose date of actual
retirement in not earlier than 27 Apr. 4. Plus P1,000 additional benefit effective Jan.
2016 – 50 years old. 2017. (Sec. 12(c), R. A. No. 11199)

b. Technical Retirement – At least 65 years 5. Dependent’s Pension (for total disability),

old. which is 10% of the member’s basic monthly
pension, or P250, whichever is higher. (Sec. 12-

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A, R. A. No. 11199) DEATH BENEFITS

NOTE: Only five dependent minor children, Death Benefit

beginning from the youngest, are entitled to
dependent’s pension. No substitution is It is a cash benefit either in monthly pension or lump
allowed. sum paid to the beneficiaries of a deceased member.
(Sec. 1, Rule 22, IRR, R. A. No. 11199)
6. 13th month pension, which is payable every
December plus additional benefits. (Sec. 4, Rule Entitlement to Death Benefits
21, IRR, R. A. No. 11199)
1. Upon death of a member who has paid at least
Consequence of the re-employment or 36 monthly contributions prior to the
resumption to work of a retired pensioner semester of death:

The monthly pension of a retired member who a. Primary beneficiaries shall be entitled to
resumes employment and is less than 65 years old the monthly pension; or
will be suspended. He and his Er will again be
subject to compulsory coverage. (Sec. 13-A, R.A. No. b. If there are no primary beneficiaries,
11199) secondary beneficiaries shall be entitled
to a lump sum benefit equivalent to 36
Death of a Retired Member times the monthly pension.

Upon the death of a retired member:

2. Upon death of a member who has not paid the
1. His/her primary beneficiaries, as of the date of required 36 monthly contributions prior to the
his/her retirement, shall be entitled to receive semester of death, the primary or secondary
100% of the monthly pension. beneficiaries shall receive lump sum benefit,
whichever is higher between the equivalent of:
2. If the retired member has no primary
beneficiaries and dies within 60 months from a. The monthly pension multiplied by the
the start of his/her monthly pension, his/her number of monthly contributions paid to
secondary beneficiaries shall be entitled to a the SSS; or
lump sum benefit equivalent to the total
monthly pension corresponding to the balance b. 12 times the monthly pension. (Sec. 13,
of the five-year guaranteed period, excluding R.A. No. 11199)
the dependent’s pension and additional
benefit allowance. Amount of Benefit

3. If there are no primary and secondary 1. Monthly death pension to the member’s
beneficiaries, the lump sum payment in the primary beneficiary is granted a monthly
amount specified in the preceding paragraph death pension.
shall form part of his/her estate and shall be
paid to his/her legal heirs in accordance with 2. Lump sum amount to secondary
the law of succession. (Sec. 8, Rule 21, IRR, R. A. beneficiaries in the absence of primary
No. 11199) beneficiaries, or to legal heirs in the
absence of secondary beneficiaries.

3. Dependent’s Pension (for total disability) is

10% of the member’s basic monthly

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pension, or P250, whichever is higher. (Sec. payment;
12-A, R.A. No. 11199)
3. A voluntary member who was previously
NOTE: Only five dependent minor children, covered either as employed/self-
beginning from the youngest, are entitled employed/OFW and has at least one (1)
to dependent’s pension. No substitution is contribution payment;
allowed.
4. The Ee-member was subject to compulsory
4. Plus P1,000 additional benefit effective coverage but was not reported for coverage by
January 2017. (Sec. 12(c), R.A. No. 11199) Er.

5. The minimum monthly Death Pension is

P1,000 if the member had less than ten CYS; UNEMPLOYMENT BENEFITS
P1,200 if with at least ten CYS; and P2,400
with at least 20 CYS. Unemployment Benefit

Cause of Death must be an Occupational Disease Also known as unemployment insurance or

involuntary separation benefit, it is a cash benefit
In order for the beneficiary of an Ee to be entitled to granted to covered Ees, including kasambahays and
death benefits under the SSS, the cause of death OFWs (sea-based or land-based) who are
must be a sickness listed as an occupational disease involuntarily separated from employment. (Sec. 14-
by ECC; or any other illness caused by employment, B, R.A. No. 11199)
subject to proof that the risk of contracting the same
is increased by the working conditions. (Bañez v. Qualifying Conditions
SSS, G.R. No. 189574, 18 July 2014)
1. Not over sixty (60) years old at the time of
FUNERAL BENEFITS involuntary separation, except;

Funeral Benefit a. In the case of underground mineworker

or surface mineworker which must not
A funeral grant equivalent to P12,000.00 shall be be over 50 years old; or
paid, in cash or in kind, to help defray the cost of
funeral expenses upon the death of a member or b. In the case of racehorse jockey, not over
retiree. (Sec. 13-B, R.A. No. 11199) 55 years old.

NOTE: Starting 01 Aug. 2015, the amount of the 2. Has paid at least thirty-six (36) monthly
funeral grant was increased to a variable amount contributions, twelve (12) months of which
ranging from a minimum of P20,000.00 to a should be in the eighteen (18) month period
maximum of P40,000.00, depending on the immediately preceding the unemployment or
member’s paid contributions and CYS. (Sec. 2, Rule involuntary separation;
24, IRR, R. A. No. 11199)
3. Involuntarily separated from employment
Qualifying Conditions provided that such separation did not arise
from fault or negligence of the Ee and which
1. The Ee-member was reported for coverage by may be attributed to any of, but not limited to,
his Er; the following:

2. A self-employed member/OFW/non- working a. Installation of labor-saving devices;

spouse who had at least one contribution b. Redundancy;

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 III. EMPLOYMENT PROPER
c. Retrenchment to prevent loss; barangay and sanggunian officials. (Sec. 2(d),
d. Closure or cessation of operation; or R.A. No. 8291)
e. Disease/illness. (Sec. 2, Rule 27, IRR, R. A.
No. 11199) 3. Compensation – The basic pay or salary
received by an Ee, pursuant to his or her
Amount of Benefit election or appointment, excluding per diems,
bonuses, OT pay, honoraria, allowances, and
The benefit is granted through a one- time payment, any other emoluments received in addition to
and the claim must be filed within a year from the the basic pay which are not integrated into the
date of involuntary separation. basic pay under existing laws. (Sec. 2(i), R.A. No.
8291)
The unemployment insurance or involuntary
separation benefit is a monthly cash payment Reportorial Requirements of the Employer
equivalent to 50% of the AMSC for a maximum of
two (2) months, subject to the rules and regulations Er must report to GSIS the names, employment
that the Commission may prescribe. (Sec. 1, Rule 27, status, positions, salaries of the Ee and such other
IRR, R. A. No. 11199) matter as determined by the GSIS. (Sec. 6(a), R.A. No.
8291)
2. GSIS LAW (R.A. No. 8291)
Penalty in case of Delayed Remittance or Non-
Remittance of Contributions
Purpose for the Enactment of the GSIS Law

Agencies which delay the remittance of any and all

To provide and administer the following social
monies due the GSIS shall be charged interests as
security benefits for government Ees:
prescribed by the GSIS Board of Trustees but shall
not be less than 2% simple interest per month from
1. Compulsory Life Insurance;
due date to the date of payment by the Ers
2. Optional Life Insurance;
concerned. (Sec. 7, R.A. No. 8291)
3. Retirement Benefits;
4. Disability Benefits due to work-related
Q: May a member enjoy the benefits provided for
contingencies; and
in the Revised GSIS Act simultaneous with
5. Death Benefits.
similar benefits provided under other laws for
the same contingency?
Definition of Terms

A: YES. Whenever other laws provide similar

1. Employer
benefits for the same contingencies covered by this
Act, the member who qualifies to the benefits shall
a. National Government;
have the option to choose which benefits will be
b. Its political subdivisions, branches,
paid to him or her. However, if the benefits
agencies, instrumentalities;
provided by the law chosen are less than the
c. GOCCs and financial institutions with
benefits provided under this Act, the GSIS shall pay
original charters; or
only the difference. (Sec. 55, R.A. No. 8291)
d. Constitutional Commissions and the
Judiciary. (Sec. 2(c), R.A. No. 8291)

2. Employee or member – Any person, receiving

compensation while in the service of an Er,
whether by election or appointment,
irrespective of status of appointment, including

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a) COVERAGE 1. An elective official who, at the time of election
to public office is below 65 years of age will be
The GSIS covers all Ees irrespective of employment more than 65 at the end of his term of office,
status, who are employed with: including the period/s of his re-election to
public office thereafter without interruption.
1. The national government, its political
subdivisions, branches, agencies, or 2. Appointive officials who, before reaching the
instrumentalities; mandatory age of 65, are appointed to
government position by the President of the
2. GOCCs; Republic of the Philippines and shall remain in
government service at an age beyond 65.
3. Government financial institutions with original
charters; 3. Contractual Ees, including casuals and other
Ees with an Ee-government agency relationship
4. Constitutional commissions; and are also compulsorily covered, provided they
are receiving fixed monthly compensation and
5. The judiciary. rendering the required number of working
hours for the month. (Chan, 2014)
Coverage of Life Insurance, Retirement and
Other Social Security Protection
Classification of Members for the Purpose of
GR: All members of the GSIS shall have life Benefit Entitlement
insurance, retirement, and all other social security
protections such as disability, survivorship, 1. Active Members
separation, and unemployment benefits. (Sec. 3, R.A.
No. 8291) a. Still in the service and are paying
integrated premiums; covered for the
XPNs: The members of the following shall have life entire package benefits and privileges
insurance only: being extended by GSIS.

1. The Judiciary; and 2. Policyholders

2. The Constitutional Commissions. (Ibid.)
a. Covered for life insurance only;
Compulsory Coverage of Life Insurance b. Can avail of policy loan privilege only; and
c. May also apply for housing loans.
GR: All Ees receiving compensation who have not d. Judiciary and Constitutional Commissions
reached the compulsory retirement age,
irrespective of employment status. 3. Separated Members

XPNs: All members of the Armed Forces of the a. Former active members who have been
Philippines (AFP) and the Philippine National Police separated from the service;
(PNP).
b. Still covered by the GSIS under the
NOTE: An Ee who is already beyond the mandatory principle of “once a member, always a
retirement age of 65 shall be compulsorily covered member”;
and be required to pay both the life and retirement
premiums under the following situations: c. Entitled to receive future benefits under
P.D. 1146 in the event of compensable
contingency such as old age (attainment of

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 III. EMPLOYMENT PROPER
age 60 years), disability, survivorship and legitimate, legitimated, legally adopted, or
death; and illegitimate child, or over the age of majority but
incapacitated or incapable of self-support due
d. Not entitled to any loan privilege. to mental or physical defect acquired prior to
age of majority; and
4. Retired Members
3. Parents dependent upon the member for
a. Former active members who have retired support. (Sec. 2(f), R.A. No. 8291)
from the service and are already enjoying
the corresponding retirement benefits Beneficiaries
applied for; and
1. Primary beneficiaries
b. Not entitled to any loan privilege, except
stock purchase loan. (Sec. 2.2, Rule II, IRR of a. Legal dependent spouse, until he/she
R.A. No. 8291) remarries; and
b. Dependent children. (Sec. 2(g), R.A. No.
Exclusions 8291)

The following are not considered members of the 2. Secondary beneficiaries

GSIS for purposes of this Act:
a. Dependent parents; and
1) Ees who have separate retirement schemes b. Legitimate descendants, subject to
under special laws and are therefore covered by restrictions on dependent children. (Sec.
their respective retirement laws, such as the 2(h), R.A. No. 8291)
members of the Judiciary, Constitutional
Commissions, and other similarly situated c) BENEFITS
government officials;
Benefits under the GSIS Act
2) Contractual Ees who have no Er-Ee
relationship with the agencies they serve; a. Separation benefits;
b. Unemployment or involuntary separation
3) Uniformed members of the AFP, the Bureau of benefits;
Fire Protection, and the Bureau of Jail c. Retirement benefits;
Management and Penology (BJMP) whose d. Permanent disability benefits;
coverage by the GSIS has ceased effective June e. Temporary disability benefits;
24, 1997; and f. Survivorship benefits;
g. Funeral benefits;
4) Uniformed members of the PNP whose h. Life insurance; and
coverage by the GSIS has ceased effective 01 i. Such other benefits and protection as may
Feb. 1996. (Sec. 2.4, IRR of R. A. No. 8291) be extended to them by the GSIS such as
loans.
b) DEPENDENTS AND BENEFICIARIES
SEPARATION BENEFITS
Dependents
Entitlement of a Member to Separation Benefits
1. Legitimate spouse dependent for support upon
the member or pensioner; A member who has rendered a minimum of three
(3) years of creditable service shall be entitled to
2. Unmarried and not gainfully employed

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separation benefits upon resignation or separation A member who has rendered at least fifteen (15)
under the following terms: years of service will be entitled to separation
benefits instead of unemployment benefits.
1. A member with at least 3 years of service but
less than 15 years – Cash payment equivalent Conditions for Entitlement to Unemployment
to 100% of the average monthly compensation Benefits
for every year of service the member has paid
contributions: 1. The recipient must be a permanent Ee at the
time of separation;
a. Not less than P12, 000.00; and
b. Payable upon reaching sixty (60) years of 2. His separation was involuntary due to the
age or upon separation, whichever comes abolition of his office or position resulting
later. (Sec. 11(a), R.A. No. 8291) from reorganization; and

2. A member with at least 15 years of service 3. He has been paying the contribution for at
and less than 60 years of age at the time of least one (1) year prior to separation. (Sec. 12,
resignation or separation: R.A. No. 8291)

a. Cash payment equivalent to 18 times the RETIREMENT BENEFITS

Basic Monthly Pension (BMP), payable at
the time of resignation or separation; and Reason for Compulsory Retirement

b. An old-age pension benefit equals to the The compulsory retirement of government officials
BMP, payable monthly for life upon and Ees upon reaching the age of 65 years is
reaching the age of 60. (Sec. 11(b), R.A. No. founded on public policy which aims to maintain
8291) efficiency in the government service and at the same
time, give the retiring public servants the
Effects of Separation from Service with regard to opportunity to enjoy during the remainder of their
Membership lives the recompense, for their long service and
devotion to the government, in the form of a
A member separated from the service shall continue comparatively easier life, freed from the rigors of
to be a member and shall be entitled to whatever civil service discipline and the exacting demands
benefits he/she qualifies for. (Once a member, that the nature of their work and their relations
always a member.) with their superiors as well as the public would
impose upon them. (Beronilla v. GSIS, G.R. No. L-
NOTE: A member separated for a valid cause shall 21723, 26 Nov.1970)
automatically forfeit his benefits, unless the terms
of resignation or separation provide otherwise. In Conditions to be entitled to Retirement Benefits
case of forfeiture, the separated Ee shall be entitled
to receive only one-half (1/2) of the cash surrender 1. A member has rendered at least 15 years of
value of his insurance. service;

UNEMPLOYMENT BENEFITS 2. He is at least 60 years of age at the time of

retirement; and
Unemployment benefits
3. He is not receiving a monthly pension benefit
It will consist of monthly cash payments equivalent from permanent total disability. (Sec. 13-A, R.A.
to 50% of the average monthly compensation. No. 8291)

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NOTE: Where the Ee retires and meets the eligibility which reduces or eliminates his/her capacity to
requirements, he acquires a vested right to benefits continue with his/her current gainful occupation or
that is protected by the due process clause. Retirees engage in any other gainful occupation. (Sec. 2(q),
enjoy a protected property interest whenever they R.A. No. 8291)
acquire a right to immediate payment under pre-
existing law. Thus, a pensioner acquires a vested Total Disability
right to benefits that have become due as provided
under the terms of the public Ees’ pension statute. Complete incapacity to continue with present
No law can deprive such person of his pension rights employment or engage in any gainful occupation
without due process of law, that is, without notice due to the loss or impairment of the normal
and opportunity to be heard. (GSIS v. De Leon, G.R. functions of the physical and/or mental faculties of
No. 186560, 17 Nov. 2010) the member. (Sec. 2(r), R.A. No. 8291)

Options of the Retiree with regard to his or her Types of Permanent Disability
Retirement Benefits
1. Permanent Total Disability (PTD) – Accrues
The retiree may get either of the following: or arises when recovery from any loss or
impairment of the normal functions of the
1. Lump sum payment equivalent to 60 months physical and/or mental faculty of a member
of the BMP payable at the time of retirement which reduces or eliminates his capacity to
and an old-age pension benefit equal to BMP continue with his current gainful occupation or
payable for life, starting upon the expiration of engage in any other gainful occupation is
the five (5) years covered by the lump sum; or medically remote. (Sec. 2(q) and (s), R.A. No.
8291)
2. Cash payment equivalent to 18 times his BMP
and monthly pension for life payable 2. Permanent Partial Disability (PPD) – Accrues
immediately. (Sec. 13(a), R.A. No. 8291) or arises upon the irrevocable loss or
impairment of certain portion/s of the physical
Rule in case of Extension of Service in order to faculties, despite which the member is able to
be Entitled for Retirement Benefits pursue a gainful occupation. (Sec. 2(u), R.A. No.
8291)
The Supreme Court held that the head of the
government agency concerned is vested with Benefits for PTD
discretionary authority to allow or disallow
extension of the service of an official or Ee who has 1. A member is entitled to the monthly income
reached 65 years old without completing the 15 benefit for life equivalent to the BMP effective
years of government service. However, this from the date of disability when:
discretion is to be exercised conformably with the
provisions of Civil Service Memorandum Circular No. a. He is in the service at the time of the
27, s. of 1990 which provides that the extension shall disability; or
not exceed one (1) year. (Rabor v. CSC, G.R. No.
111812, 31 May 1995) NOTE: If at the time of disability, he was in
the service and has paid a total of at least
PERMANENT DISABILITY BENEFITS 180 monthly contributions, in addition to
the monthly income benefit, he shall
Disability receive a cash payment equivalent to 18
times his BMP. (Sec. 16(a), R.A. No. 8291)
Any loss or impairment of the normal functions of
the physical and/or mental faculty of a member,

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b. If separated from service: e. One foot
f. One leg
i. He has paid at least 36 monthly g. One or both ears
contributions within 5 years h. Hearing of one or both ears
immediately preceding his disability; i. Sight of one eye
or
2. Such other cases as may be determined by the
ii. He has paid a total of at least 180 GSIS. (Sec. 17(b), R.A. No. 8291)
monthly contributions prior his
disability. (Sec. 16(a), R.A. No. 8291) Suspension of Payment of Benefits

NOTE: A member cannot enjoy the monthly 1. In case a member is re-employed;

income benefit for permanent disability and the 2. Member recovers from disability as
old-age retirement simultaneously. determined by the GSIS; or
3. Fails to present himself for medical
2. If the member does not satisfy the conditions examination when required by the GSIS. (Sec.
above but has rendered at least 3 years of 16(c), R.A. No. 8291)
service, he shall be advanced the cash payment
equivalent to 100% of his average monthly Instances when Recovery is Precluded
compensation for each year of service he has
paid contributions, but not less than If the permanent disability was due to the following
P12,000.00, which should have been his acts of the subject Ee:
separation benefit. (Sec. 16(b), R.A. No. 8291)
a. Grave misconduct;
The following Disabilities shall be deemed PTD b. Notorious negligence;
c. Habitual intoxication; or
1. Complete loss of sight of both eyes; d. Willful intention to kill himself or another.
2. Loss of two (2) limbs at or above the ankle or (Sec. 15, R.A. No. 8291)
wrist;
3. Permanent complete paralysis of two limbs; TEMPORARY DISABILITY BENEFITS
4. Brain injury resulting in incurable imbecility
or insanity; and Temporary Total Disability (TTD)
5. Such other cases as may be determined by the
GSIS. (Sec. 16(d), R.A. No. 8291) It accrues or arises when the impaired physical
and/or mental faculties can be rehabilitated and/or
Benefits for PPD restored to their normal functions. (Sec. 2(t), R.A. No.
8291)
A member is entitled to cash payment in accordance
with the schedule of disabilities to be prescribed by NOTE: A member cannot enjoy TTD benefit and sick
GSIS, if he satisfies the given conditions of either (1) leave pay simultaneously.
or (2) of Sec. 16(a) of R.A. No. 8291.
Benefits for Temporary Disability
The following Disabilities shall be deemed PPD
1. Member is entitled to 75% of his current daily
1. Complete and permanent loss of the use of: compensation for each day or fraction thereof
a. Any finger of total disability benefit, to start not earlier
b. Any toe than the 4th day but not exceeding 120 days in
c. One arm one calendar year after exhausting all his sick
d. One hand leave credits and collective bargaining

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 III. EMPLOYMENT PROPER
agreement (CBA) sick leave benefits, if any. a. Was in the service at the time of his
Provided, that: death; or

a. He was in the service at time of b. If separated from the service, has

disability; or rendered at least three (3) years of
service at the time of his death and has
b. If separated, he has rendered at least 3 paid 36 monthly contributions within the
years of service and has paid at least 6 five-year period immediately preceding
monthly contributions in the year his death; or has paid a total of at least
preceding his disability. (Sec. 18(a), R.A. 180 monthly contributions prior to his
No. 8291) death.

2. TTD benefits shall in no case be less than P70.00 2. The survivorship pension plus a cash
a day. (Sec. 18(b), R.A. No. 8291) payment equivalent to 100% of his average
monthly compensation for every year of
NOTE: An application for disability must be filed service – that the deceased was in the service at
with the GSIS within four (4) years from the date of the time of his death with at least 3 years of
the occurrence of the contingency. service; or

SURVIVORSHIP BENEFITS 3. A cash payment equivalent to 100% of his

average monthly compensation for each year
Persons Entitled to Survivorship Benefits of service he paid contributions, but not less
than P12,000.00 – that the deceased has
Upon the death of a member or pensioner, his rendered at least three (3) years of service prior
beneficiaries shall be entitled to survivorship to his death but does not qualify for the benefits
benefits. Such benefit shall consist of: under item (1) or (2) of this paragraph. (Sec.
21(a), R.A. No. 8291)
1. The basic survivorship pension which is 50%
of the BMP; and Secondary Beneficiaries
2. The dependent children’s pension not
exceeding 50% of the BMP. (Sec. 20, R.A. No. In the absence of primary beneficiaries, the
8291) secondary beneficiaries shall be entitled to:

NOTE: The dependent children shall be entitled to 1. The cash payment equivalent to 100% of his
the survivorship pension as long as there are average monthly compensation for each year
dependent children and, thereafter, the surviving of service he paid contributions, but not less
spouse shall receive the basic survivorship pension than P12,000.00 – Provided, That the member
for life or until he or she remarries. is in the service at the time of his death and has
at least three (3) years of service; or
Conditions for the Primary Beneficiaries to be
Entitled to BMP 2. In the absence of secondary beneficiaries, the
benefits under this paragraph shall be paid to
Upon the death of a member, the primary his legal heir. (Sec. 21(c), R.A. No. 8291)
beneficiaries shall be entitled to:
Payment of Survivorship Pension
1. Survivorship pension – Provided, that the
deceased: After the end of the guaranteed 30 months, the
beneficiaries are still entitled to survivorship

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benefits. The survivorship pension shall be paid as with a live wire and was electrocuted. The death
follows: certificate showed that he died of cardiac arrest
due to accidental electrocution.
1. When the dependent spouse is the only
survivor, he/she shall receive the basic Bella (Gary’s common-law wife) and Jobo (his
survivorship pension for life or until he or she only son) filed a claim for death benefits with the
remarries; GSIS, which was denied on the ground that Gary’s
death did not arise out of and in the course of
2. When only dependent children are the employment, and therefore not compensable
survivors, they shall be entitled to the basic because the accident occurred in his house and
survivorship pension for as long as they are not in the school premises. Is Bella entitled to file
qualified, plus the dependent children’s a claim for death benefits with the GSIS? Why?
pension equivalent to 10% of the BMP for every (1991 BAR)
dependent child not exceeding five (5), counted
from the youngest and without substitution; or A: NO. Bella is not entitled to receive survivorship
benefits because she is not considered as a
3. When the survivors are the dependent spouse beneficiary. Bella is a common-law wife and not a
and the dependent children, the dependent legal dependent spouse. The beneficiaries of a
spouse shall receive the basic survivorship member of the GSIS are entitled to the benefits
pension for life or until he/she remarries, and arising from the death of said member. Death
the dependent children shall receive the benefits are called survivorship benefits under the
dependent children’s pension. (Sec. 21(b), R.A. GSIS Law.
No. 8291)
Q: Is the cause of death of Gary (cardiac arrest
Benefits that the Beneficiaries are Entitled to due to accidental electrocution in his house)
upon the Death of the Pensioner compensable? Why?

1. Upon the death of an old-age pensioner or a A: YES. To be compensable under the GSIS Law, the
member receiving the monthly income benefit death need not be work-connected. In the case
for permanent disability, the qualified presented, although the accident happened in Gary’s
beneficiaries shall be entitled to the house, it is still considered work-connected since
survivorship pension; and Gary only heeded to the memorandum issued by the
school principal and complied with the instruction of
2. When the pensioner dies within the period his superior to work on the model dam project.
covered by the lump sum, the survivorship
pension shall be paid only after the expiration Q: Odeck, a policeman, was on leave for a month.
of such period. (Sec. 22, R.A. No. 8291) While resting in their house, he heard two of his
neighbors fighting with each other. Odeck
Q: Gary Leseng was employed as a public school rushed to the scene intending to pacify the
teacher at the Marinduque High School. On 27 protagonists. However, he was shot to death by
Apr. 1997, a memorandum was issued by the one of the protagonists. Zhop, a housemaid, was
school principal designating Gary to prepare the Odeck's surviving spouse whom he had
model dam project, which will be the official abandoned for another woman years back.
entry of the school in the search for Outstanding When she learned of Odeck's death, Zhop filed a
Improvised Secondary Science Equipment for claim with the GSIS for death benefits. However,
Teachers. Gary complied with his superior's her claim was denied because: (a) when Odeck
instruction and took home the project to enable was killed, he was on leave; and (b) she was not
him to finish before the deadline. While working the dependent spouse of Odeck when he died.
on the model dam project, he came to contact

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 III. EMPLOYMENT PROPER
Resolve with reasons whether GSIS is correct in official leave, in which case his death outside
denying the claim. (2005 BAR) performance of official peace-keeping mission will
bar death claim. In this case, Luis was not on official
A: YES. GSIS is correct in denying the claim. Under leave and he died in the performance of a
the law, a dependent is one who is a legitimate peacekeeping mission. Therefore, his death is
spouse living with the Ee. (Art. 173(i), LC) In the compensable.
problem given, Zhop had been abandoned by Odeck
who was then living already with another woman at No Presumption of Sham Marriages
the time of his death. Moreover, Odeck was on leave
when he was killed. The 24-hour duty rule does not The present GSIS law does not presume that
apply when the policeman is on vacation leave. marriages contracted within three (3) years before
(Employees’ Compensation Commission v. CA, G.R. No. retirement or death of a member are sham
121545, 14 Nov. 1996) marriages contracted to avail of survivorship
benefits. The law acknowledges that whether the
Taking together jurisprudence and the pertinent surviving spouse contracted the marriage mainly to
guidelines of the ECC with respect to claim for death receive survivorship benefits is a matter of
benefits, namely: (a) That the Ee must be at the evidence. It no longer prescribes a sweeping
place where his work requires him to be; (b) That classification that unduly prejudices the legitimate
the Ee must have been performing his official surviving spouse and defeats the purpose for which
functions; and (c) That the injury is sustained Congress enacted the social legislation. (Alcantara,
elsewhere, the Ee must have been executing an Book II; GSIS v. Montesclaros, G.R. No. 146494, 14 July
order for the Er, it is not difficult to understand then 2004)
why Zhop’s claim was denied by the GSIS. (Tancinco
v. GSIS, G.R. No. 132916, 16 Nov. 2001) FUNERAL BENEFITS

In the present case, Odeck was resting at his house Funeral Benefits
when the incident happened; thus, he was not at a
place where his work requires him to be. Although The funeral benefit is in the amount of P18,000. It is
at the time of his death Odeck was performing a intended to defray the expenses incident to the
police function, it cannot be said that his death burial and funeral of the deceased member,
occurred elsewhere other than the place where he pensioner, or retiree under R.A. No. 660, R.A. No.
was supposed to be because he was executing an 1616, P.D. 1146, and R.A. No. 8291. It is payable to the
order for his Er. members of the family of the deceased, in the order
which they appear:
Q: Luis, a PNP officer, was off duty and resting at
home when he heard a scuffle outside his house. 1. Legitimate spouse;
He saw two of his neighbors fighting and he 2. Legitimate child who spent for the funeral
rushed out to pacify them. One of the neighbors services; or
shot Luis by mistake, which resulted in Luis' 3. Any other person who can show
death. Marian, Luis' widow, filed a claim with the unquestionable proof that he has borne the
GSIS seeking death benefits. The GSIS denied the funeral expenses of the deceased.
claim on the ground that the death of Luis was
not service related as he was off duty when the Payment of Funeral Benefits
incident happened. Is the GSIS correct? (2015
BAR) Funeral benefits will be paid upon the death of:

A: NO. The GSIS is not correct. Luis, a policeman, just 1. An active member;
like a soldier, is covered by the 24-Hour Duty Rule.
He is deemed on round-the-clock duty unless on

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2. A member who has been separated from the Optional Life Insurance Coverage
service but is entitled to future separation or
retirement benefits; 1. A member may at any time apply for himself
and/or his dependents an insurance and/or
3. A member who is a pensioner (excluding pre-need coverage embracing:
survivorship pensioners); or
a. Life;
4. A retiree who is at the time of his retirement b. Memorial plans;
was of pensionable age, at least 60 years old, c. Health;
who opted to retire under R.A. No. 1616. (An d. Education;
act further amending Sec. 12, C.A. 186, as e. Hospitalization; or
amended, by prescribing two other modes of f. Other plans as maybe designed by GSIS
retirement and for other purposes).
2. Any Er may apply for group insurance
LIFE INSURANCE coverage for its Ees. (Sec. 26, R.A. No. 8291)

Classes of Life Insurance Coverage under the Prescriptive Period to Claim the Benefits
GSIS Law
GR: Four (4) years from the date of contingency.
1. Compulsory Life Insurance; and
2. Optional Life Insurance. XPNs: Life insurance and retirement (Sec. 28, R.A.
No. 8291)
NOTE: The plans may be endowment or ordinary
life. LIMITED PORTABILITY LAW
R.A. No. 7699
Compulsory Life Insurance Coverage
Purpose
All Ees including the members of the Judiciary and
the Constitutional Commissioners, but excluding R.A. No. 7699 was enacted to enable those from the
Members of the AFP, PNP, BFP and BJMP, shall, private sector who transfer to the government
under such terms and conditions as may be service or from the government service to the
promulgated by the GSIS, be compulsorily covered private sector to combine their years of service and
with life insurance, which shall automatically take contributions which have been credited with the SSS
effect as follows: or GSIS, as the case may be, to satisfy the required
number of years of service for entitlement to the
1. Those employed after the effectivity of this Act, benefits under the applicable laws. (Chan, 2019)
their insurance shall take effect on the date of
their employment; Coverage

2. For those whose insurance will mature after the Applies to all worker-members of the GSIS and/or
effectivity of this Act, their insurance shall be SSS who transfer from the public sector to private
deemed renewed on the day following the sector or vice-versa, or who wish to retain their
maturity or expiry date of their insurance; and membership in both Systems. (Sec. 1, Rule 1, IRR, R.A
No. 7699)
3. For those without any life insurance as of the
effectivity of this Act, their insurance shall take Portability
effect following said effectivity. (Sec. 24, R.A. No.
8291) Portability refers to the transfer of funds for the
account and benefit of a worker who transfers from

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 III. EMPLOYMENT PROPER
one system to the other. (Sec. 2(b), R.A. No. 7699) Totalization shall apply in the following
instances:
Limited Portability Rule
1. If a worker is not qualified for any benefits
A covered worker who transfers employment from from both System;
one sector to another or is employed on both
sectors, shall have creditable services or 2. If a worker in the public sector is not
contributions on both Systems credited to his qualified for any benefits in the GSIS; or
service or contribution record in each of the
Systems and shall be totalized for purposes of old- 3. If a worker in the private sector is not
age, disability, survivorship, and other benefits in qualified for any benefits from the SSS.
either or both Systems. (Sec. 3, R.A. No. 7699)
NOTE: For purposes of computation of benefits,
All contributions paid by such member personally, totalization shall apply to all cases so that the
and those that were paid by his Ers to both Systems contributions made by the worker-member in both
shall be considered in the processing of benefits, Systems shall provide maximum benefits which
which he can claim from either or both Systems. otherwise will not be available. In no case shall the
(Sec. 4, R.A. No. 7699) contribution be lost or forfeited. (Sec 3, Rule V, IRR,
R.A. N. 7699)
NOTE: This is advantageous to the SSS and GSIS
members for purposes of death, disability or Overlapping periods of creditable services in both
retirement benefits. In the event the Ees transfer Systems shall be credited only one for purposes of
from the private sector to the public sector, or vice- totalization. (Sec. 7, Rule V, IRR, R.A. 7699)
versa, their creditable employment services and
contributions are carried over and transferred as If after the totalization, the worker-member still
well. does not qualify for any benefit, the member will
then get whatever benefits correspond to his/her
Totalization contributions in either or both Systems. (Sec. 4, Rule
V, IRR, R.A. No. 7699)
Totalization refers to the process of adding up the
periods of creditable services or contributions under Creditable Services
each of the Systems, SSS or GSIS, for the purpose of
eligibility and computation of benefits. (Sec. 2(e), R.A. I. For the public sector, the following shall be
No. 7699) considered creditable services:

All services rendered or contributions paid by a 1. All previous services rendered by an

member personally or paid by the Ers to either official/Ee pursuant to an appointment
System shall be considered in the computation in the whether permanent, provisional or
computation of benefits, which may be claimed from temporary;
either or both Systems. (Sec. 2, Rule V, IRR, R.A. No.
7699) 2. All previous services rendered by an
official/Ee pursuant to a duly approved
NOTE: The amount of benefits to be paid by one appointment to a position in the Civil
System shall be in proportion to the services Service with compensation or salary;
rendered/periods of contribution made to that
System. (Sec. 2, Rule V, IRR, R.A. No. 7699) 3. The period during which an official/Ee was
on authorized sick leave of absence without
exceeding one year;

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4. The period during which an official or Ee the Government Service Insurance System
was out of the service as a result of illegal (GSIS). What would you advise? (2014 BAR)
termination of his service as finally decided
by the proper authorities; and A: YES. Under RA 7699, otherwise known as the
Limited Portability Law, one may combine his years
5. All previous services with compensation or of service in the private sector represented by his
salary rendered by elective officials. (Sec. contributions to the SSS with his government
1(f), Rule III, IRR, R.A. No. 7699) service and contributions to the GSIS. The
contributions shall be totalized for purposes of old-
II. For private sector, the periods of contribution age, disability, survivorship and other benefits in
shall refer to the periods during which a person case the covered member does not qualify for such
renders services for an Er with compensation benefits in either or both Systems without
or salary and during which contributions were totalization.
paid to SSS. (Sec. 1(g), Rule III, IRR R.A. No. 7699)
3. DISABILITY AND DEATH BENEFITS
NOTE: A self-employed person shall be considered
an Ee and Er at the same time. (Sec. 1(g), Rule III, IRR,
a) LABOR CODE
R. A. No. 7699)

Employees’ Compensation Program (ECP)

The benefits covered under the law are the
following:
The State shall promote and develop a tax-exempt
ECP whereby the Ees and their dependents, in the
1. Old-age benefit;
event of work-connected disability or death, may
2. Disability benefit;
promptly secure adequate income benefit and
3. Survivorship benefit;
medical related benefits. (Art. 172, LC)
4. Sickness benefit;
5. Medicare benefit, provided that the member
The basic features of the new program are:
shall claim said benefit from the System
where he was last a member; and
1. Integration of benefits;
2. Increase in benefits;
6. Such other benefits common to both System
3. Prompt payment of income benefits;
that may be availed of through totalization.
4. Legal services dispensed with;
(Sec. 1(j), Rule III, IRR, R.A. No. 7699)
5. Wider coverage; and
6. A more balanced rehabilitation program.
The System or Systems responsible for the payment
(Poquiz, 2019)
of money benefits due to a covered worker shall
release the same within 15 working days from
receipt of the claim, subject to the submission of the Going and Coming Rule
required documents and availability if the complete
GR: In the absence of special circumstances, an
Ee/Er records in the System. (Sec. 2, Rule IV, IRR, R.A.
employee injured in, going to, or coming from his
No. 7699)
place of work is excluded from the benefits of
workmen's compensation acts. ||| (Iloilo Dock &
Q: Luisito has been working with Lima Land for
Engineering Co. v. Workmen's Compensation
20 years. Wanting to work in the public sector,
Commission, G.R. No. L-26341, [November 27, 1968],
Luisito applied for and was offered a job at
135 PHIL 95-122)
Livecor. Before accepting the offer, he wanted to
consult you whether the payments that he and
Lima Land had made to the Social Security
System (SSS) can be transferred or credited to

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XPNs: Under the Labor Code, the sickness or death of
an employee, to be compensable, must have
1. Where the employee is proceeding to or resulted from an illness either definitely
from his work on the premises of his accepted as an occupational disease by the
employer; Employees' Compensation Commission, or
caused by employment subject to proof that the
2. Where the employee is about to enter or risk of contracting the same is increased by
about to leave the premises of his employer working conditions.
by way of the exclusive or customary
means of ingress and egress also known as Is the serious disease Rosa contracted during
the Proximity Rule; her trip to Africa compensable? Explain your
answer. (2017 BAR)
3. Where the employee is charged, while on
his way to or from his place of employment A: For sickness and the resulting disability to be
or at his home, or during his employment, compensable, the sickness must be the result of an
with some duty or special errand occupational disease listed under Annex A ofthe
connected with his employment; and Amended Rules on Employees'Compensation with
the condition set therein satisfied; otherwise, proof
4. where the employer, as an incident of the must be shown that the risk of contracting the
employment, provides the means of disease is increased by the working condition. The
transportation to and from the place of burden of proof is upon Rosa. No proof was
employment. (Iloilo Dock & Engineering Co. presented by Rosa to substantiate the foregoing.
v. Workmen's Compensation Commission, Moreover, it is required that the sickness and the
G.R. No. L-26341, 27 Nov. 1968) resulting injury must have arisen out of or in the
course of employment. In the present case, Rosa
NOTE: For an injury to be compensable it is not contracted the disease while on vacation leave.
important that the cause therefore shall have taken Consequently, the disease contracted by her in
place within the place of employment. As long as the Africa during her vacation leave is not compensable.
worker acted within the purview of his (De La Rea v. Employees' Compensation Commission,
employment, performing an act reasonably G.R. No. L-66129, 17 Jan. 1986)
necessary or incidental thereto, the injury sustained
by reason thereof falls within the protection of the State Insurance Fund
law regardless of the place of injury (Lopez v. ECC,
G.R. No. 90267, 21 Dec. 1993) The State Insurance Fund (SIF) is built up by the
contributions of Ers based on the salaries of their
Q: Rosa was granted vacation leave by her Ees as provided under the Labor Code. (Chan, 2019)
employer to spend three weeks in Africa with
her family. Prior to her departure, the General It is exclusively used for payment of the Ee’s
Manager of the company requested her to visit compensation benefits and no amount thereof is
the plant of a client of the company in Zimbabwe authorized to be used for any other purpose. (Art.
in order to derive best manufacturing practices 185, LC)
useful to the company. She accepted the request
because the errand would be important to the Beneficiaries under the Labor Code
company and Zimbabwe was anyway in her
itinerary. It appears that she contracted a I. Primary Beneficiaries
serious disease during the trip. Upon her return,
she filed a claim for compensation, insisting that 1. The legitimate spouse until he remarries;
she had contracted the disease while serving the and
interest of her employer.

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2. Legitimate, legitimated, legally adopted or not from the time the illness was discovered.
acknowledged natural children, who are (ECC v. Sanico, G.R. No. 134028, 17 Dec. 1999)
unmarried not gainfully employed, not
over 21 years of age, or over 21 years of 2. Injury – from the time it was sustained.
age provided that he is incapacitated and
incapable of self-support due to physical 3. Death – from the time of death of the covered Ee.
or mental defect, which is congenital or (Sec. 6(a), Rule VII, Amended Rules on EC)
acquired during minority.

NOTE: A dependent acknowledged natural child DISABILITY BENEFITS

shall be considered as a primary beneficiary only
when there are no other dependent children who are Disability refers to the loss or impairment of a
qualified and eligible for monthly income benefit; physical or mental function resulting from injury or
provided finally, that if there are two or more sickness. (Art. 173(n), LC)
acknowledged natural children, they shall be
counted from the youngest and without substitution, The purpose of the law in providing benefits to the
but not exceeding five (5). (Sec. 1(b), Rule XV, injured or sick Ee during temporary disability is to
Amended Rules on Ees’ Compensation (EC)) compensate him for what he might have earned
during the period while his injury or sickness is
II. Secondary beneficiaries being medically treated. (Chan, 2019)

1. The legitimate parents wholly dependent Kinds of Disability

upon the Ee for regular support; and
There are three (3) kinds of disability benefits
2. The legitimate descendants and under the Labor Code:
illegitimate children who are unmarried,
not gainfully employed, and not over 21 a. Temporary total disability (Art. 197, LC)
years of age, or over 21 years of age b. Permanent total disability (Art. 198, LC)
provided that he is incapacitated and c. Permanent partial disability (Art. 199, LC)
incapable of self- support due to physical
or mental defect which is congenital or NOTE: The compensation for the disabilities is not
acquired during minority. (Sec. 1(c), Rule mutually exclusive. For instance, recovery of
XV, Amended Rules on EC) compensation for temporary total disability or
permanent partial disability shall not preclude
Prescriptive Period recovery for permanent total disability. (Chan,
2019)
No claim for compensation shall be given due course
unless said claim is filed with the System within a. Temporary Total Disability (TTD)
three (3) years from the time the cause of action
accrued. (Sec. 6(a), Rule VII, Amended Rules on EC) A total disability is temporary if as a result of the
injury or sickness, the Ee is unable to perform any
Reckoning Date of the Three-Year Prescriptive gainful occupation for a continuous period not
Period exceeding 120 days, or where the injury or sickness
still requires medical attendance beyond 120 days
1. Sickness – from the time the Ee lost his earning but not exceed 240 days from the onset of disability.
capacity. (Sec. 2(a), Rule VII, Amended Rules on EC)

NOTE: The three (3) years have to be counted

from the time the Ee lost his earning capacity,

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Conditions for Entitlement Effect of Relapse of Illness

An Ee shall be entitled to an income benefit for After the Ee has fully recovered from an illness as
temporary total disability if all the following duly certified to by the attending physician, the
conditions are satisfied: period covered by any relapse he suffers, or
recurrence of his illness, which results in disability
1. He has been duly reported to the System; and is determined to be compensable, shall be
considered independent of, and separate from, the
2. He sustains the temporary total disability as period covered by the original disability in the
a result of the injury or sickness; and computation of his income benefit for temporary
total disability. (Sec. 2(b), Rule X, Amended Rules on
3. The System has been duly notified of the EC)
injury or sickness which caused his
disability. b. Permanent Total Disability (PTD)

NOTE: His Er shall be liable for the benefit if such A disability is total and permanent if as a result of
illness or injury occurred before the Ee is duly the injury or sickness, the Ee is unable to perform
reported for coverage to the System. (Sec. 1, Rule X, any gainful occupation for a continuous period
Amended Rules on EC) exceeding 120 days except when the disability not
exceeding 240 days is declared as temporary total
Period of Entitlement disability. (Sec. 2(b), Rule VII, Amended Rules on EC)

The income benefit equivalent to 90% of his average Total disability means disablement of an Ee to earn
daily salary credit shall be paid beginning on the first wages in the same kind of work, or work of similar
day of such disability. If caused by an injury or nature that he was trained for or accustomed to
sickness, it shall not be paid longer than 120 perform, or any kind of work which a person of his
consecutive days except when such injury or mentality and attainment could do. (Philippine
sickness still requires medical attendance beyond Transmarine Carriers, Inc. v. NLRC, G.R. No. 123891,
120 days but not to exceed 240 days from onset of 28 Feb. 2001)
disability, in which case, benefit shall be paid.
NOTE: In disability compensation, it is not the
However, the System may declare the total and injury per se which is compensated but the
permanent status at any time after 120 days of incapacity to work. (Bejerano v. ECC, G.R. No. 84777,
continuous temporary total disability as may be 30 Jan. 1992)
warranted by the degree of actual loss or
impairment of physical or mental functions as Conditions for Entitlement
determined by the System. (Sec. 2(a), Rule X,
Amended Rules on EC) An Ee is entitled to an income benefit for permanent
total disability if all of the following conditions are
NOTE: An Ee shall submit to the System a monthly satisfied:
medical report on his disability certified by his
attending physician, otherwise, his benefit shall be 1. He has been duly reported to the System;
suspended until such time that he complies with
this requirement. (Sec. 5, Rule IV, Amended Rules on 2. He sustains the permanent total disability as
EC) a result of the injury or sickness; and

3. The System has been duly notified of the

injury or sickness which caused his
disability.

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NOTE: His Er shall be liable for the benefit if such 1. Failure to present himself for examination
illness or injury occurred before the Ee is duly at least once a year upon notice by the
reported for coverage to the System. (Rule XI, System;
Amended Rules on EC)
2. Failure to submit a quarterly medical
Total Disabilities Deemed Permanent report certified by his attending physician;

The following total disabilities shall be considered 3. Complete or full recovery from his
permanent: permanent disability; or

1. Temporary total disability lasting 4. Upon being gainfully employed. (Sec. 2(c),
continuously for more than 120 days, Rule XI, Amended Rules on EC)
except as otherwise provided for temporary
total disability; Benefit for Dependent Children

2. Complete loss of sight of both eyes; Each dependent child, not exceeding five (5),
counted from the youngest and without
3. Loss of two limbs at or above the ankle or substitution, shall be entitled to ten percent of the
wrist; monthly income benefit of the Ee. This rule,
however, shall not apply to causes of action which
4. Permanent complete paralysis of two limbs; accrued before 1 May 1978. (Sec. 4, Rule XI, Amended
Rules on EC)
5. Brain injury resulting in incurable
imbecility and insanity; and Q: Ronnie was a “third engineer officer" on
board the vessel for a period of 10 months. On
6. Such cases as determine by the System and 13 Oct. 2010, petitioner complained of severe
approved by the Commission. (Sec. 1, Rule stomach pains and was confined in Singapore. A
XI, Amended Rules on EC) day after, Dr. Noel Yao, his attending physician,
declared him to be fit to rejoin the vessel with
Period of Entitlement rest on board for three more days. When his
condition did not improve, he was
The full month income benefit shall be paid for all recommended for repatriation.
compensable months of disability. (Sec. 2(a), Rule XI,
Amended Rules on EC) He arrived in Manila on 17 Oct. 2010. The
following day, he was referred for a medical
After the benefit under the EC shall has ceased as check-up at the company's accredited clinic
provided under the preceding paragraph, and if the where the company physician, diagnosed him as
Ee is otherwise qualified for benefit for the same suffering from "cholecystlithiasis and r/o
disability under another law administered by the pancreatic pseudo cyst," with a
System, he shall be paid a benefit in accordance with recommendation for surgery. About four
the provisions of that law. This paragraph applies to months later, or exactly 134 days from his
contingencies which occurred prior 01 May 1978. arrival in Manila, he again underwent an
(Sec. 2(b), Rule XI, Amended Rules on EC) examination. This time, he was declared by the
company physician, as "fit to work”.
NOTE: Except as otherwise provided for in other
laws, decrees, orders or letter of instructions, the Ronnie filed a complaint against his contracting
monthly income benefit shall be guaranteed for five agency for the payment of his disability benefits,
(5) years and shall be suspended under any of the sickness allowance, refund of medical expenses,
following conditions: as well as damages and attorney's fees alleging

U N IV E R S I T Y O F S A N T O T O M A S 200
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 III. EMPLOYMENT PROPER
that he contracted the illness during the term of needed. (Singson v. Arktis Maritime Corp., G.R. No.
his employment contract, he maintained that his 214542, 13 Jan. 2021, as penned by J. Hernando)
illness was work-related. Will his claim
prosper?
A: NO. The mere lapse of the 120-day period under
Art. 198(c)(1) of the LC does not automatically give c. Permanent Partial Disability (PPD)
rise to a cause of action for a claim of PTD benefits.
A disability is partial and permanent if as a result of
The seafarer, upon sign-off from his vessel, must injury or sickness, the Ee suffers a permanent partial
report to the company-designated physician within loss of the use of any part of his body. (Sec. 2(c), Rule
three (3) days from arrival for diagnosis and VII, Amended Rules on EC)
treatment. For the duration of the treatment but in
no case to exceed 120 days, the seaman is on NOTE: An Ee’s disability may not manifest fully at
temporary total disability as he is totally unable to one precise moment in time but rather over a period
work. He receives his basic wage during this period of time. It is possible that an injury which at first
until he is declared fit to work or his temporary considered as temporary may later become
disability is acknowledged by the company to be permanent, or who suffers a partial disability
permanent, either partially or totally, as his becomes total and permanently disabled for the
condition is defined under the POEA Standard same cause. (GSIS v. CA, G.R. No. 117572, 29 Jan. 1998)
Employment Contract and by applicable Philippine
laws. If the 120 days initial period is exceeded and Conditions for Entitlement
no such declaration is made because the seafarer
requires further medical attention, then the An Ee is entitled to an income benefit for permanent
temporary total disability period may be extended partial disability if all of the following conditions are
up to a maximum of 240 days, subject to the right of satisfied:
the Er to declare within this period that a
permanent partial or total disability already exists. 1. He has been duly reported to the System;
The seaman may of course also be declared fit to
work at any time such declaration is justified by his 2. He sustains the permanent partial disability
medical condition. as a result of the injury or sickness; and

In the present case, since the facts do not show that 3. The System has been duly notified of the
there was no declaration as to Ronnie’s fitness to injury or sickness which caused his
work or as to the permanent and total status of his disability.
disability within the 120-day period but his sickness
required medical treatment beyond the 120-day NOTE: His Er shall be liable for the benefit if such
period, the temporary total disability period was illness or injury occurred before the Ee is duly
extended up to a maximum of 240 days, subject to reported for coverage to the System.
the right of his Er to declare within this period that
a permanent partial or total disability already exists. For purposes of entitlement to income benefits, a
covered Ee shall continue to receive benefits
In this connection, it must be emphasized that the provided thereunder even if he is gainfully employed
facts show that Ronnie never presented any and receiving his wages or salary. (Sec. 1(b), Rule XII,
declaration to the effect that his disability is total Amended Rules on EC)
and permanent. A recommendation to undergo
surgery does not necessarily prove that petitioner Period of Entitlement
was not fit to work. Rather, such recommendation
merely proves that further medical treatment is The monthly income benefit shall be paid beginning
on the first month of such disability, but no longer

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than the designated number of months in the 6. Loss of only the first joint shall be
following schedule: (Art. 199, LC) considered a loss of one-half of the whole
finger or toe; and
Complete and Permanent Number of
Loss of the Use of Months 7. Other permanent partial disabilities shall
One thumb 10 be determined by the Medical Officer of the
One index finger 8 System.
One middle finger 6
One ring finger 5 DEATH BENEFITS
One little finger 3
One big toe 6 Compensable death refers to death which is the
One toe 3 result of a work-related injury or sickness. (Chan,
One hand 39 2019)
One arm 50
Conditions for Entitlement
One foot 31
One leg 46
The beneficiaries of a deceased Ee shall be entitled
One ear 10
to an income benefit if all of the following conditions
Both ears 20
are satisfied:
Hearing of one ear 10
Hearing of both ears 50
1. The Ee has been duly reported to the
Sight of one eye 25 System;
2. He died as a result of an injury or sickness;
A worker who sustained work-related injuries that and
resulted to functional loss and/or physical loss of 3. The System has been duly notified of his
any part of this body shall be granted Temporary death as well as the injury or sickness which
Total Disability (TTD) and Permanent Partial caused his death.
Disability (PPD) benefits successively. Any earlier
compensation for TTD that may have been paid to an NOTE: His Er shall be liable for the benefit if such
injured worker shall not be deducted from the PPD illness or injury occurred before the Ee is duly
benefit that may be later granted to him. reported for coverage to the System.
NOTE: Under Sec. 2(b), Art. XII, Amended Rules on EC:
If the Ee has been receiving monthly income benefit
1. Loss of a wrist shall be considered a loss of for PTD at the time of his death, the surviving spouse
a hand; must show that the marriage has been validly
subsisting at the time of his disability. In addition,
2. Loss of an elbow shall be considered a loss the cause of death must be a complication or natural
of the arm; consequence of the compensated PTD. (Sec. 1, Art.
XIII, Amended Rules on EC)
3. Loss of an ankle shall be considered a loss
of the foot; Period of Entitlement

4. Loss of a knee shall be considered a loss of I. For Primary Beneficiaries

the leg;
1. The monthly income benefit shall be paid
5. Loss of more than one joint shall be beginning at the month of death and shall
considered a loss of the whole finger or toe; continue to be paid as long as the beneficiaries
are entitled thereto. With respect to the
surviving legitimate spouse, the qualification is

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 III. EMPLOYMENT PROPER
that he/she has not remarried. For dependent counted from the children of each wife of
children, the qualifications are that they must the Muslim. (Board Resolution No. 14-07-34,
be: 29 July 2014)

a. Unmarried; Presumptive Death

b. Not gainfully employed; and
c. Over 21 years of age provided he/she is Under ECC Circular No. 15-01-20, 20 Jan. 2015, the
incapable of self-support due to a following are the series of events which should be
physical or mental defect which is considered in the grant of EC benefits:
congenital or acquired during minority.
a. The word “missing” refers to unknown fate
2. The monthly income benefit shall be guaranteed or there is no trace of whereabouts of a
for five (5) years which in no case shall be less worker, Ee and uniformed personnel while
than P15,000.00. Thereafter, the beneficiaries he/she is in the performance of his/her
shall be paid the monthly income benefit for as duties during the calamities or fatal events;
long as they are entitled thereto. (Sec. 2(A), Rule
XIII, Amended Rules on EC) b. The worker, Ee or uniformed personnel was
not seen or hear from after the lapse of four
II. For Secondary Beneficiaries: years from the occurrence of the incident;

The income benefit shall be 60 times the monthly c. The disappearance of the worker, Ee or
income benefit of a primary beneficiary, which in no uniformed personnel gives rise to
case be less than P15,000.00, which shall likewise be presumption of death; and
paid in monthly pension. (Sec. 2(B), Rule XIII,
Amended Rules on EC) d. The death of the worker, Ee or uniformed
personnel arises out of and in the course of
NOTE: If the deceased has no ben eficiaries at the employment.
time of his death, the death benefit shall accrue to the
Ees Compensation Fund. (Sec. 2(C), Rule XV, Amended b) POEA-STANDARD EMPLOYMENT CONTRACT
Rules on EC)
For an occupational disease and the resulting
In relation thereto, the following are the guidelines disability or death to be compensable, all of the
on the grant of EC death benefits to qualified wives following conditions must be satisfied:
and children beneficiaries of Muslims:
1. The seafarer's work must involve the risks
1. The basic monthly pension shall be divided described in Sec. 32-A of the POEA-SEC;
equally among the surviving wives;
2. The disease was contracted as a result of the
2. Upon the death or remarriage of any of the seafarer's exposure to the described risks;
wives, her basic monthly pension shall be
equally redistributed to the remaining 3. The disease was contracted within a period of
wives; and exposure and under such other factors
necessary to contract it; and
3. The qualified dependent children not
exceeding 5 beginning with the youngest 4. There was no notorious negligence on the part
and without substitution, who are entitled of the seafarer. (Romana v. Magsaysay
to dependent’s pension, shall be counted Maritime Corporation, G.R. No. 192442, 09 Aug.
from among the collective number of 2017)
children of the wives of the Muslim and not

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DISABILITY BENEFITS time he is declared fit or the degree of his
disability has been established by the
Elements of a Compensable Injury company-designated physician;

1. The injury or illness is work-related; and 3. The seafarer shall also receive sickness
2. It occurred during the term of the seafarer’s allowance from his Er in an amount
contract. equivalent to his basic wage computed
from the time he signed off until he is
Kinds of Disability declared fit to work or the degree of
disability has been assessed by the
1. Permanent disability is the inability of a company-designated physician. (Sec. 20(a)
worker to perform his job for more than 120 2010 POEA-SEC)
days, regardless of whether or not he loses the
use of any part of his body. NOTE:

2. Total disability means the disablement of an Ee a. The period within which the seafarer
to earn wages in the same kind of work of shall be entitled to his sickness
similar nature that he was trained for, allowance shall not exceed 120 days.
accustomed to perform, or any kind of work
which a person of his mentality and attainments b. Payment of the sickness allowance
could do. shall be made on a regular basis, but
not less than once a month.
A total disability does not require that the Ee be
completely disabled, or totally paralyzed. What is 4. The seafarer shall be entitled to
necessary is that the injury must be such that the Ee reimbursement of the cost of medicines
cannot pursue his or her usual work and earn from prescribed by the company-designated
it. A total disability is considered permanent if it physician; and
lasts continuously for more than 120 days.

Liabilities of the Employer When the Seafarer 5. In case of permanent total or partial
Suffers Work-Related Injury or Illness During disability of the seafarer caused by either
the Term of His or Her Contract injury or illness, the seafarer shall be
compensated in accordance with the
1. The Er shall continue to pay the seafarer his schedule of benefits enumerated in Sec. 32
wages during the time he is on board the of the POEA-Standard Employment Contract
ship; (POEA-SEC).

2. If the injury or illness requires medical In Case Treatment of the Seafarer is on an Out-
and/or dental treatment in a foreign port, Patient Basis as Determined by the Company-
the Er shall be liable for the full cost of such designated Physician
medical, serious dental, surgical and
hospital treatment as well as board and 1. The company shall approve the appropriate
lodging until the seafarer is declared fit to mode of transportation and accommodation;
work or to be repatriated.
2. The reasonable cost of actual traveling
NOTE: However, if after repatriation, the expenses and/or accommodation shall be paid
seafarer still requires medical attention subject to liquidation and submission of official
arising from said injury or illness, he shall receipts and/or proof of expenses; and
be so provided at cost to the Er until such

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 III. EMPLOYMENT PROPER
3. The seafarer shall submit himself to a post- within three working days upon return; (2) the
employment medical examination by a injury must have existed during the term of the
company-designated physician within 3 seafarer's employment contract; and (3) the injury
working days upon his return. must be work-related.

XPN: When he is physically incapacitated to do When he arrived in the Philippines, Caraan was
so, in which case, a written notice to the agency already ill and no longer in good physical condition
within the same period is deemed as to go back to Manila for treatment. Immediately,
compliance. petitioner was subjected to series of laboratory
tests to properly diagnose his ailment.
NOTE: In the course of the treatment, the seafarer
shall also report regularly to the company- The treatment by the health card-accredited
designated physician specifically on the dates as doctors served the equivalent post-employment
prescribed by the company-designated physician medical examination to show that petitioner's
and agreed to by the seafarer. Failure of the seafarer illness existed during his employment. It is
to comply with the mandatory reporting undisputed that Caraan had been with Grieg PH
requirement shall result in his forfeiture of the right since 2006. Caraan’s illness, renal cell carcinoma,
to claim the above benefits. Non-compliance with could not have occurred overnight after
the 3-day reporting requirement upon return repatriation. In the case of petitioner, his kidney
results in the forfeiture of an employee’s cancer gradually progressed while he was
entitlement to disability compensation. (Sec. 20- employed with Grieg PH until it manifested when
A(3), 2010 POEA-SEC) petitioner complained of pain in urinating and
discharging blood in his urine. Hence, at any time
Q: Caraan’s duties as a motorman on board MV during his 8-year employment with Grieg PH,
Star Loen involved strenuous physical activities petitioner was already suffering from this illness
for his 18-hour shift, and exposed him to all while at sea.
kinds of noxious gases, harmful fumes and
excessive noise while inside the engine room. Petitioner had likewise proved that his working
Due to his working conditions and dietary conditions aggravated his kidney ailment. As found
provision, he experienced pain while urinating by the arbitrators, petitioner had sufficiently
and discharged blood in his urine. Eventually, he established that his working conditions on board
was declared unfit to work and medically the vessel increased the risk of contracting the
repatriated to the Philippines. Instead of being kidney disease. Grieg PH failed to dispute this and
fetched by his Er, he just went straight home to did not even offer any controverting evidence.
Bataan. His wife informed Grieg PH via mobile (Caraan v. Grieg Philippines, Inc., G.R. No. 252199, 05
phone that he could not personally report to the May 2021)
office due to his medical condition. Caraan got
himself examined, where it was revealed that Q: Gonzales, while on board the general cargo
there is a mass in his left kidney. Upon transfer vessel Star Florida, experienced "shortness of
to the National Kidney and Transplant Institute breath, pain in his left leg, fatigue, fever and
(NKTI), his left kidney was surgically removed, headaches." The following month, his past
where it was confirmed that he had renal cell symptoms returned with the added symptom of
carcinoma. black tarry stools. He was initially diagnosed
with "pancytopenia suspect aplastic anemia."
Is Caraan entitled to disability benefits? This caused his further medical attention as
Gonzales was repatriated in the Philippines.
A: YES. Under Sec. 20(B) of the POEA-SEC, these are
the requirements for compensability: (1) the
seafarer must have submitted to a mandatory PEME

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The company physicians opined that Gonzales' examination, Manansala was required to
leukemia was not work-related. He sought a disclose information regarding all existing and
second opinion from an independent physician, prior medical conditions. Manansala's
Dr. Emmanuel Trinidad, who certified that his examination certificate indicates that he denied
leukemia was work-related. Gonzales claimed having hypertension and diabetes, specifically
for disability benefits against Grieg Philippines, answering "NO."
Inc. but denied the same on the ground that
Gonzales was not able to substantially prove the On 30 May 2010, while on board the vessel,
relation between his illness and his former Manansala suffered a stroke. Because of this,
position as an Ordinary Seaman. Manansala was repatriated on 08 June 2010. He
was confined at the De Los Santos Medical
Can Gonzales claim disability benefits against Center from 10 June 2010 to 23 June 2010,
Grieg Philippines, Inc.? under the primary care of company-designated
physician, Dr. Barrairo. While under Dr.
A: YES. Settled is the rule that for illness to be Barrairo's care, he "repeatedly denied that he
compensable, it is not necessary that the nature of had any past history of diabetes and
the employment be the sole and only reason for the hypertension."
illness suffered by the seafarer. It is sufficient that
there is a reasonable linkage between the disease On 21 Oct. 2010, Manansala filed a Complaint
suffered by the Ee and his work to lead a rational against the respondents for total and permanent
mind to conclude that his work may have disability benefits. Two months after he filed his
contributed to the establishment or, at the very complaint, Dr. San Luis, issued a medical opinion
least, aggravation of any pre-existing condition he stating that Manansala must be considered
might have had. permanently disabled. The same opinion
indicated that Manansala admitted to having
Gonzales was able to satisfy the conditions under had a long history of hypertension and diabetes.
the Sec. 32-A of the 2000 POEA-SEC and establish a
reasonable linkage between his job as an Ordinary Is Manansala entitled to total and permanent
Seaman and his leukemia. Gonzales provided his disability benefits occasioned by work-related
functions as an Ordinary Seaman aboard Star illnesses?
Florida. Among others, his tasks included removing
rust accumulations and refinishing affected areas of A: NO. Manansala is not entitled to total and
the ship with chemicals and paint to retard the permanent disability benefits. Sec. 20(E) of the
oxidation process. This meant that he was POEA-SEC bars the compensability of disability
frequently exposed to harmful chemicals which arising from pre-existing illness when attended by
could have also contributed to Gonzales' leukemia. an Ee’s fraudulent misrepresentation. Petitioner
knowingly and fraudulently misrepresented
It is also not disputed that he contracted leukemia himself as not afflicted with hypertension and
only while he was onboard Star Florida since he was diabetes during his PENE and after repatriation
certified to be fit for sea duty prior to boarding and while being treated by the company-designated
his leukemia was not genetic in nature. (Grieg physician. (Manansala v. Marlow Navigation Phils.,
Philippines, Inc. v. Gonzales, G.R. No. 228296, 26 July Inc., G.R. No. 208314, 23 Aug. 2017)
2017)

Q: Manansala’s services were engaged by

Marlow Navigation Phils., Inc, for him to serve as
a fitter on a vessel. Before boarding the vessel,
Manansala underwent a Pre-Employment
Medical Examination (PEME). In his

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When a Seafarer May be Allowed to Pursue an after the lapse of said periods. (C.F. Sharp Crew
Action for Total or Permanent Disability Management, Inc. v. Taok, G.R. No. 193679, 18
Benefits July 2012)

1. The company-designated physician failed to Q: Mabunay was hired by Sharpe Sea as an oiler
issue a declaration as to his fitness to engage in for a period of 9 months. A day after boarding,
sea duty or disability even after the lapse of the Mabunay slipped and hit his back on the
120-day period and there is no indication that purifier, while he was cleaning. When he awoke,
further medical treatment would address his his back was numb and he had difficulty getting
temporary total disability, hence, justify an up. Despite the persistent pain in his back,
extension of the period to 240 days; Mabunay continued working for 2 days, until the
Chief Engineer allowed him to have a medical
2. 240 days had lapsed without any certification checkup when the ship docked in Nanjing, China.
issued by the company-designated physician; He was declared unfit to work by his attending
physician and was eventually repatriated.
3. The company-designated physician declared
that he is fit for sea duty within the 120-day or On 30 Apr. 2009, Mabunay reported to Sharpe
240-day period, as the case may be, but his Sea's office and was told to report to a company-
physician of choice and the doctor chosen designated physician. He was diagnosed with
under Sec. 20-B(3) of the POEA-SEC are of a "Cervical Spondylosis; Thoracolumbar
contrary opinion; Spondylosis; and Mild chronic compression
fracture". The doctor recommended that
4. The company-designated physician Mabunay undergo a discectomy. On 24 Nov.
acknowledged that he is partially permanently 2009, Mabunay underwent surgery and was
disabled but other doctors who he consulted, on observed that he "tolerated the procedure well."
his own and jointly with his Er, believed that his
disability is not only permanent but total as Mabunay filed a complaint against Sharpe Sea,
well; Monte Carlo, and Florem for the payment of his
total disability benefits Mabunay sought the
5. The company-designated physician recognized opinion of third doctor, who opined that he was
that he is totally and permanently disabled but unfit to work as a seaman in his present
there is a dispute on the disability grading; condition.

6. The company-designated physician determined The LA ruled in Mabunay's favor and directed
that his medical condition is not compensable Sharpe Sea to pay him permanent and total
or work-related under the POEA-SEC but his disability benefits. It rejected Sharpe Sea's claim
doctor-of-choice and the third doctor selected that its company-designated physicians
under Sec. 20-B(3) of the POEA-SEC found assessed Mabunay with a disability rating of
otherwise and declared him unfit to work; Grade 8 since it was not supported by the
records. The NLRC upheld the LA's findings that
7. The company-designated physician declared the records were bereft of evidence to support
him totally and permanently disabled but the Er Sharpe Sea's claim.
refuses to pay him the corresponding benefits;
and On 29 Nov. 2011, the NLRC modified its decision
by reducing the award of US$60,000.00 it earlier
8. The company-designated physician declared granted to Mabunay, to US$16,795.00,
him partially and permanently disabled within corresponding to a Grade 8 disability rating. The
the 120-day or 240-day period but he remains NLRC noted that Sharpe Sea attached a medical
incapacitated to perform his usual sea duties report dated 18 Aug. 2009 from Dr. Cruz, which

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supported its claim that a company-designated seafarer's disability becomes permanent and
physician had diagnosed Mabunay with a Grade total;
8 disability. Is Mabunay entitled to permanent
and total disability benefits? 3. If the company-designated physician fails to
give his assessment within the 120 days with a
A: YES. With the company-designated physicians' sufficient justification (e.g., seafarer required
failure to issue either a fit-to-work certification or a further medical treatment or seafarer was
final disability rating within the prescribed periods, uncooperative), then the period of diagnosis
respondent's disability was rightfully deemed to be and treatment shall be extended to 240 days.
total and permanent. The Er has the burden to prove that the
company-designated physician has sufficient
A company-designated physician is expected to justification to extend the period; and
come up with a definite assessment of a seafarer's
fitness or lack of fitness to work or to determine the 4. If the company-designated physician still fails
seafarer's degree of disability within a period of 120 to give his assessment within the extended
or 240 days from repatriation. Clearly, Dr. Cruz, Dr. period of 240 days, then the seafarer's
Castillo, or any other company-designated disability becomes permanent and total,
physician failed to issue respondent either a fit-to- regardless of any justification.
work certification or a final disability rating after his
operation and before the lapse of 240 days from his Case law states that without a valid final and
repatriation. definitive assessment from the company-
designated physician within the 120/240-day
Nonetheless, even if this Court accepted petitioners' period, the law already steps in to consider
explanation on the belated submission of the petitioner's disability as total and permanent. Thus,
disability rating into evidence, it is worthy to note a temporary total disability becomes total and
that Dr. Cruz only issued an interim disability rating. permanent by operation of law. (Gamboa v. Maunlad
It has been settled in Magsaysay Maritime Corp. v. Trans., Inc., G.R. No. 232905, 20 Aug. 2018)
Cruz (G.R. No. 204769, 06 June 2016) that an interim
disability grading is merely an initial prognosis and NOTE: A TTD lasting continuously for more than
does not provide sufficient basis for an award of 120 days, except as otherwise provided, is
disability benefits. (Sharpe Sea Personnel, Inc. v. considered as a total and permanent disability. The
Mabunay, Jr., G.R. No. 206113, 06 Nov. 2017) exception pertains to a situation when the sickness
"still requires medical attendance beyond 120 days
Need for Definite Assessment Within 120/240 but not to exceed 240 days" in which case the
Days temporary total disability period is extended up to a
maximum of 240 days.
The court summarized the rules regarding the
company-designated physician's duty to issue a However, for the company-designated physician to
final medical assessment on the seafarer's disability avail of the extended 240-day period, he must first
grading, as follows: perform some significant act to justify an extension;
otherwise, the seafarer's disability shall be
1. The company-designated physician must issue conclusively presumed to be permanent and total.
a final medical assessment on the seafarer's (Talaroc v. Arpaphil Corporation, et. al., G.R. No.
disability grading within a period of 120 days 223731, 30 Aug. 2017)
from the time the seafarer reported to him;

2. If the company-designated physician fails to

give his assessment within the period of 120
days, without any justifiable reason, then the

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Third-Doctor Referral labor tribunal, and the parties, after a
directive from the LA pursuant to NLRC En
If the physician appointed by the seafarer disagrees Banc Resolution No. 008-14, fail to secure
with the company-designated physician's the services of a third doctor, the labor
assessment, the opinion of a third doctor may be tribunals shall hold the findings of the
agreed jointly between the Er and the seafarer to be company-designated physician final and
the decision final and binding on them. Non- binding.
compliance with this procedure would lead to the
conclusion that the determination of the company- XPN: unless the same is found to be biased
designated physician would prevail. (Gargallo v. (i.e., lacking in scientific basis or
Dohle Seafront Crewing, G.R. No. 215551, 17 Aug. unsupported by the medical records of the
2016) seafarer). In such a case, the inherent
merits of the respective medical findings
NOTE: The Third Physician Rule has no application shall be considered by the tribunals or
when the company-designated physician exceeds court.
the 120-day treatment period without making a
final, categorical and definitive assessment. (Alpines NOTE: If, however, the parties were able to
v. Elburg Shipmanagement Phil., Inc., G.R. No. secure the services of a third doctor during
202114, 09 Nov. 2016) mandatory conference, the latter’s
assessment of the seafarer’s medical
Guidelines in Cases Where a Seafarer Claiming condition should be considered final and
Disability Benefits Requests for a Third Doctor binding.
Referral
4. In case of a valid written request from the
1. A seafarer who receives a contrary medical seafarer for a third doctor referral, the Er
finding from his/her doctor must send to must, within 10 days from receipt, send a
the employer, within a reasonable period, a written reply stating that the procedure
written request to refer the conflicting shall be initiated by the employer. After a
medical findings to a third doctor, to be positive response from the employer, the
mutually agreed upon by the parties, and parties are given a period of 15 days to
whose findings shall be final and binding secure the services of a third doctor and an
between the parties; additional period of 30 days for the third
doctor to submit his/her assessment. The
2. The written request must be accompanied assessment of the third doctor shall be final
by or must indicate the contents of the and binding;
medical report from his/her doctor.
Otherwise, the written request shall be NOTE: In case, however, the parties fail to
considered invalid and as if none had been mutually agree as to the third doctor, a
requested; complaint for disability benefits may be
filed by the seafarer against the employer.
3. In case there was no valid request for a The labor tribunals shall then consider and
third doctor referral from the seafarer, the peruse the inherent merits of the
Er may opt to ignore the request or to respective medical findings of the parties’
refuse to assent, either verbal or written, to doctors before making a conclusion as to
such request without violating the the condition of the seafarer.
pertinent provision of the POEA-SEC;
5. If, however, the Er ignores the written
NOTE: if a complaint is subsequently filed request of the seafarer, or sends a written
by the seafarer against the Er before the reply to the seafarer refusing to initiate the

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referral to a third doctor procedure, or 8. If, despite the employer’s failure to respond
sends a written reply giving its assent to the to the seafarer’s valid request for a third
request beyond 10 days from receipt of the doctor, the parties, during mandatory
written request of the seafarer, the Er is conference, were able to secure the
considered in violation of the POEA-SEC. services of a third doctor, and the latter was
The seafarer may now institute a complaint able to make a reassessment on the
against his or her employer; seafarer’s condition, the third doctor’s
findings should be final and binding
6. Upon the filing of the complaint and during between the parties. In such a case, the
the mandatory conference, the LA shall give employer’s refusal to respond to the
the parties a period of 15 days to secure the seafarer’s valid request for a third doctor
services of a third doctor and an additional referral should be considered immaterial.
period of 30 days for the third doctor to (Bunayog v. Foscon Shipment, Inc., G.R. No.
submit his/her reassessment; 253480, 04 May 2023)

7. If the services of a third doctor were not NOTE: This case is beyond the cut-off date provided
secured on account of the employer’s in the 2023 Bar Syllabus.
refusal to give heed to the LA’s request or
due to the failure of the parties to mutually Q: In July 2011, A, a seafarer, underwent a Pre-
agree as to the third doctor, the labor Employment Medical Examination (PEME)
tribunals should make conclusive between wherein he was declared as fit for work. Upon
the parties the findings of the seafarer’s the expiration of his contract on March 2012, A
physician of choice, unless the same is disembarked from the vessel. Upon his arrival in
clearly biased, i.e., lacking in scientific basis the Philippines, he did not report that he was
or unsupported by the medical records of experiencing any illness or injury. On March
the seafarer. In such a case, the inherent 2012, Ville underwent another PEME as a
merits of the respective medical findings prerequisite for another deployment. In said
and the totality of evidence shall be PEME, he disclosed for the first time that he has
considered by the labor tribunals or courts; a history of high blood pressure or hypertension
and has been taking medication. The results of
NOTE: If, however, the failure to refer the the PEME indicated that Ville had Coronary
seafarer’s condition to a third doctor after Artery Disease. Hence, he was declared "Unfit
directive from the LA was due to the fault of for Sea Duty.” Under the impression that he
the seafarer, then the labor tribunals and contracted the illness while on board Adrian
the courts should make conclusive between Maersk, Ville filed a Complaint on 03 May 2012
the parties the findings of the company- against the respondents for reimbursement of
designated physician, except when the medical expenses and sickness allowance,
company-designated physician’s medical payment of total and permanent disability
conclusion is found to have been issued benefits, moral and exemplary damages,
with a clear bias in favor of the employer attorney's fees plus legal interest. Is A correct?
(i.e., lacking in scientific basis, or
unsupported by the medical records of the A: NO. A contract between an Er and a seafarer
seafarer) as held in Dionio v. Trans-Global ceases upon its completion, when the seafarer signs
Maritime Agency Inc. (G.R. No. 217362, 19 off from the vessel and arrives at the point of hire."
Nov. 2018). When such exception applies, Indeed, "the employment of seafarers and its
the inherent merits of the respective incidents are governed by the contracts they sign
medical findings shall be considered by the every time they are hired or re-hired. These
tribunals or court. contracts have the force of law between the parties
as long as their stipulations are not contrary to law,

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 III. EMPLOYMENT PROPER
morals, public order or public policy." Thus, upon allowance. Subsequently, he sought a second
A’s signing off from the vessel and repatriation on medical opinion from Dr. Pascual, who certified
01 Mar. 2012 due to the completion of his contract, that he was "medically unfit to work in any
his employment relationship with the respondents capacity as seaman."
correspondingly ceased. Consequently, no liability
should attach to the respondents for any illness or Should the contrary findings of San Juan's own
incident that may have been acquired or transpired physician be upheld over the fit-to-work
after signing off or expiration of his contract, as in certifications issued by PTCI's company-
this case. designated physicians?

In addition, A seafarer-claimant is mandated a A: NO. Settled is the rule that when a seafarer
period of three working days within which he sustains a work-related illness or injury while on
should submit himself to a post-employment board the vessel, his fitness or unfitness for work
medical examination so that the company- shall be determined by the company-designated
designated physician can promptly arrive at a physician, and that "in case of conflicting medical
medical diagnosis. Due to the express mandate on assessments between the company-designated
the reportorial requirement, the failure of the physician and the seafarer's own physician, referral
seafarer to comply shall result in the forfeiture of his to a third doctor is mandatory. In the absence of a
right to claim compensation and benefits for injury third doctor's opinion, it is the medical assessment
and illness. Such was not followed in this case hence of the company-designated physician that should
A is not entitled to any compensation or benefits. prevail."
(Gerardo U. Ville v. Maersk-Filipinas Crewing, Inc.
And/Or A.P. Mollera/S, G.R. No. 217879. 01 Feb. 2021, In this case, San Juan pursued his claim without
as penned by J. Hernando) observing the laid-out procedure. Instead of setting
into motion the process of selecting a third doctor,
Q: PTCI hired San Juan on several occasions as he preempted the mandated procedure by filing the
Chief Cook from 24 Feb. 1992 to 15 May 2008. He instant complaint for permanent total disability
was re-hired on 26 Aug. 2009 to work aboard a benefits (Philippine Transmarine Carriers, Inc. v.
vessel. Prior to his embarkation, San Juan Almario San Juan, G.R. No. 207511, 05 Oct. 2020, as
underwent a routine Pre-Employment Medical penned by J. Hernando).
Examination where he declared that he suffered
from "hypertension treated with medication." Q: Smith Bell Manning hired Esteva as a seafarer
He was given cardiac clearance and was for 9 months. He underwent the prescribed
certified as "fit to work" by PTCI's company- medical examination and was pronounced fit to
designated physicians. work. While he was onboard the vessel, Esteva
began to suffer severe back pains. He underwent
San Juan performed hard manual labor and x-ray and was diagnosed with lumbar disc
engaged in strenuous physical activities for 12 prolapse. According to the Injury/Illness
hours a day. He suffered fatigue, shortness of Report, his condition required a specialist
breath, and severe headaches. On 23 Jan. 2010, treatment and possible operation. Dr. Watson
he signed off from the vessel and was medically declared Esteva to have a temporary total
repatriated to the Philippines. He was referred disability and unfit for work and recommended
to the company-designated physicians, who immediate repatriation. Wilhelmsen Ship
certified on 20 Apr. 2010 and 30 Apr. 2010 that Management also wrote a letter requesting that
San Juan was fit for duty. Esteva be examined by the company-designated
physician in the Philippines. Esteva returned to
However, he was not rehired by PTCI. Hence, he the Philippines and reported to his Er.
filed a complaint, seeking payment of his
permanent disability benefits and sickness

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The company-designated physician, Dr. Cruz- Be that as it may, respondents also failed to
Balbon, issued a Medical Certificate indicating discharge their duty. Petitioner claims that they did
that Esteva was given medications for Pott's not inform him that the company-designated
disease, a form of tuberculosis of the spine. She physician has already issued an assessment.
prescribed that Esteva take at least one (1) year Respondents did not dispute his contention that he
of treatment. was never furnished copies of the disability
assessment, and that only after filing the Complaint
In the Medical Certificate, Esteva's suggested did, he become aware of it.
disability grading was Grade 8, with 2/3 loss of
lifting power. Esteva consulted another doctor, Absent a final, definite disability assessment from a
Dr. Reyes-Paguia, who issued another Medical company-designated physician, the mandatory rule
Certificate. Esteva consulted another doctor, Dr. on a third doctor referral will not apply here.
Raymundo, an orthopedic surgeon. The
physician issued a Medical Report which Hence, petitioner cannot be faulted for not referring
showed Esteva to be ambulatory but walking the assessment to a third doctor at the time he filed
with a limp and his condition will no longer his Complaint. There was no medical assessment
allow him to return as an able-bodied seaman. from a company-designated physician to contest
then as it had not been timely disclosed to him.
Is Esteva entitled to total disability benefits?
Thus, petitioner's failure to refer the assessment to
A: YES. The entitlement of an overseas seafarer to a third doctor is not fatal to his disability claim.
disability benefits is governed by law, the Hence, petitioner is entitled to total and permanent
employment contract, and the medical findings. Sec. disability benefits (Esteva v. Wilhelmsen Smith Bell
20(3) of the POEA states that “…if a doctor appointed Manning, et al., G.R. No. 225899, 10 July 2019)
by the seafarer disagrees with the assessment, a
third doctor may be agreed jointly between the Er Q: Jara was hired by Orient Hope as an engine
and the seafarer. The third doctor's decision shall be cadet on board M/V Orchid Sun. On its way to
final and binding on both parties.” Oman, M/V Orchid Sun sank off Muscat on 12
July 2007. Jara sustained leg injuries. On 29 May
As the one contesting the company-designated 2008, the company-designated physician
physician's findings, it is the seafarer's duty to suggested that his disability grading is Grade 11.
signify the intention to resolve the conflict through
the referral to a third doctor. If the seafarer does not On 06 Mar. 2008, Jara filed a complaint with the
contest the findings and fails to refer the assessment Labor Arbiter, insisting that he was entitled to
to a third doctor, the company can insist on its total permanent disability benefits amounting
disability rating even against a contrary opinion by to US$60,000.00. Is Jara entitled to permanent
another physician. Securing a third doctor's opinion and total disability compensation considering
is the duty of the Ee, who must actively or expressly that there was a Grade 11 disability grading
request it. given by the company-designated physician?

Here, petitioner failed to signify his intention to A: YES. Jara is entitled to permanent and total
resolve the conflicting assessments of the company- disability compensation despite the Grade 11
designated physician and his chosen physicians. disability grading given by the company-designated
Instead, he immediately filed the claim for physician. The Court finds that the company-
permanent disability benefits. Clearly, petitioner designated physician’s failure to issue a final and
failed to comply with the mandatory rule on referral definitive medical assessment within the 240-day
to a third doctor. extended period transformed the respondent’s
disability to permanent and total.

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In Island Overseas Transport Corporation v. Beja from Sec. 20-A(3)(1). It presupposes that the
(G.R. No. 203115, 07 Dec. 2015), this Court clarified company-designated physician came up with a
that: If the maritime compensation complaint was valid, final, and definite assessment on the
filed prior to 06 Oct. 2008, the rule on the 120-day seafarer’s fitness or unfitness to work before the
period, during which the disability assessment expiration of the 120- or 240-day period.
should have been made in accordance with Crystal
Shipping, Inc. v. Natividad (G.R. NO. 154798, 20 Oct. In this case, the third doctor-referral provision does
2005), that is, the doctrine then prevailing before not apply because there is no definite disability
the promulgation of Vergara on 06 Oct. 2008, assessment from the company-designated
stands; if, on the other hand, the complaint was filed physicians. (Magsaysay Mol Marine, Inc. v. Atraje,
from 06 Oct. 2008 onwards, the 240-day rule G.R. No. 229192, 23 July 2018)
applies. (Orient Hope Agencies, Inc. v. Jara, G.R. No.
204307, 06 June 2018) Q. Teodoro Ventura, Jr. was employed by
Crewtech Shipmanagement Philippines, Inc. as
Q: After suffering an Epileptic Seizure with post- Chief Cook on board the vessel MV Maria
fit neurological deficit, Atraje was repatriated to Cristina Rizzo. Ventura complained that he was
the Philippines and was referred to the having a hard time urinating that was
company-designated doctor for further medical accompanied by lower abdominal pain. He was
evaluation and treatment. After completing his medically repatriated and referred to the
treatment, Atraje continued to suffer from company-designated physician who diagnosed
shoulder and neck pain. Thus, he consulted an Ventura's illnesses to be "Cystitis with
independent specialist who declared him Cystolithiases and Benign Prostatic Hyperplasia
permanently unfit to resume his duties as a (BPH)," which he declared to be not work-
seaman. related.

Atraje later filed a complaint for permanent and Prior to the expiration of the 240-day period
total disability benefits against his Ers. The reckoned from his repatriation, Ventura
latter argued that since Atraje failed to comply claimed that he was verbally informed by the
with the third doctor rule, the assessment of the company-designated physician that it would be
company-designated doctor should prevail. his last check-up session and that subsequent
consultations would be for his own account.
Meanwhile, the Panel of Voluntary Arbitrators Ventura was compelled to seek an independent
noted that while Atraje initiated submitting to physician of his choice, Dr. Tan, who declared
examination by a third doctor, there was silence him to be permanently disabled.
on the part of his Ers. Hence, it held that Atraje
could not be faulted anymore if the appointment Ventura filed a complaint for total permanent
of a third physician was deemed waived in this disability benefits. Crewtech argued that the
case. failure to observe the procedure for the joint
appointment of a third doctor negates the claim
Does non-compliance with the third doctor rule for the disability benefits. Is Ventura entitled?
prejudice Atraje’s claim for disability benefits?
A. NO. While the seafarer is not irrevocably bound
A: NO. Under Sec. 20-A(3) of the 2010 POEA-SEC, “If by the findings of the company-designated
a doctor appointed by the seafarer disagrees with physician as he is allowed to seek a second opinion
the assessment, a third doctor may be agreed jointly and consult a doctor of his choice, Sec. 20-A(3)
between the Er and the seafarer. The third doctor’s thereof further provides that any disagreement in
decision shall be final and binding on both parties.” the findings may be referred to a third doctor jointly
The assessment refers to the declaration of fitness agreed upon by the parties, whose findings shall be
to work or the degree of disability, as can be gleaned final and binding between them. The non-

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observance of the requirement to have the Because of the impediment, he is permanently
conflicting assessments determined by a third unfit to return to work as a seaman in any
doctor would mean that the assessment of the capacity and considered for total permanent
company-designated physician prevails. disability. Is Toquero's injury compensable?

Considering that Ventura failed to observe the A: YES. A disability is compensable under the POEA-
conflict-resolution procedure provided under the SEC if two elements are present:
2010 POEA-SEC, the Court is inclined to uphold the
opinion of the company-designated physician that 1. The injury or illness must be work-related; and
Ventura's illnesses were not work-related, hence, 2. The injury or illness must have existed during
not compensable. the term of the seafarer's employment
contract.
Q: Toquero was employed by Crossworld as a
fitter for a vessel for 7 months. He underwent a Hence, a claimant must establish the causal
pre-employment medical examination and was connection between the work and the illness or
declared fit for sea duty. While on board the injury sustained.
vessel, Toquero was assaulted by his fellow
seafarer, Fong. Here, the two (2) elements of a work-related injury
are present. Not only was petitioner's injury work-
According to Toquero, he and Fong were related, but it was also sustained during the term of
instructed by the master of the vessel to check his employment contract. His injury, therefore, is
and repair a generator. While repairing, compensable.
Toquero advised Fong not to remove the flanges
which his irked Fong, and recalled their prior Respondents' argument that the claim is precluded
altercation and challenged him to a fistfight. He because the injury is due to the willful acts of
ignored Fong and continued working when another seafarer is untenable. The POEA-SEC
suddenly Fong hit the back of his head with a disqualifies claims caused by the willful or criminal
large metal spanner, knocking him unconscious. act or intentional breach of duties done by the
He was given first aid treatment at the ship claimant, not by the assailant. It is highly unjust to
clinic, where his vital signs were monitored. preclude a seafarer's disability claim because of the
assailant's willful or criminal act or intentional
Toquero's assessment showed that his physical breach of duty. (Toquero v. Crossworld Marine
discomfort was due to trauma and skull defect. Services, et al., G.R. No. 213482, 26 June 2019)
His Medical Evaluation Report read that
Toquero became incapacitated because of the Q: Ventis Maritime Corporation (VMC) hired
serious head injury that he incurred on board; Cayabyab on behalf of its foreign principal, St.
he has a large bone defect which may pose Paul Maritime Corporation (SPMC), to work as a
further damage to his brain; contusion of the wiper on board one of its vessels. Cayabyab
brain tissue also occurred at the site of the skull underwent a Pre-Employment Medical
fracture. At this time, he is no longer allowed to Examination (PEME) where he was declared fit
engage in heavy physical activities. The ship's for sea duty. In fulfilling his work, Cayabyab
environment is also dangerous to him because claimed he skipped meals to assist other crew
of the unsteady state of the vessel when sailing members. He also experienced erratic sleeping
at high seas. Dizziness may set anytime and may patterns aggravated by poor nutrition. He began
result to fall, which may cause further talking to himself and recited bible verses out of
irreparable injury. nowhere. He was then bought to a psychiatric
clinic where he was diagnosed with
Occupational Stress Disorder and

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recommended his immediate repatriation on that the seafarer complied with the conditions
the ground of "acute psychosis.” stipulated in the CBA, i.e., prove that the seafarer's
injury arise from an accident while on board the
Upon Cayabyab's arrival in the Philippines, VMC vessel.
referred him to the company-designated
physician, who endorsed him to a psychiatrist at Cayabyab cannot claim disability benefits under the
the Philippine General Hospital (PGH). The CBA owing to the following reasons: 1) He failed to
psychiatrist prescribed him medication for prove its existence; 2) He failed to establish that his
schizophrenia and advised him to return to employment contract is covered by the supposed
work. During his follow-up check-up on said CBA; and 3) He failed to adduce evidence to show
date, the psychiatrist declared that Cayabyab that his disability arose from an accident.
had a brief psychotic episode. Subsequently, the
company-designated physician issued a Grade 6 The award of compensation and disability benefits
Disability Assessment. Cayabyab thus filed a cannot rest on speculations, presumptions, and
complaint for total and permanent disability conjectures. While the CBA is a labor contract that
benefits. Months after the filing of the complaint, must be logically and liberally construed in favor of
Cayabyab a second opinion from his personal Filipino seafarers, still the rule is that "justice is in
physician, Dr. Elias D. Adamos, who declared every case for the deserving, to be dispensed with in
him to be suffering from total and permanent the light of established facts, the applicable law, and
disability. existing jurisprudence.

The LA awarded Cayabyab total and permanent Thus, Cayabyab is entitled to disability benefits
disability benefits. On the other hand, the NLRC corresponding to Grabe 6 disability rating under the
held that VMC is liable to pay Cayabyab only Amended POEA-SEC, and not the CBA. (Ventis
partial disability benefits corresponding to Maritime Corporation, et al. v. Cayabyab, G.R. No.
Grade 6 rating under the Amended POEA-SEC. 239257, 21 June 2021)
On appeal, the CA upheld the findings of the
company-designated physician who classified DEATH BENEFITS
Cayabyab's mental disorder as a partial
disability with a Grade 6 rating. It also held the GR: The seafarer’s death should occur during the
local agency VMC and its foreign principal SPMC term of his employment.
solidarity liable for the payment of Grade 6
disability benefits owing to Cayabyab, based on XPN: The seafarer’s death occurring after the
the parties' CBA. termination of his employment due to his medical
repatriation on account of a work-related injury or
Can Cayabyab claim partial disability benefits illness. This is based on a liberal construction of the
under the CBA? 2000 POEA-SEC as impelled by the plight of the
bereaved heirs who stand to be deprived of a just
A: NO. Cayabyab cannot claim partial disability and reasonable compensation for the seafarer’s
benefits under the alleged CBA. death, notwithstanding its evident work-
connection. (Sec. 20(B), 2010 POEA-SEC)
There are three requisites which a seafarer declared
to be suffering from a disability, whether permanent Work-Related Death of the Seafarer During the
or partial, must prove to establish his or her Term of Their Contract
entitlement to superior disability benefits under the
CBA. First, the existence of the CBA; second, the The Er shall pay his beneficiaries the Philippine
seafarer's employment contract is covered by the currency equivalent to:
CBA, i.e., the CBA is in effect or had not yet lapsed at
the time of the seafarer's employment; and third, 1. The amount of $50,000; and

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2. An additional amount of $7,000 to each child the exchange rate prevailing during the time of
under the age of 21 but not exceeding four (4) payment. (Sec. 20-B(4), 2010 POEA-SEC)
children, at the exchange rate prevailing
during the time of payment. (Sec. 20-B(1), 2010 When is There No Compensation and Benefits to
POEA–SEC) be Payable in Respect of an Injury, Incapacity,
Disability or Death of a Seafarer
Where Death is Caused by Warlike Activity
While Sailing Within a Declared War Zone or No compensation and benefits shall be payable in
War Risk Area respect of any injury, incapacity, disability or death
of the seafarer when it is the result of his:
The compensation payable shall be doubled. The Er
shall undertake appropriate war zone insurance 1. Willful or criminal act; or
coverage for this purpose. 2. Intentional breach of his duties

NOTE: It is understood and agreed that the benefits Provided, that the Er can prove that such injury,
mentioned above shall be separate and distinct incapacity, disability, or death is directly
from, and will be in addition to whatever benefits attributable to the seafarer.
which the seafarer is entitled to under Philippine
laws from the SSS, OWWA, ECP, PHIC and Home Q: Rodolfo L. Racelis was recruited and hired by
Development Mutual Fund (Pag-IBIG Fund). (Sec. respondent United Philippine Lines, Inc. (UPL)
200-B(2), 2010 POEA–SEC) for its principal, respondent Holland America
Lines, Inc. (HAL) to serve as "Demi Chef De
Other Liabilities of the Employer When the Partie" on board the vessel MS Prinsendam.
Seafarer Dies as a Result of Work – Related
Injury or Illness During the Term of In the course of his last employment contract,
Employment (O-R-B) Rodolfo experienced severe pain in his ears and
high blood pressure causing him to collapse
1. The Er shall pay the deceased’s beneficiary all while in the performance of his duties. He
outstanding Obligations due the seafarer consulted a doctor in Argentina and was
under this Contract; medically repatriated on for further medical
treatment.
2. The Er shall transport the Remains and
personal effects of the seafarer to the Upon arrival in Manila, he was immediately
Philippines at Er’s expense except if the death brought to Medical City, Pasig City, where he was
occurred in a port where local government seen by a company-designated physician, Dr.
laws or regulations do not permit the Gerardo Legaspi, and was diagnosed to be
transport of such remains. suffering from Brainstem (pontine) Cavernous
In case death occurs at sea, the disposition of Malformation. He underwent surgery twice for
the remains shall be handled or dealt with in the said ailment but developed complications
accordance with the master’s best judgment. and died. Rodolfo’s surviving spouse sought to
claim death benefits but to no avail.
In all cases, the Er/master shall communicate
with the manning agency to advise for Is petitioner entitled to death benefits?
disposition of seafarer’s remains; and
A: YES. Among other basic provisions, the POEA-
3. The Er shall pay the beneficiaries of the SEC stipulates that the beneficiaries of a deceased
seafarer the Philippine currency equivalent to seafarer may be able to claim death benefits for as
the amount of $1,000 for Burial expenses at long as they are able to establish that (a) the
seafarer’s death is work-related, and (b) such death

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had occurred during the term of his employment On 21 Mar. 2007, he underwent a Left
contract. Axillofemoral Bypass. He died on 26 Mar. 2007.
Cynthia, Bernardine’s widow claimed that her
While it is true that Brainstem (pontine) Cavernous husband suffered chest pains while he was still
Malformation is not listed as an occupational aboard the Regal Princess. She claimed that he
disease under Sec. 32-A of the 2000 POEA-SEC, Sec. had reported his condition, but he was not
20-B(4) of the same explicitly provides that “the provided with medical attention. Furthermore,
liabilities of the Er when the seafarer suffers work- he had also asked for medical attention upon his
related injury or illness during the term of his repatriation, but his request was once again
contract are as follows: those illnesses not listed in denied.
Sec. 32 of this Contract are disputably presumed as
work related.” Is Bernardine’s widow is entitled to death
benefits?
Also, while the general rule is that the seafarer’s
death should occur during the term of his A: YES. Bernardine's widow is entitled to death
employment, the seafarer’s death occurring after benefits. Sec. 20 (A) of the POEA-SEC requires that
the termination of his employment due to his for a seafarer to be entitled to death benefits, he
medical repatriation on account of a work-related must have suffered a work-related death during the
injury or illness constitutes an exception thereto. term of his contract.

Invalid Side Agreement However, Sec. 32-A of the POEA-SEC acknowledges

the possibility of “compensation for the death of the
An agreement that diminishes an Ee’s pay and seafarer occurring after the employment contract
benefits as contained in the POEA-approved on account of a work-related illness” if the following
contract is void, unless such subsequent agreement conditions are met:
is approved by the POEA. (Azucena, 2016)
1. The seafarer's work must involve the risks
Period to File OFW Claims described herein;

The POEA-SEC states in Sec. 28 that claims under the 2. The disease was contracted as a result of the
contract shall be filed within 1 year from the date of seafarer's exposure to the described risks;
the seafarer’s return to the point of hire. On the
other hand, Art. 306 of the LC provides for 3 years to 3. The disease was contracted within a period of
file money claims arising from Er-Ee relations. The exposure and under such other factors
LC provision prevails over Sec. 28 of the SEC and the necessary to contract it; and
latter is declared “null and void.” (Azucena, 2016)
4. There was no notorious negligence on the part
Q: On 28 Feb. 2006, Magsaysay Maritime of the seafarer.
Corporation (Magsaysay), the local manning
agent of Princess Cruise Lines, Limited, hired Both labor tribunals found that Bernardine first
Bernardine De Jesus as an Accommodation experienced chest pains while he was still onboard
Supervisor for the cruise ship Regal Princess. the cruise ship, i.e., during the term of his
On 09 Mar. 2006, Bernardine boarded Regal employment contract. It was likewise established
Princess and he eventually disembarked 10 that while Bernardine requested medical attention
months later, or on 16 Jan. 2007, after his when he started to feel ill and upon his repatriation,
contract of employment ended. Bernardine was his requests were repeatedly ignored.
soon diagnosed with Aortic Aneurysm and on 15
Mar. 2007, he had a coronary angiography.

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This Court concurs with the Labor Arbiter's involves the redistribution of agricultural land
observation that it was improbable for Bernardine among the landless. Agrarian Reform, on the other
to have developed and died from a cardio-vascular hand, means redistribution of lands, regardless of
disease within the two short months following his crops or fruits produced, to farmers and regular
repatriation. (Magsaysay Maritime Corporation v. De farmworkers who are landless to lift the economic
Jesus, G.R. No. 203943, 30 Aug. 2017) status of the beneficiaries and all other
arrangements alternative to the physical
COMPREHENSIVE AGRARIAN REFORM LAW redistribution of lands, which will allow
R.A. No. 6657, as amended by R.A. No. 9700 beneficiaries to receive a just share of the fruits
owner thereof.
Agrarian Law
Agricultural land
It embraces all laws that govern and regulate the
rights and relationship over agricultural lands It is a land devoted to agricultural activities. It
between landowners, tenants, lessees or contemplates lands that are arable and suitable for
agricultural workers. (Ungos, 2018) farming. (Sec. 3(c), R.A. No. 6657; Ungos, 2018, citing
Luz Farms v. Secretary of Agrarian Reform, G.R. No.
Agrarian Reform 86889, 04 Dec. 1990)

It is the redistribution of lands, regardless of crops Ancestral land

or fruits produced to farmers and regular
farmworkers who are landless, irrespective of Ancestral lands are lands of the public domain that
tenurial arrangement, to include the totality of have been in open, continuous, exclusive, and
factors and support services designed to lift the notorious occupation and cultivation by members
economic status of the beneficiaries and all other of the National Cultural Communities (NCCs) by
arrangements alternative to the physical themselves or through their ancestors, under a bona
redistribution of lands, such as production or profit- fide claim of acquisition of ownership according to
sharing, labor administration, and the distribution their customs and traditions for a period of at 30
of shares of stocks, which will allow beneficiaries to years before the date of approval of PD 410. (Ungos,
receive a just share of the fruits of the lands they 2018)
work. (Sec. 3(a), R.A. No. 6657)
It refers to lands occupied, possessed and utilized by
It is not confined to distribution of lands to landless individuals, families, and clans who are members of
farmers and regular farmworkers. It includes other the indigenous cultural communities (ICCs) or
alternative modes, such as: indigenous peoples (IPs) since time immemorial, by
themselves or through their predecessors-in-
(a) labor administration; interest, under claims of individual or traditional
(b) profit-sharing; and group ownership, continuously, to the present
(c) stock distribution. (Ungos, 2018) except when interrupted by war, force majeure, or
displacement by force, deceit, stealth, or as a
Comprehensive Agrarian Reform Program consequence of government projects and other
(CARP) vs. Land Reform voluntary dealings entered into by government and
private individuals or corporations, including, but
CARP is the redistribution of public and private not limited to, residential lots, rice terraces or
agricultural lands to farmers and farmworkers who paddies, private forests, swidden farms, and tree
are landless, irrespective of tenurial arrangement. lots. (Ibid.)

Land Reform, on one hand, is any program NOTE: Ancestral lands exempted from the Agrarian
undertaken by the national government that Reform Law. (Ibid.)

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Primary objective of Agrarian Reform It does not include land which has become
permanently devoted to non-agricultural purposes
The primary objective of agrarian reform is to and those which has become unproductive by
breakup agricultural lands and transform them into reason of force majeure or any other fortuitous
economic-size farms to be owned by the farmers event.
themselves, with the end in view of uplifting their
socio-economic status. (Ungos, 2018) Farmer vs. Farmworker

The agrarian reform program is founded on the A Farmer is a natural person, whose primary
right of farmers and regular farm workers who are livelihood is cultivation of lands or production of
landless, to own directly or collectively the lands agricultural crops, either by himself, or primarily
they till or, in the case of other farm workers, to with the assistance of his immediate farm
receive a just share in the fruits thereof. (DAR A.O. household, whether land is owned by him or
No. 02 s. 2009) But it does not guarantee another.
improvement in the lives of the agrarian reform
beneficiaries. It merely provides for a possibility or A Farmworker, on the other hand, is a natural
a favorable chance of uplifting the economic status person who renders service for value as an
of the agrarian reform beneficiaries, which may or employee or labourer in an agricultural enterprise
may not be attained. (Ungos, 2018, citing Hacienda or farm regardless of the manner of his
Luisita Inc. v. PARC, G.R. No. 171101, 05 July 2011) compensation.

Raising of livestock, poultry, or fish, not “Squaters” are not qualified to the benefits
embraced in the term “agriculture” under CARL

Lands devoted to raising of livestock, poultry, and The forcible entry or illegal detainer by persons
swine are classified as industrial, not agricultural, who are not qualified beneficiaries cannot avail
hence, exempt from the agrarian reform program. themselves of the rights and benefits of the Agrarian
(Ungos, 2018, citing Republic v. Salvador N. Lopez Reform Program. Squatting is an act of being an
Agri-Business Corp., G.R. No. 178895, 10 Jan. 2011) illegal detainer.

In the case of Luz Farms v. Secretary of Agrarian The following are lands covered under CARP:
Reform (supra.), the Supreme Court declared (Pr-E-Dis)
unconstitutional the inclusion of lands devoted to
raising of livestock, poultry, and swine within the (a) All alienable and Disposable lands of the
term “agriculture” because in livestock, poultry, or public domain Devoted to or suitable for
swine farming, no land is tilled and no crop is agriculture;
harvested. Land is not the primary resource in
raising livestock, poultry or even swine. Livestock, (b) All lands of the public domain in Excess of
poultry, or swine do not sprout from the land, hence, the specific limits as determined by
they are not “fruits of the land. (Ungos, 2018, citing Congress; and
DAR v. Sutton, G.R. No. 162070, 19 Oct. 2005)
(c) All Private lands devoted to or suitable for
An Idle of Abandoned Land agriculture regardless of the agricultural
products raised or that can be raised
It refers to any agricultural land not cultivated, tilled thereon.
or developed for any specific purpose for a period of
three (3) years immediately prior to the receipt of
notice of acquisition by the government.

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Lands not covered by the Agrarian Reform Law In view thereof, a mere reclassification of an
agricultural land does not automatically allow a
The following lands are not covered by the Agrarian landowner to change its use. The landowner still has
Reform Law: to go through the process of conversion.

(a) Private lands with total area of five (5) The conversion of lands are applicable to the
hectares and below; following:

(b) Lands actually, directly, and exclusively 1. The beneficiary

used for parks, wildlife, forest reserves, 2. The landowner
reforestation, fish sanctuaries and breeding 3. The government agency
grounds, watersheds, and mangroves;
NOTE: A land can be converted within five years
(c) Private lands actually, directly and from the grant of the land to the beneficiary, the
exclusively used for prawn farms and land can be converted provided that the two
fishponds; conditions are met:

(d) Lands actually, directly, and exclusively 1. the land has ceased to be economically
used and found to be necessary for: feasible to become an agricultural land;
2. the land will have a greater economic value
1. National defense; for residential, industrial, and commercial
2. School sites and campuses; use.
3. Experimental farm stations operated
for educational purposes; Limitation on retaining agricultural lands under
4. seeds and seedling research and pilot the CARP
production center;
5. church sites and convents appurtenant 1. The retention limit is 5 hectares.
thereto; 2. 3 hectares may be awarded to each child of
6. mosque sites and Islamic centers the landowner, subject to the following
appurtenant thereto; qualifications: (15-ATM)
7. communal burial grounds and a. that he is at least fifteen (15) years
cemeteries; of age; and
8. penal colonies and penal farms actually b. that he is Actually Tilling the land
worked by the inmates; or directly Managing the farm.
9. research and quarantine centers; and
10. all lands with eighteen percent (18%) Q: Can a landowner who has already exercised
slope and over, except those already his retention rights under P.D. No. 27 (the Land
developed. (Sec. 10, R.A. No. 6657, as Reform Program) be entitled to the retention
amended) right under the Comprehensive Agrarian
Reform Law?
Conversion and Reclassification
A: NO. Under Sec. 6 of CARL, as amended, if the
Conversion is the act of changing the current use of landowner has already exercised his right of
a piece of agricultural land into some other use retention under P.D. No. 27, he can no longer
while reclassification is the act of specifying how exercise the retention right under CARL. However,
agricultural lands shall be utilized for non- if the landowner chooses to retain five (5) hectares
agricultural use such as residential, industrial and under CARL, the 7 hectares previously retained by
commercial. him under P.D. No. 27 shall be immediately placed

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 III. EMPLOYMENT PROPER
under the coverage of the CARL. (Sec. 3, DAR A.O. No. NOTE: The child need not directly or personally till
05-00) the land. It is enough that he directly manages the
farm. (Ungos, 2018)
Q: Can spouses retain 5 hectares each under
CARL? A qualified child who owns less than 5 hectares of
agricultural larid is still entitled to an award of his
A: YES. If the property regime is conjugal or parent’s landholding provided that his or her total
absolute community, the spouses can retain only area, including the area to be awarded does not
five (5) hectares. However, if the property regime is exceed the 5-hectare ownership ceiling. For
separation of property, the spouses can retain five example, if the child already owns 3 hectares of
(5) hectares each. (Sec. 9(g) & (h), Ibid.) agricultural land, he or she can still be awarded 2
hectares from his parent’s landholding. (Ibid.)
Qualifications to be a beneficiary under the
CARP Limitations

To be a beneficiary, one must possess the following GR: Lands awarded to qualified children of
qualifications: (15-FiLanPerCu) landowners cannot be sold, transferred or conveyed
within a period of ten (10) years.
1. At least 15 years of age at the time of
identification, screening, and selection of XPNs: however, lands can be transferred:
farmer-beneficiaries; (a) through hereditary succession;
(b) to the government;
2. Filipino citizen; (c) to the Land Bank of the Philippines; or
(d) to other qualified beneficiaries.
3. Landless (owns land less than 3 hectares);
NOTE: The children or the spouse of the transferor
4. Permanent resident of the barangay or can repurchase the land from the government or the
municipality where the landholding is Land Bank of the Philippines within a period of two
located; (2) years from the date of transfer. (Sec. 4, Code of
Agrarian Reforms, as amended)
5. Willing, able and equipped with the
Aptitude to Cultivate and make the land
productive. D. LABOR RELATIONS

NOTE: this is the basic qualification of a

beneficiary.
Labor Relations

Children of the landowner are entitled to 3

Refers to the interactions xbetween Er and Ees or
hectares each
their representatives and the mechanism by which
the standards and other terms and conditions of
If the landowner owns more than 5 hectares of
employment are negotiated, adjusted, and enforced.
agricultural land, the excess area may be awarded to
(Azucena, 2016)
the children of the landowner to the extent of 3
hectares for each child under the following
The term denotes all aspects of Er-Ee relationship
conditions:
which involve concerted action on the part of the
workers. It is usually associated with all the
(a) the child is at least 15 years old; and
ramifications of unionism, collective bargaining and
(b) the child is actually tilling the land or
negotiations, and concerted activities such as strike,
directly managing the farm.
picket, mass leave, etc. (Poquiz, 2018)
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Constitutional provisions in relation to Labor 3. Free and voluntary organization of a strong
Relations and united labor movement;

Sec. 3, Art. XIII guarantees to all workers, among 4. Enlightenment of workers concerning their
others, their right to: rights and obligations as union members and
as Ees;
1. Self-organization
5. Adequate administrative machinery for the
2. Peaceful concerted activities including the expeditious settlement of labor or industrial
right to strike in accordance with law; and peace;

3. Participate in policy-decision making 6. Stable but dynamic and just industrial peace;
processes affecting their rights and benefits as
may be provided by law. 7. Participation of workers in decision and policy
making processes affecting their rights, duties,
The right to participate in policy and decision- and welfare; and
making process is not absolute
8. Truly democratic method of regulating the
A scrutiny of the policy must be made if the same is relations between the Ers and Ees by means of
purely business oriented and concerns the agreements freely entered into through
management aspect of the business of the company collective bargaining.
or if the policy has repercussions on the Ee's right to
security of tenure. A line must be drawn between 1. RIGHT TO SELF-ORGANIZATION
management prerogatives regarding business
operations per se and those which affect the rights
Right to Self-Organization
of the Ees. In treating the latter, management should
see to it that its Ees are at least properly informed of
Refers to the right of workers and Ees to form, join,
its decisions or modes of action especially if the
or assist unions, organizations, or associations for
implementation of the provisions may result in the
purposes of collective bargaining and/or for mutual
deprivation of an Ee's means of livelihood which is
aid and protection, including the right to engage in
a property right. (PAL v. NLRC, G.R. No. 85985, 13
peaceful concerted activities and participate in
Aug. 1993)
policy-decision making processes affecting their
rights and benefits.
The right of the people, including those employed in
the public and private sectors, to form unions,
Extent of the Right to Self-Organization
associations, or societies for purposes not contrary
to law, shall not be abridged. (Sec. 8, Art. III, 1987
It includes at least two (2) rights:
Constitution)
1. The right to form, join, or assist labor
organizations; and
Declaration of Policy
2. The right to engage in lawful concerted
activities. (Art. 257, LC)
The State aims to promote:

Purpose of Exercise of Right to Self-Organization

1. Free collective bargaining and negotiations,
including voluntary arbitration, mediation,
1. Collective bargaining; and
and conciliation, as modes of settling labor or
2. Mutual aid and protection. (Art. 257, LC)
industrial disputes;

2. Free trade unionism;

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Q: Why do workers organize? generous customers. In time, the GROs formed
the Solar Ugnayan ng mga Kababaihang lnaapi
A: For self-advancement and the desire for: (SUKI), a labor union duly registered with DOLE.
(a) job security; Subsequently, SUKI filed a petition for
(b) substituting “rule of law” for the arbitrary Certification Election in order to be recognized
power by the boss; and as the exclusive bargaining agent of its
(c) sense of participation in the business members. Juicy Bar and Night Club opposed the
enterprise. (Azucena, 2016) petition for Certification Election on the singular
ground of absence of employer-employee
Collective Bargaining vs. Dealing with Employer relationship between the GROs on one hand and
the night club on the other hand. May the GROs
COLLECTIVE form SUKI as a labor organization for purposes
DEALING WITH ER
BARGAINING of collective bargaining? Explain briefly. (2012
A right that may be BAR)
A generic description
acquired by a labor
of interaction between
organization after A: YES. The GROs worked under the direct
Er and Ees concerning
registering itself with supervision of the Night Club Manager for a
grievances, wages,
the DOLE and after substantial period of time. Hence, under Art. 138,
work hours, and other
being recognized or with or without compensation, the GROs are to be
terms and conditions
certified by DOLE as deemed employees. As such, they are entitled to all
of employment, even if
the exclusive the rights and benefits granted to
the Ees’ group is not
bargaining employees/workers under the Constitution and
registered with the
representative of the other labor legislation including the right to form
DOLE. (Azucena, 2013)
Ees. (Azucena, 2013) labor organizations for purposes of collective
bargaining. (Sec. 3, Art. XIII, 1987 Constitution; Art.
a) COVERAGE 243, LC)

Who may unionize for purposes of collective NOTE: All persons employed in commercial,
bargaining industrial, and agricultural enterprises and in
religious, charitable, medical, or educational
All persons employed in commercial, industrial, and institutions, whether operating for profit or not,
agricultural enterprises and in religious, charitable, shall have the right to self-organization and to form,
medical, or educational institutions whether join, or assist labor organizations of their own
operating for profit or not, shall have the right to choosing for purposes of collective bargaining.
self-organization and to form, join, or assist labor Ambulant, intermittent and itinerant workers, self-
organizations of their own choosing for purposes of employed people, rural workers and those without
collective bargaining. (Art. 253, LC) any definite employers may form labor
organizations for their mutual aid and protection.
Q: Juicy Bar and Night Club allowed by tolerance (Art. 253, LC)
50 Guest Relations Officers (GROs) to work
without compensation in its establishment Who may form a labor organization for
under the direct supervision of its Manager from purposes of mutual aid and protection
8:00 P.M. To 4:00 A.M. everyday, including
Sundays and holidays. The GROs, however, were 1. All persons employed in commercial,
free to ply their trade elsewhere at anytime, but industrial and agricultural enterprises and in
once they enter the premises of the night club, religious, charitable, medical, or educational
they were required to stay up to closing time. institutions, whether operating for profit or
The GROs earned their keep exclusively from not;
commissions for food and drinks, and tips from

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2. Ambulant, intermittent, and itinerant workers, Q: When can an Ee join a labor organization?
self-employed people, rural workers and those
without any definite Ers may form labor A: Any Ee, whether employed for a definite period
organizations for their mutual aid and or not, shall, beginning on his first day of service, be
protection. (Art. 253, LC) considered as an Ee for purposes of membership in
any labor union. (Art. 292 (c), LC)
3. Aliens working in the country with valid
permits issued by the DOLE may exercise the EMPLOYEES RESTRICTED TO FORM, JOIN, OR
right to self-organization and join or assist ASSIST LABOR ORGANIZATIONS
labor organizations of their own choosing for
purposes of collective bargaining: Provided, a. Managerial Ees;
that said aliens are nationals of a country b. Supervisory Ees;
which grants the same or similar rights to c. Confidential Ees (in the field of labor
Filipino workers. (Principle of Reciprocity) relations);
d. Ee-members of a cooperative;
4. Ees of government corporations established e. Government Ees;
under the Corporation Code shall have the f. Ees of international organizations;
right to organize and to bargain collectively g. Foreign workers; and
with their respective Ers. All other Ees in the h. Religious objectors.
civil service shall have the right to form
associations for purposes not contrary to law. A managerial Ee is one who is vested with powers
or prerogatives to lay down and execute
Q: Is the formation of workers’ association for management policies and/or to hire, transfer,
mutual aid and protection (instead of a union for suspend, lay off, recall, discharge, assign, or
purposes of collective bargaining) limited only discipline Ees. (Art. 219(m), LC)
to ambulant, intermittent and itinerant
workers, self-employed people, rural workers, Types of Managers
and those without any definite Ers?
1. First Line Managers (supervisors) – direct
A: NO. The right to self-organization includes the operation of Ees and not supervise other
right to form a union, workers' association, and managers (e.g., foreman);
labor management councils.
2. Middle Managers – direct activities of other
More often than not, the right to self-organization managers (e.g., plant managers); and
connotes unionism. Workers, however, can also
form and join a workers' association as well as 3. Top Management – overall management of
Labor Management Councils (LMC). organization (e.g., SVP, President). (United Pepsi
The right to form a union or association or to self- Cola Supervisory Union v. Laguesma G.R. No.
organization comprehends two notions, to wit: (a) 122226, 25 Mar. 1998)
the liberty or freedom, that is, the absence of NOTE: Managerial Ees are not eligible to join, assist
restraint which guarantees that the Ee may act for or form any labor organization. (Art. 255, LC)
himself without being prevented by law; and (b) the
power, by virtue of which an Ee may, as he pleases, Rationale
join or refrain from joining an association.
(Samahan ng Manggagawa sa Hanjin Shipyard v. The rationale for the inhibition is that if managerial
BLR, G.R. No. 211145, 14 Oct. 2015) Ees would belong to or be affiliated with a union, the
latter might not be assured of their loyalty to the
union in view of evident conflict of interests. The
union can become company-dominated with the

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presence of managerial Ees in the union Examples of confidential Ees who could NOT
membership. (Bulleting Publishing Co., Inc. v. Hon. unionize:
Sanchez, G.R. No. 74425, 07 Oct. 1986)
1. Bank cashiers
Managerial Ees cannot be allowed to share in the 2. Accounting personnel
concessions obtained by the labor union through 3. Radio and telegraph operators who have
collective negotiation. Otherwise, they would be access to confidential information
exposed to the temptation of colluding with the 4. Personnel staff
union during the negotiations to the detriment of
the Er. (Azucena, 2016) Human Resource Assistants and Personnel
Assistants are considered Confidential Ees
Supervisory Ees
As a Human Resource Assistant, the scope of one’s
Supervisory Ees are those who, in the interest of the work necessarily involves labor relations,
Er, effectively recommend such managerial actions recruitment and selection of Ees, access to Ees'
if the exercise of such authority is not merely personal files and compensation package, and
routinary or clerical in nature but requires the use human resource management. As regards a
of independent judgment. (Art. 219(m), LC) Personnel Assistant, one's work includes the
recording of minutes for management during CB
Supervisory Ees are allowed to organize, but they negotiations, assistance to management during
cannot form, join, or assist a rank-and-file union. grievance meetings and administrative
(Azucena, 2016) investigations, and securing legal advice for labor
issues from the petitioner’s team of lawyers, and
Confidential Employees (in the field of labor implementation of company programs.
relations)
Therefore, in the discharge of their functions, both
A confidential Ee is one who assists and acts in a gain access to vital labor relations information
confidential capacity to, or has access to confidential which outrightly disqualifies them from union
matters of, persons who exercise managerial membership. (San Miguel Foods Inc. v. San Miguel
functions in the field of labor relations. (Philips Corporation Supervisors and Exempt Union, G.R. No.
Industrial Development v. NLRC, G.R. No. 88957, 25 146206, 01 Aug. 2011)
June 1992)
Payroll masters are not confidential Employees
NOTE: The phrase “in the field of labor relations” is
important because it stresses the labor nexus, that A confidential Ee is one entrusted with confidence
is, the confidentiality of the position should relate to on delicate, or with the custody, handling or care
labor relations matters. and protection of the Er’s property. Confidential
Ees, such as accounting personnel, should be
Doctrine of Necessary Implication excluded from the bargaining unit, as their access to
confidential information may become the source of
The reason for ineligibility of managerial Ees to undue advantage.
form, assist, or join a labor union equally applies to
confidential Ees. While the Labor Code singles out However, such fact does not apply to the position of
managerial Ees as ineligible to join, under the Payroll Master and the whole gamut of Ees who has
doctrine of necessary implication, confidential Ees access to salary and compensation data. The
are similarly disqualified. (NATU - Republic Planters position of Payroll Master does not involve dealing
Bank Supervisors Chapter v. Hon. Torres, G.R. No. with confidential labor relations information in the
93468, 29 Dec. 1994) course of the performance of his functions. Since
the nature of his work does not pertain to company

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 LABOR LAW AND SOCIAL LEGISLATION
rules and regulations and confidential labor negotiate, but not the right to strike. (Azucena,
relations, it follows that he cannot be excluded from 2016)
the subject bargaining unit. (San Miguel Foods Inc. v.
San Miguel Corporation Supervisors and Exempt The right to self-organization of government Ees
Union, G.R. No. 146206, 01 Aug. 2011) pertains to all branches, subdivisions,
instrumentalities, and agencies of the Government,
EMPLOYEE-MEMBER OF A COOPERATIVE including GOCCs with original charters. (E.O. No.
180)
An Ee of a cooperative who is also a member and co-
owner thereof cannot invoke the right to collective Government Ees’ right to organize is for a
bargaining, for an owner cannot bargain with limited purpose
himself or his co-owners. (San Jose Electric Service
Cooperative, Inc. v. Ministry of Labor, G.R. No. 77231, The right of government Ees to “form, join, or assist
31 May 1989) Ees’ organizations of their own choosing” under E.O.
No. 180 is not regarded as existing or available “for
NOTE: Even if Ee-members of a cooperative cannot purposes of collective bargaining,” but simply “for
form a union, they may, however, form an the furtherance and protection of their interests.”
association for their mutual aid and protection as (Arizala v. CA, G.R. No. L-43633-34, 14 Sept. 1990)
Ees. (Azucena, 2016)
Only terms and conditions not fixed by law may be
Q: A, an Ee of XYZ Cooperative, owns 500 shares the subject of negotiation by the duly recognized
in the cooperative. He has been asked to join the Ees’ organization of government Ees and the
XYZ Cooperative Ees Association. He seeks your appropriate government authorities. Terms and
advice on whether he can join the association. conditions of employment that are fixed by law are
What advice will you give him? (2010 BAR) excluded from negotiation. (E.O. No. 180)

A: A cannot join XYZ Cooperative Ees Association Matters that are declared to be “not negotiable” are
because owning shares makes him a co-owner matters “that require appropriation of funds” and
thereof. An Ee-member of a cooperative cannot join “those that involve the exercise of management
a union and bargain collectively with his prerogatives.” Considered negotiable are such
cooperative for an owner cannot bargain with matters as schedule of vacation, leaves, etc.
himself and his co-owners. (Cooperative Rural Bank (Azucena, 2016)
of Davao City v. Calleja, G.R. No. 143616, 09 May
2001) NOTE: Ees of government corporations established
under the Corporation Code shall have the right to
GOVERNMENT EMPLOYEES organize and to bargain collectively. (Art. 254, LC)

Ees of government corporations established under Q: Royal Savings Bank (RSB), organized and
the Corporation Code shall have the right to incorporated as a thrift bank entered into a
organize and to bargain collectively with their Memorandum of Agreement with Commercial
respective Ers. All other Ees in the civil service shall Bank of Manila to rehabilitate and infuse capital
have the right to form associations for purposes not into RSB. RSB was renamed ComSavings Bank
contrary to law. (Art. 254, LC) (CB). In 1987, the GSIS transferred its holdings
from Commercial Bank of Manila to Boston
Government Employees have the right to self- Bank. CB was not included in the transfer. Due to
organization Boston Bank’s acquisition of Commercial Bank
of Manila, the GSIS took over the control and
The highest law of the land guarantees to management of CB.
government Ees the right to organize and to

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 III. EMPLOYMENT PROPER
Sometime in 2001, CB changed its name to GSIS High-level Government Employees
Family Bank. On 06 June 2011, President Aquino
signed into law R.A. No. 10149, or the GOCC A high-level Ee is one whose functions are normally
Governance Act of 2011. The law created the considered policy determining, managerial or one
Governance Commission for Government- whose duties are highly confidential in nature. They
Owned or Controlled Corporations (Governance cannot join the organization of rank-and-file
Commission). On 20 Dec. 2013, counsel for the government Ees. (E.O. No. 180)
GSIS Union sent GSIS Family Bank a demand
letter for the payment of Christmas bonus to its NOTE: In the public sector, there are only two levels
members, as stipulated in their CBA. The GSIS of position: high level and rank-and-file.
Family Bank's refused to negotiate a new CBA.
Thus, the GSIS Union filed a Complaint before Q: How does the government employees’ right to
the NCMB. They aimed to compel GSIS Family self-organization differ from that of the
Bank to abide by the provisions of their existing employees in the private sector? (1996 BAR)
CBA.
A: In the public sector, E.O. No. 180, the purpose of
Can the GSIS Family Bank, a non-chartered self-organization is stated as for the furtherance and
government-owned or controlled corporation, protection of their interest. In the private sector,
enter into a CBA with its Ees? Art. 243 (now 253) of the LC states, for the purpose
of collective bargaining, and for the purpose of
A: NO. R.A. No. 10149 directed the Governance enhancing and defending their interests and for
Commission to develop a Compensation and their mutual aid and protection. Furthermore, no
Position Classification System, to be submitted for less than the Constitution itself guarantees that ALL
the President's approval, which shall apply to all workers have the right to self- organization. (Sec. 3,
officers and Ees of government-owned or controlled Art. XIII, 1987 Constitution)
corporations, whether chartered or non-chartered.
On 22 Mar. 2016, President Aquino issued E.O. No. NOTE: The Constitution itself guarantees that ALL
203, which approved the compensation and workers have the right to self- organization. (Sec.
classification standards and the Index of 3(2), Art. XIII of the 1987 Constitution)
Occupational Services Framework developed and
submitted by the Governance Commission. EMPLOYEES OF INTERNATIONAL
ORGANIZATIONS
When it comes to collective bargaining agreements
and collective negotiation agreements in GOCCs, GR: International organizations are immune from
E.O. No. 203 unequivocally stated that while it Philippine jurisdiction. (i.e., ICMC, IRRI, ADB) Thus,
recognized the right of workers to organize, a certification election cannot be conducted in an
bargain, and negotiate with their Ers, the Governing international organization which has been granted
Boards of all covered GOCCs, whether Chartered or immunity from local jurisdiction. (ICMC v. Hon. Pura
non-chartered, may not negotiate with their officers Calleja, G.R. No. 89331, 28 Sept. 1990)
and Ees the economic terms of their CBAs. (GSIS
Family Bank Ees Union v. Secretary Villanueva, G.R. XPN: However, the international organization has
No. 210773, Jan. 23, 2019) the discretion to waive its immunity. Without such
express waiver, the NLRC or its labor arbiters have
Members of AFP, police officers, policemen, no jurisdiction over international organizations,
firemen, and jail guards even in cases of alleged illegal dismissal of any of its
Ees. (Callado v. IRRI, G.R. No. 106483, 22 May 1995)
E.O. No. 180 excludes members of AFP, police
officers, policemen, firemen, and jail guards from
unionizing for reasons of security and safety.

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FOREIGN WORKERS former. (Victoriano v. Elizalde Rope Worker’s Union,
G.R. No. L-25246, 12 Sept. 1974)
GR: Foreigners are prohibited from engaging in all
forms of trade union activities. Religious objectors can form and join their own
union
XPN: However, an alien working in the country with
a valid working permit may exercise the right to Recognition of the tenets of a sect should not
self-organization if they are nationals of a country infringe on the basic right to self-organization
which grants the same or similar right to Filipino granted by the Constitution to workers, regardless
workers. of religious affiliation. (Kapatiran sa Meat and
Canning Division v. Hon. Pura Calleja, G.R. No. L-
Q: Do the following workers have the right to 82914, 20 June 1988)
self-organization? Reasons/basis:
NOTE: Religious objectors also have the right to
a) Employees of non-stock, non-profit vote in a certification election. (Reyes v. Trajano, G.R.
organizations? No. 84433, 02 June 1992)

A: Even employees of non-stock non-profit Q: Do workers have a right not to join a labor
organizations have the right to self-organization. organization? (2000 BAR)
This is explicitly provided for in Art. 243 (now 253)
of the Labor Code. A possible exception, however, A: YES. The constitutional right to self-organization
are employee members of non-stock, non-profit has two aspects, the right to join or form labor
cooperatives. organizations and the right not to join said
organization. (Victoriano v. Elizalde Rope Worker’s
NOTE: Even employees of non-stock non-profit Union, G.R. No. L-25246, 12 Sept. 1974)
organizations have the right to self-organization.
(Article 243 of the Labor Code) Moreover, if they are members of a religious group
whose doctrine forbids union membership, their
b) Alien employees? right not to be compelled to become union members
A: Alien employees with valid work permits may has been upheld. However, if the worker is not a
exercise the right to self-organization on the basis of "religious objector" and there is a union security
parity or reciprocity, that is, if Filipino workers in clause, he may be required to join the union if he
the aliens' country are given the same right. (Art. belongs to the bargaining unit. (Reyes v. Trajano, G.R.
269 (now Art. 283), LC) No. 84433, 2 June 1992)

NOTE: Alien employees with valid work permits NOTE: The right to join a union includes the right to
may exercise the right to self-organization on the abstain from joining any union. (Victoriano v.
basis of parity or reciprocity, that is, if Filipino Elizalde Rope Worker’s Union, G.R. No. L-25246, 12
workers in the aliens' country are given the same Sept. 1974)
right. (Article 284, LC)
The right of self-organization embraces not only the
RELIGIOUS OBJECTORS; IGLESIA NI CRISTO right to form, join or assist labor organizations, but
MEMBERS the concomitant, converse right NOT to form, join or
assist any labor union. (Reyes v. Trajano, G.R. No.
Members of religious sects cannot be compelled or 84433, 02 June 1992)
coerced to join labor unions even when said unions
have closed-shop agreements with the Ers. Free
exercise of religious belief is superior to contract
rights. In case of conflict, the latter must yield to the

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 III. EMPLOYMENT PROPER
b) ELIGIBILITY FOR MEMBERSHIP 96566, 06 Jan. 1992) However, with the
amendement of Art. 255 by R.A. No. 9481, the law
Managerial Ees are not eligible to join, assist or form now allows a rank-and-file union and a supervisory
any labor organization. (Art. 255, LC) union to operate within the same bargaining unit to
join the one and the same federation or national
The mere fact that an Ee is designated as “manager” union.
does not ipso facto make him one. Designation
should be reconciled with the actual job description Unions formed independently by the supervisory
of the Ee for it is the job description that determines and rank-and-file Ees in a company may legally
the nature of employment. Thus, if the Ee does not affiliate with the same federation. The fact that the
participate in policy making but are given ready two (2) groups of workers are employed by the
policies to execute and standard oractices to same company and are affiliated with one and the
observe, thus having little freedom of action, they same federation is not sufficient to justify the
are not managerial Ees. (NWSA v. NWSA, 11 SCRA conclusion that they are one. (Adamson & Adamson,
766) Inc. v. CIR, G.R. No. L-35120, 31 Jan. 1984)

Supervisory Ees may join a union e) EFFECT OF INCLUSION AS MEMBERS OF

EMPLOYEES OUTSIDE OF THE BARGAINING
Supervisory Ees are not eligible for membership in UNIT
a labor organization of the rank-and-file Ees but
may join, assist, or form separate organizations of The inclusion as union members of Ees outside the
their own. (Art. 245, LC) bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said Ees
NOTE: Security guards are not included in the are automatically deemed removed from the list of
disqualification. (Sec. 6, D.O. 150-16, s. 2016) membership of said union. (Art. 256, LC)

c) DOCTRINE OF NECESSARY IMPLICATION Under this provision, the inclusion as union

members of Ees outside the bargaining unit is not a
The Doctrine of Necessary Implication states that ground for the cancellation of the registration of the
what is implied in a statute is as much a part thereof union. The Ees improperly included are
as that which is expressed. While Art. 255 of the automatically deemed removed from the list of
Labor Code singles out managerial Ees as ineligible members of said union by operation of law.
to join, assist and form any labor organization, Therefore, if supervisory Ees are included as
under the doctrine of necessary implication, members of a rank-and-file union, they are deemed
confidential Ees are similarly disqualified. (NATU - automatically removed from the roster of members
Republic Planters Bank Supervisors Chapter v. Hon. of the said union and vice versa. (Chan, 2019)
Torres, G.R. No. 93468, 29 Dec. 1994)
NOTE: Mixed membership is now deemed a
d) COMMINGLING OR MIXED MEMBERSHIP prohibited ground for cancellation of union
registration. (Sec. 6, Rule XIV, Book V, IRR)
The Separation of Union Doctrine prohibits a
situation where the supervisory union and the rank- Non-interference with workers’ right to self-
and-file union operating within the same organization
establishment are both affiliated with one and the
same federation or national union. This is because It shall be unlawful for any person to restrain,
of the possible conflict of interest which may arise coerce, discriminate against, or unduly interfere
between the supervisors and rank-and-file Ees, in with Ees and workers in their exercise of the right
the areas of collective bargaining and strike. (Atlas to self-organization. Such right shall include the
Lithographic Services, Inc. v. Hon. Laguesma, G.R. No. right to form, join, or assist labor organizations for

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 LABOR LAW AND SOCIAL LEGISLATION
the purpose of collective bargaining through However, this is not the case where there is a valid
representatives of their own choosing and to engage union security clause in the CBA such as a closed-
in lawful concerted activities for the same purpose shop or union-shop arrangement between
or for their mutual aid and protection, subject to the management and the union. Here, the Ee concerned
provisions of Art. 264 of the Labor Code. (Art. 257, is duty-bound to keep his union membership for the
LC) duration of the CBA as a condition for his continued
employment. If such membership in the union
An Ee cannot invoke an absolute right to union which is the collective bargaining agent is validly
membership. The right to self-organization and terminated, he may likewise be dismissed from his
collective bargaining comprehends at least two employment. The only exception to this is when the
broad notions, namely: Ee objects to such membership on the ground of
religious belief.
1. Liberty or freedom - i.e., the absence of
legal restraint, whereby an Ee may act for Right to join a union acquired from first day of
himself without being prevented by law; employment
and
Any Ee, whether employed for a definite period or
2. Power - whereby an Ee may, as he pleases, not shall, beginning on his first day of service, be
join or refrain from joining an association. considered an Ee for purposes of membership in
any labor union. (Art. 292(c), LC)
It is, therefore, the Ee who should decide for himself
whether or not he should join an association; and Union members who are not Ees do not possess
should he choose to join, he himself makes up his the right to join union
mind as to which association he would join; and
even after he has joined, he still retains the liberty If the union members are not Ees, no right to
and the power to leave and cancel his membership organize for purposes of collective bargaining, nor
with said organization at any time. (Victoriano v. to be certified as bargaining agent can be
Elizalde Rope Worker’s Union, G.R. No. L-25246, 12 recognized. The question of whether Er-Ee
Sept. 1974) relationship exists is a primordial consideration
before extending labor benefits under the
RIGHT TO UNION MEMBERSHIP workmen’s compensation, social security,
PhilHealth, termination pay, and labor relations law.
Right to Union Membership is not absolute Failure to establish this juridical relationship
between the union members and the Er affects the
An Ee cannot invoke an absolute right to union legality of the union itself. It means the ineligibility
membership. Though granted by the Constitution, it of the union members to present a petition for
is subject to regulation by the State. An example of certification election as well as to vote therein.
this is it has been mandated by law that no labor (Singer Sewing Machine Company v. Drilon, G.R. No.
organization shall knowingly admit as member or 91307, 24 Jan. 1991)
continue in membership, any individual who
belongs to a subversive organization or who is 2. BARGAINING UNIT
engaged directly or indirectly in any subversive
activity.
The law does not mention any specific mode of
determining what constitutes a bargaining unit. The
Freedom of Choice
basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally
An Ee has the right to join or not join a labor union.
the combination which will best assure to all Ees the
As such, a member of a labor union may leave and
exercise of their collective bargaining rights.
cancel his membership at any time.

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 III. EMPLOYMENT PROPER
(International School v. Quisumbing, G.R. No. 128845, NOTE: The fact that the three plants are located in
1 June 2000) three different places, namely, in Cabuyao, Laguna,
in Otis, Pandacan, Metro Manila, and in San
Tests to determine the appropriate bargaining Fernando, Pampanga is immaterial. Geographical
unit location can be completely disregarded if the
communal or mutual interests of the Ees are not
1. Community or mutuality of interest sacrificed. (Azucena, 2016)
2. Will of the Ees or “Globe Doctrine”
3. Collective bargaining history Q: Samahang Tunay, a union of rank-and-file
4. Similarity of employment status Ees, lost in a certification election at Solam
Company and has become a minority union. The
COMMONALITY OR MUTUALITY OF INTEREST majority union now has a signed CBA with the
company and the agreement contains
Under this doctrine, the Ees sought to be Maintenance of Membership Clause.
represented by the collective bargaining agent must
have community or mutuality of interest in terms of What can Samahang Tunay still do within the
employment and working conditions as evidenced company as a union considering that it still has
by the type of work they perform. This is members who continue to profess continued
characterized by similarity of employment status, loyalty to it? (2013 BAR)
same duties, and responsibilities and substantially
similar compensation and working conditions. (San A: As a legitimate labor organization, it can continue
Miguel Corp. Ees Union-PTGWO v. Confesor, G.R. No. to represent its members on non-CBA-related
111262, 19 Sept. 1996) matters. (Art. 248, LC)

Factors considered in determining the Q: A registered labor union in UP, ONAPUP, filed
Substantial or Mutuality Interest Doctrine a petition for certification election among the
non-academic Ees. The university did not
1. Similarity in the scale and manner of oppose, however, another labor union, the All
determining earnings; UP Workers Union assents that it represents
2. Similarity in employment benefits, hours of both academic and non-academic personnel and
work, and other terms and conditions of seeks to unite all workers in one union. Do Ees
employment; performing academic functions need to
3. Similarity in the kinds of work performed; comprise a bargaining unit distinct from that of
4. Similarity in the qualifications, skills, and the non-academic Ees?
training of Ees;
5. Frequency of contract or interchange among A: YES. The mutuality of interest test should be
the Ees; taken into consideration. There are two classes of
6. Geographical proximity; rank-and-file Ees in the university – those who
7. Continuity and integration of production perform academic functions such as the professors
processes; and instructors, and those whose function are non-
8. Common supervision and determination of academic who are the janitors, messengers, clerks
labor-relations policy; etc. Thus, not much reflection is needed to perceive
9. History of CB; that the mutuality of interest which justifies the
10. Desires of the affected Ees; or formation of a single bargaining unit is lacking
11. Extent of union organization. (Cox, Bok & between the two classes of Ees. (U.P. v. Ferrer-
Gorman, Labor Law, 1977) Calleja, G.R. No.96189, 14 July 1992)

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WILL OF THE EMPLOYEES or NOTE: The policy should yield to the right of Ees to
“GLOBE DOCTRINE” form a union for purposes not contrary to law, self-
organization, and to enter into CB negotiations.
This principle is based on the desires of the Ees. In
defining the appropriate bargaining unit, the Two corporations cannot be treated as a single
determining factor is the desire of the workers bargaining unit, even if their businesses are related.
themselves. While the desires of Ees with respect to (Indophil Textile Mill Workers Union v. VA Calica, G.R.
their inclusion in bargaining unit is not controlling, No. 96490, 03 Feb. 1992)
it is a factor which would be taken into
consideration in reaching a decision. (Globe Machine NOTE: The proliferation of unions in an Er unit is
& Stamping Co., 3 NLRB 294, 1937) merely discouraged as a matter of policy. However,
if there are compelling reasons which would deny a
“One-company, One-union” Policy certain class of Ees the right to self-organization for
purposes of collective bargaining, then it would be
It is the policy of the BLR to encourage the formation allowed.
of an Er unit. In other words, one Er enterprise
should constitute only one bargaining unit because In case of two companies with related
the more solid the Ees are, the stronger their businesses, not necessarily treated as a single
bargaining capacity. BU

GR: All the rank-and-file Ees with substantially the It is erroneous to treat two companies as a single
same interests and who invoke the right to self- bargaining unit when these companies are
organization are part of a single unit so that they can indubitably distinct entities with separate juridical
deal with their Er with just one and potent voice. personalities.
The Ees’ bargaining power is strengthened thereby.
(General Rubber and Footwear Corporation v. BLR, et Subsidiaries and Spin-off Corporations
al., G.R. No. 74262, 29 Oct. 1987)
Subsidiaries or corporations formed out of former
XPNs: divisions of a mother company following a re-
organization may constitute a separate bargaining
1. Supervisory Ees – allowed to form their own unit.
unions apart from the rank-and-file Ees;
NOTE: In determining an appropriate bargaining
2. Craft Unit – bargaining unit composed of Ees unit, the test of grouping is mutuality or
of the company with the same occupation, commonality of interests. Considering the spin-offs,
such as pilots as distinguished from ground the companies would have their respective and
personnel; distinctive concerns in terms of the nature of work,
wages, hours of work, and other conditions of
3. Plant Unit – bargaining unit composed of Ees employment. Interests of Ees in the different
in a particular plant of the company, such as companies per force differ. (San Miguel Corp. Union
the company’s Cebu plant as distinguished v. San Miguel Corp., Magnolia Corp., and San Miguel
from its Ilocos plant. Foods, Inc., G.R. No. 111262, 19 Sept. 1996)

The main consideration in a plant unit is

geographical, while it is occupational in a craft unit.
(Alcantara, 2008)

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 III. EMPLOYMENT PROPER
The Four-Factor Analysis 3. They have a single mutual benefit system and
followed a single system of compulsory
The US National Labor Relations Board continues to retirement;
apply a four-factor analysis in determining whether
two or more Ers constitute a single Er: 4. They could easily transfer security guards of
one agency to another and back again by
1. Interrelations of operation; simply filling-up a common pro-forma slip;
2. Centralized control of labor relations;
3. Common management; and 5. They always hold joint yearly ceremonies such
4. Common ownership (Azucena, 2016) as the PGA Annual Awards Ceremony; and

Distinguishing the CBU from the union is 6. They continue to be represented by one
important because: counsel.

1. In a CE, the voters are the whole bargaining Hence, the veil of corporate fiction of the three
unit, whether union or non-union members; agencies should be lifted for the purpose of allowing
the Ees of the three agencies to form single union.
2. In CBA ratification, the voters are the whole As a single bargaining unit, the Ees need not file
bargaining unit, not just the union members; three separate PCE. (Philippine Scout Veterans
Security and Investigation Agency v. SOLE, G.R. No.
3. In strike voting, the voters are the members 92357, 21 July 1993)
of the union, not the whole bargaining unit.
(Azucena, 2016) Grounds for Cancellation of Union Registration

Q: Union filed a petition for certification election 1. Misrepresentation, false statement, or fraud
among the rank-and-file Ees of three security in connection with the adoption or
agencies including the Veterans Security. The Ratification of the constitution and by-laws or
latter opposed alleging that the three security amendments thereto, the minutes of
agencies have separate and distinct corporate ratification, and the list of members who took
personalities. May a single petition for part in the ratification;
certification election be filed by a labor union in
the three corporations instead of filing three 2. Misrepresentation, false statements, or fraud
separate petitions? in connection with the Election of officers,
minutes of the election of officers, and the list
A: YES. The following are indications that the three of voters;
agencies do not exist and operate separately and
distinctly from each other with different corporate 3. Voluntary dissolution by the members. (Art.
direction and goals: 247, LC)

1. Veterans Security failed to rebut the fact that Q: Company XYZ has two recognized labor
they are managed through the Utilities unions, one for its rank-and-file Ees and the
Management Corporation with all their Ees other for its supervisory Ees. Of late, the
drawing their salaries and wages from the said company instituted a restructuring program by
entity; virtue of which A, a rank-and-file Ee and officer
of rank-and-file Ees’ labor union, was promoted
2. The agencies have common and interlocking to a supervisory position along with four other
incorporators and officers; colleagues, also active union members and/or
officers. Labor Union KMJ, a rival labor union
seeking recognition as the rank-and-file

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bargaining agent, filed a petition for the considered. The test of grouping is community or
cancellation of the registration of rank-and-file mutuality of interests. This is because the basic test
Ees labor union on the ground that A and her of an asserted bargaining unit’s acceptability is
colleagues have remained to be members of whether or not it is fundamentally the combination
rank-and-file Ees labor union. Is the petition which will best assure to all Ees the exercise of their
meritorious? Explain. (2010 BAR) CB rights. (Democratic Labor Association v. Cebu
Stevedoring Company, Inc., G.R. No. L-10321, 28 Feb.
A: NO. The inclusion as union members of Ees 1958)
outside the bargaining unit shall not be a ground for
the cancellation of the registration of the union. Said EMPLOYMENT STATUS DOCTRINE
Ees are automatically deemed removed from the list
of membership of said union. The determination of the appropriate bargaining
unit based on the employment status of the Ees is
There are only three grounds for the cancellation of considered as an acceptable mode. (Chan, 2019)
union registration: (R-E-V)
3. BARGAINING REPRESENTATIVE
1. Misrepresentation, false statement, or
fraud in connection with the adoption or
Organized Establishment
Ratification of the constitution and by-laws
or amendments thereto, the minutes of
It is an enterprise where there exists a recognized
ratification, and the list of members who
or certified sole and exclusive bargaining agent.
took part in the ratification;

Unorganized establishment
2. Misrepresentation, false statements, or
fraud in connection with the Election of
It is an enterprise where no union has yet been duly
officers, minutes of the election of officers,
recognized or certified as bargaining
and the list of voters;
representative.

3. Voluntary dissolution by the members.

Bargaining representative of the Employees for
(Art. 247, LC)
purposes of collective bargaining

COLLECTIVE BARGAINING HISTORY DOCTRINE

The labor organization designated or selected by
the majority of the Ees in an appropriate collective
This principle puts premium to the prior collective
bargaining unit shall be the exclusive representative
bargaining history and affinity of the Ees in
of the Ees in such unit for the purpose of CB.
determining the appropriate bargaining unit.
However, an individual Ee or group of Ees shall have
However, the existence of a prior collective
the right at any time to present grievances to their
bargaining history has been held as neither decisive
Er. (Art. 267, LC)
nor conclusive in determination of what constitutes
an appropriate bargaining.
Methods of determining the exclusive
bargaining representative:
Bargaining history not a decisive factor in the
determination of appropriateness of bargaining
1. Sole and Exclusive Bargaining Agent (SEBA)
unit
Certification;
2. Certification Election; and
While the existence of a bargaining history is a
3. Consent Election.
factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be

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 III. EMPLOYMENT PROPER
SEBA CERTIFICATION 5. The statement of the existence/non-
existence of other labor
This is a new mode of determining sole and organization/CBA.
exclusive bargaining agent provided for under D.O.
No. 40-I-15, s. 2015 which has expressly repealed the Where to file the Request
entire set of Rules applicable to Voluntary
Recognition in the IRR on Book V of the LC. (Chan, Any legitimate labor organization may file a Request
2017) in the DOLE Regional Office which issued its
certificate for registration or certificate of creation
It is a process where a union requests the DOLE of chartered local, as the case may be.
Regional Director to recognize and certify the union
as the Sole and Exclusive Bargaining Agent (SEBA) Action on the Request
of the Barganing Unit (BU) it purports to represent
for purposes of collective bargaining with the Er. Within 1 day from the submission of the Request,
the DOLE Regional Director should:
Rationale for the Repeal
1. Determine whether the request is compliant
By allowing the Er to extend “voluntary recognition” with the documentary requirements and
to a union, it is no longer the Ees but the Er who whether the bargaining unit sought to be
determines and designates the SEBA when it is represented is organized or not; and
supposed to be just a mere “by-stander” in such
determination and designation process. (Chan, 2. Request a copy of the payroll for purposes of
2017) SEBA certification.

Conditions: If the DOLE Regional Director finds the Request

deficient, he should advise the requesting union or
1. The bargaining unit is not unionized; local to comply within 10 days from notice. Non-
2. The requesting union is the only union in that compliance shall be deemed withdrawal of the
bargaining unit; and request. (Sec. 3, D.O. 40-1-15)
3. The CBU majority are members of the union.
Scenarios contemplated by the Rules on Request
Documentary Requirements for Sole and Exclusive Bargaining Agent
Certification
The Request should indicate:
1. Request certification in unorganized
1. The name and address of the requesting establishment with only one legitimate
legitimate labor organization; union.

2. The name and address of the company 2. Request for certification in unorganized
where it operates; establishment with more than one legitimate
labor organization
3. The bargaining unit sought to be
represented; 3. Request for certification in organized
establishment
4. The approximate number of the Ees in the
bargaining unit; and

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Unorganized – Only One Legitimate Union Organized

The DOLE Regional Director shall call a conference If the DOLE Regional Director finds that the
within 5 working days for the submission of the establishment organized, he should refer the same
following: to the Mediator-Arbiter for the determination of the
propriety of conducting a certification election.
a. The names of Ees in the covered bargaining unit
who signify their support for the SEBA Q: What would happen if the request is denied?
certification, provided that said Ees comprise at
least majority of the number of Ees in the A: It may be referred to an election officer for the
covered bargaining unit; and conduct of a certification election.

b. Certification under oath by the President that Q: What if it was granted?

all documents submitted are true and correct
based on his/her personal knowledge. A: Then the certified union shall enjoy the rights and
privileges of an EBA for the BU.
If the requesting union or local fails to complete the
requirements for the SEBA certification during the CERTIFICATION ELECTION
conference, the Request should be referred to the
Election Officer for the conduct of certification Certification Election
election.
It is the process of determining through secret ballot
If the DOLE Regional Director finds that the the sole and exclusive representative of the Ees in
requirements are complete, he shall issue, during an appropriate bargaining unit, for purposes of
the conference, a Certification as SEBA. collective bargaining or negotiation. (Sec. 1(h), Rule
I, Book V, IRR)
Effect of the Issuance of the Certification as SEBA
NOTE: The process is called certification election
a. The certified union shall enjoy all the rights and because it serves as the official, reliable, and
privileges of an exclusive bargaining agent of all democratic basis for the BLR to determine and
the Ees in the covered bargaining unit. certify the union that shall be the exclusive
bargaining representative of the Ees for the purpose
b. Certification Bar Rule - The issuance of the of bargaining with the Er.
SEBA Certification as SEBA bars the filing of a
petition for election by any labor organization Nature of Certification Election
for a period of one (1) year from the date of
issuance. A CE is not a litigation but merely an investigation of
a non-adversarial fact-finding character in which
Unorganized – More Than One Legitimate Labor BLR plays a part of a disinterested investigator
Organization seeking merely to ascertain the desire of the Ees as
to the matter of their representation. (Airline Pilots
If the DOLE Regional Director finds that the Association of the Philippines v. CIR, G.R. No. L-33705,
establishment unorganized with more than one 15 Apr. 1977)
legitimate labor organization, he should refer the
same to the Election Officer for the conduct of Certification proceedings directly involve only two
certification election. (Sec. 3, D.O. No. 40-1-15) issues:

a. Proper composition and constituency of the

bargaining unit; and

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 III. EMPLOYMENT PROPER
b. Veracity of majority membership claims of the Filing a Petition for Certification Election (PCE)
competing unions so as to identify the one
union that will serve as the bargaining The following may file a PCE:
representative of the entire bargaining unit.
(Azucena, 2016) 1. Any LLO;

Purpose of a Certification Election 2. A National Union or Federation which has

already issued a charter certificate to its local
It is a means of determining the worker’s choice of: chapter participating in the CE;

1. Whether they want a union to represent them 3. A local chapter which has been issued a charter
for CB or if they want no union to represent certificate; or
them at all.
4. An Er only when requested to bargain
2. And if they choose to have a union to collectively in a bargaining unit where no
represent them, they will choose which registered CBA exists. (Sec. 1, Rule VIII, Book V,
among the contending unions will be the sole IRR)
and exclusive bargaining representative of
the Ees in the appropriate bargaining unit. NOTE: A national union or federation filing a
petition in behalf of its local/chapter shall not be
Q: There are instances when a certification required to disclose the names of the
election is mandatory. What is the rationale for local/chapter’s officers and members, but shall
such a legal mandate? attach to the petition the charter certificate it issued
to its local/chapter. (Sec. 1, Rule VIII, Book V, IRR as
A: According to the LC, in any establishment where amended by D.O. 40-F-03)
there is no certified bargaining agent, a certification
election shall automatically be conducted by the In registration of federation or national union,
Med-Arbiter upon the filing of a petition by a the 20% membership requirement may not be
legitimate labor organization. In the above- complied with
described situation, a certification election is made
mandatory because if there is no certified The registration requirement of submitting the
bargaining agent as determined by a certification names of all its members comprising at least 20% of
election, there could be no collective bargaining in all the Ees in the bargaining unit where it seeks to
the said unorganized establishment. (Art. 269. operate is applicable only to registration of
(257), LC) independent union. LC merely requires for proof of
affiliation of at least 10 local chapters and the names
NOTE: The Court has repeatedly stressed that the and addresses of the companies where they operate.
holding of a certification election is based on a No 20% membership requirement is required for
statutory policy that cannot be circumvented. The registration of a federation or national union.
workers must be allowed to freely express their
choice in a determination where everything is open NOTE: Under the LC and the Rules, the power
to their sound judgment and the possibility of granted to labor organizations to directly create a
fraud and misrepresentation is eliminated. chapter or local through chartering is given to a
(Progressive Development Corporation v. SOLE, G.R federation or national union only, not to a trade
No. 96425, 4 Feb. 1992) union center. (SMCEU v. San Miguel Packaging
Products Ees Union, G.R. No. 171153, 12 Sept. 2007)

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Er may file a Petition for Certification Election If there is a CBA, the petition may only be filed
within the “freedom period” of the representational
Er may file a petition for certification election when aspect of the CBA.
requested to bargain collectively, but it should
thereafter not be allowed to have an active role in NOTE: Freedom period refers to the last 60 days
the CE; it shall merely act as a bystander. immediately preceding the expiration of CBA.
(Tanduay Distillery Labor Union v. NLRC, G.R. No.
NOTE: If the petition for certification election was 75037, 30 Apr. 1987)
filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the Q: In what instance may a petition for
principal which must be a legitimate labor certification election be filed outside the
organization. The chapter cannot merely rely on the freedom period of a current collective
legitimate status of the mother union. bargaining agreement? (1997 BAR)

Equity of the Incumbent A: As a general rule, in an establishment where

there is a CBA in force and effect, a PCE may be filed
The incumbent bargaining agent shall automatically only during the freedom period of such CBA, but to
be one of the choices in the certification election as have that effect, the CBA should have been filed and
forced intervenor. (Rule VIII, Sec. 8, DO 40-03) registered with the DOLE. (Art. 237, 265, and 268,
LC)
The incumbent bargaining agent will not file a PCE
because it will not contest its own status as the Thus, a CBA that has not been filed and registered
bargaining representative. with the DOLE cannot be a bar to a CE and such
It does not lose its representative status; it remains election can be held outside the freedom period of
the sole bargaining representative until it is such CBA.
replaced by another. Until so replaced, it has the
right to retain the recognition by the Er. Where to file the PCE

No Union as a Choice A petition for certification election shall be filed

with the Regional Office which issued the
The right to join a union includes the right not to petitioning union’s certificate of registration or
join. (Victoriano v. Elizalde Rope Workers Union, G.R. certificate of creation of chartered local.
L-25246, 12 Sept. 1974) In view of this, the “no
union” choice should always be included in the The petition shall be heard and resolved by the Med-
certification election. If the “no union” option wins, Arbiter.
the statutory bar rule shall apply. Thus, there will be
no SEBA and no new PCE can be filed within one (1) NOTE: The filing or pendency of any inter/intra-
year from the conduct of certification elections. union dispute and other related labor relations
dispute is not a prejudicial question to any petition
Time to File PCE for certification election and shall not be a ground
for the dismissal of a petition for certification
It would depend if the Bargaining Unit has a CBA or election or suspension of proceedings of
none. certification election. (Sec. 2, Rule XI of D.O. 40-03)
If there is none, the petition may be filed anytime
except within the 12 months of a previous election,
if any.

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 III. EMPLOYMENT PROPER
Med-Arbiter’s Action on the Petition organized establishment as soon as the following
requisites are met:
Hold a Preliminary Conference:
1. A petition questioning the majority status
1. To determine whether the PCE should be of the incumbent bargaining agent is filed
processed or dismissed; before the DOLE within the 60-day
freedom period;
2. To determine the BU that will participate in
the election and the identity of the contending 2. Such petition is verified; and
unions; and
3. The petition is supported by the written
3. To determine the possibility of holding a consent of at least 25% of all the Ees in the
“consent election.” bargaining unit. (Art. 268, LC; TUPAS-
a. If the unions agree, the PCE will no longer WFTU v. Laguesma, G.R. No. 102350, 30
be heard and the unions will instead June 1994)
prepare for the consent election. (There
is implied waver of the bars) Filing of 25% Consent Signatures in the Petition
for Certification Election
b. If the unions fail to agree, hearings would
be conducted. Ideally, the signature should be filed together with
the petition. However, it may be filed after the
Conduct of Hearings petition within a reasonable period of time.

After the last hearing, the Med-Arbiter shall issue a Effect if the Petition for Certification Election
formal order denying or granting the petition. was NOT accompanied by the requisite 25%
Consent Signatures
Requisites For Certification Election in an
Unorganized Establishment Under the Implementing Rules, absence or failure to
submit the written consent of at least 25% of all the
An unorganized establishment is a bargaining unit Ees in the bargaining unit to support the petition is
with no recognized or certified bargaining agent. It a ground for denying the said petition.
does not necessarily refer to an entire company.
Notwithstanding the provision of the IRR that
NOTE: It may happen that the rank-and-file unit has failure to submit the required 25% consent
a bargaining agent while the supervisory unit still signatures is a ground for the denial of the petition,
does not have such agent; thus, the former is already the Supreme Court ruled that, it is within the
an “organized establishment” while the latter discretion of the Med-Arbiter whether to grant or
remains, in the same company, an unorganized deny the petition despite absence of the required
establishment. 25% written consent. (Port Workers Union v.
Bienvenido Laguesma, G.R. Nos. 94929-30, 18 Mar.
The certification election shall be automatically 1992)
conducted upon the filing of a PCE by a LLO.
If the petition, however, is accompanied by the 25%
Requisites For Certification Election in an consent signatures, then the holding of the CE
Organized Establishment becomes mandatory. (California Manufacturing
Corp. v. Laguesma, G.R. No. 97020, 8 June 1992)
The Mediator-Arbiter is required to automatically
order the conduct of a CE by secret ballot in an

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Consent signatures of at least 25% of the Ees in Bar Rules
the bargaining unit may not be submitted
simultaneously with the filing of the Petition for No certification election may be held under the
Certification Election following rules:

The administrative rule requiring the simultaneous 1. Certification year bar rule;
submission of the 25% consent signatures upon the 2. Negotiations bar rule;
filing of PCE should not be strictly applied to 3. Bargaining deadlock bar rule; or
frustrate the determination of the legitimate 4. Contract bar rule.
representative of the workers. Accordingly, the
Court held that the mere filing of a PCE within the Certification Year Bar Rule
freedom period is sufficient basis for the issuance of
an order for the holding of a CE, subject to the Under this rule, a petition for certification election
submission of the consent signatures within a may not be filed within one (1) year from the date a
reasonable period from such filing. (Port Workers valid certification, consent, run-off, or re-run
Union of the Phils. v. Laguesma, G.R. Nos. 94929-30, election has been conducted within the bargaining
18 Mar. 1992) unit. This is also called as the 12-month Bar rule.

Duty of Fair Representation The same ban applies if “No Union” won in the
previous election.
The winning union in the certification election
becomes the EBA of all the workers in the BU and NOTE: In case of failure of elections, a re-run
shall represent even the members of the minority election will be held within six (6) months. Also,
union. when the election held is invalid.

CONSENT ELECTION XPN to the Certification Year Bar Rule

Consent election When there is a failure of election, when the number

of votes cast in a certification or consent election is
It is an election that is voluntarily agreed upon by less than the majority of the number of eligible votes
the parties with or without the intervention of DOLE and there is no material challenged votes.
for the purpose of determining the EBA.
Failure of election does not bar the holding of
Certification Election vs. Consent Election another certification or consent election within six
(6) months.
CERTIFICATION CONSENT
ELECTION ELECTION NOTE: If an election had been held but No Union
Voluntarily agreed won, a PCE may be filed again but only after 12
upon by the parties months.
Ordered by DOLE
with or without the
intervention of DOLE If a union has won, such union and the Er must
within 12 months start negotiating a collective
BARS TO THE HOLDING OF agreement.
CERTIFICATION/CONSENT ELECTION
Negotiation Bar Rule
GR: In the absence of a CBA duly registered in
accordance with Art. 237 of the Labor Code, a Under this rule, no petition for certification election
petition for certification election may be filed at any should be entertained while the sole and exclusive
time. (Sec. 1, Rule VIII, Book V, IRR) bargaining agent and the Er have commenced and

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 III. EMPLOYMENT PROPER
sustained negotiations in good faith within the The purpose of this rule is to ensure stability in the
period of one (1) year from the date of a valid relationship of the workers and the Er by
certification, consent, run-off, re-run, or from the preventing frequent modifications of any CBA
date of voluntary recognition. entered into by them in good faith and for the
stipulated original period.
Once the CBA negotiation have commenced and
while the parties are in the process of negotiating NOTE: To bar a certification election, it is no longer
the terms and conditions of the CBA, no challenging necessary that the CBA be “certified”; it is enough
union is allowed to file a petition for certification that it is registered in accordance with Art. 237.
election that would disturb the process and unduly (Azucena, 2016)
forestall the early conclusion of the agreement.
Requisites of Contract Bar
If after the lapse of 12 months and they failed to
commence the negotiation, the Ees’ wish to have a 1. It must contain substantial terms and
CBA is defeated. Hence, another union can petition conditions of employment sufficient to
again for a certification election to replace the stabilize the bargaining relationship;
unproductive bargaining agent. (Azucena, 2016)
2. It must be signed by the parties; and
Bargaining Deadlock Bar Rule
3. The effective date and expiration date must be
Under this rule, a petition for certification election readily discernible on the face of the contract.
may not be entertained when a bargaining deadlock
to which an incumbent or certified bargaining agent Contract Bar Rule applied on Extended CBA
is a party has been submitted to conciliation or has under Deadlock
become the subject of a valid notice of strike or
lockout. No petition for certification election may be filed
before the onset of the freedom period nor after
NOTE: The Er’s continuing act of evading such period. The old CBA is extended until a new
negotiation with the certified bargaining union is one is signed.
tantamount to a bargaining deadlock.
It shall be the duty of both parties to keep the status
Artificial Deadlock quo and to continue in full force and effect the terms
and conditions of the existing agreement during the
A deadlock pre-arranged or preserved by collusion 60-day period and/or until a new agreement is
of the Er and the majority union. Signs of Artificial reached by the parties.
Deadlock include failure of the union to resort to
conciliation, failure to charge the Er ULP, or failure The Contract Bar Rule does NOT apply in the
to file a notice of strike despite the deadlock. following cases:

Contract Bar Rule 1. Where there is an automatic renewal provision

in the CBA but prior to the date when such
Under this rule, a petition for certification election automatic renewal became effective, the Er
may not be filed when a CBA between the Er and a seasonably filed a manifestation with the
duly recognized or certified bargaining agent has Bureau of Labor Relations of its intention to
been registered with the BLR in accordance with the terminate the said agreement if and when it is
Labor Code. Where the CBA is duly registered, a established that the bargaining agent does not
petition for certification election may be filed within represent anymore the majority of the workers
the 60-day freedom period prior to its expiry. in the bargaining unit;

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2. Where the CBA, despite its due registration, is 4. When a PCE is filed before or after the freedom
found in appropriate proceedings that: period of a duly registered CBA, provided that
a. it contains provisions lower than the the 60-day period based on the original CBA
standards fixed by law; or shall not be affected by any amendment,
b. the documents supporting its extension or renewal of the CBA; (Sec. 14(c),
registration are falsified, fraudulent, or Rule VIII of D.O. 40-F-03)
tainted with misrepresentation;
5. Filing of a petition within one (1) year from the
3. Where the CBA does not foster industrial date of recording of voluntary recognition, or
stability, such as contracts where the identity of within the same period from a valid
the representative is in doubt since the Er certification, consent, or run-off election
extended direct recognition to the union and where no appeal on its results is pending; (Sec.
conducted a CBA therewith less than one (1) 14(d), Rule VIII of D.O. 40-F-03)
year from the time a certification election was
conducted where the “no union” vote won. This 6. When a duly certified union has commenced
situation obtains in a case where the company and sustained negotiations with the Er in
entered into a CBA with the union when its accordance with Art. 250 of LC within the one-
status as exclusive bargaining agent of the Ees year period referred in the preceding number;
has not been established yet; and (Sec. 14(e), Rule VIII of D.O. 40-F-03)

4. Where the CBA was registered before or during 7. Absence of Er-Ee relationship between all the
the last 60 days of a subsisting agreement or members of the petitioning union and the
during the pendency of a representation case. It establishment where the proposed bargaining
is well-settled that the 60-day freedom period unit is sought to be represented; (Sec. 14(h),
based on the original CBA should not be Rule VIII of D.O. 40-F-03)
affected by any amendment, extension, or
renewal of the CBA for purposes of certification Q: Does the filing of a petition for
election. cancellation of registration of union cause
the suspension or dismissal of a PCE?
Denial; Other grounds
A: NO. An order to hold a certification election
The Med-Arbiter may either approve or disapprove is proper despite the pendency of the petition
the PCE. The disapproval or denial of the petition for cancellation of the registration certificate
has to be based on the grounds specified by the law: of the respondent union. The rationale for this
is that at the time the respondent union filed
1. Non-appearance – When petitioner does not its petition, it still had the legal personality to
appear in two (2) successive conferences perform such act absent an order directing the
called by the Med-Arbiter, despite notice, the cancellation. (Association of Court of Appeals
petition may be dismissed; Ees v. Ferrer-Calleja, G.R. No. 94716, 15 Nov.
1991)
2. Illegitimacy/Unregistered union - When the
petitioning union or national union or NOTE: The finality of a decision cancelling the
federation is not listed in DOLE’s list of LLOs or certificate of registration of a LLO would not
if its registration has been cancelled; retroact to the time of its issuance of the
certificate. Meaning, despite the fact that a PCE
3. When there is a failure on the part of a local is filed during the pendency of a trial ruling
chapter, national union or federation to submit over the legitimacy of a labor union, the filing
a duly issued Charter Certificate upon filing of for said petition was done when it still had
PCE; (Sec. 14(b), Rule VIII of D.O. 40-F-03) legal personality. Additionally, the legitimacy

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of the legal personality of a LLO cannot be 1. If it is made before the filing, the withdrawal is
collaterally attacked. It must be done in a presumed voluntary and affects the propriety
separate action. (Legend International Resorts of the petition.
Limited v. Kilusang Manggagawa Ng Legenda,
G.R. No. 169754, 23 Feb. 2011) 2. If it is made after the filing, the withdrawal is
deemed involuntary and does not cause the
8. Illegitimacy – No charter - When the local or dismissal of the petition.
chapter, or the national union or federation
fails to submit a duly issued charter certificate Appeal of Grant or Denial of PCE
of the chapter at the time the union files its
PCE, it will cause the dismissal of the PCE; It would depend if the establishment is organized or
unorganized.
9. Absence of employment relationship - Ees’
right to unionize is founded on the existence of 1. In case of organized establishment, it is
Er-Ee relationship. If there is none, there appealable.
would be no basis; and
2. In case of unorganized establishment, it is
NOTE: Med-Arbiter can determine Er-Ee not appealable, except if the petition is denied.
relationship. Med-Arbiter has the authority to
determine existence of Er-Ee relationship in a NOTE: The filing or pendency of any inter/intra-
PCE. union dispute and other related labor relations
dispute is not a prejudicial question to any petition
10. Lack of support (25% signature for certification election and shall not be a ground
requirement) - When the union filing a PCE for the dismissal of a petition for certification
does not have the support of 25% of the election or suspension of proceedings of
bargaining unit manifested through their certification election. (Sec. 2, Rule XI of D.O. 40-03)
signatures, the PCE may be denied.
Double Majority Rule (certification election)
Without this minimum support, the challenge
to the incumbent union looks like a nuisance. 1. Valid election (First Majority rule) – Majority
It must appear that a sizeable portion of the of eligible voters shall have validly cast their
Ees desire to have a union. votes.

This requirement only applies to organized 2. Winning Union (Second Majority rule) – The
establishments. In unorganized winner who obtained majority of the valid
establishments, it is merely directory. votes cast shall be declared as the bargaining
agent in the bargaining unit.
NOTE: The 25% requirement may be relaxed
by the Med-Arbiter and order the holding of Q: Can the Bureau of Labor Relations certify a
the certification election precisely for the union as the exclusive bargaining
purpose of ascertaining which of the representative after showing proof of majority
contending unions shall be the EBA. representation thru union membership cards
without conducting an election?
Effect of Withdrawal of Signature by the
Employees A: The Bureau of Labor Relations cannot certify a
union as the exclusive collective bargaining
Critical factor to consider is when the withdrawal representative after showing proof of majority
happened: representation through union membership cards
without conducting a certification election. The LC

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(in Arts. 256, 257, and 258 (now Arts. 268, 269, and c. Should Union A be declared the winner?
270)) provides only for a certification election as the
mode for determining the exclusive collective A: NO. Union A should not be declared the winner
bargaining representative if there is a question of because it failed to garner majority of the valid
representation in an appropriate bargaining unit. votes. The majority of 500 votes, representing valid
votes, is 251 votes. Since Union A received 200 votes
NOTE: Under the so-called “double majority rule” only, it did not win the election. (Kato, 2022)
for there to be a valid certification election, the
majority of the employees in the bargaining unit d. Suppose the election is declared invalid,
must have voted and the winning union must have which of the contending unions should
garnered majority of the valid votes cast. represent the rank-and-file Ees?
(NUWHRAI-Manila Pavilion Hotel Chapter v. SOLE,
G.R. NO. 181531, 31 July 2009) A: NONE of the participating unions can represent
the rank-and-file employees for purposes of
Q: Liwayway Glass had 600 rank-and-file Ees. collective bargaining because none of them enjoys
Three rival unions A, B, and C ‒ participated in majority representative status. (Kato, 2022)
the certification election ordered by the Med-
Arbiter. 500 Ees voted. The unions obtained the e. Suppose that in the election, the unions
following votes: A-200; B-150; C-50; 90 Ees obtained the following votes: A-250;
voted “no union”; and 10 were segregated votes. B-150; C-50; 40 voted “no union”; and 10
Out of the segregated votes, four (4) were cast by were segregated votes. Should Union A be
probationary Ees and six (6) were cast by certified as the bargaining
dismissed Ees whose respective cases are still representative?
on appeal. (2014 BAR)
A: If the 10 votes were segregated on the same
a. Should the votes of the probationary and grounds, Union A cannot still be certified as the
dismissed Ees be counted in the total bargaining representative because its vote of 250 is
votes cast for the purpose of determining still short of the majority vote of 251. However, if
the winning labor union? the 10 votes were validly segregated, majority vote
would be 246 votes. Since Union A received more
A: YES. The segregated votes should be counted as than majority vote then it won the election. (Kato,
valid votes. Probationary employees are not among 2022)
the employees who are ineligible to vote. Likewise,
the pendency of the appeal of the six dismissed Q: May an organization which carries a mixture
employees indicates that they have contested their of rank-and-file and supervisory Ees possess
dismissal before a forum of appropriate any of the rights of a legitimate labor
jurisdiction; hence, they continue to be employees organization, including the right to file a petition
for purposes of voting in a certification election for certification election for the purpose of
(D.O. 40-03). (Kato, 2022) collective bargaining?

b. Was there a valid election? A: YES. While there is a prohibition against the
mingling of supervisory and rank-and-file Ees in one
A: YES. The certification election is valid because it labor organization, the Labor Code does not provide
is not a barred election and majority of the eligible for the effects thereof. Thus, the Court held that after
voters cast their votes. (Kato, 2022) a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate
labor organization. Any mingling between
supervisory and rank-and-file Ees in its
membership cannot affect its legitimacy for that is

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 III. EMPLOYMENT PROPER
not among the grounds for cancellation of its When to be Conducted
registration, unless such mingling was brought
about by misrepresentation, false statement, or If conditions that justify the conduct of a run-off
fraud under Art. 239 of the Labor Code. (Republic v. election are present and there are no objections or
Kawashima Textile, G.R. No. 160352, 23 July 2008) challenges which, if sustained, can materially alter
the election results, the Election Officer should motu
FAILURE OF ELECTION, RUN-OFF ELECTION, proprio conduct the run-off election within ten (10)
and RE-RUN ELECTION days from the close of the election proceeding
between the labor unions receiving the two highest
Failure of Election number of votes cast.

There exists a failure of election in the following Requirements for a Run-Off Election
instances:
1. A valid election took place because majority of
1. Where the number of votes cast in a the CBU members voted;
certification or consent election is less than
the majority of the number of eligible voters 2. The election presented at least three choices,
and there is no material challenged votes – In
this case, the failure of election shall not bar the e.g., Union One, Union Two, and No Union,
filing of a motion for the immediate holding of meaning, there are at least two union
another certification or consent election within “candidates;”
six (6) months from date of declaration of
failure of election; and 3. Not one of the unions obtained the majority
valid votes;
2. When there is a tie – The next election must be
held within a period of ten (10) days from the 4. The total number of votes for all the unions is
last election in order to determine or break the at least 50% of the votes cast; and
tie.
5. There is no unresolved challenge of voter or
Run-off Election election process. (Azucena, 2016)

A run-off election refers to an election between the NOTE: Thus, if “no union” garnered the majority
labor union receiving the two highest votes in a vote, no run-off elections may be held.
certification election or consent election with three
or more unions in contention, where such Choices in a run-off election
certification election or consent election results in
none of the contending unions receiving the The unions receiving the highest and 2 nd highest
majority of the valid votes cast; provided, that the number of the votes cast. (Sec. 2, Rule X, Book V, IRR)
total number of votes for all contending unions, if
added is at least 50% of the number of valid votes NOTE:“No Union” is not a choice in the Run-off
cast. (Art. 268, LC) Election.

Qualification of Voters in the Run-Off Election Posting of Notice for Run-Off Election

The same voters list used in the certification The notice should be posted by the Election Officer
election shall be used in the run-off election. at least five (5) days before the actual date. (Sec. 1,
Rule X, Book V, IRR)

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Re-Run Election 4. RIGHTS OF LABOR ORGANIZATIONS

There are three instances of Re-Run:

Labor Organization

1. Failure of certification election declared by the

It means any union or association of Ees which
election officer;
exists in whole or in part for the purpose of
2. Tie between two unions; or
collective bargaining or of dealing with Ers
3. Tie between a union and no union.
concerning terms and conditions of employment.
(Art. 219 (g), LC)
In both instances, the “no union” is also a choice.

It is created for mutual aid, interest, cooperation,

Er as a Bystander (Bystander Rule)
protection, or other lawful purposes. (Sec. 1, Rule I,
Book V, IRR as amended by D.O. No. 40-04)
In all cases, whether the PCE is filed by an Er or an
LLO, the Er shall not be considered a party thereto
It is a generic term as it can refer to a “union” or
with a concomitant right to oppose a PCE. The only
“association of Ees,” registered or not. The purposes
purpose of the proceeding is to determine which
may also be broad such as “collective bargaining” or
organization will represent the Ees in bargaining
“mutual aid” or “cooperation” or other lawful
with the Er. The choice of representative is the
purpose. (Azucena, 2016)
exclusive concern of the Ees.

Legitimate labor organization

The Er’s participation in such proceedings shall
be limited to:
It means any labor organization duly registered
with the DOLE, and includes any branch or local
1. Being notified or informed of petitions of
thereof. (Art. 219 (h), LC)
such nature; and
Bargaining representative
2. Submitting the list of Ees during the pre-
election conference should the Mediator-
It means a legitimate labor organization or any
Arbiter act favorably on the petition.
officer or agent of such organization, whether or not
(Republic v. Kawashima Textile, G.R. No.
employed by the Er. (Art. 219 (j), LC)
160352, 23 July 2008)

Company Union
Er’s possible recourse

It refers to any labor organization whose formation,

If the Er believes that the union has inappropriate
function or administration has been assisted by any
membership because it includes rank-and-file with
act defined as unfair labor practice by the Labor
managerial/supervisory Ees, the Er’s recourse is
Code. (Art. 219 (i), LC)
not to oppose the PCE, but to file a separate
petition to cancel the union’s registration.
Two Basic Purposes of a Labor Organization
(Azucena, 2016)

1. For collective bargaining; and

2. For dealing with the Er.

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Modes of Creating a Labor Organization 3. The names of all its members comprising at
least 20% of all the Ees in the bargaining unit
1. Independent registration; (Art. 240, LC) and where it seeks to operate;
2. Chartering of local chapter/chartered local
(Art. 241, LC) 4. If the applicant union has been in existence for
one or more years, copies of its annual
Registration with the DOLE financial reports; and

A labor organization may be registered or not. If 5. Four (4) copies of the constitution and by-laws
registered, it is considered a “legitimate labor of the applicant union, minutes of its adoption
organization” (LLO). However, a labor organization or ratification, and the list of the members who
is not “illegitimate” just because it is unregistered. It participated in it. (Art. 240, LC)
is still a lawful organization but it has no legal
personality to demand collective bargaining with Where to Register
the Er. (Azucena, 2016)
1. Independent labor unions, chartered locals,
NOTE: Registration with the DOLE makes a labor and workers’ associations – it shall be filed
organization legitimate in the sense that it is clothed with and acted upon by the Regional Office
with legal personality to claim the representational where the applicant principally operates.
and bargaining rights enumerated in Art. 251 and
Art. 267 or to strike and picket under Art. 278. 2. Federations, national unions, or workers’
(Azucena, 2013) associations operating in more than one
region – it shall be filed with the Bureau or the
It is the fact of being registered with DOLE that Regional Offices, but shall be processed and
makes a labor organization legitimate. Registration acted upon by the Bureau which has national
under the corporation law before the Securities and jurisdiction unlike a regional office.
Exchange Commission (SEC) only has the effect of
giving it juridical personality to represent itself in Classification of Labor Organizations
regular courts but it does not grant the rights and
privileges of a legitimate labor organization. (Phil. At the National Level
Land-Sea-Air Labor Union, Inc. v. CIR, G.R. No. L- 1. National Union/Federation;
25711, 29 Oct. 1975) 2. Industry Union;
3. Trade Union Center; and
Requirements for Registration 4. Company Union.

Any applicant labor organization, association, or At the Enterprise Level

group of unions or workers shall acquire legal 1. Independent Union; and
personality and shall be entitled to the rights and 2. Chapter.
privileges granted by law to legitimate labor
organizations upon issuance of the certificate of NOTE: A trade union center cannot create a
registration based on the following requirements: chartered local. (SMCEU-PTGWO v. SMPPEU-PDMP,
G.R. No. 171153, 12 Sept. 2007)
1. P50.00 registration fee;
Grounds for Cancellation of Registration (R-E-V)
2. The names of its officers, their addresses, the
principal address of the labor organization, the 1. Misrepresentation, false statement, or fraud in
minutes of the organizational meetings, and connection with the adoption or Ratification of
the list of the workers who participated in such the constitution and by-laws or amendments
meetings;

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thereto, the minutes of ratification, and the list How local chapter is created
of members who took part in the ratification;
A duly registered federation or national union may
2. Misrepresentation, false statements, or fraud in directly create a local/chapter by issuing a charter
connection with the Election of officers, certificate indicating the establishment of a
minutes of the election of officers, the list of local/chapter.
voters; and
1. The chapter shall acquire legal personality
3. Voluntary dissolution. (D.O. 40-F-03) only for purposes of filing a PCE from the date
it was issued a charter certificate;
Q: If there are supervisors that are joined with
the rank-and-file Ees union, would that be a 2. The chapter shall be entitled to all other rights
ground for cancellation of registration? and privileges of a LLO only upon the
submission of the following documents in
A: NO. Those who do not properly belong to the addition to its charter certificate:
union are deemed automatically removed from the
union by operation of law. (Art. 256, LC) a. Names of the chapter’s officers, their
addresses, and the principal office of the
Affiliation/Disaffiliation from National Union or chapter;
Federation
b. Chapter’s constitution and by-laws; and
A local union may affiliate with or disaffiliate from a
federation. This is an exercise of the right of c. Where the chapter’s constitution and
association recognized by the Constitution. by-laws are the same as that of the
federation or the national union, this
Between the chapter and the federation, affiliation fact shall be indicated accordingly; and
or disaffiliation is a contractual relation. Hence,
even if disaffiliation is a matter of right, the local 3. The genuineness and due execution of the
must comply with the obligations under the CBL supporting requirements shall be:
such as manner and period of notice.
a. Certified under oath by the secretary or
Affiliate treasurer of the local/chapter; and

An affiliate refers to: b. Attested to by its president. (Sec. 2(e),

Rule III, Book V, IRR, as amended by D.O.
1. An independently registered union that enters 40-F-03)
into an agreement of affiliation with a
federation or national union; or Reportorial Requirements in Affiliation

2. A chartered local which applies for and is The report of affiliation of independently registered
granted an independent registration but does labor unions with a federation or national union
not disaffiliate from its mother federation or shall be accompanied by the following documents:
national union.
1. Resolution of the labor union's board of
directors approving the affiliation;

2. Minutes of the general membership

meeting approving the affiliation;

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 III. EMPLOYMENT PROPER
3. The total number of members comprising Disaffiliation must be decided by the entire
the labor union and the names of members membership through secret balloting in accordance
who approved the affiliation; and with Art. 250(d). This happens when there is a
substantial shift in allegiance on the part of the
4. The certificate of affiliation issued by the majority of the members of the union. In such a case,
federation in favor of the independently however, the CBA continues to bind the members of
registered labor union; and written notice the new or disaffiliated and independent union to
to the Er concerned if the affiliating union determine the union which shall administer the
is the incumbent bargaining agent. (Sec. 7, CBA. (ANGLO-KMU v. Samahan ng Manggagawang
Rule III, D.O. 40-03) Nagkakaisasa Manila Bay Spinning Mills at J.P. Coats,
G.R. No. 118562, 05 July 1996)
Reasons for Affiliation
Disaffiliation must be by majority decision
1. Secure support or assistance especially
during the formative stage of Disaffiliation must be decided by the entire
unionization; membership through secret balloting in accordance
with Art. 250(d). An individual member or any
2. Utilize expertise in preparing and number of members may disaffiliate from the union
pursuing bargaining proposals; and during the “freedom period” but disaffiliating the
union itself from the mother union must be
3. To marshal mind and manpower in the supported by the majority of the members. If done
course of a group action such as a strike. by a minority, even during the freedom period, the
(Azucena, 2016) act may constitute disloyalty. They may be expelled
from the union or may be removed from their
NOTE: The sole essence of affiliation is to increase, employment because of the union security clause.
by collective action, the common bargaining power
of local unions for the effective enhancement and Limitation to Disaffiliation
protection of their interests. (Azucena, 2016)
To disaffiliate is a right, but to observe the terms of
Independently registered union is required to affiliation is an obligation. (Azucena, 2016)
report affiliation with the Regional Office
Disaffiliation should be in accordance with the rules
A union affiliating with a federation or national and procedures stated in the Constitution and by-
union is required to report such affiliation to the laws of the federation. A local union may disaffiliate
Regional Office that issued its certificate of with its mother federation, provided that there is no
registration. enforceable provision in the federation’s
constitution preventing disaffiliation of a local
Disaffiliation of local union from the federation union. (Tropical Hut Ees Union v. Tropical Hut, G.R.
Nos. L-43495-99, 20 Jan. 1990)
GR: A labor union may disaffiliate from the mother
union to form an independent union only during the A prohibition to disaffiliate in the Federation’s
60-day freedom period immediately preceding the constitution and by-laws is valid because it is
expiration of the CBA. intended for its own protection.

XPN: Even before the onset of the freedom period, Effect of Disaffiliation
disaffiliation may still be carried out, but such must
be effected by the majority of the union members in 1. Union Dues – the obligation of an Ee to remit
the bargaining unit. union dues to the mother is coterminous with

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the affiliation or membership of its local. The Effect of Disaffiliation to the CBA
dues must now be remitted to the local.

2. Existing CBA – the CBA continues to bind the An existing CBA would
members of the new or disaffiliated and continue to be valid as The CBA would
independent union up to the CBA’s expiration the labor organization continue to be valid up
date based on the “Substitutionary Doctrine.” can continue to its expiration date.
administering the CBA.
Revocation of Charter
Entitlement to Union Dues after Disaffiliation
A federation may revoke the charter issued to a
local/chapter by serving a verified notice of
Union dues may no
revocation, copy furnished to the Bureau, on the Labor organization
longer be collected as
ground of disloyalty or such other grounds as may entitled to the union
there would no longer
be specified in the constitution and by-laws of the dues and not the
be any labor union that
federation. (Sec. 5, Rule VIII, Book V, IRR) federation from which
is allowed to collect
the labor organization
such union dues from
Effect of Revocation disaffiliated.
the Ees.

CHARTERED LOCAL UNION

INDEPENDENTLY
UNREGISTERED Effect of Revocation
REGISTERED
How to Affiliate? GR: The revocation shall divest the local/chapter of
its legal personality upon receipt of the notice by the
Bureau.
By application with the
federation for the
XPN: If the local/chapter has acquired independent
issuance of a charter
By signing contract of registration.
certificate to be
affiliation.
submitted to the
Effect of Cancellation of Registration of
Bureau of Labor
Federation or National Union on locals/chapters
Relations

GR: The cancellation shall operate to divest its

Effect of Disaffiliation to the Union (local) locals/chapters of their status as legitimate labor
organizations.

XPN: Locals/chapters are covered by a duly

Would cease to be an registered CBA.
Would not affect its LLO and would no
being an LLO and longer have the legal NOTE: In the latter case, locals/chapters shall be
therefore, it would personality and the allowed to register as independent unions. If they
continue to have legal rights and privileges fail to register, they shall lose their legitimate status
personality and to granted by law to LLO, upon the expiration of the CBA.
possess all rights and unless the local
privileges of LLO. chapter is covered by Q: PSEA is a local union in Skylander Company
its duly registered CBA. which is affiliated with PAFLU. PSEA won the
certification election among the rank-and-file
Ees of the Skylander Company but its rival union

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PSEA-WATU protested the results. Pending the in the bargaining units in question. (Benguet
resolution of such controversy, PSEA Consolidated Inc v. BCI Ees and Workers Union- Paflu,
disaffiliated with PAFLU and hence affiliated G.R. No. L-24711, 30 Apr. 1968)
with NCW which was supported by its members.
May a local union disaffiliate with its mother RIGHTS OF LABOR ORGANIZATIONS
federation pending the settlement of the status
as the sole and exclusive bargaining agent? A legitimate labor organization shall have the
right:
A: YES. The pendency of an election protest does not
bar the valid disaffiliation of the local union which 1. To act as the representative of its members for
was supported by the majority of its members. The the purpose of collective bargaining; (Right of
right of a local union to disaffiliate with the Representation)
federation in the absence of any stipulation in the
Constitution and by-laws of the federation 2. To be certified as the exclusive representative
prohibiting disaffiliation is well settled. Local of all the Ees in an appropriate bargaining unit
unions remain as the basic unit of association, free for purposes of collective bargaining;
to serve their own interest subject to the restraints
imposed by the Constitution and by-laws of national 3. To be furnished by the Er with annual audited
federation and are free to renounce such affiliation financial statements, including the balance
upon the terms and conditions laid down in the sheet and the profit and loss statement; (Right
agreement which brought such affiliation to to Information)
existence.
4. To own property, real or personal; (Property
In the case at bar, no prohibition existed under the Rights)
Constitution and by-laws of the federation. Hence, 5. To sue and be sued in its registered name;
the union may freely disaffiliate with the federation. (Property Rights)
(Philippine Skylanders v. NLRC, G.R. No. 127374, G.R.
No. 127374, 31 Jan. 2002) 6. To undertake all other activities designed to
benefit the organization and its members; and
Substitutionary Doctrine (Art. 251, LC) (Property Rights)

This doctrine holds that the Ees cannot revoke the 7. To collect reasonable membership fees, union
validly executed collective bargaining contract with dues, assessments, fines, and other
their Er by the simple expedient of changing their contributions. (Art. 292(a), LC) (Right to
bargaining agent. The new agent must respect the Collect Union Dues)
contract. The Ees, through their new bargaining
agent, cannot renege on the collective bargaining Rights and Conditions of Membership in
contract, except to negotiate with the management Legitimate Labor Organizations
for the shortening thereof. (Elisco-Elirol Labor
Union, G.R. No. L-41955, 29 Dec. 1977) The rights of union members may be summarized as
follows: (D-I-M-Pol)
The Substitutionary Doctrine, however, cannot be
invoked to support the contention that a newly a. Political right;
certified collective bargaining agent automatically b. Right over Money matters;
assumes all the personal undertakings—like the no- c. Right to Information; and
strike stipulation here—in the collective bargaining d. Deliberative and decision-making right.
agreement made by the deposed union. When EBR
bound itself and its officers not to strike, it could not
have validly bound all the other rival unions existing

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Political Right Membership in the union does not necessarily
mean coverage in the CBA
The member’s right to vote and be voted for, subject
to lawful provisions on qualification and Inclusion or coverage in the CBA depends on the
disqualifications. stipulations in the CBA itself. It is the CBA which
defines its coverage as agreed by the parties.
Right over money matters Qualifying for union membership does not
necessarily mean inclusion in the coverage of the
The member’s right: CBA.

1. Against excessive fees; Membership in the CBU does not mean

2. Against unauthorized collection of membership in the union
contributions or disbursements;
3. To require adequate records of income and Inclusion or membership in the union depends on
expenses; the union’s constitution and by-laws.
4. Of access to financial records;
5. Vote on officer’s compensation; and Inclusion in the CBU depends on the determination
6. Vote on proposed special assessment and be of its appropriateness.
deducted a special assessment only with the
member’s written authorization. Expulsion of a Union Member

Right to information A member of a union may be expelled but only for a

valid cause and by following the procedure outlined
The member’s right to be informed about the: in the constitution and by-laws. A member is
entitled to due process. Expulsion of a member for
1. Organization’s constitution and by-laws; arbitrary or impetuous reasons may amount to ULP
2. Collective bargaining agreement; and by the union.
3. Labor laws.
Election of Union Officers
Deliberative and decision-making right
Q: What positions should be filled up, when, and
The member’s right to participate in deliberations how should the election be done?
on major policy questions and decide them by secret
ballot. A: It depends on the union’s constitution and by-
laws or the agreement among the members. In the
Q: When, how, and under what conditions does absence thereof, the Implementing Rules of Book V
an Ee become a union member? shall apply.

A: The answer depends on the union’s constitution NOTE: Officers are elected by the members through
and by-laws. The LC gives a labor organization the secret ballot voting.
right to prescribe its own rules for acquisition or
retention of membership. Nonetheless, an Ee is Eligibility of Voters
already qualified for union membership starting on
his first day of service. (Azucena, 2016) Only union members can take part in the election of
union officers. The election takes place at intervals
of five (5) years, which is the term of office of the
union officers. (Azucena, 2016)

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Election under the Implementing Rules Faculty Union, et. al. v. Bitonio, Jr., G.R. No. 131235, 16
Nov. 1999)
The incumbent president should create an election
committee within 60 days before expiration of the Due Process in Impeachment of Union Officers
term of incumbent officers. The Rules specify the
composition of the election committee as well as its Despite practical difficulties in complying with the
powers and duties. procedure laid down in the constitution and by-
laws, the impeachment procedure contained
If the officers with expired term do not call an therein must be substantially complied with. (Litton
election, the remedy is for at least 30% of the Mills Ees Association v. Ferrer-Calleja, G.R. No. 78061,
members to file a petition with the DOLE Regional 24 Nov. 1988)
Office. (Sec. 2, Rule XII, Book V, IRR)
Q: Can a labor organization prescribe rules and
Union Officer must be an Ee regulation with respect to voting?

No person who is not an Ee or worker of the A: YES. It may require reasonable period of prior
company or establishment where a union operates membership (such as six months or a year). It may
shall be elected or appointed as an officer of such also condition the exercise of right to vote on the
union. Only an Ee may be a union officer. payment of dues since paying dues is a basic
obligation of membership. However, this is subject
Disqualification of Union Officers to two (2) qualifications: (a) it must be applied
uniformly; and (b) members must be afforded a
The following are disqualified to become union reasonable opportunity to pay dues, including a
officers: grace period during which dues may be paid
without any loss of rights. It should be noted
1. Those convicted of a crime involving moral however, that it cannot create special classes of non-
turpitude; voting members.
2. Those who belong to a subversive
organization; or Obtaining Relief with the Union
3. Those engaged directly or indirectly in any
subversive activity. GR: First, redress must be sought with the union
itself in accordance with the constitution and by-
Frustration over incumbent officers of union laws.
does not justify disregard of union’s constitution
and by-laws When the intra-union remedy fails, a case can be
filed with the Bureau of Labor Relations.
Frustration over the performance of the incumbent
officers, as well as their fears of a fraudulent election XPN: When the exhaustion of remedies with the
to be held under the latter’s supervision, could not union would practically amount to a denial of
justify the imposition of their own will on the union. justice. Then, it cannot be insisted upon as a
The organizations shall have the right to draw up condition to the right to invoke the aid of the court.
their own constitution and rules and to elect their
representatives in full freedom, free from any 30% Requirement
interference from public authorities. The union
members should respect the constitution and rules GR: At least 30% of the members are required to
they themselves draw up equally so. The CBL is the report a violation of labor organization procedures.
fundamental law that governs the relationship
between and among the members of the union. (UST

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XPN: When such violation affects only one or two Requirements for a Valid Check-Off
members, then only one or two members would be
enough to report such violation. 1. Authorization by a written resolution of the
majority of all the members at a general
Visitorial power of SOLE to inquire into the membership meeting duly called for the
financial activities of labor organizations purpose;

SOLE is authorized to inquire into the financial 2. Secretary’s record of the minutes of said
activities of any labor organization to determine meeting; and
compliance or non-compliance with the laws and to
aid in the prosecution of any violation thereof. 3. Individual written authorizations for check-off
duly signed by the Ees concerned.
It is initiated on the basis of:
NOTE: Under Art. 113, one of the lawful deductions
1. A Complaint under oath; and from Ee’s wage is for “union dues, in cases where the
2. Supported by 20% of the membership. right of the worker or his union to check-off has
been recognized by the Er or authorized in writing
Dues and assessments which the union may by the individual worker concerned.” (Azucena,
collect 2016)

Legitimate labor organizations are authorized to Jurisdiction over Check-Off Disputes

collect reasonable amounts of the following:
Being an intra-union dispute, the Regional Director
1. Membership fees; of DOLE has jurisdiction over check off disputes.
2. Union dues; (Art. 250(p), LC)
3. Assessments;
4. Fines; ASSESSMENTS
5. Contribution for labor education and research,
mutual death and hospitalization benefits, Payments used for a special purpose. Especially if
welfare fund, strike fund, and credit and required only for a limited time. (Azucena, 2016)
cooperative undertakings; (Art. 292(a), LC)
and Requisites to Collect Special Assessment
6. Agency fees. (Art. 259(e), LC)
GR: No special assessments, attorney’s fees,
a) CHECK OFF, ASSESSMENT, AND AGENCY FEES negotiation fees, or any other extraordinary fees
may be checked-off from any amount due to an Ee
CHECK OFF unless there is:

A check-off is a method of deducting from the Ee’s 1. Authorization by a written resolution of the
pay at prescribed periods, any amount due for fees, majority of all members at the general
fines, or assessments. It is a process or device membership meeting duly called for that
whereby the Er, on agreement with the union purpose;
recognized as the proper bargaining representative,
or on prior authorization from its Ees, deducts 2. Secretary’s record of the minutes of the
union dues and assessments from the latter’s wages meeting; and
and remits them directly to the union.
3. Individual written authorization for check-off
duly signed by the Ee concerned. (Art. 250, LC;

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ABS-CBN Supervisors Ees Union Members v. AGENCY FEES
ABS-CBN Corp., G.R. No. 106518, 11 Mar. 1999)
It is an amount equivalent to union dues, which a
The authorization should specify the: non-union member pays to the union because he
1. Amount; benefits from the CBA negotiated by the union.
2. Purpose; and
3. Beneficiary of the deduction. NOTE: Payment by non-union members of agency
fees does not amount to unjust enrichment because
XPNs: the purpose of such dues is to avoid discrimination
a. For mandatory activities under the LC; between union and non-union members. The source
b. For Agency Fees; of Agency Fee is not contractual but is based from
c. When non-members of the union avail of quasi-contract.
the benefits of the CBA:
Requisites for Assessment of Agency Fees
i. Non-members may be assessed
union dues equivalent to that paid by 1. The Ee is part of the bargaining unit;
union members; and 2. He is not a member of the union; and
3. He partook of the benefits of the CBA.
ii. Only by board resolution approved
by majority of the members in NOTE: The individual authorization required under
general meeting called for the Art. 250(n) shall not apply to non-members of the
purpose. recognized CB agent with regard to assessment of
agency fees.
Effect of failure to strictly comply with the
requirements set by law The Ee's acceptance of benefits resulting from a
collective bargaining agreement justifies the
It shall invalidate the questioned special deduction of agency fees from his pay and the
assessments. Substantial compliance with the union's entitlement thereto. In this aspect, the legal
requirements is not enough in view of the fact that basis of the union's right to agency fees is neither
the special assessment will diminish the contractual nor statutory, but quasi-contractual
compensation of union members. (Palacol v. Ferrer- deriving from the established principle that non-
Calleja, G.R. No. 85333, 26 Feb. 1990) union Ees may not unjustly enrich themselves by
benefiting from employment conditions negotiated
UNION DUES by the bargaining union. (Holy Cross of Davao
College v. Hon. Joaquin, G.R. No. 110007, 18 Oct. 1996)
These are regular monthly contributions paid by the
members to the union in exchange for the benefits Limitation on the Amount of Agency Fee
given to them by the CBA and to finance the
activities of the union in representing the union. The bargaining union cannot capriciously fix the
amount of agency fees it may collect from its non-
Nature and purpose of union dues members. Article 248(e) of the LC expressly sets
forth the limitation in fixing the amount of the
Union dues are the lifeblood of the union. All unions agency fees, thus:
are authorized to collect reasonable membership
fees, union dues, assessments, fines, and other 1. It should be reasonable in amount; and
contributions for labor education and research, 2. It should be equivalent to the dues and
mutual death and hospitalization benefits, welfare other fees paid by members of the
fund, strike fund, and credit and cooperative recognized collective bargaining agent.
undertakings. (Art. 292(a), LC)

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Q: A is employed by XYZ Company where XYZ Ees b) COLLECTIVE BARGAINING
Union (XYZ-EU) is the recognized exclusive
bargaining agent. Although A is a member of Collective Bargaining Agreement (CBA)
rival union XYR-MU, he receives the benefits
under the CBA that XYZ-EU had negotiated with Refers to a contract executed upon request of either
the company. XYZ-EU assessed A, a fee the Er or the exclusive bargaining representative of
equivalent to the dues and other fees paid by its the Ees – incorporating the agreement reached after
members but A insists that he has no obligation negotiations with respect to wages, hours of work,
to pay said dues and fees because he is not a and all other terms and conditions of employment,
member of XYZ–EU and he has not issued an including proposals for adjusting any grievances or
authorization to allow the collection. Explain questions under such agreement.
whether his claim is meritorious.
Nature
A: NO. The fee exacted from A takes the form of an
agency fee which is sanctioned by Art. 248 (now The CBA is the law between the contracting parties
259)(e) of the LC). The collection of agency fees in and the Collective Bargaining representative and
an amount equivalent to union dues and fees from the Er-company. Compliance with a CBA is
Ees who are not union members is recognized mandated by the expressed policy to give protection
under the LC. The union may collect such fees even to labor. (Vicente Almario v. Philippine Airlines, Inc.,
without any written authorization from the non- G.R. No. 170928, 11 Sept. 2007)
union member Ees, if said Ees accept the benefits
resulting from the CBA. The legal basis of agency NOTE: Unilateral changes in the implementation of
fees is quasi-contractual. (Del Pilar Academy v. Del the provisions of the CBA cannot be allowed without
Pilar Academy Ees Union, G.R. No. 170112, 30 Apr. the consent of both contracting parties. (Wesleyan
2008) University-Philippines v. WUP Faculty and Staff
Association, G.R. No. 181806, 12 Mar. 2014)
Union Dues vs. Agency Fees
Purpose
UNION DUES AGENCY FEES
From whom collected The goal of collective bargaining is the making of
agreements that will stabilize business conditions
Collected by the union and fix fair standards of working conditions. (P.I.
from non-members Manufacturing, Incorporated v. P.I. Manufacturing
Collected from union belonging to the same Supervisors and Foremen Association, G.R. No.
members bargaining unit who 167217, 04 Feb. 2018)
receive the benefits
under the CBA. Coverage

Need for Written Authorization The benefits of a collective bargaining agreement

are extendible to all employees regardless of their
Can be assessed even
There must be an membership in the union because to withhold the
without the
individual written same from the non- members would be to
authorization of the Ee
authorization by discriminate against them. Moreover, when a union
concerned.
individual members. bids to be the bargaining agent, it voluntarily
assumes the responsibility of representing all the
employees in the appropriate unit. Such non-
members are neither "free-riders" nor should they
be made to pay on the principle of quasi-contract.

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 III. EMPLOYMENT PROPER
(National Brewery & Allied Industries Labor Union of Q: How should the CBA be interpreted?
the Philippines v. San Miguel Brewery, Inc., G.R. No. L-
18170, 31 Aug. 1963). A: As a contract and the governing law between the
parties, the general rules of statutory construction
(1) ECONOMIC TERMS AND CONDITIONS apply in the interpretation of its provisions
(NUWHRAIN-APL-IUF v. Phil Plaza Holdings, G.R. No.
Term/Duration of a CBA 177524, 23 July 2014)

1. Economic and Non-Economic Aspect – may In case of doubt, all labor legislation and labor
last for a maximum period of three (3) years contracts should be construed in favor of the safety
after the execution of the CBA. and decent living of the laborer. (Art. 1702, NCC)

2. Representation Aspect – may last for five (5) All doubts should be resolved in favor of labor. (Art.
years. It refers to the identity and majority 4, LC)
status of the union that negotiated the CBA as
the exclusive bargaining representative. Q: Is the 10-year suspension of the CBA
unconstitutional and contrary to public policy?
60-Day Freedom Period (Representative
Aspect) A: NO. The assailed PAL-PALEA agreement was the
result of voluntary collective bargaining
During the 60-day freedom period: negotiations undertaken in the light of the severe
financial situations faced by the Er. It is a valid
1. A labor union may disaffiliate from the mother exercise of the freedom to contract. (Rivera, et al. v.
union to form a local or independent union Espiritu, G.R. No. 135547, 23 Jan. 2002)
only during the 60-day freedom period
immediately preceding the expiration of the Q: On 01 Dec. 2018, GHI Co., an organized
five-year term of the CBA; establishment, and Union J, the exclusive
bargaining agent therein, executed a five-year
2. Either party can serve a written notice to collective bargaining agreement (CBA) which,
terminate or modify agreement at least 60 after ratification, was registered with the
days prior to the expiration of the five-year Bureau of Labor Relations.
term of the CBA; and
When can the union ask, at the earliest, for the
3. A PCE may be filed. renegotiation of all the terms of the CBA, except
its representation aspect? Explain. (2019 BAR)
60–Day Notice Period (Non-representative
aspect) A: It can ask for the renegotiation of the terms of the
CBA within sixty (60) days prior to the expiration of
The freedom period under Art. 265 & 268 is its economic period, viz., from 02 Oct. 2018 until 30
different from the other 60-day period mentioned in Nov. 2021.
Art. 264. The latter speaks of the right of the parties
to propose modifications to the existing CBA, as an According to Art. 253-A (now 265) of the LC, all
exception to the rule that the CBA cannot be other provisions of the CBA shall be renegotiated
modified during its lifetime, within 60 days prior the not later than three (3) years after its execution.
expiration of its economic/non-economic aspect. Any agreement of such other provisions of the CBA
This 60-day period does not and cannot refer to the entered into within six (6) months from the date of
representative status of the incumbent union since expiry of the term of such other provisions as fixed
the acquisition or loss of representative status is to in such CBA, shall retroact to the day immediately
be resolved through CE. following such date. If any such agreement is

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entered into beyond six months, the parties shall 1. Duly accomplished and notarized
agree on the duration of retroactivity thereof. In Application Form;
case of a deadlock in the renegotiation of the CBA,
the parties may exercise their rights under this 2. Original and 2 duplicate signed copies of
Code. the CBA which must be certified under oath
by the representatives of the Er/s and labor
Hence, they may submit the demand for union/s concerned;
renegotiation at any time between 02 Oct. 2021 to
30 Nov. 2021. The earliest day would be 02 Oct. 3. Statement that the CBA was posted in at
2021. (UPLC Suggested Answers) least two (2) conspicuous places in the
establishment/s concerned for at least five
NOTE: All other provisions of the CBA shall be (5) days before its ratification; and
negotiated not later than three (3) years after its
execution. The "representation aspect" refers to the 4. Statement that the CBA was ratified by the
identity and majority status of the union that majority of the Ees in the bargaining unit of
negotiated the CBA as the exclusive bargaining the Er/s concerned.
representative of the appropriate bargaining unit
concerned. "All other provisions" simply refers to NOTE: The following documents must be certified
the rest of the CBA, economic as well as non- under oath by the representative of the Er and the
economic provisions, except representation. labor union. No other document shall be required in
(SMCU-PTGWO v. Hon. Confesor, G.R. No. 111262. 19, the registration of the CBA.
Sept. 1996.)
Q: What is the effect for non-compliance with the
(2) NON-ECONOMIC TERMS AND CONDITIONS requirement of posting?

Registration A: In one case, the CBA was not posted for at least
five days in two conspicuous places in the
Within 30 days from execution of CBA, the parties establishment before ratification, to enable the
thereto shall submit the agreement to the DOLE workers to clearly inform themselves of its
Regional Office where the bargaining union is provisions. Moreover, the CBA submitted to the
registered or where it principally operates. Multi-Er MOLE (now SOLE) did not carry the sworn
collective bargaining agreements shall be filed with statement of the union secretary, attested by the
the Bureau. union president, that the CBA had been duly posted
and ratified, as required by Sec. 1, Rule 9, Book V of
NOTE: Failure to register the CBA does not make it the IRR. These requirements being mandatory, non-
invalid or unenforceable. Once it is duly entered into compliance therewith rendered the said CBA
and signed by the parties, a CBA becomes effective ineffective. (Associated Trade Unions v. Trajano, G.R.
as between the parties whether or not it has been No. L-75321, 20 Jun. 1988)
certified by the BLR. (Liberty Flour Mills Ees
Association v. Liberty Flour Mills, G.R. Nos. 58768-70, NOTE: In case of denial by the Regional Office, it is
29 Dec. 1989) However, its non-registration renders appealable to the Bureau within ten (10) days. In
the contract-bar rule inoperative. case of denial by the Bureau, it is appealable to the
Secretary of Labor and Employment.
Requirements for Registration
Effectivity of an Arbitral Award
The application for CBA registration shall be
accompanied by the original and two duplicate CBA arbitral awards granted after six (6) months
copies of the following requirements: from the expiration of the last CBA, shall retroact to
such time agreed upon by both parties. Absent such

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 III. EMPLOYMENT PROPER
an agreement, the award shall retroact to the first NOTE: The date is important particularly in relation
day after the six-month period following the to wage increase because a long retroaction period
expiration of the last day of CBA. will mean sizeable back pay to Ees.

In the absence of a CBA, the Secretary’s CBA arbitral awards granted after six months from
determination of the date of retroactivity as part of the expiration of the last CBA shall retroact to such
his discretionary powers over arbitral awards shall time agreed upon by the Er and Ees of their union.
control. (Manila Electric Co. v. Quisumbing, G.R. No. Absent such an agreement as to the retroactivity,
127598, 22 Feb. 2000) the award shall retroact to the first day after the six-
month period following the expiration of the last
Zipper Clause day of BA should there be one. In the absence of a
CBA the Secretary’s determination of the date of
It is a stipulation in a CBA indicating that issues that retroactivity as part of his discretionary powers
could have been negotiated upon but not contained over tribunal awards shall control. (Manila Electric
in the CBA cannot be raised for negotiation when Co. v. Quisumbing, G.R. No. 127598, 01 ugust 1, 2000],
the CBA is already in effect. All matters not included 391 PHIL 769-779)
in the agreement shall be deemed to have been
raised and disposed of as if covered. Retroaction should be agreed upon by the parties. If
no agreement is made to that effect, prospective
A CBA is not an ordinary contract but one impressed application will apply. Article 265, which leaves to
with public interest, only provisions embodied in the parties the determination of retroactivity, refers
the CBA should be so interpreted and complied to negotiation concluded by the party beyond six
with. Where a proposal raised by a contracting months, but it does not restrict the effectivity date
party does not find print in the CBA, it is not a part of arbitral awards by the Secretary of Labor.
thereof and the proponent has no claim whatsoever (Azucena, 2016)
to its implementation under the Zipper Clause.
(SMTFM-UWP v. NLRC, G.R. No. 113856, 07 Sept. Q: Company A and Union B had a 3-year CBA that
1998) expired on June 12, 1990. Negotiations proved
futile, so the unresolved issues were referred to
Effectivity an Arbiter who rendered a decision on 15 Mar.
1992 retroactive to 14 Dec. 1990. Is the Arbiter's
The effectivity date depends on whether the CBA is decision providing for retroactivity tenable or
the first CBA or a renegotiated CBA. not? Why? (2001 BAR)

1. First CBA - Effectivity date depends upon the A: The referral of the unresolved issues of the
agreement of the parties. collective bargaining negotiations to an Arbiter is
not within the jurisdiction of the Arbiter. But
NOTE: The determining point is the date the assuming that the unresolved issues in the CBNs
parties agreed, not the date they signed. were properly referred to the Arbiter pursuant to
the provision of the Labor Code (Art. 262 [now 275])
2. Renegotiated CBA - If within six (6) months that states that a Voluntary Arbitrator may hear and
from the expiry date of the old CBA, then the decide any labor dispute, including bargaining
new CBA starts to take effect on the date deadlocks, the Arbiter's decision providing for
following such expiry date. If beyond six (6) retroactivity is tenable. Exercising his compulsory
months, the retroaction date will have to be arbitration power, the Arbiter could decide the
agreed upon by the parties. issue of retroactivity in any way which is not
contrary to law, morals, good customs, public order
or public policy.

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But in the case Manila Electric Co v. Secretary of However, either party can serve a written notice to
Labor Leonardo Quisumbing (G.R. No. 127598, 22 terminate or modify the agreement at least 60 days
Feb. 2000), the Supreme Court said that an arbitral prior the expiration of its fifth year.
award should retroact to the first day after the six-
month period following the expiration of the last NOTE: It shall be the duty of both parties to keep the
day of the CBA that was being renegotiated. status quo and to continue in full force and effect the
terms and conditions of the existing agreement
(3) DUTY TO BARGAIN COLLECTIVELY during the 60-day period and/or until a new
agreement is reached by the parties’ automatic
The duty to bargain collectively means the renewal clause. (Art. 264, LC)
performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith Jurisdictional Preconditions of Collective
for the purpose of: Bargaining:

1. Negotiating an agreement with respect to 1. Possession of the status of majority

wages, hours of work, and all other terms and representation of the Ees’ representative;
conditions of employment; 2. Proof of majority representation; and
3. A demand to bargain. (Associated Labor Unions
2. Including proposals for adjusting any (ALU) v. Hon. Ferrer-Calleja, G.R No. 77282, 5
grievances or questions arising under such May 1989)
agreement;
NOTE: An Er’s duty to recognize and bargain
3. Executing a contract incorporating such collectively with a union does not arise until the
agreements if requested by either party but union requests the Er to bargain.
such duty does not compel any party to agree
to a proposal or to make any concession (Art. Q: When should bargaining begin and when
263, LC); and should it end?

4. Negotiation over the terms of a new contract or A: It begins when the three (3) jurisdictional
proposed modifications, when an existing preconditions are present. The collective bargaining
agreement is validly opened for negotiations. should begin within the 12 months following the
(Azucena, 2016) determination and certification of the Ees’ exclusive
bargaining representative. The period is known as
When there is no CBA certification year.
The law encourages expeditious and good-faith
In the absence of an agreement or other voluntary negotiations but fixes no time limit for completion
arrangement providing for a more expeditious of the negotiation. The law dictates no deadline. It
manner of collective bargaining, it shall be the duty depends upon the will and agreement of the
of Er and the representatives of the Ees to bargain negotiating panels. (Azucena, 2016)
collectively in accordance with the provisions of the
LC. (Art. 262, LC) (4) MANDATORY PROVISIONS IN THE
COLLECTIVE BARGAINING AGREEMENT (CBA)
When there is a CBA
For a matter to be subject to mandatory collective
When there is a CBA, the duty to bargain bargaining, it must materially or significantly affect
collectively, in addition to Art. 263, shall mean that the terms or conditions of employment.
neither party shall terminate nor modify such
agreement during its lifetime.

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Examples of matters considered as mandatory 5. If not resolved, the parties may resort to any
subjects of bargaining: other lawful means, either to settle the dispute
or submit it to a voluntary arbitrator.
1. Wages and other types of compensation
including merit increases; NOTE: During the conciliation proceeding in the
2. Working hours and working days, including NCMB, the parties are prohibited from doing any act
work shifts; which may disrupt or impede the early settlement
3. Vacations and holidays; of disputes. (Art. 261(d), LC)
4. Bonuses;
5. Pensions and retirement plants; Ratification of the CBA
6. Seniority;
7. Transfer; GR: The agreement negotiated by the Ees' EBR
8. Lay-offs; should be ratified or approved by the majority of all
9. Ee workloads; the workers in the bargaining unit. The proper
10. Work rules and regulations; ratifying group is not the majority union but the
11. Rent of company houses; and majority of all the workers in the bargaining unit
12. Union security arrangements. represented by the negotiation.

CBA should include the mandatory provisions such XPN: Ratification of the CBA by the Ees is not
as grievance procedure, “no strike-no lockout” needed when the CBA is a product of an arbitral
clause, cooperative scheme, and Labor Management award by a proper government authority (Art.
Council (LMC). (Abad, 2015) 278(g) LC) or a voluntary arbitrator. (Art. 275, LC)

No duty to agree even on mandatory subjects Q: What is the automatic renewal clause of
collective bargaining agreements? (2008 BAR)
The law speaks of a duty to bargain but not of an
obligation to agree. The law does not compel A: The automatic renewal clause means that
agreements between Ers and Ees, and neither party although the CBA has expired, it continues to have
is legally obligated to yield even on a mandatory legal effects as between the parties until a new CBA
bargaining subject. (Azucena, 2016) has been entered. (Pier &Arrastre Stevedoring
Services, Inc. v. Confessor, G.R. No. 110854, 13 Feb.
Procedure in Collective Bargaining 1995)

When a party desires to negotiate an agreement: The rationale of the such clause is to make it the
duty of the parties to keep the status quo and to
1. It shall serve a written notice upon the other continue in full effect the terms and conditions of
party with a statement of proposals; the existing agreement until a new agreement is
reached by the parties. (Principle of CBA Continuity)
2. Reply by the other party shall be made within (Art. 264, LC)
ten (10) calendar days with counter proposals;
Q: What is the Lock, Stock, and Barrel Rule?
3. In case of differences, either party may request
for a conference which must be held within 10 A: When the Er refuses to submit any counter-
calendar days from receipt of request; proposal, the Er had lost its right to bargain the
terms and conditions of employment. Consequently,
4. If not settled, NCMB may intervene and shall all the terms and conditions of the CBA as proposed
exert all efforts to settle disputes amicably, and by the SEBA are deemed approved and accepted
encourage the parties to submit the dispute to lock, stock, and barrel by the Er. (Kiok Luy v. NLRC
a voluntary arbitrator; and G.R. No. L-54334, 22 Jan. 1986)

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Hold-over Principle Q: Is there an exception where ULP is committed
even if the act is not a violation of an Ee’s right to
It shall be the duty of both parties to keep the status self-organization?
quo and to continue in full force and effect the terms
and conditions of the existing agreement during the A: YES. Dismissing or prejudicing an Ee for giving
60-day period and/or until a new agreement is testimony (regardless of the subject of the
reached by the parties. Despite the lapse of the testimony) under Art. 259(f) of the LC.
formal effectivity of the CBA, the law still considers
the same as continuing in force and effect until a a) NATURE AND ASPECT
new CBA shall have been validly executed.
(MERALCO v. Hon. Sec. of Labor, G.R. No. 127598, 1 ULPs are not only violations of the civil rights of
Aug. 2000) both labor and management but are also criminal
offenses against the State. (Art. 258, LC)
NOTE: During the interregnum between the
expiration of the economic provisions of the CBA Elements of ULP
and the date of effectivity of the arbitral award, it is
understood that the hold- over principle shall 1. Existence of Er-Ee relationship between the
govern. (MERALCO v. Hon. Sec. of Labor, G.R. No. offender and offended party; and
127598, 1 Aug. 2000) 2. Act is expressly defined in the Code as ULP.

Q: Does the hold-over principle apply to an NOTE: A showing of prejudice to public interest is
imposed CBA / arbitral award? not a requisite for ULP charges to prosper.
(Standard Chartered Bank Ees Union v. Hon.
A: YES. The Hold-over Principle applies to an Confessor, G.R. No. 114974, 16 Jun. 2014)
imposed CBA. The law does not provide for any
exception nor qualification on which economic ULP has two aspects, namely:
provisions of the existing agreement are to retain its 1. Civil; and
force and effect. Likewise, the law does not 2. Criminal.
distinguish between a CBA duly agreed upon by the
parties and an imposed CBA. (General Milling NOTE: Lawmakers intended acts of ULP to be
Corporation – ILU v. General Milling Corp., G.R. No. prosecuted in the same manner as criminal offenses
193723, 20 July 2011) because it is an offense against a public right or
interest.
5. UNFAIR LABOR PRACTICES
Q: Is the commission of an unfair labor practice
Definition by an employer subject to criminal
prosecution?
ULP means any unfair labor practice as expressly
defined by the Labor Code. (Art. 219(k), LC) A: YES. The second paragraph of Art. 247 (now 258)
of the Labor Code expressly so provides. The last
ULP has a technical meaning. It only refers to acts paragraph of Art. 247 (now 258) provides that no
that violate the right of Ees to self-organization and criminal prosecution for unfair labor practice may
the observance of the CBA. Thus, not all unfair acts be made without a prior final judgment in an unfair
constitute as unfair labor practice. Without the labor practice administrative case (filed before the
element of self-organization, an act, no matter how LA of the NLRC pursuant to Art. 217(a)(1) (now
unfair, cannot be considered as unfair labor 224(a)(1)) of the LC). And even with such final
practice. judgment in an administrative case, still, the final
judgment would not be binding in the criminal case.
Neither would such final judgment be considered as

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evidence in the criminal case. At best, it would only b) BY EMPLOYERS
serve as proof of compliance of the required prior
exhaustion of administrative complaint. The following are the ULP committed by Ers:

Q: What is the condition precedent before a. Interference, restraint, or coercion;

criminal prosecution of ULP may be made? b. Yellow dog contract;
c. Contracting out of services;
A: There should be a finality of judgment in a labor d. Company unionism;
case finding that the respondent indeed committed e. Discrimination for or against union
ULP. membership;
f. Discrimination because of testimony;
NOTE: The judgment in the labor case cannot be g. Violation of duty to bargain;
used as evidence in the criminal case. It should be h. Paid negotiation; and
noted that the evidence required in labor i. Gross violation of the CBA.
proceedings is only substantial evidence while
criminal cases need proof beyond reasonable doubt. NOTE: The enumeration of ULP under Art. 259 is
Thus, the criminal charge needs to be proven not exclusive.
independently from the labor case.
INTERFERENCE, RESTRAINT, OR COERCION
Difference between Civil and Criminal aspect of
ULP To interfere with, restrain, or coerce Ees in the
exercise of their right to self-organization. (Art.
CIVIL ASPECT CRIMINAL ASPECT 259(a), LC)
Persons liable
ULP can be committed even if union is not
Officers and agents of Officers and agents registered
Er or labor who participated or
organizations authorized the act An Er who interferes with the formation of a labor
Jurisdiction union and retaliation against the Ees’ exercise of
RTC or MTC, as the case their right to self-Sorganization is guilty of ULP.
Labor Arbiter may be. (Concurrent (Samahan ng mga Manggagawa sa Bandolino-LMLC,
jurisdiction) et. al v. NLRC, G.R. No. 125195, 17 July 1997)
Prescriptive period
Q: Is persistent interrogation by an Er to elicit
One (1) year from One (1) year from information about what happened in union
accrual of the ULP act accrual of the ULP act meetings and activities considered as ULP?
Quantum of proof
A: YES, it may be deemed as coercive. In order not
Beyond reasonable to become coercive, the Er must:
Substantial evidence
doubt
1. Communicate to the Ee the purpose of the
All ULP acts must be included in a single charge questioning;

A charge of ULP must include all acts of ULP. 2. Assure the Ee that no reprisal would take
Splitting the cause of action is not allowed to place; and
prevent harassing the Er with subsequent charges.
3. The questioning must occur in a context free
from Er hostility to union organization.

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Test of Interference honest closing of one’s plant is not a violation of the
law.
Whether the Er has engaged in conduct which it may
reasonably be said tends to interfere with the free NOTE: Proof of Er’s state of mind is often very
exercise of Ees’ rights. difficult unless it is expressed. However, it may be
proven by circumstantial evidence.
Direct evidence of interference is not necessary
Other examples of interference, restraint, or
Direct evidence is not necessary if there is a coercion:
reasonable inference that the anti-union conduct of
the Er does have an adverse effect on self- 1. Using violence or intimidation to restrain or
organization and collective bargaining. coerce Ees to exercise their right to self-
organization.
Totality of Conduct Doctrine
2. Espionage and surveillance of Ees by the Er
An Er’s remarks must be evaluated not only based since it is a form of “pressure.”
on their implications, but against the background of
and in conjunction with collateral circumstances. 3. Inducing Ees with economic benefits to
restrain or coerce them in their exercise of
Expression of opinion by the Er, though innocent in their right to self-organization.
themselves, was frequently held to be culpable
because of the circumstances under which they 4. Mass layoff of union members by the
were uttered. company pursuant to a subterfuge or a fake
reduction effort when it has been making
Prohibiting organizing activities is ULP profits. (Madrigal and Company, Inc. v.
Zamora, G.R. No. L-48237, 30 Jun. 1987)
It is unlawful to prohibit solicitation of union
membership in the company whether it is working In case of sale in bad faith
or non-working time.
When the sale of a business enterprise was attended
Illegal dismissal may be considered as ULP with bad faith, labor contracts, despite being in
personam, becomes enforceable against the
When there is a showing that the illegal dismissal transferee. The transferee is in the position of tort-
was dictated by anti-union motives, the same feasor, having been a party likewise responsible for
constitutes as ULP. If not, then there is no ULP. The the damage inflicted on the members of the
proper remedy would be an action for aggrieved union and therefore cannot justly escape
reinstatement with backwages and damages. liability. As successor-in-interest of the vendor, he
becomes responsible for all the rights and
NOTE: The dismissal of an employee by the obligations of his predecessor.
company pursuant to a labor union's demand in
accordance with a union security agreement does Q: Kim, owner of the factory, called the workers
not constitute unfair labor practice. (MSMG-UWP, who are also members of the union to a meeting.
et.al v. NLRC, G.R. No. 113907, 28 Feb. 2000) He requested them to resign from the union and
withdraw their claims filed before the NLRC
Lockout or closure may amount to ULP years before. The requests were rejected.

The lockout or closure must be for the purpose of Later, Kim executed a deed purporting to convey
interfering with an Ees’ exercise of their right. An the factory to Yu Guat. When the factory
reopened, the members of the union were not

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readmitted and those who left the union were If the contracting out is done for a legitimate
allowed to work. The union members filed a business reason such as decline in business,
complaint for ULP against Kim. Decide. inadequacy of equipment, or need to reduce cost, it
is a valid exercise of management prerogative.
A: YES. The sale of the factory was simulated, and a
device resorted merely to get rid of the Ees who NOTE: To be considered as valid outsourcing, it
were members of the union. (Moncada Bijon Factory must be (1) motivated by good faith; and (2) must
v. CIR, G.R. No. L-16037, 29 Apr. 1964) not have been resorted to circumvent the law.

YELLOW DOG CONTRACT Contracting out restricted in the CBA

To require as a condition of employment that a When a CBA is entered into, the terms of the
person or an Ee shall not join a labor organization agreement is binding on both parties. The company
or shall withdraw from one to which he belongs. did not have to agree to such a stipulation. Or it
(Art. 259(b), LC) could have reserved the right to effect a dissolution
and reassignment. It did not do so. (Shell Oil
A Yellow Dog Condition is a promise exacted from Workers’ Union v. Shell Company of the Philippines,
workers as a condition of employment that they are G.R. No. L-28607, 31 May 1971)
not to belong to, or attempts to foster, a union
during their period of employment. Runaway shop

Requisites of a Yellow Dog Condition (R-P-P) Refers to business relocation animated by anti-
union animus. It is a plant moved to a new location
1. A Representation by the Ee that he is not a in order to discriminate against Ees at the old plant
member of a labor union; because of their union activities.

2. A Promise by the Ee not to join a labor Q: Complex Electronics Corporation informed

union; and its Ees that it was closing down its operations
since it was incurring losses and promised to
3. A Promise by the Ee that, upon, joining a give notice and retrenchment pay. The Ees
labor union, he will quit his employment. asked for a higher retrenchment pay but the
company refused. The machines and equipment
CONTRACTING OUT were pulled out from the company premises and
were transferred to the premises of Ionics
To contract out services or functions being Circuit, Inc.
performed by union members when such will
interfere with, restrain, or coerce Ees in the exercise The union of the Ees filed a complaint for ULP
of their right to self-organization. (Art. 259(c), LC) against the company alleging that Ionics Circuit
is a runaway shop since it has the same
Q: Is contracting out per se ULP? President and Board of Directors with Complex
Electronics. Is the contention tenable?
A: NO. Contracting out, itself, is not ULP. It is the ill
intention that makes it so when it is motivated by a A: NO. The mere fact that one or more corporations
desire to prevent his Ees from organizing and are owned or controlled by the same or single
selecting a collective bargaining representative, get stockholder is not sufficient ground for
rid of union men, or escape his statutory duty to disregarding separate corporate personalities. It is
bargain collectively with his Ees’ bargaining not enough reason to pierce the veil of corporate
representative. fiction of the corporation. The closure was not
motivated by union activities of the Ees, but rather

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by necessity since it can no longer engage in NOTE: Existence of a union security clause is a form
production. (Complex Electronics Ees Association v. of valid discrimination. It is a discrimination
NLRC, G.R. No. 121315, 19 July 1999) favoring unionism.

COMPANY UNIONISM DISCRIMINATION BECAUSE OF TESTIMONY

To initiate, dominate, assist, or otherwise interfere Dismissing or prejudicing an Ee who is about to give
with the formation or administration of any labor or has given testimony under the Labor Code.
organization, including the giving of financial or
other support to it or its organizers or supporters. NOTE: The subject matter of the testimony is
(Art. 259(d), LC) anything under the Labor Code.

Forms of company domination: ULP also applies to refusal to testify

1. Initiation of the company union idea by: The article also applies to refusal to testify because
a. Outright formation by the Er or his it is analogous to giving of testimony. (Mabeza v.
representatives; or NLRC, G.R. No. 118506, 18 Apr. 1997)
b. Managerially motivated formation of
union; VIOLATION OF DUTY TO BARGAIN
2. Financial support to the union;
3. Er encouragement and assistance; and It refers to acts that violate the duty to bargain
4. Supervisory assistance. collectively as prescribed by the Code.

DISCRIMINATION FOR OR AGAINST Four Forms of ULP in bargaining: (F-E-B-G)

UNION MEMBERSHIP
1. Failure or refusal to meet and convene;
To discriminate in regard to wages, hours of work, 2. Evading mandatory subjects of bargaining;
and other terms and conditions of employment in 3. Bad faith in bargaining; and
order to encourage or discourage membership in 4. Gross violation of the CBA.
any labor organization. (Art. 259(e), LC)
Failure or Refusal to Meet and Convene
Discrimination v. Classification
This occurs when the Er refuses or fails to meet and
Discrimination is different from classification. For convene with the majority of his Ees. To bargain in
instance, it is common management practice to good faith, an Er must not only meet and confer with
classify jobs and grant them varying levels of pay or the union which represents his Ees but must also
benefits package. These are valid differentiations recognize the union for the purpose of CB. (Azucena,
that recognize differences in job requirements or 2010)
contributions. They are not necessarily
discrimination classifiable as ULP. Effect of Refusal of Management to Give Counter-
Proposals to the Union’s Demands
Test of Discrimination
The failure of the Er to submit its counter-proposals
Whenever benefits or privileges given to one is not to the demands of the bargaining union does not, by
given to the other under similar or identical itself, constitute refusal to bargain. (Philippine
conditions when directed to encourage or Marine Radio Officers Association v. CIR, G.R. Nos. L-
discourage union membership. 10095 & L-10115, 31 Oct. 1957)

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However, when the Er refuses to submit an answer Voluntary Benefits
or reply to the written bargaining proposals of the
certified bargaining union, ULP is committed. Q: In consideration of the impending expiration
of the existing collective bargaining agreement,
NOTE: While the law does not compel the parties to which includes a retirement plan, between
reach an agreement, it contemplates that both Nestle and Union, the latter informed the former
parties will approach the negotiation with an open of their intent to open a new collective
mind and make a reasonable effort to reach a bargaining negotiation for the succeeding years.
common ground of agreement. They should However, Nestle underscored its position that
negotiate in good faith. (Kiok Loy v. NLRC, G.R. No. unilateral grants such as the retirement plan
54334, 22 Jan. 1986) are, by their very nature, not proper subjects of
the CBA negotiations. The Union argues that the
Acts not deemed refusal to bargain: retirement plan remains to be a CBA item. May
the Union demand that an existing voluntary
a. Adoption of an adamant bargaining position in benefit such as the retirement plan be discussed
good faith; and included in the CBA?

b. Refusal to bargain over demands for A: YES. As the benefit was already subject of the
commission of ULP; existing CBA, the members of Union were only
exercising their prerogative to bargain or
c. Refusal to bargain during period of illegal renegotiate for the improvement of the terms of the
strike; Retirement Plan just like they would for all the other
economic, as well as non-economic benefits
d. There is no request for bargaining; previously enjoyed by them. Precisely, the purpose
of collective bargaining is the acquisition or
e. The union seeks recognition for an attainment of the best possible covenants or terms
appropriately large unit; relating to economic and non-economic benefits
granted by Ers and due the Ees. The Labor Code has
f. The union seeks to represent some persons imposed as a mutual obligation of both parties, this
who are excluded under the LC; duty to bargain collectively. (Union of Filipro Ees v.
Nestle Philippines, G.R. No. 158930-31, 03 Mar. 2008)
g. The rank-and-file includes supervisors;
Impasse In Bargaining
h. The demand for recognition and bargaining is
made within the year following a certification Where the subject of a dispute is a mandatory
election in which the clear choice was no bargaining subject, either party may bargain to an
union, and no ad interim significant change has impasse if he bargains in good faith.
taken place in the unit; or
Where the subject is non-mandatory, a party may
i. The union makes unlawful bargaining not insist on bargaining to the point of impasse. His
demand. insistence may be construed as evasion of duty to
bargain.
Evading Mandatory Subjects of Bargaining
Deadlock
There is no duty to agree even on mandatory
subjects. The law speaks of a duty to bargain but not It is synonymous with impasse or a standstill which
of an obligation to agree. presupposes reasonable effort at good faith
bargaining but despite noble intentions, does not
conclude an agreement between the parties.

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Remedies In Case of Deadlock a bit in your position and you impose a “take-it-or-
leave-it” position to the other party, then such
The parties, during renegotiation, may: amounts to boulwarism which is already bargaining
in bad faith.
1. Call upon the NCMB to intervene for the
purpose of conducting conciliation or Blue Sky Bargaining
preventive mediation;
It is defined as making exaggerated or unreasonable
2. Refer the matter for voluntary arbitration proposals. It connotes demands from the union
or compulsory arbitration; or which the Er has no capacity to give. Whether or not
the union is engaged in blue-sky bargaining is
3. Declare a strike or lockout upon determined by the evidence presented by the union
compliance with the legal requirements. as to its economic demands. Thus, if the union
requires exaggerated or unreasonable economic
NOTE: This remedy is a remedy of last demands, then it is guilty of ULP. (Standard
resort. Chartered Bank v. Confessor, G.R. No. 114974, 16 Jun.
2004)
Bad Faith in Bargaining
Boulwarism
The following are bad faith in bargaining:
It is a violation of good faith in bargaining. It
1. Surface Bargaining; includes the failure to execute the CBA.
2. Blue Sky Bargaining; and
3. Boulwarism. It is the tactic of making a "take-it-or-leave-it" offer
in a negotiation, with no further concessions or
Surface Bargaining discussion. It is also known as the “Take-It-or-Leave-
It Bargaining.”
It is defined as "going through the motions of
negotiating" without any legal intent to reach an Gross Violation of the CBA
agreement. It is also called “shadow boxing” or
“apparent bargaining.” The allegations in the complaint should show prima
facie the concurrence of two things, namely:
It is the act of “going through the motions of
negotiating” without any legal intent to reach an 1. gross violation of the CBA, as opposed to
agreement. (Standard Chartered Bank v. Confessor, simple violations of the CBA which are only
G.R. No. 114974, 16 Jun. 2004) grievance matters; and

Surface Bargaining is a question of intent of the 2. the violation pertains to the economic
party concerned and usually, such intent can only be provisions of the CBA. (Silva v. NLRC, G.R.
inferred from the totality of the challenged party’s No. 110226, June 1997)
conduct both at and away from the bargaining table.
PAID NEGOTIATION
A concrete example is the withholding of the Er of
the audited financial statement requested by the The act of Er of paying negotiation or attorney’s fees
union. to the union or its officers as part of the settlement
of any issue in collective bargaining or any other
NOTE: Blue-sky bargaining and Surface bargaining dispute.
are allowed in the beginning of negotiations. But
when during the negotiations, you have not moved

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 III. EMPLOYMENT PROPER
Sweetheart Contract the waivers and are currently receiving
₱32.00/day more than those who did not sign.
It is when a labor organization asks for or accepts Should the wage increase given to the Ees who
negotiations or attorney’s fees from Ers as part of signed the waiver be awarded to the Ees who did
the settlement of any issue in CB or any other not?
dispute. The resulting CBA is considered as a
“sweetheart contract,” which is a CBA that does not A: YES. Generally, the CBA controls the relationship
substantially improve the Ees’ wages and benefits between the parties. Any benefit not included in it is
and whose benefits are far below than those not demandable. However, considering the peculiar
provided by law. It is an incomplete or inadequate circumstances in this case, the requested wage
CBA. increase should be granted. Accordingly, it is illegal
to continue denying the petitioners the wage
GROSS VIOLATION OF THE CBA increase that was granted to Ees who signed the
waivers. To rule otherwise will perpetuate the
It is the flagrant and/or malicious refusal by a party discrimination against Ees who did not sign. All the
to comply with the economic provisions of the CBA. consequences of the unfair labor practice must be
addressed. The grant of the P32.00/day wage
NOTE: If the violation of the CBA is not gross, it is increase is not an additional benefit outside the CBA
not ULP but a mere grievance. of 2009. By granting this increase to those who did
not sign, the Court is eliminating the discrimination
Individual bargaining considered as ULP against them, which was a result of respondent's
unfair labor practice. (Sonedco Workers Free Labor
When the Er attempts to negotiate with individual Union v. Universal Robina Corporation, G.R. No.
workers rather than with the certified bargaining 220383, 05 July 2017)
agent, it is considered as ULP. (Insular Life
Assurance Co., Ltd., Ees Assoc.-NATU v. Insular Life c) BY ORGANIZATIONS
Assurance Co., Ltd., G.R. No. L-25291, 30 Jan. 1971)
Persons Criminally Liable in Case of ULP by
NOTE: There is no legal prohibition for an Ee to Labor Organization
bargain with his Er.
1. Officers;
Q: ABC Corporation offered, among other 2. Members of governing board; and
benefits, a ₱l6.00/day wage increase to their 3. Representatives, agents, members of the labor
Ees. To receive the benefits, Ees had to sign a organization who actually participated,
waiver that said that the new CBA shall only be authorized, or ratified the ULP act.
effective on Jan. 1, 2008. Realizing that the
waiver was an unfair labor practice, some ULP Committed by Labor Organizations
members of XYZ union refused to sign. XYZ
Union and its members who refused to sign the a. Restraint or coercion;
waivers filed a complaint for unfair labor b. Union-induced discrimination;
practices against ABC Corporation. Further, XYZ c. Refusal to bargain;
Union members who did not sign the waiver d. Featherbedding or Make-Work
demanded a wage increase enjoyed by those Arrangements;
who signed. The Court found ABC Corp guilty of e. CBA deal with Er; and
unfair labor practice but denied the claim for f. Gross violation of CBA.
wage increase as there was no provision in the
existing CBA pertaining to the said increase. XYZ
Union appealed alleging that the wage increase
was integrated in the salary of those who signed

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RESTRAINT OR COERCION A union member may not be expelled from her
union, and consequently from her job, for personal
Interference by a Labor Organization is not ULP or impetuous reasons or for causes foreign to the
closed-shop agreement and in a manner
A labor organization can interfere with Ees’ right to characterized by arbitrariness and whimsicality.
self-organization as long as it does not amount to (Manila Mandarin Ees Union v. NLRC, G.R. No. 76989,
restraint or coercion. Interfering in the exercise of 29 Sept. 1987)
right to organize is itself a function of self-
organizing. (Azucena, 2016) Not disloyalty to ask help from another union

NOTE: Under the first ULP committed by an Er, The mere act of seeking help from another union
there is Interference, Restraint, or Coercion. cannot constitute disloyalty. It is an act of self-
However, under the first ULP committed by a labor preservation of workers who, driven to desperation,
organization, the word “interference” is left out, found shelter in another union who took the cudgels
leaving only “restraint or coercion.” The omission is for them. (Rance v. NLRC, G.R. No. L-68147, 30 Jun.
deliberate. (Azucena, 2016) 1988)

Labor organization cannot coerce members to Q: Noya was employed by Slord. The
participate in strike employment was governed by a CBA effective
until 15 Apr. 2014. The CBA contained a closed-
A labor organization violates the law when it shop agreement. Sometime in 2013, Noya tried
restrains or coerces an Ee in the exercise of his right to form a new union which was eventually
to refuse to participate in or recognize a strike. formed and registered on 20 Feb. 2014. NLM –
Katipunan, the exclusive bargaining
UNION-INDUCED DISCRIMINATION representative, on the strength of the
testimonies and affidavit signed by the other
This pertains to the attempt of the labor members that Noya was actively seeking
organization to cause an Er to grant advantages to: signature to form a new union, terminated the
membership of Noya after due proceeding.
1. Members over non-members;
2. Members in good standing over suspended or Thereafter, NLM – Katipunan requested Slord to
expelled members; terminate Noya’s employment. After notifying
3. Members of the executive board over more Noya of the decision of NLM – Katipunan and
senior Ees; or showing him the documents, Slord terminated
4. Members of one union over members of the employment of Noya. Could Noya be
another union. dismissed on the ground he solicited signature
to form a new union?
Arbitrary use of Union Security Clause
A: YES. Case law recognizes that dismissal from
Unions are not entitled to arbitrarily exclude employment due to the enforcement of the union
qualified applicants for membership, and a closed- security clause in the CBA is another just cause for
shop provision would not justify the Er in termination of employment.
discharging, or a union in insisting upon the
discharge of an Ee whom the union thus refuses to To validly terminate the employment of an Ee
admit to membership, without any reasonable through the enforcement of the union-security
ground therefor. (Salunga v. CIR, G.R. No. L-22456, 27 clause, the following requisites must concur:
Sept. 1967)

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 III. EMPLOYMENT PROPER
1. The union security clause is applicable; See page 268 for further discussion on Bad Faith
in Bargaining
2. The union is requesting for the
enforcement of the union security FEATHERBEDDING OR MAKE-WORK
provision in the CBA; and ARRANGEMENTS

3. There is sufficient evidence to support the To cause or attempt to cause an Er to pay or deliver
decision of the union to expel the Ee from or agree to pay or deliver any money or other things
the union. for value, in the nature of an exaction, for services
which are not performed or not to be performed,
All requisites are present. In Tanduay Distillery including the demand for fee for union negotiations.
Labor Union v. NLRC (G.R. Nos. 75037 & 75055 30 (Art. 260 (d), LC)
Apr. 1987), the Court ruled that the organization by
union members of a rival union outside the freedom Featherbedding
period, without first terminating their membership
in the union and without the knowledge of the refers to an Ee practice which creates or spreads
officers of the latter union, is considered an act of employment by unnecessarily maintaining or
disloyalty, for which the union members may be increasing the number of Ees used, or the amount of
sanctioned. This requirement ceases to be binding time consumed, to work on a particular job.
only during the 60-day freedom period immediately
preceding the expiration of the CBA. However, the NOTE: The practices are found to be economically
Er must furnish the Ee with two (2) written notices wasteful and without any legitimate Ee justification.
before the termination of employment can be (Azucena, 2016)
effected: (1) the first apprises the Ee of the
particular acts or omissions for which his dismissal CBA DEAL WITH EMPLOYER
is sought; and (2) the second informs the Ee of the
Er's decision to dismiss him. Slord failed to do so. Accepting for or accepting some “fee” from the Er as
part of CBA or dispute settlement.
It is settled that in cases involving dismissals for just
cause but without observance of the twin See page 269 on Sweetheart Contracts
requirements of notice and hearing, the validity of
the dismissal shall be upheld, but the Er shall be GROSS VIOLATION OF THE CBA
ordered to pay nominal damages. (Slord
Development Corp v. Noya, G.R. No. 232687, 04 Feb. It is the flagrant and/or malicious refusal by a party
2019) to comply with the economic provisions of the CBA.

REFUSAL TO BARGAIN NOTE: If the violation of the CBA is not gross, it is

not ULP but a mere grievance.
It is the act of a union in refusing or violating its duty
to bargain collectively by entering negotiations with Reliefs available in ULP cases (Dis-Cease-O-A)
a fixed purpose of not reaching an agreement or
signing a contract. 1. Cease and Desist Order
2. Affirmative Order
NOTE: It is intended to ensure that unions approach 3. Order to Bargain; or Mandated CBA
the bargaining table with the same attitude of 4. Disestablishment of the Company-Dominated
willingness to agree as the law requires of Union
management.

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Cease and Desist Order Right to strike or lockout not absolute

A prohibitive order requiring a person found to be The exercise of these rights is subject to reasonable
committing ULP to cease and desist from such ULP restrictions pursuant to the police power of the
and take affirmative action that will effectuate the State. It has been held that the right to strike,
policies of the law, including, but not limited to because of the more serious impact upon the public
reinstatement with or without back pay and interest, is more vulnerable to regulation than the
including rights of Ees prior to dismissal, including right to organize and select representatives for
seniority. purposes of CB. (NFSW v. Ovejera, et al. G.R. No. L-
59743, 31 May 1982)
Affirmative Order
6. PEACEFUL CONCERTED ACTIVITIES
It is an order directing either the reinstatement of
the discharged Ee without prejudice to their rights
Forms of Concerted Activities
or, if new laborers have been hired, the dismissal of
the hired laborers to make room for the returning
1. Legal Strike – One called for a valid purpose
Ee.
and conducted through means allowed by law.

Order to Bargain
2. Illegal Strike – One staged for a purpose not
recognized by law, or if for a valid purpose,
It is an order to compel the respondent to bargain
conducted through means not sanctioned by
with the bargaining agent. It can also be an
law.
imposition of a collective bargaining contract upon
an Er who refuses to bargain with the union of its
3. Economic Strike/Bargaining Strike – One
Ees which is known as “Mandated CBA.”
staged by workers to force wage or other
economic concessions from the Er which he is
Disestablishment
not required by law to grant.
(Consolidated Labor Association of the Phil. v.
It is an order directing the Er to withdraw all
Marsman, G.R. No. L-17038, 31 July 1964)
recognition from the dominated labor union and to
disestablish the same.
4. ULP Strike – One called to protest the Er’s acts
of unfair practice enumerated in Art. 259 of the
ULP case is not subject to compromise
LC, as amended, including gross violation of the
CBA and union busting.
In view of the public interest involved, they are not
subject to compromise. (E.G. Gochangco Workers
5. Slow Down Strike – An industrial action in
Union v. NLRC, G.R. Nos. L-67158-62, 30 May 1988)
which Ees perform their duties but seek to
reduce productivity or efficiency in their
Express statutory recognition of the workers’
performance of these duties.
right to strike and the Er’s right to lockout

6. Mass Leaves – An action wherein the Ees

The right to strike is a constitutional and legal right
simultaneously filed leaves of absence based on
of the workers in the same manner that the Ers have
various reasons such as, inter alia, vacation and
the inherent and statutory right to lockout, all
sick leaves.
within the context of labor relations and collective
bargaining. It is a means of last resort and
7. Wild-Cat Strike – A strike action undertaken by
presupposes that the duty to bargain in good faith
Ees without filing the required notice of strike
has been fulfilled and other voluntary modes of
dispute settlement have been tried and exhausted.

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 III. EMPLOYMENT PROPER
and without the majority approval of the total Express statutory recognition of the workers’
union membership. right to strike and the Er’s right to lockout

8. Sit Down Strike – A strike during which The right to strike is a constitutional and legal right
workers occupy their place of employment and of the workers in the same manner that the Ers have
refuse to work or allow others to work until the inherent and statutory right to lockout, all
such time that the strike is settled. within the context of labor relations and collective
bargaining. It is a means of last resort and
9. Overtime Boycott – Involves the act of workers presupposes that the duty to bargain in good faith
in refusing to render overtime work in violation has been fulfilled and other voluntary modes of
of the CBA resorted to as it means to coerce the dispute settlement have been tried and exhausted.
Er to yield to their demands.
Right to strike or lockout not absolute
10. Boycott of Products – Involves the concerted
refusal to patronize an Er’s goods and services The exercise of these rights is subject to reasonable
and to persuade others to a like refusal. restrictions pursuant to the police power of the
State. It has been held that the right to strike,
11. Walk-out Strike – A form of strike where the because of the more serious impact upon the public
Ees leave their workplace and establish interest, is more vulnerable to regulation than the
themselves outside the plant and refuse access right to organize and select representatives for
to the owners and other Ees who want to work. purposes of CB. (NFSW v. Ovejera, et al. G.R. No. L-
59743, 31 May 1982)
12. Primary Strike – Directed against the Er
because of a labor dispute with him. a) STRIKES (VALID vs. ILLEGAL)

13. Secondary Strike – Directed against the Er with Strike

primary labor dispute connected by-product or
employment with the Er of the secondary It means any temporary stoppage of work by the
strikers. concerted action of Ees as a result of an industrial or
labor dispute. (Sec. 1(uu), Rule I, Book V, IRR)
14. Sympathy Strike – A strike staged to make
common cause with strikers in other The right to strike, while constitutionally
establishments, without any dispute between recognized, is not without legal constrictions. Art.
the strikers and their Er. In a sympathy strike, 279(a) of the LC, as amended, provides that no
there is no connection of product or strike or lockout shall be declared after assumption
employment with the primary labor dispute. of jurisdiction by the President or the SOLE or after
This distinguishes a secondary strike and a certification or submission of the dispute to
sympathy strike. compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for
15. General Strike – Directed against all the Ers, the strike or lockout. The court has consistently
participated in by the workmen, irrespective of ruled that once the SOLE assumes jurisdiction over
the Ers for whom they are working. a labor dispute, such jurisdiction should not be
interfered with by the application of the coercive
16. Particular Strike – Directed solely against the processes of a strike or lockout. A strike that is
strikers’ Er. undertaken despite the issuance by the Secretary of
Labor of an assumption order and/or certification is
NOTE: For purposes of determining whether or not a prohibited activity and thus illegal. (Solidbank
a certain activity is “concerted,” it is essential that Corporation v. Gamier/Solid Bank Union, G.R. No.
the activities of the Ee should be collective in nature. 159460, 15 Nov. 2010)

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NOTE: The fact that the conventional term “strike” 7. The striking group is a legitimate labor
was not used by the striking Ees to describe their organization; in case of a bargaining deadlock,
common course of action is inconsequential, since it must be the Ees’ sole bargaining
the substance of the situation and not its representative.
appearance will be deemed controlling. (Toyota
Motor Phils. Corp. Workers Association v. NLRC, G.R. Grounds for a valid strike
Nos. 158786 & 158789, 19 Oct. 2007)
The law recognizes two (2) grounds for the valid
Purpose of a Strike exercise of the right to strike or lockout, namely:

A strike is a coercive measure resorted to by 1. Collective Bargaining Deadlock (CBD); and

laborers to enforce their demands. The idea behind 2. Unfair Labor Practices (ULP) - Includes
a strike is that a company engaged in a profitable flagrant and/or malicious refusal to comply
business cannot afford to have its production or with the economic provisions of the CBA.
activities interrupted, much less, paralyzed. (Phil.
Can Co. v. CIR, G.R. No. L-3021, 13 July 1950) NOTE: If the violation of the CBA is gross, it will
amount to unfair labor practice, which is a ground
“Striking Ee” is still an Ee for a valid strike. If the violation is not gross, it will
just be a grievance falling under the grievance
During a strike the Er-Ee relationship is not machinery of the CBA.
terminated but merely suspended as the work
stoppage is not permanent but only temporary. Summarized Requirements of a valid strike
Thus, a striking Ee is still an Ee. However, the effects
of employment are suspended, hence a striking Ee, The requirements for a valid strike are as follows:
as a rule, is not entitled to his wage during the strike.
(Azucena, 2016) a. Filing of Notice of Strike;
b. Observance of the cooling-off period:
Elements of a Strike
1. 30 days for bargaining deadlock, and
1. Existence of established relationship between 2. 15 days for ULP;
the strikers and the person or persons against
whom the strike is called; c. Notice of strike vote meeting within 24
hours before the intended vote;
2. Existence of an Er-Ee relationship; d. Strike vote;
e. Report of the strike vote; and
3. Existence of a labor dispute and the utilization f. Observance of the 7-day waiting period.
by labor of the weapon of concerted refusal to
work as a means of persuading, or coercing The legal requirements of a valid strike are as
compliance with the working men’s demands; follows:

4. Employment relation is deemed to continue 1. No labor union may strike on grounds

although in a state of belligerent suspension; involving inter-union and intra-union
disputes.
5. Temporary work stoppage;
2. In cases of bargaining deadlocks, the duly
6. Work stoppage is done through concerted certified or recognized bargaining agent
action; and may file a notice of strike with the
Department of Labor and Employment at
least 30 days before the intended date

U N IV E R S I T Y O F S A N T O T O M A S 274
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 III. EMPLOYMENT PROPER
thereof. In cases of unfair labor practice, thoroughfares.
the period of notice shall be 15 days and in
the absence of a duly certified or Declaration of a Strike
recognized bargaining agent, the notice of
strike may be filed by any legitimate labor The following may declare a strike or lockout:
organization in behalf of its members.
1. Any certified or duly recognized bargaining
3. However, in case of dismissal from representative may declare a strike in cases of
employment of union officers duly elected bargaining deadlocks and ULP. The Er may
in accordance with the union constitution declare a lockout in the same cases.
and by-laws, which may constitute union
busting where the existence of the union is 2. In the absence of a certified or duly recognized
threatened, the 15-day cooling-off period bargaining representative, any LLO in the
shall not apply and the union may take establishment may declare a strike but only on
action immediately. grounds of ULP. (Sec. 6, Rule XXII, Book V, IRR
as amended by D.O. 40-03)
4. A decision to declare a strike must be
approved by a majority of the total union A strike conducted by a minority union is patently
membership in the bargaining unit illegal because no labor dispute which will justify
concerned, obtained by secret ballot in the conduct of a strike may exist between the Er and
meetings or referenda called for that a minority union. (United Restaurors v. Torres, et al.,
purpose. G.R. No. L-24993, 18 Dec. 1968)
5. In every case, the union shall furnish the
Department of Labor and Employment the Grievance
voting at least seven (7) days before the
intended strike subject to the cooling-off Any question by either the Er or the union regarding
period herein provided. the interpretation or application of the CBA or
company personnel policies or any claim by either
6. No labor organization shall declare a strike party that the other party is violating any provision
without first having bargained collectively; of the CBA, or company personnel policies.
without first having filed the notice
required or without the necessary strike Grievance machinery
vote first having been obtained and
reported to the Department of Labor and The mechanism for the adjustment and resolution
Employment. of grievances arising from the interpretation or
implementation of a CBA and those arising from the
7. No strike shall be declared after interpretation or enforcement of company
assumption of jurisdiction by the President personnel policies. It is part of the continuing
or the Secretary or after certification or process of CB.
submission of the dispute to compulsory or
voluntary arbitration or during the NOTE: The Court has ruled that the grievance
pendency of cases involving the same procedure provided in the CBA should be adhered
grounds for the strike. to by the parties. Refusal or failure to do so is a ULP
because the grievance procedure is part of the
8. In a strike, no person engaged in picketing continuous process of collective bargaining.
should commit any act of violence, coercion (Azucena, 2016)
or intimidation or obstruct the free ingress
to or egress from the employer’s premises
for lawful purposes, or obstruct public

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Q: What is the effect of absence of a grievance 2. The interpretation or enforcement of company
machinery under the CBA, being considered as a personnel policies.
mandatory provision of the CBA?
Filing a Notice of Strike
A: The CBA cannot be registered with the DOLE
Regional Office. It should be filed with the DOLE, specifically the
Regional Branch of the NCMB, copy furnished the Er.
NOTE: Despite non-registration, the CBA will not be
rendered invalid or unenforceable as between Time to File
parties, but the contract bar rule will be inoperative.
1. At least 15 days before the intended strike or
Grievance procedure lockout if the issues raised are ULP.

The internal rules of procedure established by the NOTE: In case of union busting where the
parties in their CBA with voluntary arbitration as existence of the union is threatened because of
the terminal step, which are intended to resolve all the dismissal from employment of union
issues arising from the implementation and officers duly elected in accordance with the
interpretation of their CBA. union constitution and by-laws, the 15-day
cooling-off period shall not apply and the union
In the absence of applicable provisions in the CBA, a may act immediately after the strike vote is
grievance committee shall be created within ten conducted and the result thereof submitted to
(10) days from signing of the CBA. the appropriate Regional Branch of the NCMB
with due observance with the seven (7) day
Regarding procedure in handling grievances, in the strike ban.
absence of a specific provision in the CBA or existing
company practice prescribing for the procedures in 2. At least 30 days before the intended date
handling grievance, the following shall apply: thereof if the issues involve bargaining
deadlock.
1. An Ee shall present his grievance or complaint,
orally or in writing to the shop steward. Those Who May File Notice of Strike

2. If the grievance is valid, the shop steward shall Only an LLO can legally hold a strike. (Bukluran ng
immediately bring the complaint to the Er’s Manggagawa sa Clothman Knitting, etc. v. CA, et al.,
immediate supervisor. At this level, parties G.R. No. 158158, 17 Jan. 2005)
shall exert efforts to settle the grievance.
a. In establishments with certified bargaining
3. If no settlement is reached, the grievance shall agent
be referred to the grievance committee which
shall have 10 days to decide the case. (Sec. 2, 1. Any certified or duly recognized bargaining
D.O. No. 40-03) representative may file a notice or declare
a strike in cases of ULP; and
Cases falling under the jurisdiction of the
Grievance Machinery 2. If the reason for the intended strike is
bargaining deadlock, only the bargaining
Any grievance arising from: union has the legal right to file a notice of
strike.
1. The interpretation or implementation of the
CBA; and

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 III. EMPLOYMENT PROPER
NOTE: The Er may file a notice or declare NOTE: During the said period, the NCMB-DOLE is
lockout or request for preventive directed to exert all efforts at the mediation and
mediation in the same cases. conciliation to affect a voluntary settlement during
the cooling-off period. The cooling-off period is
b. In establishments with no certified designed to afford the parties the opportunity to
bargaining agent - Any LLO in the amicably resolve the dispute with the assistance of
establishment may file a notice, request the NCMB Conciliator/Mediator.
preventive mediation, or declare a strike but
only on grounds of ULP. Cooling-off Periods Provided by Law

NOTE: A union, instead of filing a notice of a. In cases of CBD, the cooling-off period is 30
strike, may request NCMB to do preventive days;
mediation, but the union must be the certified b. In cases of ULP, the period shall be 15 days.
or duly recognized bargaining agent. (Insular
Hotel Ees Union-NFL v. Waterfront Insular Hotel NOTE: In the case of union busting, as defined in Art.
Davao, G.R. No. 174040-41, 22 Sept. 2010) 278(c), the cooling-off period need not be observed.

Contents of Notice of Strike Start of Cooling-off Period

1. Name and addresses of Er; The start of the cooling-off period should be
2. Union involved; reckoned not on the date the union or Er prepared
3. Nature of the industry to which the Er belongs; the notice of strike or lockout but from the time the
4. Number of union members; notice of strike or lockout is filed with the NCMB, a
5. Workers in the bargaining unit; copy of said notice having been served on the other
6. Other relevant dates; party concerned.

7. In case of bargaining deadlocks, unresolved The mere filing of the notice with NCMB, without
issues, written proposals of the union, proof of valid service thereof to the other party
counter-proposals of the Er and proof of concerned, shall not trigger the running of the
request for conference to settle differences; cooling-off period.
and
Notice of strike vote meeting to NCMB within 24
8. In case of ULP, the acts complained of and the hours before the intended vote
efforts taken to resolve the dispute.
The union shall furnish the regional branch of the
NOTE: NCMB shall inform the concerned party in NCMB the notice of the meeting for the strike vote
case notice does not conform to the requirements. at least 24 hours before the intended vote.

Observance of the Cooling-off Period Strike Vote

The Cooling-off Period is the period given by the A strike must be approved by a majority vote of the
NCMB to mediate and conciliate the parties. It is the members of the union and a lockout must be
span of time allotted by law for the parties to settle approved by a majority vote of the members of the
their disputes in a peaceful manner before staging a Board of Directors of the Corporation or Association
strike or lockout. The principles of improved offer or of the partners in a partnership, obtained by a
and reduced offer balloting apply during the secret ballot in a meeting called for that purpose.
cooling-off period.

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Purpose of Strike Vote A: YES. The time requirement of 15 days for the
filing of the Notice of Strike shall be dispensed with
To ensure that the decision to strike broadly rests but the strike vote requirement, being mandatory in
with the majority of the union members in general, character, shall “in every case” be complied with.
and not with a mere minority, at the same time, to
discourage wildcat strikes, union bossism, and even Strike Vote Report
corruption. (No. 07, Primer on Strike, Picketing and
Lockout) The result of the strike vote should be reported to
the NCMB at least seven (7) days before the
Participation of the NCMB in the taking of strike intended strike subject to the cooling-off period.
vote or lockout vote
A strike staged without the submission of the result
The Regional Branch of the NCMB may, at its own of the strike-vote is illegal. (Samahan ng
initiative or upon request of any affected party, Manggagawa sa Moldex Products, et al. v. NLRC, et
supervise the conduct of the secret balloting. The al., G.R. No. 119467, 01 Feb. 2000)
union / Er must give notice at least 24 hours prior
to the conduct of the voting to give the NCMB Waiting period vs. Cooling-off period
sufficient time to decide if it will supervise the
voting and in the event it does, to prepare. COOLING-OFF
WAITING PERIOD
PERIOD
Seven (7)-Day Waiting Period or Strike Ban
Period counted from
The seven (7)–day waiting period is intended to Period reckoned from the time of the filing of
give the DOLE an opportunity to verify whether the the time the strike vote the notice of strike or
projected strike really carries the imprimatur of the report is submitted to lockout up to the
majority of the union members in addition to the the NCMB, DOLE. intended or actual
cooling-off period before the actual strike. staging thereof.

NOTE: Failure to comply with the aforesaid

requirements makes the strike illegal. The requirement on
Consequently, the officers of the union who the 7-day waiting
participated therein are deemed to have lost their period or strike ban,
employment status. (Bukluran ng Manggagawa sa together with the In case of union-
Clothman Knitting, etc. v. CA, et al., G.R. No. 158158, requirement on the busting, the law allows
17 Jan. 2005) conduct of strike vote the complete disregard
and submission of the of the cooling-off
Effect of the 7-day waiting period if the vote result thereof to the period.
balloting is taken within the cooling-off period NCMB, should still be
complied with in case
The 7–day requirement shall be counted from the of union-busting.
day following the expiration of the cooling-off
period. (No. 06 Primer on Strike, Picketing and
Cooling-off and waiting period may be
Lockout)
done simultaneously.

Q: Is the Strike Vote still necessary in case of

union-busting? If the dispute remains unsettled after the lapse of
the cooling-off period and the seven-day waiting
period, the labor union may strike.

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 III. EMPLOYMENT PROPER
LEGAL STRIKE vs. ILLEGAL STRIKE Wildcat Strike

LEGAL STRIKE ILLEGAL STRIKE It fails to comply with

A work stoppage that
certain requirements
One staged for a violates the labor
of the law, to wit:
purpose not contract and is not
One called for a valid notice of strike, vote,
recognized by law, or if authorized by the
purpose and and report on strike
for a valid purpose, union membership.
conducted through vote.
conducted through
means allowed by law.
means not sanctioned Slowdown Strike
by law.
Ees work on their own
Strike on an
Tests in Determining the Legality of Strike terms; while the Ees
installment plan. An
continue to work and
activity by which
The following must concur: remain in their
workers, without
positions and accept
complete stoppage of
1. Purpose test – The strike must be due to either wages paid to them,
work, retard
bargaining deadlock and/or the ULP. they, at the same time,
production or their
select what part of
performance of duties
2. Compliance with the procedural and their allotted tasks
and functions to
substantive requirements of the law. they care to perform
compel management
on their own volition
to grant their
See requisites of a valid strike on page 274 or refuse openly or
demands.
secretly.
3. Means employed test – It states that a strike
may be legal at its inception but eventually be Sympathetic Strike
declared illegal if the strike is accompanied by
violence which is widespread, pervasive, and Work stoppages of
adopted as a matter of policy and not mere workers of one
violence which is sporadic and which normally company to make There is no labor
occurs in a strike area. common cause with dispute between the
other strikers or other workers who are
Different Type of Strikes companies without joining the strikers
demands or and the latter’s Er.
grievances of their
REASON FOR ITS
DEFINITION own against the Er.
ILLEGALITY
Sit down Strike Secondary Strike

Work stoppages of
workers of one
Characterized by a
company to exert
temporary work
Amounts to a criminal pressure on their Er so
stoppage of workers
act because of the Ees that the latter will in There is no labor
who seize or occupy
trespass on the turn bring pressure dispute involved.
property of the Er or
premises of the Er. upon the Er of another
refuse to vacate the
company with whom
premises of the Er.
another union has a
labor dispute.

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General Strike (Cause-Oriented Strike) Ees who staged an illegal strike are not entitled
to backwages
A type of political
sympathetic strike and Contemplating two causes for the dismissal of an Ee
therefore there is — (a) unlawful lockout, and (b) participation in an
It is a political rally.
neither a bargaining illegal strike — Art 279(a) authorizes the award of
deadlock nor any ULP. full backwages only when the termination of
(e.g., Welga ng bayan) employment is a consequence of an unlawful
lockout.
Quickie Strike

Brief and As a general rule, backwages are granted to

Failure to comply with
unannounced indemnify a dismissed Ee for his loss of earnings
notice requirements
temporary work during the whole period that he is out of his job.
and etc.
stoppage. Considering that an illegally dismissed Ee is not
deemed to have left his employment, he is entitled
to all the rights and privileges that accrue to him
Good Faith Strike is no longer a valid defense from the employment. That backwages are not
granted to Ees participating in an illegal strike
A strike may be considered legal when the union simply accords with the reality that they do not
believed that the respondent company committed render work for the Er during the period of the
unfair labor acts and the circumstances warranted illegal strike under the principle of a fair day’s wage
such belief in good faith although subsequently such for a fair day’s labor.
allegation of unfair labor practices is found out as
not true. (PICEWO-FFW v. People’s Industrial and With respect to backwages, the principle of “fair
Commercial Corp., G.R. No. L-37687, 15 Mar. 1982) day’s wage for a fair day’s labor” remains as the
basic factor in determining the award thereof. If
However, with the enactment of R.A. No. 6715 there is no work performed by the Ee, there can be
which took effect on 21 Mar. 1989, the rule now is no wage or pay unless, of course, the laborer was
that such requirements as the filing of a notice of able, willing, and ready to work but was illegally
strike, strike vote, and notice given to the DOLE are locked out, suspended, dismissed or otherwise
mandatory in nature. illegally prevented from working. However, for this
exception to apply, it is required that the strike be
Thus, even if the union acted in good faith in the legal. (Olisa v. Escario, G.R. No. 160302, 27 Sept.
belief that the company was committing an unfair 2010)
labor practice, if no notice of strike and a strike vote
were conducted, the said strike is illegal. Claim of Prohibited Acts During a Strike
good faith is not a valid excuse to dispense with the
procedural steps for a lawful strike. (Grand 1. The term “illegal acts” under Art. 279(a) may
Boulevard Hotel v. Dacanay, G.R. No. 153665, 18 July encompass several acts that violate existing
2003) labor or criminal laws, such as:

It is not enough that the union believed that the Er a. Any act of violence, coercion or
committed acts of ULP when the circumstances intimidation, or obstruct the free ingress to
clearly negate even prima facie showing to sustain or egress from the Er’s premises for lawful
such belief. (National Union of Workers in Hotels, purposes or obstruct public thoroughfares.
Restaurants and Allied Industries v. NLRC, et al., G.R. (Art. 279(e), LC)
No. 122561, 06 Mar. 1998)
b. Commission of crimes and other unlawful
acts in carrying out the strike; and

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 III. EMPLOYMENT PROPER
c. Violation of any order, prohibition, or LIABILITY OF UNION OFFICERS AND MEMBERS
injunction issued by the SOLE or NLRC in FOR ILLEGAL STRIKE AND ILLEGAL ACTS
connection with the assumption of DURING STRIKE
jurisdiction or certification order under
Art. 278(g) of the LC. Participation in Lawful Strike

2. No Er shall employ any strike-breaker that shall Mere participation of a worker in a lawful strike
interfere with any peaceful picketing by Ees shall not constitute sufficient ground for
during any labor controversy. (Art. 279, LC) termination of his employment, even if a
replacement had been hired by the Er during such
3. No public official or Ee, including officers and lawful strike. (Art. 279, LC)
personnel of the Armed Forces of the
Philippines, or armed person, shall bring in, Liability for Participation in Illegal Strike
introduce, or escort in any manner, any
individual who seeks to replace strikers in 1. Union officers – The mere finding or
entering or leaving the premises of a strike area, declaration of illegality of the strike will result
or work in place of the strikers. (Art. 279(d), LC) in the termination of all union officers who
knowingly participated in the illegal strike.
The involvement of the police during strikes, Unlike ordinary members, it is not required,
lockouts, or labor disputes in general shall be for purposes of termination, that the officers
limited to the maintenance of the peace and order, should commit an illegal act during the strike.
enforcement of laws and legal orders of duly However, absent any showing that the Ees are
constituted authorities, and the performance of union officers, they cannot be dismissed solely
specific functions as may be provided by law. on the illegality of the strike. Further, the fact
that they are union officers is not sufficient – it
Requisites for Police should be proven that they participated.

1. Should always be in uniform with proper name To illustrate how the “knowing participation”
cloth; of union officers may be ascertained, the
following are considered:
2. Shall observe strict neutrality in dealing with
both parties. They shall not bring in, introduce, a. Their persistence in holding picketing
or escort any individual who seeks to replace activities despite the declaration by the
the strikers; NCMB that their union was not duly
registered as a legitimate labor
3. Shall not be stationed in the organization and notwithstanding the
picket/confrontation line; and letter from the federation’s legal counsel
informing them that their acts constituted
4. Shall maintain themselves outside a 50-meter disloyalty to the national federation; and
radius from the picket/confrontation or in
such public thoroughfare for the purpose of b. Their filing of notice of strike and
insuring free flow of traffic. conducting a strike vote even though their
union has no legal personality to
negotiate with their Er for collective
bargaining purposes. (Abaria v. NLRC, G.R.
No. 154113, 07 Dec. 2011)

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2. Ordinary union members – The mere finding vehicles and to the guardhouse. They shouted at
or declaration of illegality of a strike will not customers using megaphones to prevent them
result in termination of ordinary union from going to the bakeshop.
members. For an ordinary union member to
suffer termination, it must be shown by clear The strike was later stopped when both parties
evidence that he has committed illegal acts agreed to compulsory arbitration. The union
during the strike. members argued that their second strike was
not illegal because they were dismissed prior
Reason for the distinction thereto. Thus, the commission of any prohibited
acts during the second strike cannot be used as
Union officers have the duty to guide their members a justification for their illegal dismissal on 19
to respect the law. If instead of doing so, the officers Feb. 2022. They prayed for reinstatement,
urged the members to violate the law, their including the union officers, with payment of
dismissal from the service is just a penalty for their backwages. Arabella’s Bakeshop argued that
unlawful act. Their responsibility, as main players in there was a sit-down strike staged by the union
an illegal strike, is greater than that of an ordinary members as it was the Ees who refused to
union member’s and, therefore, limiting the penalty perform their respective jobs during the first
of dismissal only to the former for their shift of the day. Also, it argued that they are not
participation in an illegal strike is in order. entitled to backwages because the strike that
they conducted was illegal.
Q: The Ees of Arabella’s Bakeshop formed a
union called as AB Union and was certified by a) Were the strikes staged by the union
the DOLE as a legitimate labor organization. On members illegal?
19 Feb. 2022, members of the union, headed by
its president, Arturo Lopez, staged a sit-down A: YES. In a strike grounded on unfair labor practice,
strike at Arabella’s Bakeshop allegedly because the following are the requirements: (1) the strike
of Arabella’s Bakeshop officers who are may be declared by the duly certified bargaining
interfering in their union activities and for agent or legitimate labor organization; (2) the
threatening to terminate union members from conduct of the strike vote in accordance with the
employment. notice and reportorial requirements to the NCMB
and subject to the seven (7)-day waiting period; and
A Notice of Strike was made to the NCMB on the (3) notice of strike filed with the NCMB and copy
same day. Due to this, Arabella’s Bakeshop furnished to the Er, subject to the 15-day cooling-off
issued a memorandum ordering the preventive period.
suspension of striking union members and to
explain within 24 hours from notice their In cases of union busting, the 15-day cooling-off
actions. However, said union members failed to period shall not apply. The union did not file the
comply hence were dismissed. requisite Notice of Strike and failed to observe the
cooling-off period. To legitimize the strike on 19
Another strike was staged by the union Feb. 2022, the union filed a Notice of Strike on the
members on 05 Mar. 2022 to which Arabella’s same day. This cannot be considered as compliance
Bakeshop presented evidence of prohibited acts with the requirement, as the cooling-off period is
conducted by the union members such as violent mandatory. As to the second strike, it was illegal
and disruptive acts. They prevented ingress and because prohibited acts were committed by the
egress of Ees and customers to and from the union members against Art. 279 of the Labor Code.
company’s premises. They also stopped (Bigg’s Inc. v. Jay Boncacas, G.R. No. 200487, 06 Mar.
Arabella’s Bakeshop’s vans from making 2019)
deliveries by throwing stones at the vans which
caused injury to the driver as well as damage to

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 III. EMPLOYMENT PROPER
b) Were the union officers and Ees validly A: NO. If the strike is declared illegal, the SOLE
dismissed? cannot restrain or enjoin the Er from imposing the
appropriate sanctions against the union officers
A: YES. The dismissal of union officers was valid, but who knowingly participated in the illegal strike and
the dismissal of Ees who did not commit prohibited against any striking Ee who committed illegal acts
acts during the strike was invalid. For union during the strike. Since the strike is illegal, the Er
members, what is required is that they knowingly has the right to take disciplinary action against the
participated in the commission of illegal acts during union officers who participated in it and against any
the strike for there to be sufficient ground for member who committed illegal acts during the
termination of employment. For union officers, strike. (PAL v. SOLE, G.R. No. 88210, 23 Jan. 1991)
however, it suffices that they knowingly
participated in an illegal strike. (Bigg’s Inc. v. Jay Q: The Alliance of Independent Labor Unions
Boncacas, G.R. No. 200487, 06 Mar. 2019) (AILU) is a legitimate labor federation which
represents a majority of the appropriate
c) Should backwages be awarded to dismissed bargaining unit at the Lumens Brèwery (LB).
Ees? While negotiations were ongoing for a renewal
of the collective bargaining agreement (CBA),LB
A: NO. Backwages are not granted to dismissed Ees handed down a decision in a disciplinary case
who participated in an illegal strike even if they are that was pending which resulted in the
later reinstated. In Escario v. NLRC, the Court held: termination of the AILU's treasurer and two
Conformably with the long-honored principle of a other members for cause. AILU protested the
fair day’s wage for a fair day’s labor, Ees dismissed decision, claiming that LB acted in bad faith and
for joining an illegal strike are not entitled to asked that LB reconsider. LB refused to
backwages for the period of the strike even if they reconsider. AILU then walked out of the
are reinstated by virtue of their being merely negotiation and declared a strike without a
members of the striking union who did not commit notice of strike or a vote. AILU members locked
any illegal act during the strike. (Bigg’s Inc. v. Jay in the LB management panel by barricading the
Boncacas, G.R. No. 200487, 06 Mar. 2019) doors and possible exits (including windows
and fire escapes). LB requested the DOLE to
Liability for Participation in the Commission of assume jurisdiction over the dispute and to
Illegal Acts During a Strike certify it for compulsory arbitration.

1. The legality or illegality of a strike is The SOLE declined to assume jurisdiction,

immaterial as far as liability for commission of finding that the dispute was not one that
illegal acts during the strike is concerned. If the involved national interest. LB then proceeds to
union officer or member commits an illegal act terminate all of the members of the bargaining
during the strike, be it legal or illegal, his agent on the ground that it was unlawful to: (1)
employment can be validly terminated. barricade the management panel in the
building, and (2) participate in an illegal strike.
2. Liability for illegal acts should be determined (2015 BAR)
on an individual basis. For this purpose, the
individual identity of the union members who a) Was the Secretary of Labor correct in
participated in the commission of illegal acts declining to assume jurisdiction over the
may be proven through affidavits and dispute?
photographs.
A: YES. The refusal of the Secretary to assume
Q: Can the SOLE restrain the Er from imposing jurisdiction is valid. Art. 263(g) (now Art. 278) of
sanctions against the union officers who the LC leaves it to his sound discretion to determine
knowingly participated in the illegal strike? if national interest is involved. Assumption power is

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full and complete. It is also plenary and
Knowingly participating in the commission of
discretionary (Philtranco Service Enterprises, Inc. v.
illegal acts during strike
Philtranco Workers Union-AGLO, G.R. No. 180962, 26
Feb. 2014). Thus, if in his opinion national interest is May be terminated May be terminated
not involved, then the company cannot insist that he
assume jurisdiction.
Rule on reinstatement of striking workers

b) Was LB justified in terminating all those who

Striking Ees are entitled to reinstatement,
were members of AILU on the two grounds
regardless of whether or not the strike was the
cited?
consequence of the Er’s ULP because while out on
strike, the strikers are not considered to have
A: If dismissal is based on illegal strike, the company
abandoned their employment, but rather have only
has to file a complaint for illegal strike first. Once the
ceased from their labor. The declaration of a strike
strike is declared by final judgment to be illegal, it
is not a renunciation of employment relation.
can dismiss the union officers. As to members, their
dismissal must be based on their having committed
Persons not entitled to reinstatement
illegalities on the occasion of their illegal strike.
Since the company prematurely and
1. Union officers who knowingly participate in
indiscriminately dismissed the AILU members then
the illegal strike; and
their dismissal is illegal.

2. Any striker or union who knowingly

If dismissal is based on the unlawful acts of
participates in the commission of illegal acts
barricading to lock the AILU members, LB was
during the strike.
justified in terminating the Ees. Art. 264(a) of the LC
authorizes the employer to declare the loss of
NOTE: Those union members who have joined an
employment status of “any worker” or union officer
illegal strike but have not committed any illegal act
who knowingly participates in the commission of
shall be reinstated but without backwages.
illegal acts during a strike.

The responsibility for the illegal acts committed

Effects on Union Officer vs. Ordinary Worker
during the strike must be on an individual and not
when they knowingly participated in illegal
on a collective basis. (First City Interlink
strike and when they knowingly participated in
Transportation Co., Inc. v. Roldan-Confesor, G.R. No.
the illegal acts during strike
106316, 05 May 1997)

UNION OFFICER ORDINARY WORKER

Q: X was dismissed for joining an illegal strike
Knowingly participated in illegal strike but was reinstated because he is only a member
Cannot be terminated of the union who did not commit any illegal act.
Is X entitled for backwages for the period of
NOTE: The LC protects strike?
ordinary, rank-and-file
May be declared to union members who A: NO. Conformably with the long-honoured
have lost his participated in such a principle of “a fair day’s wage for a fair day’s labor,”
employment status. strike from losing their Ees dismissed for joining illegal strike are not
jobs, provided that entitled to backwages for the period of the strike
they did not commit even if they are reinstated by virtue of their being
illegal acts during the merely members of the striking union who did not
strike. commit any illegal act during the strike. (Escario v.
NLRC, G.R. 124055, 08 June 2000)

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 III. EMPLOYMENT PROPER
Rule on strikes in hospitals with pending criminal charges in the return-to-
work order?
It shall be the duty of the striking Ees or locking out
Er to provide and maintain an effective skeletal A: NO. To exclude union officers, shop stewards, and
workforce of medical and health personnel for the those with pending criminal charges in the directive
duration of the strike or lockout. to the company to accept back the striking workers
without first determining whether they knowingly
SOLE may immediately assume jurisdiction within committed illegal acts would be tantamount to
24 hours from knowledge of the occurrence of such dismissal without due process of law. (Telefunken
strike or lockout and certify it to the NLRC for Semiconductors Ees Union-FFW v. SOLE, G.R. No.
compulsory arbitration. 122743 & 127215, 12 Dec. 1997)

Q: More or less 1,400 Ees of the company staged Ees who abandoned a legal strike but were
a mass walk-out, allegedly without anybody refused reinstatement can be awarded
leading them as it was a simultaneous, backwages
immediate and unanimous group action and
decision, to protest the non-payment of their Provided the following requisites are present:
salaries and wages. The SOLE, who found the
strike to be illegal, granted the clearance to 1. The strike was legal;
terminate the employment of those who were
instigators in the illegal strike. Was the decision 2. There was an unconditional offer to return to
of the Secretary in granting the clearance work as when the strikers manifested their
correct? willingness to abide by the CIR back-to-work
order and even sought the aid of competent
A: NO. A mere finding of the illegality of a strike authorities to affect their return; and
should not be automatically followed by wholesale
dismissal of the strikers from their employment. 3. The strikers were refused reinstatement such
While it is true that administrative agencies as when they have not been re-admitted to
exercising quasi-judicial functions are free from the their former position. (Philippine Marine
rigidities of procedure, it is equally well-settled that Officers' Guild v. Compañia Maritima et al., G.R.
avoidance of technicalities of law or procedure in Nos. L-20662 & L-20663, 27 Mar. 1971)
ascertaining objectively the facts in each case
should not, however, cause denial of due process. Separation pay in lieu of reinstatement in strike
(Bacus v. Ople, G.R. No. L-56856, 23 Oct. 1984) cases

Q: Two days after the union struck, the SOLE In strike cases, the award of separation pay in lieu
ordered the striking workers to return to work of reinstatement is proper only when the strikers
within 24 hours. But the striking union failed to did not participate in the commission of illegal acts
return to work and instead they continued their in the course thereof.
pickets. As a result, violence erupted in the
picket lines. The service bus ferrying non- Entitlement of strikers to their backwages or
striking workers was stoned causing injuries to strike duration pay
its passengers. Threats, defamation, illegal
detention, and physical injuries also occurred. GR: Strikers are not entitled to their backwages or
The company was directed to accept back all strike duration pay even if such strike was legal.
striking workers, except the union officers, shop
stewards, and those with pending criminal
charges. Was the SOLE correct in not including
the union officers, shop stewards, and those

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 LABOR LAW AND SOCIAL LEGISLATION
XPNs: and despite the order reinstating them to their
job.
1. Where the strikers voluntarily and
unconditionally offered to return to work, 4. Pay backwages, reckoned from the Labor
but the Er refused to accept the offer – Ees Arbiter’s issuance of the reinstatement order
are entitled to backwages from the date up to its reversal by the NLRC, if Er fails to
their offer was made; reinstate strikers who were ordered
reinstated by the Labor Arbiter.
2. When there is a return-to-work order and
the Ees are discriminated against other Ees, Q: By reason of a deadlock in collective
workers are entitled to backwages from the bargaining, the union, after the lapse of the
date of discrimination; cooling-off period, declares a strike. The strike
is peaceful but fruitless; the management is
3. In case of a ULP strike, in the discretion of adamant. So after 60 days, the strikers abandon
the authority deciding the case; and their strike and offer to return to work. Is the
company bound to re-admit them? Why?
4. When the Ees were illegally locked out and
thus, compelled them to stage a strike. A: YES. By going on strike, the Ees are not deemed
to have abandoned their work; they are merely
If the strike is illegal, no backwages should be paid. utilizing a weapon given to them by law to seek
Thus, where the strike was declared illegal, better terms and conditions of employment and to
petitioner union members who were found not to protect their rights. An Er who refuses to re-admit
have participated in the commission of illegal acts the strikers, excepting those who have forfeited
during the strike were ordered reinstated to their their employment status because of illegal acts
former positions but without backwages. If committed during the strike, would be
reinstatement is no longer possible, they should discriminating against them for having exercised
receive separation pay of one (1) month for every their right to engage in a concerted action; it
year of service in accordance with existing commits a ULP. (Cromwell Commercial Ees and
jurisprudence. With respect to the union officers, Laborers Union v. CIR, et al., G.R. No. L-19778, 30 Sept.
their mere participation in the illegal strike 1964)
warrants their dismissal. (Arellano University Ees
and Workers Union v. CA, G.R. No. 139940, 19 Sept. b) PICKETING
2006)
Picketing
Liability of Er for Reinstatement of Strikers
It is a concerted activity of workers consisting in
1. Reinstatement (without backwages) of peacefully marching to and from, before an
ordinary rank-and-file union members who establishment involved in a labor dispute, generally
did not participate in the commission of illegal accompanied by the carrying and display of signs,
acts during the conduct of the illegal strike placards and banners intended to inform the public
may be ordered. about the dispute. (Chan, 2017)

2. Terminate strikers who committed illegal acts The Right to Picket as a Means of
during a strike. They are not entitled to be Communicating the Facts of a Labor Dispute
reinstated. Additionally, they may be held
criminally liable therefor. It is a phase of the freedom of speech guaranteed by
the Constitution. Picketing, if peacefully carried out,
3. Forfeit reinstatement of strikers who failed to cannot be curtailed even in the absence of Er-Ee
report for work without proper justification

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 III. EMPLOYMENT PROPER
relationship. (PAFLU v. Cloribel, G.R. No. L-25878, 28 land. Any such squatting or assembly would exceed
Mar. 1969) the scope of the public’s easement and would
constitute enjoinable trespass.
Requisites for Lawful Picketing
Untruthful Picketing
1. It should be peacefully carried out;
Such act is tantamount to unlawful picketing which
2. There should be no act of violence, coercion, or is enjoinable even though the purpose is valid. It is
intimidation; the act of employing false statements, falsehood,
defamation, and other misrepresentations.
3. The ingress to (entrance) or egress from (exit)
the company premises should not be Other Unlawful Picketing Acts
obstructed; and
1. Use of abusive and threatening language
4. Public thoroughfares should not be impeded. towards patrons of the place or business;

Effect of the absence of Ee-Er Relationship on 2. Use of violence and intimidation; or

Picketing
3. Vandalisms and other acts of a less terroristic
If peacefully carried out, picketing cannot be nature which causes physical discomfort to the
prohibited even in the absence of Ee-Er Er’s customers.
relationship. (PAFLU v. CFl, G.R. No. L-49580, 17 Jan.
1983) Right to picket is protected by the Constitution
and the law
Right to Picket not an absolute right
Unlike a strike which is guaranteed under the
While peaceful picketing is entitled to protection as Constitutional provision on the right of workers to
an exercise of free speech, the courts are not conduct peaceful concerted activities under Sec. 3,
without power to confine or localize the sphere of Art. XIII thereof, the right to picket is guaranteed
communication or the demonstration to the parties under the freedom of speech and of expression and
to the labor dispute, including those with related to peaceably assemble to air grievances under Sec.
interests, and to insulate establishments or persons 4, Art. III thereof.
with no industrial connection or having interest
totally foreign to the context of the dispute. Effect of the use of foul language during the
(Liwayway Pub., Inc. v. Permanent Concrete Workers conduct of the picket
Union, G.R. No. L-25003, 23 Oct. 1981)
In the event the picketers employ discourteous and
While workers have the right to peaceful picketing, impolite language in their picket, such may NOT
no person engaged in picketing is allowed to commit result in, or give rise to libel or action for damages.
any act of violence, coercion, or intimidation or to
obstruct the free ingress to or egress from the Er’s When picket considered a strike
premises for lawful purposes, or to obstruct public
thoroughfares. (Chan, 2017) In distinguishing between a picket and a strike, the
totality of the circumstances obtaining in a case
Moving Picket should be considered.

The right granted to striking workers is merely a

pedestrian right. It does not create the additional
rights of squatting or assembly on the portion of Er’s

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Strike vs. Picketing Industries, Inc. v. PHIMCO Industries Labor
Association, G.R. No. 170830, 11 Aug. 2010)
STRIKE PICKETING
Q: Following a deadlock in collective bargaining,
To march to and from the AC-AC Labor Union filed a notice of strike
To withhold or to stop
the Er’s premises, with the Department of Labor and Employment
work by concerted
usually accompanied and, thirty (30) days later, went on strike and
action of Ees because of
by the display of picketed the gates of the UP-UP Company,
an industrial or labor
placards and other paralyzing its operations. The company is
dispute. The work
signs making known engaged in telecommunications, including the
stoppage may be
the facts involved in a supply of cellular phone equipment, with a
accompanied by
labor dispute. It is a nationwide network of facilities.
picketing by the
strike activity separate
striking Ees outside of
and different from In a petition with the DOLE, the company
the company
actual stoppage of questioned the legality of the strike and asked
compound.
work. for compulsory arbitration. The Secretary of the
DOLE certified the dispute to the NLRC for
compulsory arbitration and ordered the
Focuses on publicizing company to readmit the workers pending the
the labor dispute and arbitration. The workers returned and were
its incidents to inform readmitted by the company but five (5)
Focuses on stoppage of
the public of what Is technicians were temporarily reassigned to the
work.
happening in the warehouse while five (5) others were reinstated
company struck on payroll only. The company justified its acts as
against. an exercise of management prerogative.

During the strike, may the striking union picket

Q: PHIMCO argues that the strike staged by its the company's outside outlets although they are
Ees was illegal as they committed the prohibited not company-owned but independent dealers?
acts under Art. 279(e) of the LC such as blocking (1991 BAR)
the ingress and egress of the company premises.
The Ees, on the other hand, submit that the A: Peaceful picketing conducted by employees in a
picket was peaceful, and no human barricade strike area during any labor controversy is given
blocked the company premises. May a peaceful protection by the Labor Code.
picketing of Ees be held illegal?
Thus, if the place being picketed is a strike area
A: YES. Despite the validity of the purpose of a strike which is defined by the LC as “the establishment,
and compliance with the procedural requirements, warehouses, depots, plants or offices, including the
a strike may still be held illegal where the means sites or premises used as runaway shops, of the
employed are illegal. The means become illegal employer struck against, as well as the immediate
when they come within the prohibitions under Art. vicinity actually used by picketing strikers in
264(e) of the LC. Protected picketing does not moving to and fro before all points of entrance to
extend to blocking ingress to and egress from the and exit from said establishment,” then the
company premises, and, the fact that the picket was picketing is protected, if it is peaceful.
moving, was peaceful and was not attended by
actual violence may not free it from taints of In the question given, however, since the striking
illegality if the picket effectively blocked entry to union is picketing the company's outside outlets
and exit from the company premises. (PHIMCO who are not company owned but independent

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dealers, the picketing is not in a strike area, thus the disputes. (Free Telephone Workers Union v. PLDT,
picketing is not protected by the Code. G.R. No. L-31390, 15 Apr. 1988)

Q: The workers engaged in picketing activity in Q: Asia Union (Union) is the certified bargaining
the course of a strike. agent of the rank-and-file employees of Asia
Pacific Hotel (Hotel).
a) Will picketing be legal if non- employees of
the strike-bound employer participate in the The Union submitted its Collective Bargaining
activity? Agreement (CBA) negotiation proposals to the
Hotel. Due to the bargaining deadlock, the
A: YES, the picketing is legal even though non- Union, on 20 Dec. 2014, filed a Notice of Strike
employees join it. Picketing is a form of the exercise with the National Conciliation and Mediation
of freedom of speech. Picketing, provided it is held Board (NCMB). Consequently, the Union
peacefully, is a constitutional right. The disputants conducted a Strike Vote on 14 Jan. 2015, when it
in a legal dispute need not be employer-employee of was approved.
each other. (De Leon v. National Labor Union, G.R. No.
L-7586, 30 Jan. 1957) The next day, waiters who are members of the
Union came out of the Union office sporting
NOTE: Picketing peacefully carried out is not illegal closely cropped hair or cleanly shaven heads.
even in the absence of employer-employee The next day, all the male Union members came
relationship for peaceful picketing is a part of a to work sporting the same hair style. The Hotel
freedom of speech guaranteed by the Constitution. prevented these workers from entering the
(De Leon v. National Labor Union, G.R. No. L-7586, 30 premises, claiming that they violated the
Jan. 1957) company rule on Grooming Standards.

b) Can picketing activity be curtailed when On 16 Jan. 2015, the Union subsequently staged
illegal acts are committed by the picketing a picket outside the Hotel premises and
workers in the course of the activity? prevented other workers from entering the
Hotel. The Union members blocked the ingress
A: NO, the picketing activity itself cannot be and egress of customers and employees to the
curtailed. What can be curtailed are the illegal acts Hotel premises, which caused the Hotel severe
being done in the course of the picket. However, if lack of manpower and forced the Hotel to
this is a “national interest" case under Art. 263(g), temporarily cease operations resulting to
[now 278(g)], the strike or work stoppage may be substantial losses.
stopped by the Secretary’s assumption of
jurisdiction or certification of the case to the On 20 Jan. 2015, the Hotel issued notices to
National Labor Relations Commission. Union members, preventively suspending them
(Nagkakaisang Mangagawa sa Cuison Hotel v. and charging them with the following offenses:
Libron, G.R. No. L-64336, 31 Aug. 1983; Free (1) illegal picket; (2) violation of the company
Telephone Workers Union v. PLDT, G.R. No. L-31390, rule on Grooming Standards; (3) illegal strike;
15 Apr. 1988) and (4) commission of illegal acts during the
illegal strike. The Hotel later terminated the
NOTE: The peaceful picketing authorized cannot Union officials and members who participated
countenance acts of illegality. (Nagkakaisang in the strike. The Union denied it engaged in an
Mangagawa sa Cuison Hotel v. Libron, G.R. No. L- illegal strike and countered that the Hotel
64336, 31 Aug. 1983) committed a ULP and a breach of the freedom of
speech.
Regular courts have no jurisdiction over actions for
the recovery of damages in connection with labor

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Was the picketing legal? Was the mass action of NOTE: The lockout must be for a lawful purpose and
the Union officials and members an illegal carried out through lawful means. A lockout is
strike? Explain. (2016 BAR) unlawful where it is declared in order to defeat
organizational and bargaining rights of Ees.
A: NO, the picket was illegal. The right to picket as (Dingsalan v. NLU, G.R. No. L-14183, 28 Nov. 1959)
a means of communicating the facts of a labor
dispute is a phase of freedom of speech guaranteed Lockout consists of the following:
by the constitution (De Leon v. National Labor Union,
G.R. No. L-7586, 30 Jan. 1957). But this right is not 1. Shutdowns
absolute. Art. 278 of the LC provides that no person
engaged in picketing shall obstruct the free ingress 2. Mass Retrenchment and dismissals
to or egress from the employer's premises for lawful initiated by the Er
purposes or obstruct public thorough fares. The acts
of the union members in blocking the entrance and 3. Dismissals without previous written
exit of the hotel which caused it to shut down clearance from the Secretary of Labor or his
temporarily makes the picket illegal. duly authorized representative. (Sec. 3, P.D.
823, as amended by P.D. 849)
The actions of all the union members in cropping or
shaving their head is deemed an illegal strike. In 4. Er’s act of excluding Ees who are union
National Union of Workers in the Hotel Restaurant members. (Complex Electronics Ees
and Allied Industries (NUWHRAINAPL-IUF) Dusit Association, etc. et. al. v. NLRC, et al., G.R. No.
Hotel Nikko Chapter v. Court of Appeals (G.R. No. 121315, 19 July 1999)
163942, 11 Nov. 2008), the Supreme Court ruled that
the act of the Union was not merely an expression of Grounds for lockout
their grievance or displeasure but was, indeed, a
calibrated and calculated act designed to inflict 1. Collective bargaining deadlock; or
serious damage to the hotel's grooming standards 2. Unfair Labor Practice act. (D.O. No. 40-03, as
which resulted in the temporary cessation and amended by D.O. No. 40A-03)
disruption of the hotel's operations. This should be
considered as an illegal strike. NOTE: No strike or lockout may be declared on
grounds involving inter-union and intra-union
NOTE: Picketing peacefully carried out is not illegal dispute or without first having filed a notice of strike
even in the absence of Er-Ee relationship, for or lockout or without the necessary strike or
peaceful picketing is a part of the freedom of speech lockout vote having been obtained and reported to
guaranteed by the Constitution. (De Leon v. National the Board. (Sec. 5, Rule XXII, Book V, IRR)
Labor Union, supra.)
Mandatory procedural requirements
c) LOCKOUTS
The requirements for a valid lockout are as follows:
It means any temporary refusal of an Er to furnish
work as a result of an industrial or labor dispute. a. Filing of Notice of Lockout by the Er to the
(Art. 219(p), LC) NCMB;

Elements of Lockout b. Observance of the cooling-off period:

1. 30 days for bargaining deadlock, and
1. Temporary refusal to furnish work by the Er; 2. 15 days for ULP;
and
2. Occasioned by an industrial or labor dispute. c. Notice of lockout vote meeting within 24
(Chan, 2017) ours before the intended vote;

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 III. EMPLOYMENT PROPER
d. Lockout vote; Observance of the cooling-off period
e. Report of the lockout vote; and
f. Observance of the 7-day waiting period. A cooling-off period must be observed, i.e., a time
gap is required to cool-off tempers between the
Filing of Notice of Lockout filing of notice and the actual execution of lockout.

A notice of lockout should be filed with the NCMB, Upon receipt of the notice, the regional branch of
copy furnished the union. the NCMB shall exert all efforts at mediation and
conciliation to enable the parties to settle the
In bargaining deadlocks, the notice shall be filed at dispute amicably. It may, upon agreement of the
least 30 days before the intended date thereof. In parties, treat a notice as a preventive mediation
cases of unfair labor practice, the period of notice case. It shall also encourage the parties to submit
shall be 15 days. the dispute to voluntary arbitration.

The notice shall state, among others: NOTE: During the proceedings, the parties shall not
do any act which may disrupt or impede the early
1. Names and addresses of the Er and the settlement of the dispute. They are obliged, as part
union involved; of their duty, to bargain collectively in good faith
and to participate fully and promptly in the
2. The nature of the industry to which the Er conciliation meetings called by the regional branch
belongs; of the NCMB. (Sec. 9, Rule XXII, Book V, IRR)

3. The number of union members and of the A lockout notice, upon agreement of the parties,
workers in the bargaining unit; and may be referred to alternative modes of dispute
resolution, including voluntary arbitration. (Ibid.)
4. Such other relevant data as may facilitate
the settlement of the dispute, such as a brief Notice of Lockout vote
statement or enumeration of all pending
labor disputes involving the same parties. The Er shall furnish the regional branch of the
(Sec. 8, Rule XXII, Book V, IRR) NCMB a notice of meeting for the lockout vote at
least 24 hours before such meeting.
NOTE: In cases of bargaining deadlocks, the notice
shall, as far as practicable, further state: Lockout vote

1. The unresolved issues in the bargaining A decision to declare a lockout must be approved by
negotiations; a majority of the Board of Directors of the Er,
2. The written proposals of the union; corporation or association or the partners in a
3. The counter-proposals of the Er; and partnership obtained by a secret ballot in a meeting
4. The proof of a request for conference to called for the purpose. (Sec. 10, Rule XXII, Book V,
settle the differences. (Sec. 8, Rule XXII, IRR)
Book V, IRR)
The regional branch of the NCMB may, at its own
In cases of unfair labor practices, the notice shall, as initiative or upon request of any affected party,
far as practicable, state the acts complained of and supervise the conduct of the secret balloting.
the efforts taken to resolve the dispute amicably.
(Sec. 8, Rule XXII, Book V, IRR) Report of the Lockout Vote

The Er shall furnish the regional branch of the

NCMB the results of the voting at least 7 days before

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the intended lockout, subject to the cooling-off shutdowns are lockouts but not all lockouts
period. constitute shutdowns. (Sta. Mesa Slipways
Engineering v. CIR, G.R. No. L-4521, 18 Aug. 1952)
NOTE: If the vote is filed within the cooling-off
period, the seven-day waiting period shall be d) ASSUMPTION OF JURISDICTION BY THE
counted from the day the following the expiration of DOLE SECRETARY
the cooling-off period. In effect, the seven days are
added to the 15-day of 30-day cooling off period. When DOLE Secretary may assume or certify a
labor dispute
Observance of the 7-day waiting period
Art. 278(g) of the LC provides that when in the
The 7-day waiting period/lockout ban reckoned opinion of the SOLE, the there exists a labor dispute
after the submission of the lockout vote report to causing or will likely cause a strike or lockout in an
the NCMB-DOLE should be fully observed in all industry indispensable to the national interest, he is
cases. empowered to either:

Should the dispute remain unsettled after the lapse 1. Assume jurisdiction over the labor dispute and
of the said period, the Er may lock out its workers. decide it himself; or
The regional branch of the NCMB shall continue
mediating and conciliating. (Sec. 11, Rule XXII, Book 2. Certify it to the NLRC for compulsory
V, IRR) arbitration, in which case, it will be the NLRC
which shall hear and decide it.
Lockout amounting to ULP
The Secretary may act at his own initiative or upon
A lockout, actual or threatened, as a means of petition by any of the parties. (Azucena, 2016)
dissuading the Ees from exercising their rights, is
clearly an ULP. However, to hold an Er guilty, the The assumption of jurisdiction by the Secretary of
evidence must establish that the purpose was to Labor over labor disputes causing or likely to cause
interfere with the Ees exercise of their rights. a strike or lockout in an industry indispensable to
the national interest is in the nature of a police
In an unfair labor practice proceeding which arises power measure. It cannot be denied that the private
out of a lockout used as a weapon during a labor- respondent is engaged in an undertaking affected
management dispute, an Er’s legal position is with public interest being one of the largest
improved if it appears that he did not lock out his manufacturers of food products. The compelling
Ees during the early stages of negotiations, and did consideration of the Secretary's assumption of
not employ the lockout to for acceptance of his jurisdiction is the fact that a prolonged strike or
terms. (NLRB v. Brown, 380 U.s. 278, 29 Mar. 1965). lockout is inimical to the national economy and
thus, the need to implement some measures to
Lockout vs. Shutdown suppress any act which will hinder the company's
essential productions is indispensable for the
Lockout is different from shutdown in the sense that promotion of the common good. Under this
in a lockout the plant continues to operate; whereas situation, the Secretary's certification order for
in a shutdown, the plant ceases to operate. (Ungos, compulsory arbitration which was intended for the
2021) immediate formulation of an already delayed CBA
was proper. (Union of Filipro Ees v. NLRC, G.R. No.
A shutdown is the willful act of the Er himself 91025, 19 Dec. 1990)
following a complete lockout as contrasted to the
compulsory stoppage of operations as a result of a
strike and walkout. It can be truly said that all

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 III. EMPLOYMENT PROPER
Requisites for Assumption of Jurisdiction Voluntary Arbitrators. (As created by D.O. No. 40-G-
03-10, and amended by D.O. No. 040-H-13)
The SOLE may assume jurisdiction over the dispute
and decide it, or certify the same to the NLRC for Prior notice is not required for Assumption of
compulsory arbitration, provided, that any of the Jurisdiction
following conditions is present:
The discretion to assume jurisdiction may be
1. Both parties have requested the SOLE to exercised by the SOLE without the necessity of prior
assume jurisdiction over the labor dispute; notice or hearing given to any of the parties’
or disputants. The rationale justifiably rests on his
consideration of the exigency of the situation in
2. After a conference called by the SOLE on relation to national interests.
the propriety of its issuance, motu proprio
or upon a request or petition by either Actual Strike or Lockout Not a Condition for the
parties to the labor dispute. (Sec. 15, Rule Exercise of the Power
XXII, Book V, IRR)
Art. 278(g) of the LC does not require the existence
Effect of Assumption of a strike or lockout. All that is required is the
existence of a labor dispute likely to cause a strike
The assumption or certification by the SOLE has the or lockout.
effect of automatically enjoining the intended or
impending strike or lockout as specified in the Extent of the powers of the President during
assumption or certification order. strikes/lockouts

Effect of assumption if a strike or lockout has 1. May determine the industries which are, in
already taken place his opinion, indispensable to national
interest; and
If a strike or lockout has already taken place at the
time of assumption or certification: 2. May intervene at any time and assume
jurisdiction over any such labor dispute in
1. The striking or locked Ees shall immediately order to settle or terminate the same. (Art.
return to work; and 278(g), LC)

2. The Er shall immediately resume operations NOTE: The decision of the President or SOLE is final
and readmit all workers under the same terms and executory after receipt thereof by the parties.
and conditions prevailing before the strike or
lockout. (Art. 278(g), LC) Different rule on strikes and lockouts in
hospitals, clinics, and medical institutions
The SOLE or the Commission may seek the
assistance of law enforcement agencies to ensure As a general rule, strikes and lockouts in hospitals,
compliance with this provision as well as with such clinics, and similar medical institutions should be
orders as he may issue to enforce the same. avoided.

NOTE: Notwithstanding the foregoing, parties to In case a strike or lockout is staged, it shall be the
the case may agree at any time to submit the dispute duty of the striking union or locking-out Er to
to the Secretary of Labor or his/her duly authorized provide and maintain an effective skeletal
representative as Voluntary Arbitrator or to a duly workforce of medical and other health personnel
accredited Voluntary Arbitrator or to a panel of whose movement and services shall be unhampered
and unrestricted as are necessary to insure the

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proper and adequate protection of the life and Effects of Defiance
health of its patients, most especially in emergency
cases, for the duration of the strike or lockout. Non-compliance with the certification order of the
Secretary of Labor and Employment shall be
The SOLE may immediately assume, within 24 considered as an illegal act committed in the course
hours from knowledge of the occurrence of such a of the strike or lockout and shall authorize the
strike or lockout, jurisdiction over the same or Commission to enforce the same under pain of
certify it to the NLRC for compulsory arbitration. immediate disciplinary action, including dismissal,
or loss of employment status, or payment by the
Decision on the Assumed Labor Dispute locking-out Er of backwages, damages and other
affirmative relief, even criminal prosecution against
Within five (5) days from the issuance of the the liable parties. (Section 4, Rule VIII, 2011 NLRC
assumption or certification order, a preliminary Rules of Procedure)
conference or hearing shall immediately be
conducted by the Office of the Secretary of Labor Q: Several employees and members of Union A
and Employment, the NLRC, or the voluntary were terminated by Western Phone Co. on the
arbitrator or panel of voluntary arbitrators as the ground of redundancy. After complying with the
case may be. necessary requirements, the Union staged a
strike and picketed the premises of the
The decision of the SOLE, the NLRC, or Voluntary company. The management then filed a petition
Arbitrator or Panel of Voluntary Arbitrators shall be for the Secretary of Labor and Employment to
rendered within 30 calendar days from submission assume jurisdiction over the dispute. Without
of the case for resolution and shall be final and the benefit of a hearing, the Secretary issued an
executory 10 calendar days after receipt thereof by Order to assume jurisdiction and for the parties
the parties. (Sec. 18, Rule XXII, Book V, Omnibus Rules to revert to the status quo ante litem.
Implementing the Labor Code)
Under the same set of facts the Secretary issued
Issues that the SOLE may resolve when he an Order directing all striking workers to return
assumes jurisdiction over a labor dispute to work within 24 hours, except those who were
terminated due to redundancy. Was the Order
Power of SOLE is plenary and discretionary. (St. legal? Explain. (2010 BAR)
Luke’s Medical Center v. Torres, G.R. No. 99395, 29
June 1993) A: NO. The SOLE’s order will be inconsistent with
the established policy of the State of enjoining the
As the term "assume jurisdiction" connotes, the parties from performing acts that undermine the
intent of the law is to give the Labor Secretary full underlying principles embodied in Art. 263(g) (now
authority to resolve all matters within the dispute 278(g)) of the Labor Code.
that gave rise to or which arose out of the strike or
lockout; it includes and extends to all questions and In this case, excepting the employees terminated
controversies arising from or related to the dispute, due to redundancy from those who are required to
including cases over which the labor arbiter has return-to-work, which was the very labor dispute
exclusive jurisdiction. (Tabangao Shell Refinery Ees that sparked the union to strike, the SOLE comes
Association v. Pilipinas Shell Petroleum Corp, G.R. No. short of his duty under Art. 263(g) (now 278(g)) to
170007, 07 Apr. 2014) maintain status quo or the terms and conditions
prevailing before the strike. In fact, the Secretary
could be accused of disposing of the parties’ labor
dispute without the benefit of a hearing, in clear
derogation of due process of law

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NOTE: The SOLE’s order, directing all striking As to the involvement of a strike or lockout
workers to return to work within 24 hours, except
those who were terminated due to redundancy, will
“Serious labor dispute” Labor dispute referred
be inconsistent with the established policy of the
contemplated may or to will cause or likely to
State of enjoining the parties from performing acts
may not involve a cause a strike or
that undermine the underlying principles embodied
strike or lockout. lockout.
in Art. 263(g) (now 278(g)) of the LC. (Art. 278(g),
LC)
As to the industry or nature of
Power of SOLE under Art. 277(b) vs. under Art. the business involved
263(g)
May be exercised in
POWER OF SOLE cases of termination of
POWER OF SOLE UNDER ART 263(g) employment for as
May only be exercised
UNDER ART 277(b) ASSUMPTION OF long any of the two
in industries
JURISDICTION grounds mentioned in
indispensable to the
As to the applicability Art. 277(b) exists,
national interest.
irrespective of the
It is applicable to all nature of the business
labor disputes, of the Er.
It involves only the irrespective of the
issue of termination of grounds therefor, As to the remedy
employment which provided such labor
may cause a serious disputes will cause or Automatic return to
labor dispute or is in likely to cause strikes work of the strikers or
implementation of a or lockouts in locked-out Ees, if the
mass lay-off. industries strike or lock-out is on-
indispensable to the going at the time of the
Immediate
national interest. issuance of the
reinstatement pending
assumption or
As to the requirement of preliminary resolution of the
certification order of
determination of the existence of termination case
the enjoining of the
prima facie evidence which the LA has
strike or lockout, if one
exclusive jurisdiction.
has not taken place,
Requires the conduct pending the resolution
of preliminary of the issues raised in
determination of the the notice of strike or
Does not require such
existence of prima facie lockout.
preliminary prima
evidence that the
facie determination. In
termination may cause
fact, prior notice and
a serious labor dispute
hearing are not Art. 128 vs. Art. 129
or is in implementation
required before the
of a mass lay-off to be
SOLE may issue an ART. 128 ART. 129
conducted by
assumption or As to the nature and subject of the
appropriate official of
certification order. proceedings
DOLE before whom the
Limits the proceedings
termination dispute is It covers enforcement
to monetary claims
pending. of labor legislation in
which involve only
general.
labor standards laws.

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As to the workers involved Telecommuting Agreement

It applies to present or
The Er and Ees shall adhere to and be guided by the
past Ees at the time the
mutually agreed policy or telecommuting
complaint is filed,
Ees still in the service agreement, which stipulates for the following
provided there is no
provisions, including but not limited to:
demand for
reinstatement.
1. Eligibility;
As to the jurisdictional limits 2. Applicable code of conduct and
The law fixes no The amount of money performance evaluation and assessment;
maximum monetary claim per claimant 3. Appropriate alternative workplace/s;
amount for the exercise should not exceed 4. Use and cost of equipment;
of enforcement power. P5,000.00. 5. Work days and/or hours;
6. Conditions of employment, compensation,
As to the officers designated
and benefits particularly those unique to
SOLE or any of his duly telecommuting Ees;
Vested upon a regional
authorized 7. Non-diminution of benefits;
director or any duly
representatives who 8. Occupational safety and health;
authorized hearing
may or may not be a 9. Observance of data privacy policy;
officer of the DOLE.
regional director. 10. Dispute settlement; and
11. Termination or change of work
As the to Appeal
arrangement. (Sec. 4, R.A. No. 11165)
Appealable to the
Appealable to the SOLE.
NLRC. Termination of Telecommuting Arrangement

The Er or Ees may terminate or change the

telecommuting work arrangement, in accordance
E. TELECOMMUTING ACT (R.A. No. 11165) with the telecommuting policy or agreement,
without prejudice to employment relationship and
working conditions of the Ee, at no cost to the latter.
State Policy
2. TELECOMMUTING PROGRAM (Sec. 4)
It is hereby declared the policy of the State to affirm
labor as a primary social economic force. To this
An Er in the private sector may offer a
end, it shall protect the rights of workers and
telecommuting program to its Es on a voluntary
promote their welfare, especially in the light of
basis or as a result of collective bargaining, if any,
technological development that has opened up new
and upon such terms and conditions as they may
and alternative avenues for employees to carry out
mutually agree upon. (Sec. 3, D.O. 202-19)
their work such as telecommuting, and other
flexible work arrangements. (Sec. 2, R.A. No. 11165)
NOTE: Such terms and conditions shall not be less
than the minimum labor standards set by law, and
1. DEFINITION (Sec. 3) shall include compensable work hours, minimum
number of work hours, overtime, rest days,
Telecommuting refers to a work arrangement that entitlement to leave benefits, social welfare
allows an employee in the private sector to work benefits, and security of tenure.
from an alternative workplace with the use of
telecommunication and/or computer technologies.
(Sec. 3, R.A. No. 11165)

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3. FAIR TREATMENT (Sec. 5) opportunity to meet with colleagues on a regular

basis and allowing access to the regular workplace
and company information.
Fair Treatment

Data Protection
The Er shall ensure that telecommuting Ees are
given the same treatment as that of comparable Ees
To ensure the protection of data used and processed
working at the Er's premises. All telecommuting Ees
by the telecommuting Ee for professional purposes,
shall be covered by the same set of applicable rules
the Er shall be responsible for strictly taking the
and existing CBA, if any. They shall also:
appropriate measures, which are not limited to:

1. Receive a rate of pay, including overtime and

1. Disabling of hardware,
night shift differential, and other similar
2. Universal Serial Bus (USB) access, and
monetary benefits not lower than those
3. External cloud-based storage can be taken
provided in applicable laws, and/or CBA;
by the Er.

2. Have the right to rest days, regular holidays,

For this purpose, the provisions of the Data Privacy
and special nonworking days;
Act of 2012 shall have suppletory effect. (Sec. 5, D.O.
202-19)
3. Have the same or equivalent workload and
performance standards as those of comparable
Notice and Monitoring
workers at the Er's premises; provided that the
parties may mutually agree to different
The Er shall notify the DOLE on the adoption of a
performance standards that may be more
telecommuting work arrangement, by
appropriate given the location of the Ee is not at
accomplishing the DOLE prescribed report form
the premises of the Er;
and submitting the same in print or digital copy, to
the nearest DOLE Field or Provincial Office having
4. Without additional cost, have the same access
jurisdiction over the area where the principal office
to training and career development
is located.
opportunities as those of comparable workers
at the Er's premises, and be subject to the same
If the Er has branches or operational units outside
appraisal policies covering these workers,
the region of its principal office, each branch or
including the qualification provided on the
operational unit shall also submit its respective
preceding item;
report to the nearest DOLE Field or Provincial Office
having jurisdiction over the branch or operational
5. Without additional cost, receive appropriate
unit. (Sec. 7, D.O. 202-19)
training on the technical equipment at their
disposal, and the characteristics and conditions
of telecommuting; and

6. Have the same collective rights as the workers

at the Er's premises, including access to safety
and health services when necessary, and shall
not be barred from communicating with
worker's representatives. (Sec. 4, D.O. 202-19)

The Er shall also ensure that measures are taken to

prevent the telecommuting Ee from being isolated
from the rest of the working community in the
company by giving the telecommuting Ee the
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Employee (Ee)
IV. POST-EMPLOYMENT
Any person who performs services for an Er in
which either or both mental and physical efforts are
used and who receives compensation for such
Coverage of Termination of Employment
services, where there is an Er‐Ee relationship. (R.A.
No. 8282, Social Security Law)
Applies to all establishments or undertakings
whether for profit or not. (Art. 293, LC)
Only a natural person can qualify as an Ee. Natural
persons may include Filipino citizens and
Termination is a broader concept that is used to
foreigners.
denote dismissal or lay-off. It may also imply
complete severance of Er-Ee relationship.
Ee includes any person in the employ of an Er. The
term shall not be limited to the Ees of a particular
On the other hand, dismissal is a form of ending an
Er, unless the Code so explicitly states. It shall
Er-Ee relationship initiated either by the Ee or Er.
include any individual whose work has ceased as a
e.g., Just cause or authorized cause dismissal.
result of or in connection with any current labor
dispute or because of any unfair labor practice if he
Lay-off is a termination initiated by the Er without
has not obtained any other substantially equivalent
prejudice to reinstatement or recall of an Ee who
and regular employment. (Art. 219(f), LC)
has been temporarily separated brought about by
adverse economic conditions.
NOTE: A self-employed person shall be both an Ee
and Er at the same time.

A. EMPLOYER-EMPLOYEE RELATIONSHIP Existence of an Employment Relationship

Employment relationship is determined by law and

Employer (Er) not by contract. (Insular Life Assurance Co. Ltd. v.
NLRC, G.R. No. 119930, 12 Mar. 1998)
Any person, natural or juridical, domestic, or
foreign, who carries on in the Philippines any trade, NOTE: Taxi or jeepney drivers under the
business, industry, undertaking or activity of any “boundary” system are Ees of the taxi or jeepney
kind and uses the services of another person, who is owners/operators, as well as passenger bus drivers
under his orders as regards the employment, except and conductors are Ees. (Jardin v. NLRC and
the Government and any of its political subdivisions, Goodman Taxi, G.R. No. 119268, Feb. 23, 2000)
branches or instrumentalities, including GOCCs.
Er-Ee Relation as a Question of Law (Stipulation
The Er may be a natural or juridical person. It may that No Er-Ee Relationship Exists)
be a single proprietor, a partnership or a
corporation. The existence of an Er-Ees relation is a question of
law and being such, it cannot be made the subject of
Er includes any person acting in the interest of an agreement. (Tabas v. California Manufacturing Co.,
Er, directly or indirectly. The term shall not include Inc., G.R. No. 80680, 26 Jan. 1989)
any labor organization or any of its officers or
agents except when acting as Er. (Art. 219(e), LC) It is axiomatic that the existence of an Er-Ee
relationship cannot be negated by expressly
repudiating it in the management contract and
providing therein that the Ee is an independent
contractor when the terms of the agreement clearly

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show otherwise. For, the employment status of a contributions and withholding taxes from the
person is defined and prescribed by law and not by wages of the security guards. The assignments of
what the parties say it should be. In determining the security guards, who should be on duty or on
status of the management contract, the Four-Fold call, promotions, suspensions, dismissals and
Test on employment has to be applied. (Insular Life award citations for meritorious services were
Assurance Co. Ltd. v. NLRC, G.R. No. 119930, 12 Mar. all done upon approval by Baron's chief security
1998) officer. After the expiration of the contract with
ASIA, Baron did not renew the same and instead
Er-Ee Relation as a Question of Fact executed another contract for security services
with another agency. ASIA placed the affected
The existence of an Er-Ee relationship depends security guards on "floating status" on "no work
upon the facts of each case. (Social Security System v. no pay" basis.
CA, G.R. No. 100388, 14 Dec. 2000)
Having been displaced from work, the ASIA
Q: Romel is working as a pianist in the security guards filed a case against Baron for
restaurant of a hotel for almost 7 years. During illegal dismissal, OT pay, minimum wage
his employment, he was given a time for his differentials, vacation leave and sick leave
performance fixed at 7-10pm for 3-6x a week; benefits, and 13th month pay. Baron denied
the manager requires him to conform with the liability alleging that ASIA is the Er of the
venue’s motif and is subjected to the rules and security guards and therefore, their complaint
regulations of the Ees of the hotel. His salary was for illegal dismissal and payment of money
given every night. His services were terminated claims should be directed against ASIA.
as a cost-cutting measure. He filed for illegal Nevertheless, Baron filed a Third-Party
dismissal. As a defense, the hotel management Complaint against ASIA.
alleged that there can be no illegal dismissal as
Er-Ee relationship is absent. Is the defense of the Is there an Er-Ee relationship between the
hotel tenable? Baron, on one hand, and the ASIA security
guards, on the other hand? Explain briefly.
A: NO. Romel is an Ee of the hotel. The issue of (1999 BAR)
whether or not an Er-Ee relationship existed
between petitioner and respondent is essentially a A: YES. As a general rule, the security guards of a
question of fact. The factors that determine the issue private security guard agency are the Ees of the
include who has the power to select the Ee, who latter and not of the establishment that has entered
pays the Ee’s wages, who has the power to dismiss into a contract with the private security guard
the Ee, and who exercises control of the methods agency for security services. But under the facts in
and results by which the work of the Ee is the question, Baron Hotel appears to have hired the
accomplished. (Legend Hotel v. Realuyo, G.R. No. security guards, paid their wages, had the power to
153511, 18 July 2012) promote, suspend or dismiss the security guards
and the power of control over them. In other words,
Q: ASIA executed a one (1)-year contract with the security guards were under orders of Baron
the Baron Hotel for the former to provide the Hotel as regard to their employment. Thus, Baron
latter with 20 security guards to safeguard the Hotel is the Er of the security guards.
persons and belongings of hotel guests, among
others. The security guards filled up Baron Q: Assuming that ASIA is the Er, is the act of ASIA
application form and submitted the executed in placing the security guards on "floating
forms directly to the Security Department of status" lawful? Why?
Baron. The pay slips of the security guards bore
Baron's logo and showed that Baron deducted
the amounts for SSS premiums, medicare

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A: YES. It is lawful for a private security guard Control Test
agency to place its security guard on a "floating
status" if it has no assignment to give to said The control test assumes primacy in the overall
security guards. But if the security guards are placed consideration. There is an Er-Ee relationship when
on a "floating status" for more than six (6) months, the person for whom the services are performed
the security guards may consider themselves as reserves the right to control not only the end
having been dismissed. achieved but also the manner and means used to
achieve that end. (Television and Production
Q: What property right is conferred upon an Ee Exponents, Inc. v. Servaña, G.R. No. 167648, 28 Jan.
once there is an Er-Ee relationship? Discuss 2008)
briefly. (2006 BAR)
The power of control refers to the existence of
A: Once an Er-Ee relationship is established, such power and not necessarily to the actual exercise
employment is treated, under our constitutional thereof. It is not essential for the Er to actually
framework, as a property right. When a person has supervise the performance of duties of the Ee; it is
no property, his job may possibly be his only enough that the Er has the right to wield that power.
possession or means of livelihood and those of his (Republic v. Asiapro Cooperative, G.R. No. 172,101, 23
dependents. When a person loses his job, his Nov. 2007)
dependents suffer as well. The worker should,
therefore, be protected and insulated against any Exclusivity of service, control of assignments and
arbitrary deprivation of his job. (Philips removal of agents under private respondents’ unit,
Semiconductors, Inc. v. Fadriquela, G.R. No. 141717, collection of premiums, furnishing of company
14 Apr. 2004) facilities and materials as well as capital described
as Unit Development Fund are but hallmarks of the
1. TESTS TO DETERMINE EMPLOYER- management system where there can be no
EMPLOYEE RELATIONSHIP escaping the conclusion that one is an Ee of the
insurance company. (Insular Assurance Co., Ltd., v.
NLRC, G.R. No. 119930, 12 Mar. 1998)
Four-Fold Test (Select(a)-Wag-Dis-Co)

The control test calls merely for the existence of the

Factors determining the existence of an Er-Ee
right to control the manner of doing the work, not
relationship:
the actual exercise of the right. (Zanotte Shoes v.
NLRC, G.R. No. 100665, 13 Feb. 1995)
1. Selection and engagement of the Ee;
2. Payment of wages;
Kinds of Control Exercised by an Employer
3. Power of dismissal; and
4. Power of control, or the Control Test.
Not every form of control will have the effect of
(Azucena, 2016)
establishing an Er-Ee relationship. Thus, a line
should be drawn between:
NOTE: It is the so-called “control test” that is
the most important element. Absent the power
a. Rules that merely serve as guidelines, which
to control the Ee with respect to the means and
aims only to promote the result. In such case,
methods by which his work was to be
no Er-Ee relationship exists; and
accomplished, there is no Er-Ee relationship
between the parties. (Continental Marble Corp.,
b. Rules that fix the methodology and bind or
et.al v. NLRC, G.R. No. 43825, 09 May 1988)
restrict the party hired to the use of such
means or methods. These addresses both the
result and the means employed to achieve it
and hence, Er-Ee relationship exists. (Insular

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Life Assurance Co. v. NLRC, G.R. 84484, 15 Nov. A: I will rule in favor of AB Hotel and Resort. Dr.
1989) Crisostomo was an independent contractor and the
nurses and clinic staff are his employees. Dr.
The main determinant therefore is whether the Crisostomo had the power of selection and
rules set by the Er are meant to control not just the engagement of the nurses and clinic staff; he also
results but also the means and methods. (Orozco v. paid their wages and SSS contributions. Most
CA, G.R. 155207, 13 Aug. 2008) importantly, he exercises control over the nurses
and clinical staffs’ conduct in dispensing medical
NOTE: However, in certain cases the control test is services to the guests and personnel of the resort.
not sufficient to give a complete picture of the The fact that AB Hotel and Resort gave instructions
relationship between the parties, owing to the to Dr. Crisostomo regarding replenishment of
complexity of such a relationship where several emergency kits and forbidding his staff from
positions have been held by the worker. The better receiving cash payments from guests is of no
approach is to adopt the two-tiered test. (Francisco consequence. They are nothing more but guidelines
v. NLRC, G.R. No. 170087, 31 Aug. 2006) which will not create an employer-employee
relationship (Insular Life Co., Ltd. v. NLRC, G.R. No.
Physicians 84484, 15 Nov. 1989)

Under the control test, an employment relationship Q: Genesis entered into a Career’s Agent
existed between the physicians and the hospital Agreement with EmoLife Insurance Company, a
because the hospital controlled the means and the domestic corporation engaged in insurance
details of the process by which the resident doctors business. The Agreement provides that the
accomplished their task. (Calamba Medical Center, agent is an independent contractor and nothing
Inc. v. NLRC, et al., G.R. No. 176484, 25 Nov. 2008) therein shall be construed or interpreted as
creating an Er-Ee relationship. It further
Q: Dr. Crisostomo entered into a retainer provides that the agent must comply with three
agreement with AB Hotel and Resort whereby requirements: (1) compliance with the
he would provide medical services to the guests regulations and requirements of the company;
and employees of AB Hotel and Resort, which, in (2) maintenance of a level of knowledge of the
turn, would provide the clinic premises and company's products that is satisfactory to the
medical supplies. He received a monthly company; and (3) compliance with a quota of
retainer fee of ₱60,000.00, plus a 70% share in new businesses. However, EmoLife insurance
the service charges from AB Hotel and Resort's company terminated Genesis’ services. Genesis
guests availing themselves of the clinic's filed an illegal dismissal complaint alleging
services. The clinic employed nurses and allied therein that an Er-Ee relationship exists and that
staff, whose salaries, SSS contributions and he was illegally dismissed. Is he an Ee of the
other benefits he undertook to pay. AB Hotel Insurance Company?
and Resort issued directives giving instructions
to him on the replenishment of emergency kits A: NO. Genesis is not an Ee of EmoLife Insurance
and forbidding the clinic staff from receiving Company. Generally, the determinative element is
cash payments from the guests. In time, the the control exercised over the one rendering the
nurses and the clinic staff claimed entitlement service. The concept of “control” in LC has to be
to rights as regular employees of AB Hotel and compared and distinguished with “control” that
Resort, but the latter refused on the ground that must necessarily exist in a principal-agent
Dr. Crisostomo, who was their employer, was an relationship. The Er controls the Ee both in the
independent contractor. Rule, with reasons. results and in the means and manner of achieving
(2017 BAR) this result. The principal in an agency relationship,
e.g., insurance agent, on the other hand, also has the
prerogative to exercise control over the agent in

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undertaking the assigned task based on the needed. In 2008, their regular Ees ceased calling
parameters outlined in the pertinent laws. helpers.

In the present case, the Agreement fully serves as Were petitioners regular Ees of Shogun Ships?
grant of authority to Genesis as EmoLife’s insurance
agent. This agreement is supplemented by the A: YES. In determining the existence of an Er-Ee
company’s agency practices and usages, duly relationship, this Court has time and again applied
accepted by the agent in carrying out the agency. the "four-fold test" which has the following
Foremost among these are the directives that the elements, to wit: (a) the selection and engagement
principal may impose on the agent to complete the of the Ee; (b) the payment of wages; (c) the power
assigned tasks, to the extent that they do not involve to discipline and dismiss; and (d) the Er's power to
the means and manner of undertaking these tasks. control the Ee with respect to the means and
methods by which the work is to be accomplished.
The law likewise obligates the agent to render an
account; in this sense, the principal may impose on Shogun did not categorically deny the following:
the agent specific instructions on how an account that in May 2006, petitioners were engaged by
shall be made, particularly on the matter of Shogun to work on repairs on one of its barges; that
expenses and reimbursements. To these extents, petitioners worked for Shogun until they were
control can be imposed through rules and verbally dismissed on 01 May 2008; that petitioners
regulations without intruding into the labor law were duly compensated for any work done; that
concept of control for purposes of employment. Shogun provided petitioners’ financial assistance
(Gregorio Tongko v. ManuLife Insurance Company, while confined; that Shogun continued to pay their
G.R. No. 167622, 29 June 2010) salaries after they being discharged from
hospitalization; and that petitioners were verbally
Q: Petitioners alleged that they were employed dismissed on 01 May 2008.
in 1996 as fitters/welders by Oceanview, a
corporation engaged in the business of ship As regards Shogun’s power of control, the control
building. Their duties and responsibilities test calls merely for the existence of the right to
included repairing Oceanview barges. They control the manner of doing the work and not the
presented a copy of their IDs and Certificates of actual exercise of the right. Considering that
Employment. In 2003, Oceanview changed its petitioners were working on the barges alongside
corporate name to "Shogun Ships Inc." regular Ees and that they were taking orders from
its engineers as to how the barges of Shogun should
In May 2006, they were assigned to do a welding be repaired, it may be logically inferred that Shogun
job on one of the barges of Shogun Ships. An had the right to control the work of petitioners
explosion occurred where petitioners sustained (Pedrito Parayday and Jaime Reboso v. Shogun
injuries. They were hospitalized and medical Shipping Co., G.R. No. 204555, 06 July 2020, as
expenses were borne by respondent. After being penned by J. Hernando).
discharged, respondent resumed payment of
their salaries. Subsequently, Shogun Ships Economic Dependence (Two-Tiered Test)
verbally dismissed them from service effective
01 May 2008 due to lack of work. This two-tiered test provides us with a framework
of analysis, which would take into consideration the
Shogun Ships denied that petitioners were its totality of circumstances surrounding the true
regular Ees. It pointed out that Oceanview was nature of the relationship between the parties. This
separate and distinct from it, and that is especially appropriate in this case where there is
petitioners were mere helpers brought in by its no written agreement or terms of reference to base
regular Ees of Shogun Ships when repairs were the relationship on and due to the complexity of the
relationship based on the various positions and

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responsibilities given to the worker over the period Evidence of Employment: ID, Voucher, SSS
of the latter’s employment. (Francisco v. NLRC, G.R. Registration, Memorandum
No. 170087, 31 Aug. 2006)
No particular form of evidence is required to prove
Elements the existence of such relationship. Any competent
and relevant evidence to prove the relationship may
1. The putative Er’s power to control the Ee with be admitted. (Domasig vs. NLRC, G.R. No. 118101, 16
respect to the means and methods by which Sept. 1996)
the work is to be accomplished (Four-fold
Test); and Absence of Name in the Payroll

2. The underlying economic realities of the In Opulencia Ice Plant v. NLRC (G.R. No. 98368, 15
activity or relationship. (Economic Reality Dec. 1993), the Supreme Court disagreed with the
Test). Er’s argument that the absence of the complainant’s
name in the payroll disapproved his being an Ee.
Proper Standard for Economic Dependence
It held that, “if only documentary evidence would be
The proper standard is whether the worker is required to show that relationship, no scheming Er
dependent on the alleged Er for his continued would ever be brought before the bar of justice, as
employment in that line of business. no Er would wish to come out with any trace of
illegality he has authored considering that it should
The determination of the nature of the relationship take much weightier proof to invalidate a written
between Er and Ee depends upon the circumstances instrument.”
of the whole economic activity, such as:
Thus, since the Er-Ee relationship in this case was
1. The extent to which the services performed sufficiently proven by testimonial evidence, the
are an integral part of the Er’s business; absence of time sheet, time record or payroll
became inconsequential. (Azucena, 2016)
2. The extent of the worker’s investment in
equipment and facilities; Mode of Compensation: Not Determinative of Er-
Ee Relationship
3. The nature and degree of control exercised by
the Er; The presence or absence of Er-Ee relationship is not
determined by the basis of the Ee’s compensation.
4. The worker’s opportunity for profit and loss; The compensation, whether called wage, salary,
commission or other name, may be computed on the
5. The amount of initiative, skill, judgment, or basis of time spent on the job or it may be based on
foresight required for the success of the the quality and/or quantity of the work done. It may
claimed independent enterprise; further be dependent on skills possessed, seniority
earned, or performance and initiative shown by the
6. The permanency and duration of the Ee.
relationship between the worker and Er; and
Piece-rate, boundary, and pakyaw are merely
7. The degree of dependency of the worker methods of pay computation and do not prove
upon the Er for his continued employment in whether the payee is an Ee or not. (Azucena, 2016)
that line of business.

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Q: Africa, et al. are engaged as garbage truck supervision over the driver. (Villamaria v. CA and
drivers to collect garbage from different cities Bustamante, G.R. No. 165881, 19 Apr. 2006)
and transport the same to the designated
dumping site. They filed separate cases against The boundary-hulog contract between the jeepney
Expedition for illegal dismissal for having been owner and the jeepney driver does not negate the
prevented from entering the premises of Er-Ee relationship between them. (Azucena, 2016)
Expedition without cause or due process. They
claimed that they were regular Ees and were Q: To ensure road safety and address the risk-
required to work a minimum of 12 hours a day, taking behavior of bus drivers, the LTFRB issued
seven days a week, even on holidays, and were Memorandum Circular 2012-001 requiring all
not paid the minimum wage, holiday or Public Utility Bus (PUB) operators to secure
premium pay, overtime pay, SIL pay and 13th Labor Standards Compliance Certificates under
month pay. pain of revocation of their existing certificates of
public convenience or denial of an application
Expedition denied that respondents were its Ees for a new certificate. The DOLE likewise issued
claiming that respondents were not part of the Department Order (D.O.) No. 118-12 elaborating
company’s payroll but were being paid on a per- on the part-fixed-part-performance-based
trip basis. They claimed that respondents were compensation system referred to in the said
not under their direct control and supervision memorandum circular. Petitioners assail the
as they worked on their own. Are the constitutionality of the department order and
respondents Ees of Expedition? memorandum circular, arguing that these
issuances violate petitioners' rights to non-
A: YES. Applying the four-fold test, Africa, et al. were impairment of obligation of contracts, due
engaged/hired by Expedition as garbage truck process of law, and equal protection of the laws.
drivers. It is undeniable that they receive Respondents counter that the department order
compensation from Expedition for the services that and memorandum circular are valid issuances
they rendered to the latter. The fact that they were promulgated by the DOLE and the LTFRB in the
paid on a per trip basis is irrelevant because this exercise of their quasi-legislative powers. Are
was merely the method of computing the proper the department order and memorandum
compensation due to them. Also, Expedition’s circular constitutional?
power to dismiss was apparent when work was
withheld from the respondent. Finally, Expedition A: YES. D.O. 118-12 and M.C. 2012-001 are in the
has the power of control over respondents in the nature of social legislations to enhance the
performance of their work. (Expedition Construction economic status of bus drivers and conductors, and
Corp., et. al v. Africa, G.R. No. 228671, 14 Dec. 2017) to promote the general welfare of the riding public.
D.O. 118-12 was issued to grant bus drivers and
Boundary-Hulog System conductors minimum wages and social welfare
benefits. Further, petitioners repeatedly admitted
Under the boundary-hulog scheme, a dual juridical that in paying their bus drivers and conductors, they
relationship was created: that of Er-Ee and vendor- employ the boundary system or commission basis,
vendee. The boundary system is a scheme by an payment schemes which cause drivers to drive
owner or operator engaged in transporting recklessly. Not only does D.O. 118-12 aim to uplift
passengers as a common carrier to primarily govern the economic status of bus drivers and conductors;
the compensation of the driver, that is, the latter’s it also promotes road and traffic safety. (Provincial
daily earnings are remitted to the owner/operator Bus Operators Association of the Philippines v. DOLE
less the excess of the boundary which represents and LTFRB, G.R. No. 202275, 17 July 2018)
the driver’s compensation. Under this system, the
owner or operator exercises control and

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Labor Union and Unregistered Association as May be terminated only because of “just”
Employer or an “authorized” cause according to Art.
294
The mere fact that the respondent is a labor union
does not mean that it cannot be considered as an Er b. Temporary/Probationary – one who
of the persons who work for it. Much less should it stays on the job for a defined or pre-
be exempted from the very labor laws which it agreed period. (Azucena, 2016)
espouses as labor organization. (Bautista v. Inciong,
G.R. No. L-52824, 16 Mar. 1988) 2. As to the Labor Code Book VI
a. Regular
Application of the four-fold test and the two- b. Project
tiered test c. Seasonal
d. Casual
Present Philippine law recognizes a two-tiered test. e. Probationary
The first tier of the test is the Four-Fold Test. The f. Fixed-term
second tier is the Economics of the Relationship
Test. But the latter test is used if and only if there is 3. On the basis of salary component
going to be harshness in the results because of the
strict application of the four-fold test. (Francisco v. a. Monthly-paid – where the salary covers
NLRC, G.R. No. 170087, 31 Aug. 2006) all the days of the month including the
rest days and holidays;
Art. 295 Presupposes Employment Relationship
b. Daily-paid – salary only covers the day
Art. 295 applies where the existence of Er-Ee or days worked
relationship is not the issue of the dispute. If the
issue is whether or not the claimant is an Ee, the NOTE: Daily-paid or monthly-paid refers to the
tests of employment relationship shall be resorted inclusiveness of the salary, not the frequency or
to. intervals of payments.

Art. 295 limits itself to differentiating four kinds of a) REGULAR

employment arrangement: regular, project,
seasonal, and casual. The article presupposes that Those who are hired for activities which are
employment relationship exists between the necessary or desirable in the usual business of the
parties. (Azucena, 2016) Er. (Abad, Jr., 2015)

2. KINDS OF EMPLOYMENT Types of Regular Employment

1. As to tenure 1. As to nature of work – An employment shall

a. Permanent – who is appointed to a job for be deemed to be regular where the Ee has
an undefined and indefinite period. been engaged to perform activities which are
usually necessary or desirable in the usual
Also referred to as “regular” Ee business or trade of the Er, the provisions of
written agreements to the contrary
One who is doing a job which is “necessary notwithstanding and regardless of the oral
or desirable” to the usual business of the agreements of the parties. (Sec. 5(a), Rule I,
Er Book VI, IRR)

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2. As to length of service – Any Ee who has activity exists. (Universal Robina Corp. v.
rendered at least one (1) year of service, Catapang, G.R. No. 164736, 14 Oct. 2005)
whether such service is continuous or
broken, shall be considered a regular Ee with The status of regular employment attaches to the
respect to the activity in which he is casual Ee on the day immediately after the end of his
employed, and his employment shall first year of service. The law does not provide the
continue while such activity exists. (Sec. 5(b), qualification that the Ee must first be issued a
Rule I, Book VI, IRR) regular appointment or must first be formally
declared as such before he can acquire a regular
NOTE: Regularization is not a management status. (Aurora Land Projects Corp. v. NLRC, G.R. No.
prerogative; rather, it is the nature of employment 114733, 02 Jan. 1997)
that determines it. It is a mandate of the law. (PAL
v. Pascua, G.R. No. 143258, 15 Aug. 2003) Repeated rehiring and the continuing need for the
Ee’s services are sufficient evidence of the necessity
What determines regularity or casualness is not the and indispensability of his services to the Er’s
employment contract, written or otherwise, but the business or trade. (Baguio Country Club Corporation
nature of the job. (Policy Instruction No. 2) v. NLRC, G.R. No. 102397, 04 Sept. 1992)

The practice of entering employment contracts Q: A was hired in a sugar plantation performing
which would prevent the workers from becoming such tasks as weeding, cutting and loading
regular should be struck down as contrary to public canes, planting cane points, fertilizing and
policy and morals. (Universal Robina Corp. v. cleaning the drainage. Because his daily
Catapang, G.R. No. 164736, 14 Oct. 2005) presence in the field was not required, A also
worked as a houseboy at the house of the
Tests to Determine Regular Employment plantation owner. For the next planting season,
the owner decided not to hire A as a plantation
1. The primary standard of determining regular worker but as a houseboy instead. Furious, A
employment is the reasonable connection filed a case for illegal dismissal against the
between the particular activity performed by plantation owner. Decide with reason. (2010
the Ee to the usual trade or business of the Er. BAR)
The test is whether the former is usually
necessary or desirable in the usual business or A: A is a regular seasonal employee. Therefore, he
trade of the Er. (De Leon v. NLRC, G.R. No. cannot be dismissed without just or valid cause.
70705, 21 Aug. 1989)
The primary standard for determining regular
NOTE: The connection can be determined by employment is the reasonable connection between
considering the nature of the work performed the particular activity performed by the employee in
and its relation to the scheme of the particular relation to the usual trade or business of the
business or trade in its entirety. (Highway employer (Pier 8 Arrastre & Stevedoring Services,
Copra Traders v. NLRC, G.R. No. 108889, 30 July Inc., et al. v. Jeff B. Boclot, G.R. No. 173849, 28 Sept.
1988) 2007). Considering that A, as plantation worker,
performs work that is necessary and desirable to
2. Also, the performance of a job for at least a the usual business of the plantation owner, he is
year is sufficient evidence of the job’s necessity therefore a regular seasonal employee and is
if not indispensability to the business. This is entitled to reinstatement upon onset of the next
the rule even if its performance is not season unless he was hired for the duration of only
continuous and merely intermittent. The one season. (Hacienda Bino v. Cuenca, G.R. No.
employment is considered regular, but only 150478, 15 Apr. 2005)
with respect to such activity and while such

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Converting A to a mere houseboy at the house of the A: YES. The necessity or desirability of the work
plantation owner amounts to an act of severing his performed by an Ee can be inferred from the length
employment relations as its plantation worker of time that an Ee has been performing this work. If
(Angeles v. Fernandez, G.R. No. 160213, 30 Jan. 2007) an Ee has been employed for at least one (1) year,
he or she is considered a regular Ee by operation of
DOCTRINE: The primary standard, therefore, of law. Likewise, if an Ee has been on the job for at least
determining regular employment is the reasonable one (1) year, even if the performance of the job is
connection between the particular activity intermittent, the repeated and continuous need for
performed by the employee in relation to the usual the Ee's services is sufficient evidence of the
business or trade of the employer. (Pier 8 Arrastre & indispensability of his or her services to the Er's
Stevedoring Services, Inc., et al. v. Jeff B. Boclot, G.R. business.
No. 173849, 28 Sept. 2007)
Thus, even if the Court of Appeals is of the opinion
Seafarers are Not Regular Ees that carpentry and masonry are not necessary or
desirable to the business of livestock and poultry
Seafarers cannot be considered as regular Ees. The production, the nature of their employment could
contract which they sign every time they are hired have been characterized as being under the second
governs their employment. Their employment is paragraph of Art. 280. Thus, petitioners' service of
terminated when the contract expires. Their more than one (1) year to respondents has made
employment is fixed for a certain period. (Ravago v. them regular Ees for so long as the activities they
Esso Eastern Maritime Ltd., G.R. No. 158324, 15 Mar. were required to do subsist. (Mario Abuda, et al. v. L.
2005) Natividad Poultry Farms, G.R. No. 200712, 04 July
2018)
In case of OFWs, Art. 295 of the LC does not apply.
Q: Various camera operators were engaged by
Q: L. Natividad Poultry Farms is a business and rendered services directly to GMA Network,
engaged in livestock and poultry production Inc. and received compensation for such. They
which employed several workers as livestock were subsequently dismissed by GMA which led
feed mixers or as maintenance personnel. them to file a complaint for “illegal dismissal,
non-payment of salary or wages, and
The workers filed complaints for illegal regularization,” claiming that they were regular
dismissal against L. Natividad, asserting that Ees of GMA because as camera operators, they
they are regular Ees, having been continuously performed functions that were necessary and
employed by L. Natividad for a period ranging desirable to its business as a television and
from more than one (1) year to 17 years. They broadcasting company. They also claimed that
stress that L. Natividad provided all the tools, they were illegally dismissed for lack of just or
equipment, and materials they used as authorized cause. On the other hand, GMA
maintenance personnel and then gave them argues that they were not their Ees, and that
specific tasks and supervised their work. even if they were, they could not have attained
regular status considering their failure to
The CA ruled that petitioners cannot be render “at least one year of service” as required
considered as regular Ees because there was no by law.
reasonable connection between the nature of
their carpentry and masonry work and a. Is there an Er-Ee relationship between the
respondents' usual business in poultry and camera operators and GMA?
livestock production, sale, and distribution. Are
the petitioners regular Ees of L. Natividad? A: YES. To determine the existence of an Er-Ee
relationship, case law has consistently applied the
four-fold test, to wit: (a) the selection and

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engagement of the Ee; (b) the payment of wages; (c) desirable to the usual business and trade of the Er
the power of dismissal; and (d) the Er’s power to attain regular status from the time of engagement.
control the Ee on the means and methods by which Here, the camera operators were never casual Ees
the work is accomplished, this being deemed as the because they performed functions that were
most crucial and determinative indicator of the necessary and desirable to the usual business of
presence or absence of an Er-Ee relationship. GMA; hence, they did not need to render a year’s
worth of service to be considered Ees. (Henry
In applying the four-fold test in this case, (a) the Paragele, et al. v. GMA Network, Inc., G.R. No. 235315,
camera operators were engaged by and rendered 13 July 2020)
services directly to GMA; (b) they received
compensation for their services; (c) they were Domestic Helpers and Househelpers
dismissed by GMA; and (d) they were subject to
GMA’s control and supervision on the following The mere fact that the househelper or domestic
grounds: (a) their recordings and shoots were never servant is working within the premises of the
left to their own discretion and craft; (b) they were business of the employer and in relation to or in
required to follow the work schedules which GMA connection with its business, warrants the
provided to them; (c) they were not allowed to leave conclusion that such househelper or domestic
the work site during tapings, which often lasted for servant is and should be considered as a regular
days; (d) they were also required to follow company employee of the employer and not as a mere family
rules like any other Ee; (e) they were provided the househelper or domestic servant. (Apex Mining Co.,
equipment they used during tapings; and (f) they Inc. v. NLRC, G.R. No. 94951, 22 Apr. 1991)
were assigned supervisors to monitor their
performance and guarantee their compliance with Temporary Ee becoming Regular Ee
company protocols and standards.
An employment may only be said to be ‘temporary’:
b. Assuming the existence of an Er-Ee
relationship, were the camera operators 1. Where it has been fixed for a specific
regular Ees of GMA? undertaking the completion of which has
been determined at the time of the
A. YES. Under Art. 295 of the LC, there are two ways engagement of the Ee; or
to attain regular employment status: (1)
employment shall be deemed to be regular where 2. Where the work or services to be performed
the Ee has been engaged to perform activities which is seasonal in nature and the employment is
are usually necessary or desirable in the usual for the duration of the season.
business or trade of the Er, notwithstanding the
provisions of written agreement and regardless of Contract of Perpetual Employment
the oral agreement of the parties; and (2) any casual
Ee who has rendered at least one year of service, It deprives management of its prerogative to decide
whether such service is continuous or broken, shall whom to hire, fire, and promote and renders inutile
be considered a regular Ee with respect to the the basic precepts of labor relations.
activity in which he is employed and his
employment shall continue while such activity It is contrary to public policy and good customs, as
exists. it unjustly forbids the Er from terminating the
services of an Ee despite the existence of a just or
Only casual Ees performing work that is neither valid cause.
necessary nor desirable to the usual business and
trade of the Er are required to render at least one Since the relation between capital and labor are not
year of service to attain regular status. Ees who merely contractual, impressed as they are with so
perform functions which are necessary and much public interest that the same should yield to

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 IV. POST-EMPLOYMENT
common good. (Philippine Telegraph and Telephone disclaimed that these Ees were regular Ees and
Co. v. NLRC, G.R. No. 118978, 23 May 1997) maintained, among others, that they are a
special class of workers, who were hired
Mode of compensation is not determinative of temporarily under a special employment
regular employment arrangement which was a result of overtures
made by some civic and political personalities to
While the Ees mode of compensation was on a “per the Bank. Should the deaf-mute Ees be
piece basis”, the status and nature of their considered as regular Ees?
employment was that of regular Ees. (Labor
Congress of the Phils v. NLRC, G.R. No. 123938, 21 May A: YES. The renewal of the contracts of the
1998) handicapped workers and the hiring of others leads
to the conclusion that their tasks were beneficial
Q: Moises was employed by La Tondeña at the and necessary to the bank. It also shows that they
maintenance section of its Engineering were qualified to perform the responsibilities of
Department paid on a daily basis through petty their positions; their disability did not render them
cash vouchers. His work consisted mainly of unqualified or unfit for the tasks assigned to them.
painting company building and equipment and
other odd jobs relating to maintenance. After a The Magna Carta for Disabled Persons mandates
service of more than 1 year, Moises requested that a qualified disabled Ee should be given the
that he be included in the payroll of regular same terms and conditions of employment as a
workers, instead of being paid through petty qualified able-bodied person. The fact that the Ees
cash vouchers. Instead, La Tondeña dismissed were qualified disabled persons necessarily
Moises and claimed that Moises was contracted removes the employment contracts from the ambit
on a casual basis specifically to paint certain of Art. 80. Since the Magna Carta accords them the
company buildings and that its completion rights of qualified able-bodied persons, hence, they
terminated Moises’ employment. Can Moises be are covered by Art. 295 of the LC. (Bernardo v. NLRC,
considered as a regular Ee? G.R. No. 122917, 12 July 1999)

A: YES. The law demands that the nature and NOTE: The repeated rehiring of workers and the
entirety of the activities performed by the Ee be continuing need for their services clearly attest to
considered. Here, the painting and maintenance the necessity or desirability of their services in the
work given to Moises manifests a treatment regular conduct of the business or trade of the
consistent with a maintenance man and not just a company. (Magsalin & Coca-Cola v. N.O.W.M., G.R. No.
painter, for if his job was only to paint a building, 148492, 09 May 2003)
there would be no basis for giving him other work
assignments in-between painting activities. It is not Q: Metromedia Times Corp. entered, for the fifth
tenable to argue that the painting and maintenance time, into an agreement with Efren Paguio,
work of Moises are not necessary in La Tondeña’s appointing him to be an account executive of the
business of manufacturing liquors; otherwise, there firm. He was to solicit advertisements for “The
would be no need for the regular maintenance Manila Times.” The written contract between
section of the company’s engineering department. the parties provided that, “You are not an Ee of
(De Leon v. NLRC, G.R. No. 70705, 21 Aug. 1989) the Metromedia Times Corp. nor does the
company have neither any obligations towards
Q: A total of 43 Ees who are deaf-mutes were anyone you may employ, nor any responsibility
hired and re-hired on various periods by Far for your operating expenses or for any liability
East Bank and Trust Co. as money sorters and you may incur. The only rights and obligations
counters through a uniformly worded between us are those set forth in this agreement.
agreement called “Employment Contract for This agreement cannot be amended or modified
Handicapped Workers.” The company in any way except with the duly authorized

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consent in writing of both parties.” Is Efren executed the Service Agreements with MHC with
Paguio a regular Ee of Metromedia Times a full understanding that his engagement with it
Corporation? was only for a fixed period. On the issue of
constructive dismissal, the LA held that Regala's
A: YES. He performed activities which were claim of constructive dismissal must fail
necessary and desirable to the business of the Er, considering that he continued reporting for
and that the same went on for more than a year. He work at MHC at the time he instituted the instant
was an account executive in soliciting complaint for illegal or constructive dismissal.
advertisements, clearly necessary and desirable, for The NLRC reversed the decision of the LA and
the survival and continued operation of the held that Regala is a regular Ee of MHC. Being a
business of the corporation. regular Ee of MHC, the NLRC found that Regala
was constructively dismissed from employment
The law, in defining their contractual relationship, when MHC reduced his take- home pay as a
does so, not necessarily or exclusively upon the consequence of the hotel's changes in his work
terms of their written or oral contract, but also schedule which reduced his work days from five
based on the nature of the work of Efren has been (5) days a week to two (2) days a week.
called upon to perform. A stipulation in an Aggrieved, MHC filed a Petition for Certiorari.
agreement can be ignored as and when it is utilized The CA rendered a decision granting MHC's
to deprive the Ee of his security of tenure. (Paguio v. Petition for Certiorari and setting aside the
NLRC, G.R. No. 147816, 09 May 2003) decision of the NLRC. Is the CA correct?

Q: Super Comfort Hotel employed a regular pool A: NO. The employment status of a person is defined
of “extra waiters” who are asked to report for and prescribed by law and not by what the parties
duty when the Hotel’s volume of business is say it should be. In this regard, Art. 295 of the LC
beyond the capacity of the regularly employed "provides for two types of regular Ees, namely: (a)
waiters to undertake. Pedro has been an “extra those who are engaged to perform activities which
waiter” for more than 10 years. He is also called are usually necessary or desirable in the usual
upon to work on weekends, on holidays, and business or trade of the Er (first category); and (b)
when there are big affairs at the hotel. What is those who have rendered at least one year of
Pedro’s status as an Ee under the LC? (2008 service, whether continuous or broken, with respect
BAR) to the activity in which they are employed (second
category)." While MHC insists that Regala was
A: Pedro has acquired the status of a regular Ee. engaged under a fixed-term employment
Pedro was engaged to perform activities which are agreement, the circumstances and evidence on
necessary or desirable in the usual business or trade record, and provision of law, however, dictate that
of the Er. Moreover, Pedro has been “extra waiter” Regala is its regular Ee.
for more than ten years. Under the law, any Ee who
has rendered service for at least one year, whether There is constructive dismissal where "there is
such service is continuous or broken, shall be cessation of work because 'continued employment
considered a regular Ee with respect to the activity is rendered impossible, unreasonable or unlikely, as
in which he is employed, and his employment shall an offer involving a demotion in rank or a
continue while such activity exists. (Art. 295, LC) diminution in pay' and other benefits. Aptly called a
dismissal in disguise or an act amounting to
Q: Allan Regala filed a complaint for dismissal but made to appear as if it were not,
constructive dismissal and regularization, non- constructive dismissal may, likewise, exist if an act
payment of paternity leave pay, and claims for of clear discrimination, insensibility, or disdain by
backwages against Manila Hotel Corporation an Er becomes so unbearable on the part of the Ee
(MHC). The Labor Arbiter held that Regala is a that it could foreclose any choice by him except to
fixed-term Ee of MHC and that he voluntarily forego his continued employment."

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 IV. POST-EMPLOYMENT
Patently, the reduction of Regala's regular work The purpose is to give meaning to the constitutional
days from five (5) days to two (2) days resulted to a guarantee of security of tenure and right to self-
diminution in pay. Regala's change in his work organization. (Mercado v. NLRC, G.R. No. 79868, 05
schedule resulting to the diminution of his take Sept. 1991)
home salary is, therefore, tantamount to
constructive dismissal. (Allan Regala v. Manila Hotel NOTE: The scheme of the employer in hiring
Corporation, G.R. No. 204684, 05 Oct. 2020, as workers on a uniformly fixed contract basis of 5
penned by J. Hernando) months and replacing them upon the expiration of
their contracts with other workers with the same
b) CASUAL employment status was found to have been
designed to prevent “casual” employees from
Casual employment attaining the status of a regular employee. (Pure
Foods Corporation v. NLRC, G.R. No. 122653, 12 Dec.
It is an employment where the Ee is engaged in an 1997)
activity which is not usually necessary or desirable
in the usual business or trade of the Er, provided, Q: Yakult Phils. is engaged in the manufacture of
such employment is neither Project nor Seasonal. cultured milk. The workers were hired to cut
(Art. 295, LC) He performs only an incidental job in cogon grass and weeds at the back of the factory
relation to the principal activity of the Er. building used by Yakult. They were not required
to work on fixed schedule, and they worked on
NOTE: But despite the distinction between regular any day of the week on their own discretion and
and casual employment, every Ee shall be entitled to convenience. The services of the workers were
the same rights and privileges and shall be subject terminated by Yakult before the expiration of
to the same duties as may be granted by law to the 1-year period.
regular Ees during the period of their actual
employment. May casual or temporary Ees be dismissed by
An Ee is engaged to perform a job, work or service the Er before the expiration of the 1-year period
which is merely incidental to the business of the Er, of employment?
and such job, work or service is for a definite period
made known to the Ee at the time of engagement. A: YES. The usual business or trade of Yakult Phils.
(Sec. 5(b), Rule I, Book VI, IRR) is the manufacture of cultured milk. The cutting of
the cogon grasses in the premises of its factory is
Employment is casual when it is irregular, hardly necessary or desirable in the usual business
unpredictable, sporadic, and brief in nature, and of the Yakult.
outside the usual business of the Er. (Caro v.
Rilloraza, G.R. No. L-9569, 30 Sept. 1997) The workers are casual Ees. Nevertheless, they may
be considered regular Ees if they have rendered
Casual Ee becoming a Regular Ee services for at least 1 year. When, as in this case,
they were dismissed from their employment before
If he has rendered at least one (1) year of service, the expiration of the 1 year period, they cannot
whether such service is continuous or broken, he is lawfully claim that their dismissal was illegal.
considered as regular Ee with respect to the activity (Capule, et al. v. NLRC, G.R. No. 90653, 12 Nov. 1990)
in which he is employed, and his employment shall
continue while such activity exists.

A casual Ee is only casual for one (1) year, and it is

the passage of time that gives him a regular status.
(KASAMMA-CCO v. CA, G.R. No. 159828, 19 Apr. 2006)

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Casual vs. Project Employee It is usually a six-month period during which the Er
observes the performance and conduct of the Ee. If
CASUAL EE PROJECT EE he passes the agreed standard, he will be retained
as a regular Ee. If he fails, his tentative employment
ends.
Employed for a
specific project or There is probationary employment where the Ee
Engaged to perform a
undertaking where upon his engagement is made to undergo a trial
job, work or service
the completion or period during which the Er determines his fitness to
which is incidental to
termination of which qualify for regular employment based on
the business of the Er
is determined at the reasonable standards made known to him at the
and the definite period
time of his time of engagement. (Tamson’s Enterprises, Inc. v.
of his employment is
engagement. CA, G.R. No. 192881, 16 Nov. 2011)
made known to him at
the time of his
His work need not be Probationary Employment
engagement.
incidental to the
business of the Er Employment where the Ee, upon his engagement:

1. Is made to undergo a trial period;

His employment may 2. During which the Er determines his fitness

His continued
exceed one year to qualify for regular employment; and
employment after the
without necessarily
lapse one year makes
making him a regular 3. Based on reasonable standards made
him a regular Ee.
Ee. known to the Ee at the time of engagement.
(Sec. 6, Book VI, Rule I, IRR)

Job is coterminous NOTE: In all cases involving Ees engaged on

with a specific project probationary basis, the Er shall make known to the
or phase thereof. It is Ee the standards under which he will qualify as a
required that a regular Ee at the time of his engagement. (Sec. 6(d),
No termination report termination report be Book VI, Rule I, IRR)
required. submitted at the
nearest employment Requisites for a Valid Probationary Employment
office upon
completion of the 1. There must be a written contract;
project or phase.
2. The contract must spell out that the Ee will go
through a probationary period of employment
for a specified number of months;
c) PROBATIONARY
3. The contract must specify reasonable standards
Probation
on the basis of which his performance will be
evaluated;
the period during which the Er may determine if the
Ee is qualified for possible inclusion in the regular
4. There must be an assessment of the
force. (Holiday Inn Manila v. NLRC, G.R. No. 109114, performance of the probationary Ee in relation
14 Sept. 1993)
to the standards; and

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 IV. POST-EMPLOYMENT
5. The result of the assessment must be upon her engagement as required under Art.
communicated to the Ee. 295 of the Labor Code.

Rules on Probationary Employment Further, she claims that her performance was
not discussed with her in line with the
1. Er shall make known to the Ee at the time he is procedure of Abbot. Was Alcaraz sufficiently
hired, the standards by which he will qualify as informed of the reasonable standards to qualify
a regular Ee; her as a regular Ee?

NOTE: Where no standards are made known to A: YES. An Er is deemed to have made known the
the Ee at that time, he shall be deemed a regular standards that would qualify a probationary Ee to
Ee. (Sec. 6(d), Rule VIII-A, Book VI, IRR) be a regular Ee when it has exerted reasonable
efforts to apprise the Ee of what he is expected to do
2. Probationary employment must have been or accomplish during the trial period of probation.
expressly agreed upon; without such explicit In this case, Abbott clearly conveyed to Alcaraz her
agreement, the employment is considered duties and responsibilities as Regulatory Affairs
regular; Manager prior to, during the time of her
engagement, and the incipient stages of her
3. An Ee allowed to continue work after the employment. Hence, Alcaraz was validly terminated
probationary period shall be considered a from her employment.
regular Ee;
Nonetheless, despite the existence of a sufficient
4. During the probationary period, the Ee enjoys ground to terminate Alcaraz’s employment and
security of tenure; his services can only be Abbott’s compliance with the Labor Code
terminated for just or authorized causes. termination procedure, it is readily apparent that
Abbott breached its contractual obligation to
Q: Alcaraz signed an employment contract with Alcaraz when it failed to abide by its own procedure
Abbott for the position of Medical and in evaluating the performance of a probationary Ee.
Regulatory Affairs Manager which stated that Since this procedure was not followed, the dismissal
she was to be placed on probation for a period of was therefore procedurally infirm rendering Abbot
six (6) months. In line with this, she received an liable for nominal damages. (Abbott Laboratories v.
email containing Abbott’s organizational chart Alcaraz, G.R. No. 192571, 23 July 2013)
and a job description of her work. Further,
during Alcaraz’s pre-employment orientation, Period of Probationary Employment
she was briefed on her duties and
responsibilities as Regulatory Affairs Manager. GR: It shall not exceed six (6) months from the date
Abbot has a procedure which requires that the of the commencement of employment.
Ee’s performance must be discussed and
reviewed with the Ee two times. Later on, XPNs:
Alcaraz was terminated for allegedly failing to
meet the regularization standards for the said 1. Covered by an Apprenticeship or
position. Learnership agreement stipulating a
different period (Art. 296, LC); or
Alcaraz filed a complaint for illegal dismissal
and damages against Abbott and its officers. She 2. When the parties to an employment
claimed that she should have already been contract may agree otherwise, such as:
considered as a regular and not a probationary
Ee given Abbott’s failure to inform her of the a. When the same is established by
reasonable standards for her regularization company policy; or

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 LABOR LAW AND SOCIAL LEGISLATION
b. When the same is required by the NOTE: The extension of period should always be
nature of work to be performed by the reasonable; Such that, the nature of the work so
Ee. (Busier v. Leogardo, Jr., G.R. No. L- requires and that it is the amount of time required
63316, 31 July 1984) for an ordinary worker to learn the job.

e.g., The probationary period set for Essence of the Prohibition on Double or
professors, instructors and teachers is Successive Probation
three consecutive years of satisfactory
service pursuant to DOLE Manual of The evil sought to be prevented is to discourage
Regulations for Private Schools. scheming Ers from using the system of double or
successive probation to circumvent the mandate of
NOTE: By voluntarily agreeing to such an the law on regularization and make it easier for
extension, the Ee waived any benefit them to dismiss their Ees. (Holiday Inn Manila v.
attaching to the completion of the period if NLRC, G.R. No. 109114, 14 Sept. 2003)
he still failed to make the grade during the
period of extension. (Mariwasa Mfg. Inc. v. Q: Michelle Miclat was employed on a
Hon. Leogardo, G.R. No. 74246, 26 Jan. 1989) probationary basis as marketing assistant by
Clarion Printing House but during her
3. The Er gives the Ee a second chance to pass employment she was not informed of the
the standards set. (Mariwasa standards that would qualify her as a regular Ee.
Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 30 days after, Clarion informed Miclat that her
74246, 26 Jan. 1989) employment contract had been terminated
without any reason. Miclat was informed that
NOTE: Period of probation shall be reckoned from her termination was part of Clarion’s cost-
the date the Ee started working. (Sec. 6(b), Book VI, cutting measures. Is Miclat considered as a
Rule I, IRR) Probationary Ees may be dismissed for regular Ee and hence entitled to its benefits?
cause before end of the probationary period.
A: YES. In all cases of probationary employment, the
After the lapse of the probationary period 6 months, Er shall make known to the Ee the standards under
Ee becomes regular. which he will qualify as a regular Ee at the time of
his engagement. Where no standards are made
Purpose of the Probation Period known to the Ee at that time, he shall be deemed a
regular Ee. In the case at bar, she was deemed to
The purpose of the probation period is to afford the have been hired from day one as a regular Ee.
Er an opportunity to observe the fitness of a (Clarion Printing House Inc., v. NLRC, G.R. No. 148372,
probationary Ee at work. 27 June 2005)

Instances when Extension of Probationary Obligation of the Er to his Probationary Ees

Period is Allowed
There is obligation on the part of Er to inform
Extension is allowed only when: standards for regularization at the time of
engagement. The failure to inform has the effect that
1. Nature of the job requires extensive training; or upon the expiry of the probationary employment,
2. If it is a company policy that the period of with or without the period provided for in the
probationary employment should be an contract, the worker is deemed to be regular.
extended period.

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 IV. POST-EMPLOYMENT
Q: Middleby Phils. Corp. hired Alcira as 2. Rule more favorable to the Ee – Use the
engineering support services supervisor on a computation which would amount to
probationary basis for six months. Apparently granting the subject Ee regular
unhappy with Alcira’s performance, Middleby employment status (Based on
terminated his services. Alcira contends that he Constitutional and statutory provisions for
was already a regular Ee when his employment the liberal interpretation of labor laws).
was terminated. According to Alcira’s
computation, since Art. 13 of the NCC provides Instances When a probationary Ee is deemed to
that 1 month is composed of 30 days, 6 months be a Regular Ee
totaling 180 days, then his 180th day would fall
on 16 Nov. 1996 making him a regular Ee before 1. If he is allowed to work after a probationary
his termination. Is the contention of the period. (Art. 295, LC)
petitioner in the computation of six months
correct? 2. If no standards, under which he will qualify as a
regular Ee, are made known to him at the time
A: NO. The computation of the six (6) month of his engagement. (Rule I, Book VI, IRR)
probationary period is reckoned from the date of
appointment up to the same calendar date of the Grounds for Terminating Probationary
sixth month following. In short, since the number of Employment (J-A-FaR)
days in each month was irrelevant, Alcira was still a
probationary Ee when Middleby opted not to 1. Just causes
“regularize” him on 20 Nov. 1996. (Alcira v. NLRC, 2. Authorized causes; or
G.R. No. 149859, 09 June 2004) 3. When he Fails to qualify as a Regular Ee in
accordance with reasonable standards made
NOTE: In Mitsubishi Motors v. Chrysler Phils. Labor known by the Er to the Ee at the time of his
Union (G.R. No. 148738, 29 June 2004), the SC ruled engagement. (ICMC v. NLRC, G.R. No. 72222, 30
in this wise: Jan. 1989; Art. 295, LC)

“Applying Art. 13 of the NCC, the probationary NOTE: If pre-termination of probationary contract
period of 6-months consists of 180 days. This is in is due to the valid causes, the Er is not liable to pay
conformity with Art. 13(1) of the NCC. The number the monetary value of the unexpired portion of the
of months in the probationary period (6 months), employment.
should then be multiplied by the number of days
within a month (30 days). Hence, the period of 180 While probationary Ees do not enjoy permanent
days. As clearly provided in Art. 13, in computing a status, they are afforded the security of tenure
period, the first day shall be excluded and the last protection of the Constitution. Consequently, they
day included. Thus, the 180 days commenced on 27 cannot be removed from their positions unless for
May 1996, and ended on 23 Nov. 1996. The cause. Such constitutional protection, however,
termination letter dated 25 Nov. 1996 was served ends upon the expiration of the period stated in
on Paras only on 26 Nov. 1996. He was, by then their probationary contract of employment.
already a regular Ee of the company under Art. 295 Thereafter, the parties are free to renew the
of the LC.” contract or not. (CSA v. NLRC, G.R. No. 87333, 06 Sept.
1991)
How to resolve the conflict between the Alcira
and Mitsubishi Motors case: Limitations on the Er’s Power to Terminate a
Probationary Employment Contract
1. Statutory Construction – The latter case
prevails (Mitsubishi Motors); or 1. The power must be exercised in accordance
with the specific requirements of the contract;

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2. If a particular time is prescribed, the Period of Probationary Employment of Private
termination must be within such time and if School Teachers
formal notice is required, then that form must
be used; The probationary employment of academic
teaching personnel shall not be more than a period
3. The Er’s dissatisfaction must be real and in good of six (6) consecutive semesters or nine (9)
faith, not feigned to circumvent the contract or consecutive trimesters of satisfactory service, as the
the law; and case may be. (Sec. 117, The Manual of Regulations for
Private Higher Education)
4. There must be no unlawful discrimination in
the dismissal. (Manila Hotel Corporation v. NOTE: An academic teaching personnel, who does
NLRC, G.R. No. L-53453, 22 Jan. 1986) not possess the minimum academic qualifications
under Secs. 35 and 36 of the Manual of Regulations
NOTE: The probationary Ee is entitled to for Private Higher Education shall be considered as
procedural due process prior to dismissal from a part-time Ee and, therefore, cannot avail of the
service. status and privileges of a probationary employment.
A part-time Ee cannot acquire a regular permanent
Q: Ron Cruz was employed as gardener by status, and, hence, may be terminated when a
Manila Hotel on “probation status” effective 22 qualified teacher becomes available. (Manual of
Sept. 1976. The appointment signed by Cruz Regulations for Private Higher Education)
provided for a 6-month probationary period. On
20 Mar. 1977, or a day before the expiration of Full-time Teacher
the probationary period, Cruz was promoted to
lead gardener position. On the same day, Cruz’ One whose total working day is devoted to school,
position was “abolished” by Manila Hotel no other regular remunerative employment, and is
allegedly due to economic reverses or business paid on a regular monthly basis regardless of the
recession, and to salvage the enterprise from number of teaching hours.
imminent danger of collapse. Was Cruz illegally
dismissed? In college, the normal teaching load of a full-time
instructor shall be 18 hours a week.
A: YES. There is no dispute that as a probationary
Ee, Cruz had but limited tenure. Although on Professors and instructors are independent
probationary basis, however, Cruz still enjoys the contractors. They are compensated for their
constitutional protection on security of tenure. services by wages and salaries, rather than share of
During his tenure of employment, therefore, or profits; they cannot substitute others to do their
before his contract expires, Cruz cannot be removed work without the consent of the university and can
except for cause as provided for by law. be laid off if their work is unsatisfactory. All these
indicate that the university has control over their
What makes Cruz’ dismissal highly suspicious is work and that they are, therefore, Ees and not
that it took place at a time when he needed only but independent contractors. (Feati University v. Hon.
a day to be eligible as a regular Ee. That he is Jose S. Bautista, and Feati University Faculty Club-
competent finds support in his being promoted to a PAFLU, G.R. No. L-21278, 27 Dec. 1966)
lead gardener in so short span of less than six (6)
months. By terminating his employment or
abolishing his position with but only one day
remaining in his probationary appointment, the
hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
Hotel Corp. v. NLRC, G.R. No. L-53453, 22 Jan. 1986)

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Requirement of Full-Time Academic Personnel Arlene argued that since she taught at HNU for
or Teacher more than 6 consecutive regular semesters, she
already attained the status of a regular Ee
1. Possesses at least the minimum academic pursuant to the Manual of Regulations for
qualifications prescribed by the Department; Private School Teachers. There having been no
valid or justifiable cause for her dismissal,
2. Paid monthly or hourly, based on the regular petitioner claimed that her employment was
teaching loads as provided for in the policies, illegally terminated.
rules and standards of the Department and the
school; On the other hand, respondents contended that
in S.Y. 2004-2005, 2005-2006 and 2006-2007,
3. Total working day of not more than eight (8) Arlene remained a probationary Ee. The
hours a day is devoted to the school; completion of her probationary period did not
automatically make her a permanent Ee since
4. Has no other remunerative occupation she failed to comply with all the conditions of
elsewhere requiring regular hours of work that her probationary employment satisfactorily.
will conflict with the working hours in the Respondents insisted that petitioner was not
school; and dismissed; rather, her contract of employment
merely expired on 31 Mar. 2007.
5. Not teaching full-time in any other educational
institution. Was petitioner illegally dismissed?

NOTE: All teaching personnel who do not meet the A: NO. In accordance with the Revised Manual of
foregoing qualifications are considered part-time. Regulations for Private Schools, petitioner did not
(Sec. 45, Manual of Regulations for Private Higher meet the criteria required to be considered as a
Education) permanent Ee. In Lacuesta v. ADMU (G.R. No. 152777,
09 Dec. 2005), these are the requisites before a
The Legal Requisites for Acquisition by a private school teacher acquires permanent status:
Teacher of Permanent Employment (1) The teacher serves full-time; (2) they must have
rendered three consecutive years of service; and (3)
1. The teacher is a full-time teacher; such service must have been satisfactory.

2. Must have rendered three (3) consecutive While petitioner has rendered three consecutive
years of service; and years of satisfactory service, she was, however, not
a full-time teacher. Only full-time teaching
3. Such service must be satisfactory. (Jocelyn personnel can acquire regular or permanent status.
Herrera-Manaois v. St. Scholastica’s College, A part-time teacher cannot acquire permanent
G.R. No. 188914, 11 Dec. 2013) status.

Q: In 2004, petitioner was given a full-time load Therefore, petitioner was not illegally dismissed
for the S.Y. 2004-2005. For S.Y. 2005-2006 and since no dismissal occurred in the first place. Her
2006-2007, petitioner signed contracts for fixed-term contract merely expired (Arlene Palgan
term/semestral employment. However, in a v. Holy Name University, G.R. No. 219916, February
notice dated 28 Feb. 2007, HNU informed Arlene 10, 2021, as penned by J. Hernando).
that her contract of employment, which would
have expired on 31 Mar. 2007, will no longer be
renewed.

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Q: Colegio de San Agustin (CSA) hired Gela Jose Mar. 1977)
as a grade school classroom teacher on a
probationary basis for SY ‘84–‘85. Her contract 2. In all cases involving Ees on probationary
was renewed for SY’s ‘85-‘86 and ‘86-‘87. On 24 status, the Er shall make known to the Ee at the
Mar. 1987, the CSA wrote the Gela that "it would time he is hired, the standards by which he will
be in the best interest of the students and their qualify for the positions applied for.
families that she seeks employment in another 3. The filing of the complaint for illegal dismissal
school or business concern for next school year." effectively negates the Er’s theory of
abandonment. (Rizada v. NLRC, G.R. No. 96982,
Notwithstanding the said notice, the CSA still 21 Sept. 1999)
paid Gela her salary for 15 Apr. to 15 May 1987.
On 06 Apr. 1987, Gela wrote the CSA and sought 4. The order to go home and not to return to work
reconsideration but she received no reply. constitutes dismissal from employment.
Thereafter, she filed a complaint for illegal
dismissal. Was Gela illegally dismissed? 5. The eight (8) probationary Ees employment
were terminated without just cause and
A: NO. The Faculty Manual of CSA underscores the without due process.
completion of three (3) years of continuous service
at CSA before a probationary teacher acquires In view of the foregoing, I will order reinstatement
tenure. Hence, Gela cannot claim any vested right to to their former positions without loss of seniority
a permanent appointment since she had not yet rights with full back wages, plus damages and
achieved the prerequisite three (3) year period attorney’s fees.
under the Manual of Regulation for Private Schools
and the Faculty Manual of CSA. Q: Arlene started working as a Casual or
Assistant Clinical Instructor for two semesters
In the instant case where the CSA did not wish to in HNU's College of Nursing while awaiting the
renew the contract of employment for the next results of her Nursing Board Examination. She
school year, Gela has no ground to protest. She was alleged that upon her hiring, HNU did not inform
not illegally dismissed. Her contract merely expired. her of the standards for the evaluation of her
(CSA v. NLRC, G.R No. 87333, 06 Sept. 1991) satisfactory completion of her probationary
period. In the second semester of S.Y. 1994-
Q: During their probationary employment, 1995, she was hired as a full-time Clinical
eight Ees were berated and insulted by their Instructor until S.Y. 1998-1999, and was
supervisor. In protest, they walked out. The assigned at the Medical Ward. During the second
supervisor shouted at them to go home and semester of S.Y. 1998-1999, she was transferred
never to report back to work. Later, the to the Guidance Center as a Nursing Guidance
personnel manager required them to explain Instructor handling guidance, education, and
why they should not be dismissed from graduate school courses. At this time, she was
employment for abandonment and failure to elected as Municipal Councilor of Carmen,
qualify for the positions applied for. They filed Bohol.
a complaint for illegal dismissal against their
Er. As the Labor Arbiter, how will you resolve Upon her reelection as Municipal Councilor for
the case? (2006 BAR) the 2001-2004 term, she took a leave of absence
from HNU. Arlene rejoined HNU and was given a
A: As the LA, I will resolve the case in favor of the full-time load for the S.Y. 2004-2005. For S.Y.
eight probationary Ees due to the following: 2005-2006 and 2006-2007, Arlene signed
contracts for term/semesteral, employment.
1. Probationary Ees also enjoy security of tenure.
(Biboso v. Victoria Milling, G.R. No. L-44360, 31

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However, in a notice, HNU informed Arlene that that teachers' employment contracts are for a
her contract of employment, which would have specific semester or term. For the second requisite
expired on 31 March 2007, will no longer be of a valid fixed-term contract, Arlene was on equal
renewed. Arlene argued that since she taught at footing with HNU. She was an honors graduate and
HNU for more than six consecutive regular has stellar qualifications. Moreover, she is an
semesters, she already attained the status of a elected public official and appears to be quite
regular Ee pursuant to the Manual of popular, given that she has won as municipal
Regulations for Private School Teachers. Thus, councilor multiple times and even placed number
she claimed that her employment was illegally one in terms of votes garnered. These facts would
terminated. Is Arlene’s contention correct? make apparent that Arlene is not a mere run-of-the-
mill Ee, and that she certainly has the capability to
A: NO. A private school teacher acquires permanent be on equal footing in dealing with her Er when it
status when the following requisites are met: 1) The came to her employment terms.
teacher serves full-time; 2) he/she must have
rendered three consecutive years of service; and 3) Thus, petitioner was validly contracted for a fixed
such service must have been satisfactory. term. The expiry of her latest contract on 31 March
2007 effectively ended the Ee-Er relationship she
While Arlene has rendered three consecutive years had with HNU. No dismissal, whether illegal or not,
of satisfactory service, she was, however, not a full- ever happened. Therefore, she is not entitled to any
time teacher at the College of Nursing of HNU. Only of the reliefs sought. (Arlene Palgan v. Holy Name
a full-time teaching personnel can acquire regular University, et.al., G.R. No. 219916, 10 Feb. 2021)
or permanent status. The three-year or one-year
clinical practice experience is a minimum academic Q: UST has a CBA with the Union. The CBA
requirement to qualify as a faculty member in a requires a master’s degree for a professor to be
College of Nursing, and is therefore, required for tenured. The CBA, however, also provides that
one to be considered as a full-time faculty of such. “If he does not finish his degree in five (5)
semesters, he shall be separated from service at
Arlene failed to meet the required minimum clinical the end of the fifth semester; however, if he is
practice experience under the law and the relevant made to serve the University further, in spite of
regulations. Since she failed to provide substantial the lack of a master's degree, he shall be deemed
evidence, her work experience cannot be to have attained tenure”. Is the stipulation
considered as "clinical practice." Being unqualified conferring tenureship despite the lack of
as a nursing faculty from the start, Arlene cannot master’s degree valid?
possibly be considered a full-time faculty and thus,
could not, even after rendering satisfactory service A: NO. When the CBA was executed between the
for three years, be entitled to permanency. parties in 2006, they had no right to include therein
Therefore, her stint as a clinical instructor from the provision relative to the acquisition of tenure by
1994-1997 cannot even be considered as default, because it is contrary to, and thus violative
compliance with the clinical practice experience of the 1992 Revised Manual of Regulations for Private
requirement for the purpose of determining Schools that was in effect at the time. As such, said
whether or not she is a full-time faculty when she CBA provision is null and void, and can have no
was employed again as a clinical instructor from effect as between the parties. “A void contract is
2004-2007. equivalent to nothing; it produces no civil effect; and
it does not create, modify or extinguish a juridical
The fixed-term contracts presented as evidence relation.”
would reveal that the parties intended that their Er-
Ee relationship would last only for a specific period. It cannot be said either that by agreeing to the
Even if no written fixed-term contract was tenure by default provision in the CBA, UST is
presented, judicial notice can be made upon the fact deemed to be in estoppel or have waived the

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application of the requirement under CHED allocated for increase in salaries or wages of the
Memorandum Order No. 40-08. Such a waiver is members of the faculty and all other Ees of the
precisely contrary to law. Moreover, a waiver would school concerned. Is the contention of the
prejudice the rights of the students and the public, respondents correct?
who have a right to expect that UST is acting within
the bounds of the law and provides quality A: NO. The guidelines issued under DECS Order No.
education by hiring only qualified teaching 15, series of 1992 on the allocation of the 70%
personnel. incremental proceeds under R.A. No. 6728
restricted the scope of "other benefits" by limiting
As the Court held in Escorpizo v. University of Baguio its applicability to "wage related benefits," which
(G.R. No. 121962, 30 Apr. 1999), a school CBA must the law itself does not require. The term "other
be read in conjunction with statutory and benefits" should not refer only to other wage-
administrative regulations governing faculty related benefits. Well settled is the doctrine that in
qualifications. Such regulations form part of a valid case of conflict, the law prevails over the
CBA without need for the parties to make express administrative regulations implementing it. To be
reference to it. While the contracting parties may valid, a rule or regulation must conform and be
establish such stipulations, clauses, terms and consistent with the provisions of the enabling to
conditions, as they may see fit, the right to contract statute. As such, it cannot amend the law either by
is still subject to the limitation that the agreement abridging or expanding its scope.
must not be contrary to law or public policy. (Son v.
UST, G.R. No 211273, 18 Apr. 2018) Sec. 5(2) of R.A. No. 6728 clearly states that a tuition
fee increase is allowed if 70% of the amount
Q: In 2010, Guagua National Colleges subsidized allotted for tuition fee or of the tuition
(petitioner) implemented a 15% tuition fee fee increases shall go to the payment of salaries,
increase for the school year 2010-2011. After wages, allowances, and other benefits of teaching
deducting scholarship expenses and making and non-teaching personnel. The law does not
provisions for dropouts, unpaid accounts, and qualify the term "other benefits" to refer only to
contingencies, the net tuition fee incremental "wage-related benefits." Hence, the allocation of a
proceeds (TIP) of petitioner amounted to Php portion of the 70% TIP for the Ees' retirement plan,
4,579,923.00. Pursuant to Sec. 5(2) of R.A. No. which is clearly intended for the benefit of the Ees,
6728, petitioner allocated 70% of the TIP, or fall under the category of "other benefits" as
Php 3,205,946.00, as follows: (1) 13th month provided under the law.
pay and cash gift - P 91,709.00; (2) honorarium –
Php 286,497.00; (3) clothing and family Moreover, on 04 Feb. 2011, then DepEd Secretary
assistance – Php 191,225.00; (4) SSS, PHIC, and Luistro issued DepEd Order No. 11 s. 2011. It
HDMF contribution - P 67,413.00; and (5) amended Sec. 182 of the 2010 Revised Manual of
Retirement benefit fund contribution - P Private Schools to conform to the provision of Sec.
2,569,102.00. Respondents Guagua National 5(2) of R.A. No. 6728, among others, to include other
Colleges Faculty Labor Union and Guagua benefits in the allocation of the allowed tuition fee
National Colleges Non-Teaching and increase, apart from the payment of salaries, wages,
Maintenance Labor Union demanded that the and allowances of members of the faculty and other
70% of the TIP be allocated to the salaries of the school Ees. Thus, Guagua National Colleges'
Ees. As basis for their demand, respondents allocation of a portion of the 70% net tuition fee
quoted Sec. 182(b) of the 2010 Revised Manual, incremental proceeds for contribution to the
which states that the increase in tuition or other retirement plan of its Ees is VALID. (Guagua
school fees, as well as new fees shall be subject National Colleges v. Guagua National Colleges
to the condition, among others, that no increase Faculty Labor Union, G.R. No. 213730, 23 June 2021)
in tuition or other school fees or charges shall be
approved unless 70% of the proceeds is

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d) PROJECT A: YES. The principal test in determining whether
an Ee is a project Ee is whether he/she is assigned
Project to carry out a "specific project or undertaking," the
duration and scope of which are specified at the
A "project" has reference to a particular job or time the Ee is engaged in the project, or where the
undertaking that may or may not be within the work or service to be performed is seasonal in
regular or usual business of the Er. In either case, nature and the employment is for the duration of
the project must be distinct, separate, and the season. A true project Ee should be assigned to
identifiable from the main business of the Er, and its a project which begins and ends at determined or
duration must be determined or determinable. (PAL determinable times and be informed thereof at the
v. NLRC, G.R. No. 125792, 09 Nov. 1998) time of hiring.

Project Employment Clearly, the presentation of service contracts

between the Er and their client (even if it shows the
Project employment is employment that has been duration of the project), in lieu of the Ees' individual
fixed for: employment contracts, does not establish that the
latter are project Ees. There was no other
1. Specific undertaking – a specific project or substantial evidence offered to prove that
undertaking the completion; or respondents were informed at the time of their
hiring, that they were project Ees. Moreover,
2. Time-bound – termination of which has been petitioner's failure to file termination reports at the
determined at the time of engagement of the end of each project was an indication that
Ee. (Sec. 5(a), Book VI, Rule I, IRR) respondents were regular Ees. (Jovero v. Cerio et al..,
G.R. No. 202466, June 23, 2021, as penned by J.
The period is not the determining factor, so that Hernando)
even if the period is more than one (1) year, the Ee
does not necessarily become regular. Q: Herma Shipyard, Inc., (HERMA) is engaged in
the business of shipbuilding and repair. Several
NOTE: Where the employment of a project Ee is of its Ees occupy various positions. In support of
extended long after the supposed project has been their employment is a contract of employment
finished, the Ees are removed from the scope of denominated as Kasunduang Paglilingkod,
project Ees and considered as regular Ees. which classifies them as a project-based Ee only.
The Ees were informed at the time of their
Repeated hiring on a project-to-project basis is engagement that their status is only a project Ee
considered necessary and desirable to the business and their duration of specific project or
of the Er. The Ee is deemed regular. (Maraguinot v. undertaking.
NLRC, G.R. No. 120969, 22 July 1998)
However, under Paragraph 10 of their
Q: In a case for illegal dismissal, the issue is employment contract, it allows the extension of
whether the respondents were regular Ees and the Ees’ employment until the completion of the
were illegally dismissed. The respondents were specific work. Is the extension agreement under
continuously hired by the company and the employment contract violation of the second
assigned to different projects from the requisite of project employment that the
beginning of their employment in 1990 until completion or termination of such project or
their termination in 1993. They also claimed undertaking be determined at the time of
that they were not limited to performing work engagement?
as cement cutters, but they also cleaned canals
and pipes, fixed tools, and other related work at
the company. Are the respondents regular Ees?

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A: NO. It is enough that Herma Shipyard gave the prescribed form on Ee’s terminations,
approximate or target completion date in the dismissals or suspensions; or
project employment contract. Given the nature of its
business and the scope of its projects which take 6. An undertaking in the employment contract by
months or even years to finish, Herma Shipyard the Er to pay completion bonus to the project
cannot be expected to give a definite and exact Ee as practiced by most construction
completion date. It can only approximate or companies. (D.O. 19-93; Hanjin Heavy
estimate the completion date. What is important is Industries v. Ibañez, G.R. No. 170181, 26 June
that the Ees were apprised at the time of their 2008)
engagement that their employment is coterminous
with the specific project and the purpose of the Requisites in Determining Whether an Ee is a
extension is only to complete the same specific Project Ee
project, and not to keep them employed even after
the completion thereof. (Herma Shipyard Inc. v. 1. Designation of named Ees as “Project Ees”;
Oliveros et al., G.R. No. 208936, 17 Apr. 2017)
2. The project Ee was assigned to carry out a
Indicators of Project Employment in specific project or undertaking;
Construction Industry
3. The duration and scope of which were
Either one or more of the following circumstances, specified at the time the Ee was engaged for
among others, may be considered as indicators that that project (Imbuido v. NLRC, G.R. No.
an Ee is a project Ee: 114734, 31 May 2000);

1. The duration of the specific/identified 4. The Ee must have been dismissed every after
undertaking for which the worker is engaged completion of his project or phase; and
is reasonably determinable;
5. Report to the DOLE of Ee’s dismissal on
2. Such duration, as well as the specific account of completion of contract. (D.O. 19-
work/service to be performed, is defined in an 1993)
employment agreement, and is made clear to
the Ee at the time of hiring; Ees in the Construction Industry

NOTE: Absent any other proof that the project Two types of Ees in the construction industry:
Ees were informed of their status as such, it
will be presumed that they are regular Ees. 1. Project Ees - those employed in connection
with a particular construction project or
3. The work/service performed by the Ee is in phase; and
connection with the particular project/
undertaking for which he is engaged; 2. Non-project Ees - those employed by a
construction company without reference to
4. The Ee, while not employed and awaiting a particular project.
engagement, is free to offer his services to any
other Er; NOTE: In the case of Exodus International
Construction Corporation v. Guillermo Biscocho, et
5. The termination of his employment in the al., (G.R. No. 166109, 23 Feb 2011), when one project
particular project/undertaking is reported to is completed, Ees were automatically transferred to
the DOLE Regional Office having jurisdiction the next project. There was no employment
over the workplace within 30 days following agreement given to the Ees which clearly spelled out
the date of his separation from work, using the the duration of their employment, the specific work

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to be performed and that such is made clear to them Building Systems, v. Puente, G.R. No. 153832, 18 Mar.
at the time of hiring. As such, they are regular Ees 2005)
falling under the classification of non-project Ees.
NOTE: To satisfy due process requirements, under
Requisites to Acquire Regular Ee Status of DOLE D.O. No. 19, Series of 1993, the Er is required
Project Ee to report to the relevant DOLE Regional Office the
fact of termination of project Ees as a result of the
The following must concur to acquire regular Ee completion of the project or any phase thereof in
status: which one is employed.

1. There is a continuous rehiring of project Ee’s Entitlement to Separation Pay

even after cessation of a project; and
GR: Project Ees are not entitled to separation pay if
2. The tasks performed by the alleged “project their services are terminated as a result of the
Ee” are vital, necessary, and indispensable to completion of project.
the usual business or trade of the Er. (D.M.
Consunji, Inc. v. JAMIN, G.R. No. 192514, 18 Apr. XPN: If the projects they are working on have not
2012) yet been completed when their services are
terminated; project Ees also enjoy security of tenure
The length of time during which the Ee was during the limited time of their employment. (De
continuously rehired is not controlling, but merely Ocampo v. NLRC, G.R. No. 81077, 06 June 1990)
serves as a badge of regular employment.
Q: Roger Puente was hired by Filsystems, Inc.,
“Day certain” rule initially as an installer and eventually promoted
to mobile crane operator, and was stationed at
It states that a project employment that ends on a the company’s premises. Puente claimed in his
certain date does not end on an exact date but upon complaint for illegal dismissal, that his work
the completion of the project. was continuous and without interruption for 10
years, and that he was dismissed from his
Q: Diosdado, a carpenter, was hired by Building employment without any cause.
Industries Corporation (BIC), and assigned to
build a small house in Alabang. His contract of Filsystems on its part averred that Puente was a
employment specifically referred to him as a project Ee in the company’s various projects,
"project Ee," although it did not provide any and that after the completion of each project, his
particular date of completion of the project. Is employment was terminated, and such was
the completion of the house a valid cause for the reported to the DOLE. Is Roger Puente a regular
termination of Diosdado’s employment? (2009 Ee?
BAR)
A: NO. Puente is a project Ee. The contracts of
A: YES. The completion of the house should be a employment of Puente attest to the fact that he was
valid cause for termination of Diosdado’s hired for specific projects. His employment was
employment, although the employment contract coterminous with the completion of the projects for
may not state a particular date. which he had been hired. Those contracts expressly
provided that his tenure of employment depended
However, if it did not specify that the termination of on the duration of any phase of the project or on the
the parties’ employment relationship was to be on a completion of the construction projects.
“day certain”—the day when the phase of work Furthermore, the company regularly submitted to
would be completed—the Ee can be considered to DOLE reports of the termination of services of
have been a regular Ee. (Filipinas Pre-Fabricated project workers. Such compliance with the

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reportorial requirement confirms that Puente was a During off-season, the relationship of Er-Ee is not
project Ee. severed; the Seasonal Ee is merely considered on
LOA without pay. Seasonal workers who are
The mere rehiring of Puente on a project-to-project repeatedly engaged from season to season
basis did not confer upon him regular employment performing the same tasks are deemed to have
status. (Filipinas Pre-Fabricated Building Systems, acquired regular employment. (Hacienda Fatima v.
Inc. v. Puente, G.R. No. 153832, 18 Mar. 2005) National Federation of Sugarcane Workers-Food and
General Trade, G.R. No. 149440, 28 Jan. 2003)
In the case of Alcatel v. Relos, while the Ee performed
tasks that were clearly vital, necessary, and Seasonal Ees as Regular Ees
indispensable to the usual business or trade of the
company, he was not continuously rehired after the Seasonal Ees can be considered regular Ees. The fact
cessation of every project. that Seasonal Ees do not work continuously for one
whole year but only for the duration of the season
Alcatel did not rehire the Ee until after a lapse of 33 does not detract from considering them in regular
months, for the PLDT 1342 project. Alcatel's employment. Seasonal workers who are called to
continuous rehiring of respondent in various work from time to time and are temporarily laid off
capacities was done entirely within the framework during off-season are not separated from service in
of one and the same project – the PLDT 1342 that period, but merely considered on leave until re-
project. This did not make the Ee a regular Ee of employed.
Alcatel as he was not continuously rehired after the
cessation of a project. (Alcatel v. Relos, G.R. No. If the Ee has been performing the job for at least a
164315, 03 July 1999) year, even if the performance is not continuous and
merely intermittent, the law deems repeated and
e) SEASONAL continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
Seasonal employment that activity to the business. Hence, the employment
is considered regular, but only with respect to such
Employment where the job, work, or service to be activity and while such activity exists. (Benares v.
performed is seasonal in nature and the Pancho, G.R. No. 151827, 29 Apr. 2005)
employment is for the duration of the season. (Sec.
5(a), Book VI, Rule I, IRR) It is not enough that they perform work or services
that are seasonal in nature. They must have also
An employment arrangement where an Ee is been employed only for the duration of one season.
engaged to work during a particular season on an
activity that is usually necessary or desirable in the Q: Carlito Codilan and Maximo Docena had been
usual business or trade of the Er. working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria, and Reynaldo
NOTE: For Seasonal Ees, their employment legally Tulin have been working for 22, 15, and 6 years
ends upon completion of the project or the season. respectively.
The termination of their employment cannot and
should not constitute an illegal dismissal. (Mercado The operations of the rice mill continue to
v. NLRC, G.R. No. 79869, 05 Sept. 1991) operate and do business throughout the year
even if there are only two or three harvest
One-year duration on the job is pertinent in seasons within the year. This seasonal
deciding whether a casual Ee has become regular or harvesting is the reason why the company
not, but it is not pertinent to a Seasonal or Project considers the workers as seasonal Ees. Is the
Ee. Passage of time does not make a seasonal company correct in considering the Ees as
worker regular or permanent. (Ibid.) seasonal Ees?

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 IV. POST-EMPLOYMENT
A: NO. The fact is that big rice mills such as the one Fixed Term Employment
owned by the company continue to operate and do
business throughout the year even if there are only It is an employment where a fixed period of
two or three harvest seasons within the year. It is a employment was agreed upon:
common practice among farmers and rice dealers to
store their palay and to have the same milled as the 1. Knowingly and voluntarily by the parties; and
need arises. Thus, the milling operations are not
seasonal. 2. Without any force, duress or improper
pressure being brought to bear upon the Ee
Finally, considering the number of years that they and business of Er. (Philips Semiconductor v.
have worked, the lowest being six (6) years, the Fadriquela, G.R. No. 141717, 14 Apr. 2004)
workers have long attained the status of regular Ees
as defined under Art. 295. (Tacloban Sagkahan Rice Fixed-Term Employment vs. Project
Mill v. NLRC, G.R. No. 73806, 21 Mar. 1990) Employment

Entitlement to Separation Pay Both employments are time bound or for a certain
period – as agreed upon at the time of engagement.
When the business establishment is sold which However, in project employment, the Ee is tasked to
effectively terminates the employment of the do specific undertaking, which is not present in
seasonal Ees, the latter would be entitled to fixed-term employment.
separation pay.
Brent Doctrine
NOTE: “Month pay” shall be understood, in this
regard, as average monthly pay during the season Art. 295 of the LC does not prohibit an employment
they worked. (Abad, Jr., 2015) contract with a fixed period, provided it is entered
into by the parties without any force, duress, or
f) FIXED-TERM improper pressure being brought to bear upon
either party, particularly the Ee and absent any
Term Employment other circumstances vitiating consent; or where it
satisfactorily appears that the Er and Ee dealt with
A contract of employment for a definite period each other on more or less equal terms with no
terminates by its own terms at the end of such moral dominance whatever being exercised by the
period. (Brent School v. Zamora, G.R. No. L-48494, 05 former over the latter. Such employment for a
Feb. 1990) defined period is allowed even where the duties of
the Ee consist of activities usually necessary or
Term employment is not a circumvention of the law desirable in the usual business of the Er.
on security of tenure if it follows the requisites laid
down by the Brent ruling. (Romares v. NLRC, G.R. No. There can of course be no quarrel with the
122327, 19 Aug. 1998) proposition that where, from the circumstances, it is
apparent that periods have been imposed to
The defined period must be a genuine condition of preclude acquisition of tenurial security by the Ee,
the job and not merely to avoid regular status of the they should be struck down or disregarded as
Ee. (Azucena, 2016) contrary to public policy, morals, etc. (Brent School,
Inc. v. Zamora, G.R. No. L-48494, 5 Feb. 1990)
Decisive Determinant in Term Employment

It is the day certain agreed upon by the parties for

the commencement and the termination of their
employment relation.

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Overseas Seafarers are Contractuals A: NO. The decisive determinant in term
employment is the day certain agreed upon by the
The employment of overseas seafarers is governed parties for the commencement and termination of
by the POEA Standard Employment Contract for their employment relationship, a day certain being
Filipino Seamen. Their employment is governed by understood to be that which must necessarily come,
the contracts they sign every time they are rehired, although it may not be known when and not
and their employment is terminated when the whether the work is usually necessary and
contract expires. It is an accepted maritime industry desirable to the business of the Er.
practice that employment of seafarers is for a fixed
period only. Q: Does the “Reasonable Connection Rule” apply
in fixed term employment for a fixed-term Ee to
Domestic Seafarers are Not Contractual be eventually classified as a regular Ee?
Employees
A: NO. It should be apparent that this settled and
Seamen employed in domestic shipping are entitled familiar notion of a period, in the context of a
to security of tenure, can become permanent Ees, contract of employment, takes no account at all the
and can be terminated only for just or authorized nature of the duties of the Ee; it has absolutely no
causes. Domestic seafarers are covered by the LC, relevance to the character of his duties as being
including its Book VI. usually necessary and desirable to the usual
business of the Er, or not.
Q: Darrell was hired as an athletic director in
Amorita School for a period of five years. As Q: Dean Jose and other Ees are holding
such, he oversees the work of coaches and administrative positions as dean, department
related staff involved in intercollegiate or heads, and institute secretaries. In the
interscholastic athletic programs. However, he implementation of the Reorganization,
was not rehired upon the expiration of said Retrenchment and Restructuring program
period. Darrell questions his termination effective 01 Jan. 1984, Dean Jose and other Ees
alleging that he was a regular Ee and could not were retired but subsequently rehired. Their
be dismissed without valid cause. appointment to their administrative positions
as dean, department heads, and institute
a. Is he a regular Ee? secretaries had been extended by the company
from time to time until the expiration of their
A: NO. Darrell was not a regular Ee but an Ee under last appointment on 31 May 1988. Were Dean
a fixed-term contract. While it can be said that the Jose and other Ees illegally dismissed?
services he rendered were usually necessary and
desirable to the business of the school, it cannot also A: NO. Petitioners were dismissed by reason of the
be denied that his employment was for a fixed term expiration of their contracts of employment.
of five years. The decisive determinant in fixed-term Petitioners' appointments as dean, department
employment should not be the activities that the Ee heads, and institute secretaries were for fixed terms
is called upon to perform, but the day certain agreed of definite periods as shown by their respective
upon by the parties for the commencement and contracts of employment, which all expired on the
termination of their employment relation. (Brent same date, May 31, 1988. The validity of
School Inc. v. Zamora, G.R. No. 48494, 05 Feb. 1990) employment for a fixed period has been
acknowledged and affirmed by the SC. (Blancaflor v.
b. Will Darrell automatically become a regular NLRC, G.R. No. 101013, 02 Feb. 1993)
Ee if he is rehired by the school for another
definite period of employment?

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 IV. POST-EMPLOYMENT
Q: Lina has been working as a steward with a Floating Status
Miami, U.S.A.-based Loyal Cruise Lines for the
past 15 years. She was recruited by a local a) Labor Code
manning agency, Macapagal Shipping, and was
made to sign a 10-month employment contract When Employment not Deemed Terminated
every time she left for Miami. Macapagal
Shipping paid for Lina’s round-trip travel The bonafide suspension of the operation of a
expenses from Manila to Miami. Because of a business or undertaking for a period not
food poisoning incident which happened during exceeding 6 months, or the fulfillment by the
her last cruise assignment, Lina was not re- employee of a military or civic duty shall not
hired. Lina claims she has been illegally terminate employment. In all such cases, the
terminated and seeks separation pay. If you employer shall reinstate the employee to his
were the Labor Arbiter handling the case, how former position without loss of seniority rights
would you decide? (2014 BAR) if he indicates his desire to resume his work not
later than one (1) month from the resumption
A: I will dismiss Lina's complaint. Lina is a of operations of his employer or from his relief
contractual Ee, and the length of her employment is from the military or civic duty. (Art. 301, LC)
determined by the contracts she entered. Here, her
employment was terminated at the expiration of the NOTE: The floating status of an Ee should last
contract. (Millares, et al. v. NLRC G.R. No. 110524, 29 only for a legally prescribed period of time.
July 2002) When that floating status of an Ee lasts for more
than 6 months, he may be considered to have
g) FLOATING STATUS been illegally dismissed from the service. Thus,
he is entitled to the corresponding benefits for
An employment is not deemed terminated when: his separation. (Agro Commercial Security
Services Agency, Inc. v. NLRC, G.R. Nos. 82823-24,
1. There is a bona fide suspension of the 31 July 1989)
operation of a business or undertaking for
a period not exceeding six (6) months; or, b) DOLE D.O. 174-17 (Manpower Services)

2. The fulfilment by the Ee of a military or Effect of Termination of Employment

civic duty. (Art. 301, LC)
Where the termination results from the
During this period, the Ee is considered on “floating expiration of Service Agreement, or from the
status,” which is also known as temporary lay-off, completion of the phase of the job or work for
temporary off-detail, or temporary retrenchment. which the employee is engaged, the latter may
opt to wait for re-employment within three (3)
Since the lay-off is only temporary, the employment month to resign and transfer to another
status of the Ee is not deemed terminated, but contractor-employer. Failure of the contractor
merely suspended. (Dela Cruz v. NLRC, G.R. No. to provide new employment shall entitle the
119536, 17 Feb. 1997) employee to separation benefits, as may be
provided by law or the Service Agreement,
whichever is higher, without prejudice to
his/her entitlement to completion bonuses or
other emoluments. Furthermore, the mere
expiration of the Service Agreement shall not be
deemed as a termination of employment of the
contractor’s/subcontractor’s employee, who
are the regular employees of the latter.

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 LABOR LAW AND SOCIAL LEGISLATION
c) DOLE D.O. No. 150-16 (Private Security Floating status cannot last beyond 6 months. After 6
Guards) months, the Er must be able to provide the security
guard with work assignment within one (1) month
Reserved Status after the six-month period.

If after a period of six (6) months, the Security Q: Loque was hired as a security guard by
Service Contractor/Private Security Agency Seventh Fleet Security Services, Inc. Loque filed
cannot provide work or give an assignment to a complaint for constructive dismissal, and
the reserved security guard, the latter can be argued that since he was placed on floating
separated from service and shall be entitled to status period of more than six months, he is
separation pay. An assignment of the security deemed to have been constructively dismissed.
guard and other private security personnel as a To avoid liability for constructive dismissal,
reliever for less than one-month shall not be Seventh Fleet asserted that it had directed
considered as an interruption of the six (6) Loque "to report to Seventh Fleet's office for
months period. (Sec. 10.3, DOLE D.O. No. 150-16) posting within 48 hours" through the letters
dated 14 May 2014 and 28 May 2014. Seventh
NOTE: No security guard and other private Fleet faulted Loque for not complying with its
security personnel can be placed in a workpool directive. On the other hand, Loque claimed that
or on reserved status in any of the following he went to Seventh Fleet's office to report for
situations: work on two occasions — on 19 May 2014 and
11 July 2014, but he was barred from entering
a) Afte expiration of a service agreement, if the premises of Seventh Fleet. The Labor Arbiter
there are other principals where he/she found Seventh Fleet guilty of illegal constructive
can be assigned; dismissal. The NLRC reversed the ruling of the
LA and held that placing Loque on floating status
b) As a measure to constructively dismiss the was a valid exercise of Seventh Fleet's
security guard; and management prerogative. Is the NLRC correct?

c) As an act of retaliation for filing any A: NO. While there is no specific provision in the LC
complaint against the employer for governing the "floating status" or temporary "off-
violation of labor laws, among others. detail" of Ees, the Court, applying Article 301 [286]
of the LC by analogy, considers this situation as a
Reinstatement of Ee on Floating Status form of temporary retrenchment or lay-off.
Conformably with Art. 301, the placement of an Ee
The Er may suspend business operations or the Ee on "floating status" must not exceed six months.
may be relieved on the performance of his work Otherwise, the Ee may be considered constructively
when there is a need to perform civic or military dismissed. The burden of proving that there are no
duty, provided that the period in both instances posts available to which the security guard can be
should not last for a period beyond six (6) months. assigned rests on the Er. However, the mere lapse of
six months in "floating status" should not
After the Er has resumed operations of the Ee has automatically result to constructive dismissal. The
fulfilled his civic or military duty, then he must be peculiar circumstances of the Ee's failure to assume
recalled to work within a month. Otherwise, the Ee another post must still be inquired upon.
shall be considered terminated, and the Er will have
to pay separation pay. In this case, Seventh Fleet was not able to show that
Loque was not barred from entering its premises.
NOTE: If the Er does not pay him separation pay, The letters sent by Seventh Fleet to Loque are in the
then that will amount to constructive dismissal. nature of general return to work orders. Such
general return to work orders will not absolve

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 IV. POST-EMPLOYMENT
Seventh Fleet since jurisprudence requires not only 3. LEGITIMATE SUBCONTRACTING VS. LABOR-
that the Ee be recalled to the agency's office, but that ONLY CONTRACTING
the Ee be deployed to a specific client before the
lapse of six months. Considering that Loque was
a) ELEMENTS
placed on floating status for more than six months
without being deployed to a specific assignment,
and that the letters sent by Seventh Fleet are bereft LEGITIMATE LABOR-ONLY
of any reference to any specific client or indication SUBCONTRACTING CONTRACTING
that he would be assigned to a specific client, Loque
is therefore deemed constructively dismissed. It
follows then that Loque could not have abandoned
his employment with Seventh Fleet, for
1. The contractor or
abandonment is incompatible with constructive
subcontractor carries
dismissal. (Seventh Fleet Security Services, Inc. v.
on a distinct and
Loque, G.R. No. 230005, 22 Jan. 2020)
independent business
and undertakes to
Q: Juan was alleged to have made disrespectful
perform the job, work
remarks to a superior Ee in TelTel business
or service on its own
process outsourcing company. He was placed in 1. The contractor or
account and under its
preventive suspension. A company investigation subcontractor does not
own responsibility
was conducted and found that Juan is not liable. have substantial
according to its own
However, he was moved to another position on capital or investment
manner and method,
another branch but eventually told to go back to perform the job,
and free from the
again to the original branch. But this time, he work or service under
control and direction
was told that the company still needed to find an its own account and
of the principal in all
account for him. He was told that he was responsibility; and
matters connected
considered as a “floater” and he will not get paid
with the performance
unless his floating status has been lifted. In his 2. The Ees recruited,
of the work except as to
desire to keep his job and to receive his salary, supplied, or placed by
the results thereof;
Juan exhausted his earned vacation leaves. Juan such contractor or
alleged that he had been constructively subcontractor are
2. The contractor or
dismissed. Is TelTel correct? performing activities
subcontractor has
which are directly
substantial capital or
A: NO. The floating status principle does not find related to the main
investment; and
application in the instant case. While it may be business of the
argued that the nature of the call center business is principal. (Sasan v.
3. The Service
such that it is subject to seasonal peaks and troughs NLRC, G.R. No. 176240,
Agreement ensures
because of client pullouts, changes in clients' 17 Oct. 2008)
compliance with all the
requirements and demands, and a myriad other
rights and benefits for
factors, still, the necessity to transfer Juan to
all the Ees of the
another practice/account does not depend on
contractor or
TelTel's third party-client/contracts. When the
subcontractor under
controversy arose, TelTel had several clients in its
the labor laws. (Sec. 8,
roster to which it can easily assign Juan as Quality
D.O. No. 174, s. 2017)
Analyst without any hindrance. (Telus International
Philippines, Inc And Michael Sy v. Harvey De Guzman,
G.R. No. 202676, December 4, 2019, as penned by J.
Hernando)

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 LABOR LAW AND SOCIAL LEGISLATION
Legitimate Subcontracting An independent contractor is not under the
compulsory coverage of the SSS. He may be covered
The agreement between the principal and the as a self-employed person (Sec. 8(j), RA 11199)
contractor or subcontractor assures the
contractual Ees' entitlement to all labor and Indirect or Statutory Employer
occupational safety and health standards, free
exercise of the right to self-organization, security One who enters a contract with an independent
of tenure, and social welfare benefits. (Petron contractor for the performance of any work, task,
Corporation v. ARMZ Caberte et. al, G.R. No. 182255, job, or project not directly related to the Er’s
15 June 2015) business. (Baguio v. NLRC, G.R. Nos. 79004-08, 04 Oct.
1991)
Substantial Capital
NOTE: No Er-Ee relationship exists between the
Refers to paid-up capital stocks/shares of at least owner of the project and the Ees of the independent
P5 Million in the case of corporations, contractor. (Baguio v. NLRC, G.R. Nos. 79004-08, 04
partnerships, and cooperatives. P5 Million net Oct. 1991) The principal Er is considered only an
worth in the case of a single proprietorship. (Sec. indirect Er. (PCI Automation Center, Inc. v. NLRC, G.R.
3(L), DOLE D.O. No. 174 s. 2017) No. 115920, 29 Jan. 1996)

The law does not require both substantial capital What is contracted is the performance and
and investments, it is sufficient that either of the completion of a designated job, and not just the
two is complied with. (Neri v. NLRC, G.R. Nos. supplying of people to do the job.
97008-09, 23 July 1993)
Major Laws Applicable to Work Relationship
Burden of proof to prove that he/it has substantial
capital or investment rests on the contractor 1. Between the Principal and Contractor –
himself. (Guarin v. NLRC, G.R. No. 86010, 03 Oct. The Civil Code and pertinent Commercial
1989) Laws

NOTE: In legitimate Job Contracting, the principal 2. Between Contractor and his Ees – the
is jointly and severally liable with the contractor Labor Code and Special Labor Laws.
for the payment of unpaid wages. (Arts. 106, 107 &
10, LC) NOTE: Between the principal and the contractor’s
Ees, no Er-Ee relationship exists; the contractor,
Independent Contractor being himself a businessman, is the Er. But the
contractor may in turn become a contractee if he
Those who undertake “job-contracting.” They contracts with a contractor.
exercise independent employment, contracting to
do a piece of work according to their own methods Er-Ee relationship may be declared to exist between
and without being subject to control of their Er the principal and the contractor’s workers where
except as to the result of their work. (Villuga v. the contracting arrangement is not legitimate.
NLRC, G.R. No. 75038, 23 Aug. 1993)

NOTE: Independent contractors often present

themselves to possess unique skills, expertise, or
talent to distinguish them from ordinary Ees. (Sonza
v. ABS-CBN, G.R. No. 138051, 10 June 2004)

U N IV E R S I T Y O F S A N T O T O M A S 330
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 IV. POST-EMPLOYMENT
Employee vs. Independent Contractor
It refers to an arrangement where the contractor,
INDEPENDENT who does not have substantial capital or investment
EMPLOYEE
CONTRACTOR in the form of tools, equipment, machineries, work
As to their Existence premises, among others, supplies workers to an Er
and the workers recruited are performing activities
which are directly related to the principal business
Existence of an
of such Er. (Art. 106, LC)
Existence of an Er-Ee Independent
relationship is Contractorship is
It is a prohibited act, an arrangement where the
determined by law. determined by the
contractor or subcontractor merely recruits,
contract.
supplies, or places workers to perform a job, work
or service for a principal.
As to the Exercise of Control
NOTE: In labor-only contracting, there is really no
Er exercises the right contracting and no contractor. There is only a
to control not only the representative to gather and supply people to the
Only the result of their principal. (Azucena, 2016)
end achieved, but also
work is subject to the
the manner and means
Er’s control. A finding that a contractor is a “labor-only”
used to achieve that
end. contractor is equivalent to declaring that there is an
Er-Ee relationship between the principal and the
Ees of the “labor-only” contractor. (San Miguel Corp.
As to Wages
v. MAERC Integrated Systems, G.R. No. 144672, 10 July
2003)
Payment given to an
Wages should comply independent
NOTE: A finding that a contractor is a labor-only
with the minimum contractor is
contractor, as opposed to permissible job
wage established by compensation that is
contracting, is equivalent to declaring that there is
law. agreed upon in the
an Er-Ee relationship between the principal and the
contract.
Ees of the supposed contractor, and the labor-only
contractor is considered as a mere agent of the
As to Payment of Contributions principal, the real Er. (Allied Banking Corporation v.
Reynold Calumpang, G.R. No. 219435, 17 Jan. 2018)
Er is required to pay
The independent Confirming Elements
for Ee’s contributions,
contractor pays for his
such as Pag-IBIG,
own contribution. To have labor-only contracting, the essential
PhilHealth, and SSS.
element of supplying workers to another is not
enough. To it must be added either one of two
As to Termination confirming elements:

1. Lack of substantial capital or investment and

Ee may be terminated Other valid grouds may performance of activities directly related or
only due to reasons be indicated in the usually necessary or desirable to the principal’s
stated in the LC. contract. main business; or

2. The contractor does not exercise control over

the performance of the Ees. (Azucena, 2016)
Labor-only contracting (LOC)
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 LABOR LAW AND SOCIAL LEGISLATION
farmed out by the principal on his account,
NOTE: If the essential element is absent, there can manner and method, investment in the
be no LOC. And even if the essential element is form of tools, equipment, machinery and
present, but confirming element one or two is supervision;
absent, there is still no LOC. (Azucena, 2016)
3. In performing the work farmed out, the
b) TRILATERAL RELATIONSHIP contractor or subcontractor is free from the
control and/or direction of the principal in
In legitimate contracting, there exists a trilateral all matters connected with the
relationship under which there is a contract for a performance of the work except as to the
specific job, work or service between the principal result thereto; and
and the contractor or subcontractor, and a contract
of employment between the contractor or 4. The Service Agreement ensures
subcontractor and its workers. (Azucena, 2016) compliance with all the rights and benefits
for all the employees of the contractor or
There are three parties involved in these subcontractor under the labor laws.
arrangements:
"Trilateral Relationship"
1. Principal (Contractee) – It refers to any Er,
whether a person or entity, including Refers to the relationship in a contracting or
government agencies and government- subcontracting arrangement where there is a
owned and controlled corporations, contract for a specific job, work or service between
who/which puts out or farms out a job, the principal and the contractor, and a contract of
service, or work to a contractor. employment between the contractor and its
workers.
2. Contractor or subcontractor – It refers to
any person or entity, including a There is no employer-employee relationship
cooperative, engaged in a legitimate between the contractor and principal who engages
contracting or subcontracting agreement the contractor’s services, but there is an employer-
providing either services, workers or employee relationship between the contractor and
combination of services to a principal workers hired to accomplish the work for the
under a Service Agreement; principal.

3. Contractual workers – Includes one BILATERAL RELATIONSHIP

employed by a contractor to perform or
complete a job, work or service pursuant to Jurisprudence has recognized another kind of
a Service Agreement with a principal. independent contractor: individuals with unique
(DOLE D.O. No. 174 s. 2017) skills and talents that set them apart from ordinary
employees. There is no trilateral relationship in this
Factors for a contractor to be considered as a case because the independent contractor himself or
legitimate job contractor: herself performs the work for the principal. In other
words, the relationship is bilateral. (Fuji Television
1. The contractor or subcontractor is engaged Network, Inc. vs. Espiritu, G.R. Nos. 204944-45,
in a distinct and independent business and December 3, 2014.
undertakes to perform the job or work on
its own responsibility, according to its own
manner and method;
2. The contractor or subcontractor has
substantial capital to carry out the job

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 IV. POST-EMPLOYMENT
Other examples of independent contractor DOLE D.O. No. 174 s. 2017

1. Columnist (Orozco v. Court of Appeals, G.R. Issued by the SOLE and interpreting Arts. 106 to
No. 155207, 13 Aug. 2008) 109 of the LC. Effective 16 March 2017.

2. Masiador and Sentenciador (Semblante v. Non-applicability of D.O. No. 174 s. 2017

Court of Appeals, G.R. No. 196426, 15 Aug
2011) D.O. 174, Series of 2017 is not applicable to trilateral
relationship which characterizes contracting or
3. Basketball referee| (Bernarte v. Philippine subcontracting arrangement. Including:
Basketball Association, G.R. No. 192084, 14
Sept. 2011) 1. BPO/KPO - It does not contemplate to cover
information-technology enabled services
Job Contracting vs. Labor-only Contracting involving an entire or specific business process
such as Business Process Outsourcing (BPO) or
LABOR-ONLY Knowledge Process Outsourcing (KPO). (DOLE
JOB CONTRACTING
CONTRACTING D.O. No. 01, s. 2017)

The Er/principal is 2. Construction Industry - Licensing and exercise

treated as direct Er of of regulatory powers over the construction
The Er/principal is
the contractor’s Ees in industry is lodged with the Philippine
merely an indirect Er,
all instances. Constructors Accreditation Board (PCAB) of the
by operation of law, of
Construction Industry Authority of the
his contractor’s Ees.
(Contractor = agent of Philippines (CIAP).
the Er)
3. Private Security Agency - Except for the
registration requirement as provided in DO No.
The statute creates an 174, s. 2017, contracting or subcontracting
The law creates an Er-
Er-Ee relationship for a arrangement in the private security industry
Ee relationship for a
comprehensive shall be governed by DO No. 150, s. 2016.
limited purpose.
purpose.
4. Other Contractual Relationships – DOLE D.O.
No. 174. s. 2017 does not contemplate to cover
The principal becomes The principal becomes contractual relationship such as in contract of
solidarily liable. The solidarily liable with sale or purchase, contract of lease, contract of
liability, however, does the contractor not only carriage, contract growing or growership
not extend to the for unpaid wages but agreement, toll manufacturing, contract of
payment of backwages also for all the rightful management, operation and maintenance, and
or separation pay of claims of the Ees under such other contracts governed by the NCC and
Ees who are illegally the Labor Code and special laws.
dismissed. ancillary laws.
Contractor or Subcontractor to Furnish a Bond
Allowed by law Prohibited by law
An Er or indirect Er may require the contractor or
subcontractor to furnish a bond equal to the cost of
Presence of substantial Absence of substantial labor under contract, on the condition that the bond
capital or investment. capital or investment. will answer for the wages due the Ees should the
contractor or subcontractor fail to pay the same.
(Art. 107, LC)

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NOTE: Where the Er fails to require the posting of For Other Violations
the bond, he must be liable for whatever the
contractor may have incurred to his Ees, without The court has interpreted the liability of the
prejudice to its right of reimbursement from the principal under Art. 109 as a qualified or limited
contractor for whatever amount paid. (Baguio v. liability.
NLRC, G.R. Nos. 79004-08, 04 Oct. 1991)
Liability
Extent of Er’s Liability in Invalid Contracting
1. For failure to pay the minimum wage or the
Where the contracting is found to be labor-only service incentive leave or other benefits –
contracting, the liability is immediately and directly The principal is equally liable with the
imposed upon the principal. The principal contractor as if the principal were the direct
shoulders all the obligations of an Er, not just the Er.
payment of wages. The liability becomes direct and
total as that of a directly hiring Er. 2. With punitive character – Such as an award
for backwages and separation pay because of
c) SOLIDARY LIABILITY an illegal dismissal of the contractor’s Ee, the
liability should be solely that of the contractor,
Extent of Principal’s Liability in Legitimate in the absence of proof that the principal
Contracting conspired with the contractor in the
commission of the illegal dismissal.
The contractor or subcontractor shall be considered
the Er of the contractual Ee for purposes of NOTE: The contractor’s liability for underpaid
enforcing the provisions of the LC and other social wages and unpaid overtime work could be enforced
legislation. against the surety bond posted by the contractor as
required by the principal. The law’s aim in imposing
The principal shall be solidarily liable with the indirect liability upon the principal is to assure
contractor in the event of any violation of any payment of monetary obligations to the workers.
provisions of the Labor Code, including the failure This aim is accomplished through the principal’s
to pay wages. (D.O. No. 18-02) requiring the posting of a bond. After satisfying
from the bond the unpaid wages and overtime pay,
For Wages and Money Claims the contractor cannot recover from the principal if
the principal has already handed over to the
If the contractor or subcontractor fails to pay the contractor the amount covering the wages, or the
wages of his Ees in accordance with the Code, the Er pay increase mandated by a wage order. (Rosewood
shall be jointly and severally liable with the Processing, Inc. v. NLRC, G.R. Nos. 116476-84, 21 May
contractor or subcontractor to such Ees to the 1998)
extent of the work performed under the contract, in
the same manner and extent that he is liable to Ees Q: Petrotech, a subcontractor of Liquigaz,
directly employed by him. (Art. 107, LC) engaged the services of Independent Testing
Consultants (ITC) to conduct non-destructive
NOTE: Where no Er-Ee relationship exists between testing on Liquigaz's piping systems. ITC
the parties and no issue is involved which may be conducted the agreed tests. It later billed
resolved by reference to the Labor Code, other labor Petrotech. However, despite demand, Petrotech
statutes or any collective bargaining agreement, it is refused to pay. ITC filed a Complaint for
the Regional Trial Court that has jurisdiction. collection of a sum of money with damages
against Petrotech, Liquigaz, and Noell Whessoe
plus legal interest.

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 IV. POST-EMPLOYMENT
It joined Noell Whessoe as a defendant, alleging the contractor and the supplier, except when the
that it was Liquigaz's contractor that subcontractor has already been fully paid for its
subcontracted Petrotech. Liquigaz contended services. Here, there was uncontroverted evidence
that ITC had no cause of action against it since that PETROTECH had already been paid for its
there were no contractual relations between services. Since Whessoe UK and Noel Whessoe
them and that any contract that ITC had was should be considered the same entity for the
with its subcontractors. Noell Whessoe, on the purposes of the Mariveles Terminal Expansion
other hand, denied that it was Liquigaz's Project, Whessoe UK's full payment to Petrotech
contractor and that its basic role was merely to would serve as a valid defense against Noel
supervise the construction of its gas plants. It Whessoe's solidary liability.
argued that any privity of contract was only with
Petrotech. Thus, Noel Whessoe still cannot be held solidarily
liable with Liquigaz and Petrotech for any
Thus, it asserted that Petrotech alone should be remaining receivables from Independent Testing
liable to ITC. Noell Whessoe submitted Consultants. Any remaining obligations to it should
documents showing that Liquigaz engaged be solidarily borne by the owner, Liquigaz, and the
Whessoe Projects Limited (Whessoe UK), a subcontractor, Petrotech. (Noelle Whessoe, Inc. v.
limited company organized under the laws of Independent Testing Consultants, Inc., G.R. No.
the United Kingdom, for the construction of its 199851, 07 Nov. 2018)
storage facilities. Whessoe UK, in turn, engaged
Noell Whessoe, a separate and distinct entity, to Q: Star Crafts is a lantern maker based in
be the construction manager for the Mariveles Pampanga. It supplies Christmas lanterns to
Terminal Expansion Project. The documents stores in Luzon, Metro Manila, and parts of
further stated that Whessoe UK had already paid Visayas, with the months of August to November
in full its contractual obligations to Petrotech. being the busiest months. Its factory employs a
workforce of 2,000 workers who make different
Can Noell Whessoe, Inc. be held solidarily liable lanterns daily for the whole year. Because of
with respondents Liquigaz Philippines increased demand, Star Crafts entered into a
Corporation and Petrotech Systems, Inc. for contractual arrangement with People Plus, a
unpaid fees to respondent Independent Testing service contractor, to supply the former with I
Consultants, Inc.? 00 workers for only 4 months, August to
November, at a rate different from what they pay
A: NO. There was insufficient evidence proving that their regular employees. The contract with
Whessoe UK and Noel Whessoe were two (2) People Plus stipulates that all equipment and
separate and distinct entities. Noel Whessoe failed raw materials will be supplied by Star Crafts
to prove that for the Mariveles Terminal Expansion with the express condition that the workers
Project, it was a separate and distinct entity from cannot take any of the designs home and must
Whessoe UK. Therefore, it cannot set up the defense complete their tasks within the premises of Star
of privity of contract (Art. 1729) to escape liability. Crafts.
Under Art. 1729, ITC had a cause of action against
Liquigaz and Noel Whessoe, even if its contract was Is there an employer-employee relationship
only with Petrotech. However, Art. 1729, while between Star Crafts and the 100 workers from
serving as an exception to the general rule on the People Plus? Explain. (2015 BAR)
privity of contracts, likewise provides for an
exception to this exception. A: YES. People Plus is a labor-only-contractor
because it is not substantially capitalized. Neither
The contractor is solidarily liable with the owner does it carry on an independent business in which it
and subcontractor for any liabilities against a uses its own investment in the form of tools,
supplier despite the absence of contract between equipment, machineries or work premises. Hence, it

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is just an agent or recruiter of workers who perform
work directly related to the trade of Star Crafts. B. TERMINATION OF EMPLOYMENT BY
Since both the essential element and the conforming EMPLOYER
element of labor-only contracting are present, Star
Crafts becomes the employer of the supplied
worker.
2-Fold Requirement for Lawful Dismissal

As principal, Star Crafts will always be an employer

1. Substantive – legality or illegality of the act of
in relation to the workers supplied by its contractor.
dismissal (just and authorized causes)
Its status as employer is either direct or indirect
depending on whether the contractor is legitimate
2. Procedural – legality or illegality of the manner
or not. Thus, even if People Plus were a legitimate
of dismissal (due process; notice and hearing)
job contractor, still Star Crafts will be treated as a
statutory employer for purposes of paying the
SUBSTANTIVE DUE PROCESS
workers’ unpaid wages and benefits.

JUST CAUSE AUTHORIZED CAUSE

NOTE: A labor-only contractor is not substantially
Authorized cause
capitalized and does not carry on an independent
A just cause dismissal dismissal is a form of
business in which it uses its own investment in the
implies that the Ee has terminating Er-Ee
form of tools, equipment, machineries or work
committed, or is guilty relationship with a
premises. (Art. 106, LC)
of, some violation liability on the part of
against the Er, that is, the Er to pay
the Ee has committed separation pay as
some serious mandated by law. It
misconduct, is guilty of does not necessarily
fraud against the Er or imply delinquency or
he has neglected his culpability on the part
duties such as of the Ee. Instead, the
abandonment. Thus, dismissal process is
the Ee himself initiated initiated by the Er's
the dismissal process. exercise of his
Payment of separation management
pay, as a rule, is not prerogative such as
required in just cause installation of labor-
dismissal. However, saving devices, closure
where the Ee is of business, or
dismissed for causes implementing a
other than serious retrenchment
misconduct or those program. (Jaka Food v.
reflecting on his moral Pacot, G.R. No. 151378,
character, separation 28 Mar. 2005)
pay may be allowed as
a measure of social
justice. (Poquiz, 2012)

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 IV. POST-EMPLOYMENT
The existence of any of the just or authorized causes A: YES. Under the LC, Ers may only terminate
enumerated in Arts. 282 and 283 of the LC does not employment for a just or authorized cause and after
automatically result in the dismissal of the Ee. The complying with procedural due process
Er must decide whether it would dismiss the Ee, requirements. Arts. 297 and 300 of the Labor Code
impose a lighter penalty, or perhaps even condone enumerate the causes of employment termination
the offense committed by an erring Ee. In deciding, either by Ers or by Ees. In illegal dismissal cases, the
the Er may take into consideration the Ee's past burden of proof that Ees were validly dismissed
offenses. (Santos v. Integrated Pharmaceutical, Inc., rests on the Ers. Failure to discharge this burden
G.R. No. 204620, 11 July 2016) means that the dismissal is illegal.

Q: Aldovino and her co-applicants applied for A review of the records here shows that the
work at Gold and Green Manpower, a local termination of petitioners' employment was
manning agency. Eventually, they were hired as effected merely because respondents no longer
sewers for Dipper Semi-Conductor, a Taiwan- wanted their services. This is not an authorized or
based company. Their respective employment just cause for dismissal under the Labor Code.
contracts provided an eight (8)-hour working Employment contracts cannot be terminated on a
day, a fixed monthly salary, and entitlement to whim. Furthermore, petitioners were not accorded
overtime pay, among others. Once Aldovino and due process. A valid dismissal must comply with
her co-workers arrived in Taiwan, Gold and substantive and procedural due process: there must
Green Manpower took all their travel be a valid cause and a valid procedure. The Er must
documents, including their passports. They comply with the two (2)-notice requirement, while
were then made to sign another contract that the Ee must be given an opportunity to be heard.
provides that they would be paid on a piece-rate Here, petitioners were only verbally dismissed,
basis instead of a fixed monthly salary. Because without any notice given or having been informed of
they were paid on a piece-rate basis, they any just cause for their dismissal.
received less than the fixed monthly salary
stipulated in their original contract. When With their right to substantive and procedural due
Aldovino and her co-workers inquired, Dipper process denied, petitioners were illegally dismissed
Semi-Conductor refused to disclose the schedule from service. (Julita M. Aldovino et al., v. Gold and
of payment on a piece-rate basis. Green Manpower et al. G.R. No. 200811, 19 June 2019)

Aldovino and her co-workers filed a Complaint Q: Joy was deployed to work for Taiwan Wacoal,
against their Ers, Dipper Semi-Conductor and Co. Ltd. on 26 June 1997 for one year. Sameer
Sage International before a local court in Overseas Placement Agency claims that on 14
Taiwan. The parties met before the Bureau of July 1997, Mr. Huwang from Wacoal informed
Labor Affairs for a dialogue. There, Dipper Semi- Joy, without prior notice, that she was
Conductor ordered Aldovino and her co- terminated and that she should prepare for
workers to return to the Philippines as it was no immediate repatriation. Hence, Joy filed a
longer interested in their services. All of them complaint with the NLRC claiming that she was
returned to the Philippines. illegally dismissed.

They eventually filed before the Labor Arbiter a The NLRC declared that Joy was illegally
case for illegal termination, underpayment of dismissed, ruling that Sameer Overseas
salaries, human trafficking, illegal signing of Placement Agency failed to prove that there
papers, and other money claims. Respondents were just causes for termination. Sameer
argued that petitioners were not illegally Overseas Placement Agency counters that there
dismissed and that they voluntarily returned to was just cause for termination because there
the Philippines. Were petitioners illegally was a finding of Wacoal of Joy’s inefficiency,
dismissed? negligence in her duties, and failure to comply

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with the work requirements of her foreign Er. prerogative to dismiss. Dismissal is not affected by
Therefore, it claims that Joy’s dismissal was a criminal case. Under the Three-fold Liability Rule,
valid. Was Joy illegally dismissed? a single act may result in three liabilities, two of
which are criminal and administrative. To establish
A: YES. Security of tenure for labor is guaranteed by them, the evidence of the crime must amount to
our Constitution. With respect to the rights of proof beyond reasonable doubt; whereas, the
overseas Filipino workers, we follow the principle evidence of the ground for dismissal is substantial
of lex loci contractus. By our laws, overseas Filipino evidence only. In this regard, the company has some
workers may only be terminated for a just or basis already for withholding the trust it has
authorized cause and after compliance with reposed on its manager. Hence, Rico’s conviction
procedural due process requirements. Joy’s need not precede the employee’s dismissal.
dismissal less than one year from hiring and her
repatriation on the same day show not only failure 1. JUST CAUSES
on the part of Sameer Overseas Placement Agency
to comply with the requirement of the existence of
It is a termination initiated by the Ee. This is an
just cause for termination – they patently show that
exercise of management prerogative; however, it
the Ers did not comply with the due process
must not be exercised with abuse of discretion.
requirement. The abruptness of the termination
negated any finding that she was properly notified
While the law provides for a just cause to dismiss an
and given the opportunity to be heard. Her
Ee, the Er still has the discretion whether it would
constitutional right to due process of law was
exercise its right to terminate the employment or
violated. (Sameer Overseas Placement Agency v. Joy
not. (Santos v. Integrated Pharmaceutical, Inc., G.R.
Cabiles, G.R. No. 170139, 05 Aug. 2014)
No. 204620, 11 July 2016)

Three-fold Liability Rule

Basis

The "threefold liability rule" holds that the wrongful

As a measure of self-protection against acts inimical
acts or omissions of a person may give rise to civil,
to its interest, a company has the right to dismiss its
criminal and administrative liability, which may
erring Ees. An Er cannot be compelled to continue
proceed independently of one another, as in fact, the
employing an Ee guilty of acts inimical to the Er's
quantum of evidence required in each case is
interest, justifying loss of confidence in him. (Yabut
different. (Jose S. Ramiscal, Jr. vs. Commission on
v. Meralco, G.R. No. 190436, 16 Jan. 2012)
Audit, G.R. No. 213716)

Just Causes for Termination

Q: Rico has a temper and, in his work as Division
Manager of Matatag Insurance, frequently loses
1. Serious misconduct or willful disobedience by
his temper with his staff. One day, he physically
the Ee of the lawful orders of his Er or
assaults his staff member by slapping him. The
representative in connection with his work;
staff member sued him for physical injuries.
Matatag insurance decides to terminate Rico,
2. Gross and habitual neglect of duties by the Ee;
after notice and hearing, on the ground of loss of
trust and confidence. Rico claims that he is
3. Fraud or willful breach by the Ee of the trust
entitled to the presumption of innocence
reposed in him by his Er or duly organized
because he has not yet been convicted. Comment
representative;
on Matatag’s action in relation to Rico’s
argument. (2015 BAR)
4. Commission of a crime or offense by the Ee
against the person of his Er or any immediate
A: Matatag Insurance does not have to await the
result of the criminal case before exercising its

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2023 GOLDEN NOTES
 IV. POST-EMPLOYMENT
member of the latter’s family or his duly her way out of the faculty room, while he held
authorized representative; or the doorknob on the other side. When Paula Mae
5. Other causes analogous to the foregoing. (Art. stepped aside, Delos Reyes allegedly exclaimed
297, LC) the words “anak ng puta” and walked on without
any remorse, causing emotional trauma to Paula
SERIOUS MISCONDUCT AND WILLFUL Mae.
DISOBEDIENCE
Delos Reyes denied the accusations against him
Serious Misconduct and filed a counter-complaint against Paula Mae
for maligning and tarnishing his established
It is an improper or wrong conduct; the reputation in the university. A hearing was held
transgression of some established and definite rule and later, Delos Reyes was issued a Notice of
of action, a forbidden act, a dereliction of duty, Dismissal.
willful in character, and implies wrongful intent and
not mere error in judgment. To be serious within a. Was Delos Reyes validly dismissed?
the meaning and intendment of the law, the
misconduct must be of such grave and aggravated A: YES. A teacher exclaiming, "Anak ng puta" after
character and not merely trivial or unimportant. having encountered a student is an unquestionable
(Villamor Golf Club v. Pehid, G.R. No. 166152, 04 Oct. act of misconduct. However, whether it is serious
2005) misconduct that warrants the teacher's dismissal
will depend on the context of the phrase's use.
Elements
While uttering an expletive out loud in the spur of
1. It must be serious or of such a grave and the moment is not grave misconduct per se, the
aggravated character; refusal to acknowledge this mistake and the attempt
to cause further damage and distress to a minor
2. Must relate to the performance of the Ees’ student cannot be mere errors of judgment.
duties; and Petitioner's subsequent acts are willful, which
negate professionalism in his behavior. They
3. Ee has become unfit to continue working for the contradict a professor's responsibility of giving
Er. (Philippine Aeolus Automotive United Corp. v. primacy to the students' interests and respecting
NLRC, G.R. No. 124617, 28 Apr. 2000) the institution in which he teaches. In the interest of
self-preservation, petitioner refused to answer for
Examples: his own mistake; instead, he played the victim and
sought to find fault in a student who had no ill
1. Sexual harassment; motive against him. Indeed, had he been modest
2. Fighting within the company premises; enough to own up to his first blunder, petitioner's
3. Uttering obscene, insulting, or offensive case would have gone an entirely different way.
words against a superior;
4. Falsification of time records; or b. Did his dismissal constitute unfair labor
5. Gross immorality. practice?

Q: Delos Reyes was a university professor and A: NO. In Great Pacific Life Ees Union v. Great Pacific
the president of the university’s Faculty and Ees Life Assurance Corporation, the Court discussed that
Union, a duly registered labor union. An if the unfair treatment does not relate to or affect
administrative complaint for grave misconduct the workers' right to self-organize, it cannot be
was filed against him for using expletives at deemed unfair labor practice. A dismissal of a union
Paula Mae, a minor student at the university, officer is not necessarily discriminatory, especially
when the latter was holding the doorknob on

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when that officer committed an act of misconduct. these kinds of occasions, which are beyond the
In fact, union officers are held to higher standards. disciplinary authority of the Er. (Samson v. NLRC,
G.R. No. 121035, 12 Apr. 2000)
In this case, petitioner’s dismissal, which was Q: Cheryll Leus was a non-teaching personnel
brought about by his personal acts, does not employed in St. Scholastica’s College Westgrove
constitute unfair labor practice as provided under (SSCW). Cheryll and her boyfriend conceived a
the Labor Code. Dismissing him was not meant to child out of wedlock. SSCW dismissed her on the
violate the right of the university Ees to self- ground that her pregnancy out of wedlock
organize. Neither was it meant to interfere with the constitutes disgraceful and immoral conduct
Union's activities. Finally, petitioner cannot raise and ran counter to the moral principles that
the defense that he was the Union's president; this SSCW stands for and teaches its students. Does
does not make him immune from liability for his pregnancy out of wedlock (without a legal
acts of misconduct. (Adamson University Faculty and impediment to marry) constitute immoral
Ees Union, et al. v. Adamson University, G.R. No. conduct as a ground for dismissal contemplated
227070, 09 Mar. 2020) by law?

Q: Escando, upset at his transfer to the washer A: NO. It is an immoral conduct if such does not
section, repeatedly uttered “Gago ka” and conform to what society generally views as
threatened bodily harm to his superior Mr. respectable or moral. Substantial evidence must be
Andres. Is the utterance of the obscene words presented to prove that such conduct is considered
and threats of bodily harm gross and willful immoral. The two-step process to determine
misconduct? whether the conduct is immoral:

A: YES. The repeated utterances by Escando of 1. Consideration of the totality of the

obscene, insulting, or offensive words against a circumstances surrounding it; and
superior were not only destructive of the morals of 2. Assessment of said circumstances based on
his co-Ees and a violation of the company rules and the prevailing norms of conduct.
regulations, but also constitute gross misconduct,
which is one of the grounds provided by law to Pre-marital sexual relations between two
terminate the services of an Ee. (Autobus Workers consenting adults who have no impediment to
Union v. NLRC, G.R. No. 117453, 26 June 1998) marry each other, and, consequently, conceiving a
child out of wedlock, does not amount to a
Q: Samson made insulting and obscene disgraceful or immoral conduct.
utterances towards the General Manager saying,
“Si EDT bullshit yan, sabihin mo kay EDT yan” The Supreme Court further held that “when the law
among others during the Christmas party. Are refers to morality, it necessarily pertains to public
the utterances towards the General Manager and secular morality and not religious morality. And
gross misconduct? [F]or a conduct to be considered disgraceful or
immoral, it must be ‘detrimental to those conditions
A: The alleged misconduct of Samson when viewed upon which depends the existence and progress of
in its context is not of such serious and grave human society’ and not because the conduct is
character as to warrant his dismissal. Samson made prescribed by the beliefs of one religion or the
the utterances and obscene gestures at an informal other.” (Leus v. SSCW, G.R. No. 187226, 28 Jan. 2015)
Christmas gathering and it is to be expected during
this kind of gatherings, where tongues are often A teacher engaging in an extra-marital affair with
loosened by liquor of other alcoholic beverages, that another married person is a serious misconduct, if
Ees freely express their grievances and gripes not an immoral act. But a teacher falling in love with
against their Ers. Ees should be allowed wider her pupil and, subsequently, contracting a lawful
latitude to freely express their sentiments during marriage with him, though there is a disparity in

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 IV. POST-EMPLOYMENT
their ages and academic level cannot be considered the time of the incident. (Lagrosas v. Bristol Myers
as a defiance of contemporary social mores. (Chua- Squibb, G.R. No. 168637/170684, 12 Sept. 2008)
Qua v. Clave. G.R. No. 49549, 30 Aug. 1990) Additionally, there was no compliance with the
Q: Jose and Erica, former sweethearts, both rudimentary requirements of due process.
worked as sales representatives for Magna, a
multinational firm engaged in the manufacture Q: Rivera, a bus conductor of Genesis, was
and sale of pharmaceutical products. Although dismissed on account of a discrepancy in the
the couple had already broken off their amount he declared on bus ticket receipts. He
relationship, Jose continued to have special reported and remitted the amount of P198.00
feelings for Erica. One afternoon, Jose chanced instead of the admittedly correct amount of
upon Erica riding in the car of Paolo, a co-Ee and P394.00 worth of bus ticket receipts. He averred
Erica's ardent suitor; the two were on their way that it was an honest mistake, which he was
back to the office from a sales call on Silver Drug, unable to correct because the bus encountered
a major drug retailer. In a fit of extreme mechanical problems.
jealousy, Jose rammed Paolo's car, causing
severe injuries to Paolo and Erica. Jose's flare up Contending that this termination was arbitrary
also caused heavy damage to the two company- and not based on just causes for terminating
owned cars they were driving. As lawyer for employment, he filed a complaint for illegal
Magna, advise the company on whether just and dismissal. Genesis claimed that Rivera's
valid grounds exist to dismiss Jose. (2013 BAR) misdeclaration of the amount in the bus ticket
receipts and failure to remit the correct amount
A: Jose can be dismissed for serious misconduct, clearly violated Genesis' policies and amounted
violation of company rules and regulations, and to serious misconduct, fraud, and willful breach
commission of a crime against the Er’s of trust; thereby justifying his dismissal. Was
representatives. For misconduct to be serious and Rivera terminated with just cause?
therefore a valid ground for dismissal, it must be of
grave and aggravated character and not merely A: NO. Absent any other supporting evidence, the
trivial or unimportant and connected with the work error in a single ticket issued by petitioner can
of the Ee. hardly be used to justify the inference that he has
committed serious misconduct or has acted in a
Q: Assuming this time that Magna dismissed Jose manner that runs afoul of his Er's trust. Terminating
from employment for cause and you are the his employment on these unfounded reasons is
lawyer of Jose, how would you argue the manifestly unjust. The social justice suppositions
position that Jose's dismissal was illegal? (2013 underlying labor laws require that the statutory
BAR) grounds justifying termination of employment
should not be read to justify the view that bus
A: The offense committed by Jose did not relate to conductors should, in all cases, be free from any
the performance of his duties. For misconduct or kind of error. Not every improper act should be
improper behavior to be a just cause for dismissal, taken to justify the termination of employment.
it: (Rivera v. Genesis Transport Service Inc., and Moises,
a. Must be serious; G.R. No. 215568, 03 Aug. 2015)
b. Must relate to the performance of the Ee’s
duties; and Willful Disobedience
c. Must show that the Ee has become unfit to
continue working for the Er. There is willful disobedience when there is wanton
disregard to follow orders of the Er.
Based on the forgoing guidelines, it can be
concluded that Paolo was not guilty of serious Willful is characterized by a wrongful perverse
misconduct. He was not performing official work at mental attitude rendering the Ee’s act inconsistent

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with the proper subordination (Lakpue Drug Inc. v. Philippines, Inc. v. NLRC, et al., G.R. No. 106843, 20
Belga, G.R. No. 166379, 20 Oct. 2005) Jan. 1995)
The Ee’s disobedience must relate to substantial In case of a constructive dismissal, the Er has the
matters, not merely to trivial or unimportant burden of proving that the transfer and demotion of
matters. Disobedience to be considered willful must an Ee are for valid and legitimate grounds such as
be resorted to without regard to its consequences. genuine business necessity. Particularly, for a
(DOLE Manual; BLTB Co. v. CA, G.R. No. L-38482, 18 transfer not to be considered a constructive
June 1976; Family Planning Org. of the Phil. Inc. v. dismissal, the Er must be able to show that such
NLRC, G.R. No. 75907, 23 Mar. 1992) transfer is not unreasonable, inconvenient, or
prejudicial to the Ee; nor does it involve a demotion
Requisites in rank or a diminution of his salaries, privileges,
and other benefits. Failure of the Er to overcome
1. The Ees assailed conduct must have been this burden of proof, the Ee's demotion shall no
willful or intentional, the willfulness being doubt be tantamount to unlawful constructive
characterized by a wrongful and perverse dismissal. (SIMIFRU v. Baya, G.R. No. 188269, 17 Apr.
attitude; and 2017)

2. The disobeyed orders, regulations, or Disobeying an Order to Transfer

instructions of the Er must be:
The requisites for willful disobedience must be
a. Reasonable and lawful; observed with greater prudence before dismissing
b. Sufficiently known to the Ee; and an Ee who disobeys an order transferring him from
c. In connection with the duties which the one job or one location to another. The disobedience
Ee has been engaged to discharge. and the consequent dismissal may or may not be
(Cosep v. NLRC, G.R. No. 124966, June 16, valid depending on the presence of the two
1998; Realda v. New Age Graphics, G.R. requisites. Disobedience of a valid transfer order
No. 192190, 25 Apr. 2012) may justify dismissal; disobedience of an invalid
transfer does not.(Azucena, 2016)
Valid Transfer
NOTE: The refusal to obey a valid transfer order
GR: Management has the right to transfer or constitutes willful disobedience of a lawful order of
reassign an Ee. The right of the Er to transfer the Ees an Er. Ees may object to, negotiate, and seek redress
in the interest of the efficient and economic against Ers for rules or orders that they regard as
operation of its business cannot be seriously unjust or illegal. However, until and unless these
challenged. rules or orders are declared illegal or improper by
competent authority, the Ees ignore or disobey
XPN: Where the transfer is vitiated by improper them at their peril. But transfer should not result to
motive and is merely a disguised attempt to remove demotion of rank, which is tantamount to
or punish the Ee sought to be transferred. constructive dismissal. (Manila Pavilion Hotel v.
(Associated Labor Unions v. NLRC, G.R. Nos. 76916- Henry Delada. G.R. No. 189947, 25 Jan. 2012)
17, 31 Mar. 1983)
Disobedience of an Inconvenient Transfer
Invalid Transfer
GR: Inconvenience to the Ee does not necessarily
The right to transfer personnel should not be used invalidate a transfer order.
as a subterfuge by the Er to rid himself of an
undesirable worker. Nor when the real reason is to NOTE: The transfer from one city to another within
penalize an Ee for his union activities and thereby the country is valid if there is no bad faith on the
defeat his right to self-organization. (Pocketbell part of the Er. (Homeowners Savings and Loan

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Association, Inc. v. NLRC, et al., G.R. No. 97067, 26 (CSR) and assigned her to its Capital One
Sept. 1996) account. Later, Mariphil became a regular Ee.
XPN: Inconvenience caused by unreasonableness of Later on, Mariphil wrote to ICT’s Vice President
the transfer order makes the order itself invalid, and complaining about supposed irregularities in
disobedience thereof is not a reason to dismiss the the handling of funds entrusted to ICT by
worker. Washington Mutual. However, no action
appears to have been taken on her complaint.
NOTE: The reasonableness and lawfulness of a rule, Mariphil was then transferred to the Bank of
order, or instruction depend on the circumstances America account where she was required to
availing in each case. Reasonableness pertains to attend a training seminar for six days. On the
the kind or character of directives and commands third day of training, Mariphil was unable to
and to the manner through which they are made. attend.
(Escobin et al. v. NLRC et al., G.R. No. 118159, 15 Apr.
1998) When she reported for training the next day,
Mariphil was informed that she could not be
Q: Is refusal to a promotion by an Ee an act of certified to handle calls for Bank of America due
insubordination or willful disobedience? to her failure to complete the training. From
then on, she was placed on "floating status" and
A. NO. There is no law that compels an Ee to accept was not given any work assignment. After a
a promotion because a promotion is a gift or reward, month, the HR Manager tendered her
which a person has the right to refuse. The exercise resignation from work, effective upon receipt of
of the Ee of the right to refuse a promotion cannot the letter. Hence, Mariphil filed a complaint for
be considered in law as insubordination or willful constructive dismissal against ICT. Did ICT
disobedience. (PT&T Corp. v. CA, G.R. No. 152057, 29 constructively dismiss Mariphil?
Sept. 2003)
A: YES. In causing respondent's transfer, petitioner
Q: Escobin’s group were security guards based clearly acted in bad faith and with discrimination,
in Basilan. They were placed in floating status insensibility, and disdain; the transfer was effected
and were asked to report for reassignment in as a form of punishment for her raising a valid
Metro Manila by PISI. Upon failure to report or grievance related to her work. Furthermore, said
respond to such directives, they were ordered transfer was obviously unreasonable, not to
dismissed from employment by PISI for willful mention contrary to experience, logic, and good
disobedience. Did the failure to report to Manila business sense. This being the case, the transfer
amount to willful disobedience? amounted to constructive dismissal. The
managerial prerogative to transfer personnel must
A: NO. The reasonableness of the rule pertains to be exercised without grave abuse of discretion,
the kind or character of directives and commands bearing in mind the basic elements of justice and
and to the manner through which they are made. In fair play. (ICT Marketing Services, Inc. v. Mariphil L.
this case, the order to report to the Manila office fails Sales. G.R. No. 202090, 09 Sept. 2015)
to meet this standard. The order to report to Manila
was inconvenient, unreasonable, and prejudicial to GROSS AND HABITUAL NEGLECT OF DUTIES
Escobin’s group since they are heads of families
residing in Basilan and they were not given It implies a want or absence of or failure to exercise
transportation money or assurance of availability of diligence that an ordinary prudent man would use
work in Manila. (Escobin v. NLRC, G.R. No. 118159, 15 in his own affairs.
Apr. 1998)
Significantly, in order to constitute a just cause for
Q: ICT Marketing Services, Inc. hired respondent the Ees’ dismissal, the neglect of duties must not
Mariphil as its Customer Service Representative only be gross but also habitual. Thus, the single or

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isolated act of negligence does not constitute a just dismissal is quite severe considering that Antiola
cause for the dismissal of the Ee. (National committed the infraction for the first time. (Judy
Bookstore v. CA, G.R. No. 146741. 27 Feb 2002) Phils. v. NLRC, G.R. No. 111934, 29 Apr. 1998)

Degree of Negligence as a Just Cause for Q: Dolora and Merlinda are Ees of Rustan’s
Termination Makati, assigned as Inventory Specialists at the
Cosmetics, Perfumeries & Toiletries (CP & T)
GR: Gross and habitual negligence. stockroom of Rustan’s Department Store. When
there was shortage in the inventory of the CP&T
a. Gross neglect has been defined as the want or merchandise, Rustan’s sent Notices to Explain to
absence of or failure to exercise slight care or Dolora and Merlinda in reference to a report
diligence, or the entire absence of care. It provided concerning the variance in the
evinces a thoughtless disregard of inventory of concerned beauty cosmetics
consequences without exerting any effort to merchandise. Accordingly, Dolora and Merlinda
avoid them. (NBS v. Court of Appeals. G.R. No. were required "to explain why they should not
146741, 27 Feb. 2002) be held accountable for the losses of petitioner
due to the aforementioned shortage and why no
b. Habitual neglect implies repeated failure to appropriate action should be taken against
perform one’s duties over a period of time, them." Dolora and Merlinda were initially
depending upon the circumstance. (JGB and served with notices of suspension, followed by
Associates v. NLRC, G.R. No. 10939, 07 Mar. 1996) their termination from employment, allegedly
for gross and habitual neglect of duty. Is there
XPN: An Ee who was grossly negligent in the just cause for the dismissal of Dolora and
performance of his duty, though such negligence Merlinda?
committed was not habitual, may be dismissed
especially if the grossly negligent act resulted in A: YES. In any case, while the rule is that a single or
substantial damage to the company. (LBC Express v. isolated act of negligence is not sufficient to
Mateo. G.R. No. 168215, 09 June 2009) constitute a just cause for the dismissal of the Ee, the
same, however, is not absolute. An infraction, even
NOTE: To justify the dismissal of an Ee for neglect if not habitual, may warrant a dismissal under
of duties, it does not seem necessary that the Er appropriate circumstances. In this case, the Court
show that he has incurred actual loss, damage or finds, under the circumstances pertaining herein,
prejudice by reason of the Ee’s conduct. It is that it was just and reasonable for petitioner to
sufficient that the gross and habitual neglect by the dismiss respondents even, assuming, that it was the
Ee of his duties tends to prejudice the Er’s interest first time that they committed the infraction. The
since it would be unreasonable to require the Er to Court considers two important factors. First is the
wait until he is materially injured before removing quantity and the substantial amount or value of the
the cause of the impending evil. (DOLE Manual, Sec. merchandise lost, amounting to P509,044.00.
4343.01 (27)) Second, respondents' position is necessarily one of
trust and confidence. Petitioner cannot legally be
Q: Antiola, as assorter of baby infant dress for compelled to continue with the employment of
Judy Phils., erroneously assorted and packaged respondents who are entrusted with the care,
2,680 dozens of infant wears. Antiola was custody, and safekeeping of high-end cosmetic
dismissed from employment for this infraction. products, but who just committed gross negligence
Does the single act of misassortment constitute which resulted to missing assigned products
gross negligence? amounting to an enormous amount of around half a
million pesos. Clearly, respondents' continued
A: NO. Such neglect must not only be gross but also tenure is patently inimical to the petitioner's
habitual in character. Hence, the penalty of business interest. (Rustan’s Commercial Corporation

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v. Dolora F. Raysag and Merlinda S. Entrina, G.R. No. enumerated under Art. 297. (Skippers United Pacific
219664, 12 May 2021) v. Magud, G.R. No. 166363, 15 Aug. 2006)

Failure in Performance Evaluations Q: Gamido was a quality control inspector of VH

Manufacturing. Gamido was allegedly caught by
As a general concept, “poor performance” is the company Pres. Dy Juanco of sleeping and was
equivalent to inefficiency and incompetence in the dismissed from employment. Did Gamido’s act
performance of official duties. The fact that an Ee’s of sleeping on the job constitute a valid cause of
performance is found to be poor or unsatisfactory dismissal?
does not necessarily mean that the Ee is grossly and
habitually negligent of his duties. Gross negligence A: NO. Sleeping on the job as a valid ground for
implies a want or absence of or failure to exercise dismissal only applies to security guards whose
slight care of diligence or the entire absence or care. duty necessitates them to be always awake and
He evinces a thoughtless disregard of consequences watchful. Gamido’s single act of sleeping further
without exerting any effort to avoid them. (Eastern shows that the alleged negligence or neglect of duty
Overseas Employment Center Inc. v. Bea, G.R. 143023, was neither gross nor habitual. (VH Manufacturing
29 Nov. 2005) v. NLRC, G.R. No. 130957, 19 Jan. 2000)

“Unsatisfactory Rating” can be a just cause for Q: A, a duty manager was dismissed for alleged
dismissal only if it amounts to gross and habitual loss of trust and confidence in his ability to
neglect of duties. (Azucena, 2016) perform his duties. This is based on the fact of
his willful concealment of an accidental light-up
Requisites of Poor Performance as a Ground for aircraft and failure to observe the safety
Termination guidelines and precautions with respect to
aircraft towing, where he allegedly misinformed
1. Er must prove that it has set standards of his immediate supervisor on a report “based on
performance expected of the Ee; his personal findings.” Was A illegally
dismissed?
2. The standards must have been made known to
the Ee; A: YES. The requisites for dismissal on the ground
of loss of trust and confidence are: (1) the Ee
3. These standards must be reasonable and in concerned must be holding a position of trust and
connection with the Ee’s work; and confidence; (2) there must be an act that would
justify the loss of trust and confidence; and (3) such
4. There must be proof that the Ee failed to meet loss of trust relates to the Ee's performance of
the standards despite the given reasonable duties.
opportunity to meet the same.
In the instant case, petitioners failed to substantially
Inefficiency as a Just Cause for Dismissal prove the second requisite (i.e., there must be an act
that would justify the loss of trust and confidence).
Failure to observe prescribed standards of work or The facts that he transmitted in the report were the
to fulfill reasonable work assignments due to most precise information that he could gather at
inefficiency may constitute just cause for dismissal. that time. He could not immediately conclude that
Such inefficiency is understood to mean failure to there was an accidental light-up because the same
attain work goals or work quotas, either by failing had to be eventually confirmed using a boroscope.
to complete the same within the allotted reasonable (Lufthansa Technik Philippines, Inc., Antonio
period, or by producing unsatisfactory results. Loquellano and Arturo Bernal v. Roberto Cuizon, G.R.
(Buiser v. Leogardo, G.R. No. L-63316, 31 July 1984) No. 184452. February 12, 2020, as penned by J.
This ground is considered analogous to those Hernando)

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Some Forms of Neglect of Duty termination. There is still a need to observe the two-
notice rule and opportunity to be heard
1. Habitual tardiness and absenteeism; requirement. (New Puerto Commercial v. Lopez, G.R.
NO. 169999, 26 July 2010)
2. Abandonment:
Q: Mejila, a barber at Windfield Barber Shop,
a. Failure to report for work or absence had an altercation with a fellow barber, which
without justifiable reason; and resulted in his subsequent turning over the
duplicate keys of the shop to the cashier, took
b. Clear intention to sever Er-Ee away all his belongings therefrom, and worked
relationship manifested by some overt at different barbershop. Mejila then filed an
acts. (Labor et. al v. NLRC, G.R. No. illegal dismissal case but did not seek
110388, 14 Sept. 1995) reinstatement as a relief. Did Mejila commit
abandonment?
Abandonment as a Just Cause for Termination
A: YES. Mejila’s acts such as surrendering the shop’s
It means deliberate and unjustified refusal of an Ee keys, not reporting to the shop anymore without
to resume his employment. any justifiable reason, his employment in another
barber shop, and the filing of a complaint for illegal
Requirements for a Valid Finding of dismissal without praying for reinstatement clearly
Abandonment show that there was a concurrence of the intention
to abandon and some overt acts from which it may
Two factors must be present: be inferred that the Ee concerned has no more
interest in working. (Jo v. NLRC, G.R. No. 121605, 02
1. The failure to report for work, or absence Feb. 2000)
without valid or justifiable reason; and
Q: The Ees averred that they were underpaid
2. A clear intention to sever Er-Ee relationship, and filed a complaint for money claims against
with the 2nd element as the more the Er before the LA. As a result of their
determinative factor, being manifested by some complaint, they were relieved from their posts
overt acts. (Sta. Catalina College v. NLRC, G.R. No. and were not given new assignments despite the
144483, 19 Nov. 2003) lapse of six months. On the other hand, the Er
maintains that the Ees were not dismissed but
How to Prove Abandonment were merely transferred to a new post and
voluntarily abandoned their jobs when they
Abandonment is proven when the Er has shown that failed to report for duty in the new location.
the Ee deliberately and unjustifiably refused to Upon termination, the Ee moved to file a joint
resume his employment without any intention of complaint for illegal dismissal. Is there a valid
returning. There must be a concurrence of the indication of abandonment from work?
intention to abandon and some overt acts from
which an Ee may be deduced as having no more A: NO. For abandonment of work to fall under Art.
intention to work. The law, however, does not 297 of the LC, as amended, as gross and habitual
enumerate what specific overt acts can be neglect of duties there must be the occurrence of
considered as strong evidence of the intention to two elements: first, there should be a failure of the
sever the Ee-Er relationship. (Sta. Catalina College v. Ee to report for works without a valid or justifiable
NLRC, G.R. No. 144483, 19 Nov. 2003) reason and second, there should be a showing that
the Ee intended to sever the Er-Ee relationship, the
NOTE: In case of abandonment, the ER is still second element being the more determinative
required under the law to notify the Ee of his factor as manifested by overt acts.

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The Er cannot simply conclude knowledge that an adduce clear evidence of the Ee's "deliberate,
Ee is ipso facto notified of a transfer when there is unjustified refusal to resume employment,'' which
no evidence to indicate that the Ee had knowledge is manifested through the Ee's overt acts. (Demex v.
of the transfer order. Hence, the failure of an Ee to Leron, G.R. No. 204288, 08 Nov. 2017)
report for work at the new location cannot be taken
against him as an element of abandonment. In Q: Bulatao was the Senior VP of the IT Group of
addition to these tests for valid transfer, there PNB. PNB's President and one Mr. Roy
should be proper and effective notice to the Ee announced the conclusion of a Joint Venture
concerned. It is the Er’s burden to show that the Ee Agreement (JVA) between PNB and Mr. Roy. It
was duly notified of the transfer. Verily, an Er cannot was announced that not all IT staff would be
reasonably expect an Ee to report for work in a new retained; everyone had to undergo a test as a
location without first informing said Ee of the prerequisite for absorption. Those who would
transfer. (Alert Security and Investigation Agency, not be absorbed would be offered retirement
Inc. et al v. Saidali Pasawilan, et al., G.R. No. 182397, packages.
14 Sept. 2011)
Bulatao objected because of the supposed huge
Q: Leron was hired as a weaver by Demex. He is capital exposure on PNB's end so he manifested
paid on a piece-rate basis and is contracted his intent to retire in a letter dated 10 Nov. 1999.
through job orders. He worked from Monday to
Saturday, but there were times when he was On 26 Dec. 1999, Bulatao had a meeting with a
required to work on Sundays. Leron received his member of the Board who asked him to
wages at the end of every week but he never reconsider and join the latter’s management
received standard benefits such as 13th month team. So he went back to work on 01 Jan. 2000.
pay, service incentive leave, rest day pay, As the Board had not yet acted on his application
holiday pay, and overtime pay. Later, Leron was for retirement, he withdrew it in a
dismissed, thus, he filed a complaint for illegal Memorandum dated 25 Jan. 2000.
dismissal. Demex justifies Leron’s dismissal on
the ground of abandonment, arguing that The HR then informed him not to report for
Leron’s unauthorized absences, non- work as the Board already accepted his
compliance with the return-to-work notices, "resignation." Bulatao filed a Complaint for
and alleged act of crumpling the first return-to- Illegal Termination of Appointment and
work notice are indicators of his intention to Damages with RTC.
sever his employment. Was there a valid
dismissal? Thereafter, he received a letter informing him
that the Board, by virtue of Resolution No. 38 of
A: NO. The dismissal was invalid because Demex’s 28 Jan. 2000, approved and confirmed the
evidence does not clearly establish a case of acceptance of his resignation (as the Board
abandonment. It failed to prove the second element treated his application for retirement as a
of abandonment. Abandonment of work has been resignation).
construed as a “clear and deliberate intent to
discontinue one's employment without any The RTC concluded that Bulatao abandoned his
intention of returning back." To justify the dismissal employment. The CA held that Bulatao was
of an Ee on this ground, two (2) elements must illegally dismissed.
concur, namely: "(a) the failure to report for work
or absence without valid or justifiable reason; and Was there abandonment?
(b) a clear intention to sever the Er-Ee relationship."
A: NO. To establish abandonment, the Er must
Mere failure to report to work is insufficient to prove that 1) the Ee must have failed to report for
support a charge of abandonment. The Er must work or must have been absent without valid or

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justifiable reason; and 2) that there must have been A: The contention of King Chef’s General Manager is
a clear intention on the part of the Ee to sever the unmeritorious. For the claim that Santos and
Er-Ee relationship manifested by some overt act. Salmasan went AWOL, the Er must prove that first,
the Ee "failed to report for work for an unjustifiable
In this case, it was clear in Bulatao's letter that he reason," and second, the "overt acts showing the
was taking an official leave of absence following his Ee's clear intention to sever their ties with their Er."
statement that he was taking the bank's offer to
retire. Moreover, his taking up the offer to retire did In the present case, was no showing here that
not stem from Bulatao's desire to willingly and Santos and Salmasan’s absences were due to
unconditionally cut ties with PNB but because of the unjustifiable reason, or that petitioners clearly
JVA which he believed to be disadvantageous to intended to terminate their employment. Thus,
PNB. To add, Bulatao withdrew his application to there is no abandonment present. (Santos, Jr. v. King
retire before the Board "approved" his application Chef, et. al., G.R. No. 211073, November 25, 2020, as
to "resign." Indeed, "there must be a positive and penned by J. Hernando)
overt act signifying an Ee's deliberate intent to sever
his or her employment," which is wanting. Gross Negligence vs. Habitual Neglect

Further, filing an illegal dismissal case is The former connotes want of care in the
inconsistent with abandonment, as in his complaint, performance of one’s duties while the latter implies
Bulatao prayed for reinstatement. PNB failed to repeated failure to perform one’s duties over a
show that Bulatao had a clear and deliberate intent period of time, depending upon the circumstances.
to sever his employment without any intention of (Azucena, 2016)
returning (Philippine National Bank v. Manuel C.
Bulatao, G.R. No. 200972, December 11, 2019, as FRAUD OR WILLFUL BREACH OF TRUST
penned by J. Hernando).
Fraud
Q: Santos and Salmasan were employed by King
Chef. On 25 Dec. 2011, Santos rendered only a Fraud, in its general sense, is deemed to comprise
half day work without prior authorization. anything calculated to deceive, including all acts,
Salmasan, on the other hand, did not report at omissions, and concealment involving a breach of
all. They claimed that in view thereof, they were legal or equitable duty, trust, or confidences justly
dismissed from employment. They averred that reposed, resulting in damage to another, or by
when they tried to report for work, their chief which an undue and unconscientious advantage is
cook told them that they were already taken of another. Deceit is a species of fraud. (Galvez
terminated. v. CA, G.R. No. 187919, 25 Apr. 2012)

King Chef through his General Manager averred Willful Breach of Trust
that Santos and Salmasan violated the
memorandum informing the Ees of King Chef A breach is willful if it is done intentionally,
that no absences would be allowed on Dec. 25, knowingly, and purposely without justifiable
26, 31 and Jan. 1 unless justified. After excuse, as distinguished from an act done carelessly,
petitioners failed to report for work on 25 Dec. thoughtlessly, heedlessly, and inadvertently.
2011, and returned the following day merely to (Austria v. NLRC, G.R. No. 124382, 06 Aug. 1999) But
get their share in the accrued tips, they allegedly loss of trust or confidence can be based on gross
went on absence without leave (AWOL) for the negligence. (School of the Holy Spirit of Quezon City
rest of the Christmas season. Rule on the v. Taguiam, G.R. No. 165565, 14 July 2008)
contention of King Chef’s General Manager on
the matter of AWOL.

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Requisites of Fraud or Willful Breach of Trust NOTE: The mere existence of a basis for the
loss of trust and confidence justifies the
1. There must be an act, omission, or dismissal of the managerial Ee because
concealment; when an Ee accepts a promotion to a
managerial position or to an office
2. The act, omission, or concealment involves a requiring full trust and confidence, such Ee
breach of legal duty, trust, or confidence justly gives up some of the rigid guaranties
reposed; available to ordinary workers. (Cecilia T.
Manese v. Jollibee Foods Corporation, G.R.
3. It must be committed against the Er or his/her No. 1704 54, 11 Oct. 2012)
representative; and
b. Ees routinely charged with the care and
4. It must be in connection with the Ee’s work. custody of the Er’s money or property – To
this class belong cashiers, auditors,
Loss of Confidence property custodians, etc., or those who, in
the normal and routine exercise of their
There is loss of confidence when the Er has functions, regularly handle significant
reasonable ground or has basis to believe that the amounts of money or property. (Mabeza v.
Ee is responsible for the misconduct and the nature NLRC, G.R. No. 118506, 18 Apr. 1997)
of his participation renders him unworthy of the
trust and confidence demanded by his position. 2. The loss of trust and confidence must be based
Proof beyond reasonable doubt it not required. on willful breach.
(Jerusalem v. Keppel Monte Bank, G.R. No. 169564, 06
Apr. 2011) A breach is willful if it is done intentionally,
knowingly, and purposely without justifiable
Loss of Trust and Confidence as a Just Cause for excuse, as distinguished from an act done
Termination: carelessly, thoughtlessly, heedlessly, or
inadvertently. (Dela Cruz v. NLRC, G.R. No.
1. It applies only to cases involving: 119536, 17 Feb. 1997)

a. Ees occupying positions of trust and 3. The act constituting the breach must be “work-
confidence (confidential and managerial related” such as would show the Ee concerned
Ee’s) – To this class belong managerial Ees, to be unfit to continue working for the Er.
i.e., those vested with the powers or (Gonzales v. NLRC, G.R. No. 131653, 26 Mar.
prerogatives to lay down management 2001)
policies and/or to hire, transfer, suspend, 4. It must be substantial and founded on clearly
lay-off, recall, discharge, assign or established facts sufficient to warrant the Ee’s
discipline Ees or effectively recommend separation from employment. (Sulpicio Lines
such managerial actions. Inc. v. Gulde, G.R. No. 149930, 22 Feb. 2002)

Position of trust and confidence is one 5. Fraud must be committed against the Er or his
where a person is entrusted with representatives, e.g.:
confidence on delicate matters, or with the
custody, handling, or care and protection of a. Falsification of timecards
the Er’s property. (Pandoy v. NLRC, G.R. No. b. Theft of company property
67664, 20 May 1992) and/or funds. c. Unauthorized use of company vehicle
(Gonzales v. NLRC, G.R. No. 131653, 26 Mar.
2001) NOTE: The treatment of rank-and-file personnel
and managerial Ees in so far as the application of the

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doctrine of loss of trust and confidence is concerned CELIZ for serious breach of trust and confidence.
is different. As regards managerial Ees, such as CELIZ filed for illegal dismissal. Is the dismissal
Caoile, mere existence of a basis for believing that of CELIZ due to breach of trust and confidence
such Ee has breached the trust of his Er would valid?
suffice for his dismissal. (Caoile v. NLRC, G.R. No.
115491, 24 Nov. 1998) A: YES. The dismissal of CELIZ due to breach of trust
and confidence was valid. In cases of dismissal for
Guidelines for the Doctrine of Loss of Confidence breach of trust and confidence, proof beyond
to Apply reasonable doubt of an Ee's misconduct is not
required. It is sufficient that the Er had reasonable
1. Loss of confidence should not be simulated ground to believe that the Ee is responsible for the
(reasonable basis for loss of trust and misconduct, which renders him unworthy of the
confidence); trust and confidence demanded by his position. The
Court, upon review of the records of the case, found
2. Not used for subterfuge for causes which are that contrary to CELIZ’s contention, there was
improper and/or illegal or unjustified; substantial evidence showing that the subject cash
advances were properly attributed to CELIZ and
3. Not arbitrarily asserted in the face of that she failed to liquidate the same. In short, there
overwhelming evidence to the contrary; was just cause to dismiss her from the service. (Celiz
v. Cord Chemicals, Inc., G.R. No. 200352, 20 July 2016)
4. Must be genuine, not a mere afterthought to
justify earlier action taken in bad faith; and Q: Is “Attitude Problem” a Just Cause to Dismiss
an Ee?
5. The Ee involved holds a position of trust and
confidence. (Ramos v. Court of Appeals, G.R. No. A: YES. An Ee’s attitude problem is a valid ground
145405, 29 Jun. 2004) for termination. It is a situation analogous to loss of
trust and confidence that must be duly proved by
Q: Is pecuniary gain a necessary element of the Er. Similarly, compliance with the twin
termination on account of loss of trust? requirement of notice and hearing must also be
proven by the Er. (Azucena, Vol. II, 2016, p. 851)
A: NO. Even the return of misappropriated funds (Heavylift Manila v. CA, G.R. No. 154410, 20 Oct.
will not negate valid dismissal for breach of trust. 2005)
The Court has held that misappropriation of
company funds, although the shortage has been Q: Mac was employed as a part-time teacher and
fully restored, is valid ground to terminate the comptroller of Elysen College. A committee was
services of an Ee of the company for losss of trust created to formulate a new "ranking system for
and confidence. (Santos v. San Miguel Corporation, non-academic Ees for school year 2020-2021.
G.R. No. 149416, 14 March 2003) He then directed to arrange a salary adjustment
schedule for the new ranking system to the
Q: Mary June CELIZ worked as Chief of Sales committee organized.
concurrent with her position as Senior
Operations Manager with CORD, INC. Celiz then Later, he obtained his Ee ranking slip which
asked that she be allowed to resign. However, showed his evaluation score and the change of
upon clearance, the Accounting Department his rank "from office head to middle manager-
said that CELIZ need to account the unliquidated level IV', this was prepared however without
advances amounting to P713,471.00. She prior approval from the Human Resource
liquidated her advances, but her accounting fell Department. On 25 July 2020, Elysen College
short of P445,272.93. Upon her failure to notified Mac of its decision to terminate his
account her advances, CORD, INC. dismissed

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services for serious misconduct and loss of trust caught in possession of goods after alighting
and confidence. from the aircraft. Mary handed to Lal a plastic
bag containing a 1.5 liter Evian water bottle and
Upon receipt of the termination letter that reads a pile of magazines confiscated from Lamadrid
"For this reason, you are advised to explain or as well as the photocopy of the latter's passport.
show cause why your employment with Elysen Cathay Pacific asked Lamadrid to explain.
College will not be terminated for Serious
Misconduct due to intentional misclassification Lamadrid denied the allegations against her.
or miscomputation of your salary and some Ees She claimed that the Hello magazine which was
named hereunder, thereby causing prejudice confiscated from her was not Cathay's property.
not only to the school but also to said Ees as She clarified that she brought and declared the
well", Mac immediately filed before Executive bottle of Evian water as her own. She denied
Labor Arbiter. Was Mac illegally dismissed? having committed serious misconduct, and
demanded that the items taken from her be
A: NO. Mac was validly dismissed based on loss of preserved following a fair and transparent
trust and confidence. Mac was not an ordinary rank- investigation. Cathay then informed Lamadrid
and-file Ee. His position of responsibility on delicate of the termination of her services effective
financial matters entailed a substantial amount of immediately for committing serious misconduct
trust from respondent. The preparation of the by removing company property without
payroll is a sensitive matter requiring attention to authorization. According to Cathay, it could no
detail. The alleged misconduct for loss of trust and longer repose its trust and confidence on
confidence is sufficient to warrant the dismissal of petitioner considering the seriousness of her
fiduciary rank-and-file Ees. However, mere violation. Hence, Lamadrid instituted a
existence of a basis for believing that the Ee has complaint for illegal dismissal. Was Lamadrid
breached the trust and confidence of the Er is illegally dismissed?
sufficient for managerial Ees.
A: YES. Lamadrid's position as a Senior Purser is
A formal hearing only becomes mandatory in imbued with trust and confidence. Ees can be
termination cases when so required under company terminated only for just or authorized cause. Article
rules or when the Ee requests for it. "To be heard" 297 (now 282) of the LC enumerates the just causes
does not mean verbal argumentation alone because for dismissal, among others, fraud, or willful breach
one may be heard just as effectively through written by the Ee of the trust reposed in him by his Er or
explanations, submissions or pleadings. In this case, duly authorized representative.
respondent complied with all the requirements of
procedural due process in terminating petitioner's Lamadrid's infraction was clearly a case of
employment, it furnished a show cause memo misconduct considering that it is a dereliction of
stating the specific grounds for dismissal and duty, willful in character, and implies wrongful
required him to answer the charges by submitting a intent and not mere error in judgment. It evidently
written explanation. (Yolando Bravo v. Urios College eroded Cathay's trust and confidence in her.
Now Father Saturnino Urios University, G.R. No. However, while the weight of evidence points to
198066, 07 June 2017) Lamadrid's infraction of company policy, it should
also be considered that this is Lamadrid's first
Q: Salvacion A. Lamadrid was a cabin crew of infraction in her 17 years of service in the airline
Cathay Pacific, serving the airlines for about 17 which involved a mere bottle of water. Concededly,
years. On 19 May 2007, Donald Lal (Lal), Airport the company laid down the penalties for violation of
Services Officer of Cathay in Sydney Airport, its policies; however, the evaluation of an Ee's
received a report from Customer Officer Mary infraction should be dealt with fairness and reason.
Greiss (Mary) that some crew members of Simply put, all surrounding circumstances must be
Cathay flight CX 139, including Lamadrid, were considered, and the penalty must be commensurate

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to the violation committed by an Ee. Termination of habitual absenteeism without leave constitutes
the services of an Ee should be the Er's last resort gross negligence. Secondly, such leaves were so few
especially when other disciplinary actions may be to be characterized as a reckless disregard for the
imposed, considering the Ee's long years of service safety of the company.
in the company, devoting time, effort, and
invaluable service in line with the Er's goals and As to the second ground, the company also failed to
mission, as in Lamadrid's case. present substantial evidence that would show that
the company gave clear verbal instructions
During Lamadrid's span of employment, she did not regarding the preparation of deposit slips. For
commit any infraction or was ever sanctioned willful disobedience to be a valid cause, these two
except in the incident subject of the present elements must concur: (1) the Ee’s assailed conduct
controversy. To impose a penalty as grave as must have been willful or intentional; and (2) the
dismissal for a first offense and considering the order violated must have been reasonable, lawful,
value of the property allegedly taken would be too made known to the Ee, and must pertain to the
harsh under the circumstances. Therefore, duties which he had been engaged to discharge.
Lamadrid was illegally dismissed from service.
(Lamadrid v. Cathay Pacific Airways Limited, G.R. No. As to the last ground, loss of trust and confidence
200658, 23 June 2021) may be a just cause for termination only upon proof
that: (1) the dismissed Ee occupied a position of
Q: Ballesteros worked as an administrative staff trust and confidence; and (2) the dismissed Ee
for SPID Corp. The Personnel Officer of SPID, committed an act justifying the loss of trust and
Castro, talked to Ballesteros and told her that confidence. The first element was met because she
the President and Chief Executive Officer was held a position of trust and confidence. However,
asking for her resignation because she was the second element was never established in the
pregnant. In March 2011, Ballesteros gave birth proceedings before the NLRC and the CA. (Systems
and availed of the maternity leave. While still on and Plan Integrator and Development Corporation
maternity leave, the company informed her of vs. Michelle Elvi Ballesteros, G.R. No. 217119, April 25,
her termination from the service. On the other 2022, as penned by J. Hernando)
hand, the company alleged that Ballesteros’
employment was terminated based on her COMMISSION OF A CRIME OR OFFENSE
incompetence and inefficiency in the
performance of duties, open and willful This refers to an offense committed by the Ee
disobedience, and loss of trust and confidence. against the person of his Er or any immediate
Is Ballesteros validly terminated from member of his family or his duly authorized
employment? representative and thus, conviction of a crime
involving moral turpitude is not analogous thereto
A: NO. For a dismissal from employment to be valid, as the element of relation to his work or to his Er is
it must be pursuant to either a just or an authorized lacking.
cause under Arts. 297, 298, or 299 of the LC. Here,
the company dismissed Ballesteros based on three Requisites
just causes: (a) habitual leaves of absence or gross
habitual neglect of duty; (b) open and willful 1. There must be an act or omission
disobedience; and (c) loss of trust and confidence. punishable/prohibited by law; and

As to the first ground, the company failed to present 2. The act or omission was committed by the Ee
substantial evidence to prove that Ballesteros was against the person of the Er, any immediate
indeed habitually absent. All the leaves she incurred member of his/her family, or his/her duly
were deducted from her earned leave credits, which authorized representative. (Sec. 5.2(f), D.O. No.
she was entitled to over the course of her work. Only 147-15)

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An Er’s immediate family shall refer to the 7. Theft of company property;
spouse, ascendants, descendants or legitimate, 8. Theft of property owned by co-Ee;
natural, or adopted brothers or sisters of the 9. Failure to attain work quota; and
Er or of his relative by affinity in the same 10. Attitude problem. (Chan, 2019)
degrees, and those by consanguinity within
the fourth civil degree. (Art. 11(2), RPC) NOTE: To fall within the ambit of “analogous cases”
the act or omission must have an element like those
NOTE: A criminal case need not be filed. found in the specific Just cause enumerated under
Commission of acts constituting a crime itself is Art. 297. (International Rice Research Institute v.
sufficient. (National Labor Union, Inc. v. Standard NLRC, G.R. No. 97239, 12 May 1993)
Vacuum Oil Company. G.R. No. L-48170, 10 Oct. 1941)
Qualification under D.O. 147-15
Conviction not a Condition Sine Qua Non
D.O. No. 147-15 amends the IRR of Book IV. The last
The conviction of an Ee in a criminal case is not sentence in Sec. 5.2(g) states, “No act or omission
indispensable to warrant his dismissal by his Er. shall be considered as analogous cause unless
(Starlite Plastic Industrial Corporation v. NLRC. G.R. expressly specified in the company rules and
No. 78491, 16 Mar. 1989) regulations or policies.”

Ratio: The quantum of evidence needed is merely NOTE: However, nowhere does the Labor Code
substantial evidence to terminate an Ee under require analogous acts or omissions to be
these grounds. “expressly specified in company rules and
regulations or policies.” Moreover, the requirement
ANALOGOUS CAUSES appears unreasonable, if not impossible. To demand
an express specification of all analogous cases is to
For an act to be included in analogous cases of just demand anticipation of all things similar. But these
causes of termination, it must be due to the cannot all be preconceived or predefined. (Azucena,
voluntary and/or willful act or omission of the Ee. 2016)
(Nadura v. Benguet Consolidated, G.R. No. L-17780, Past offenses
24 Aug. 1962)
Previous offenses may be used as a valid
Requisites justification for dismissal from work only if the
infractions are related to the subsequent offense
1. There must be an act or omission like those upon which the basis the termination of
specified just causes; and employment is decreed. (Stellar Industrial Service
2. The act or omission was voluntary and/or Inc. v. NLRC, G.R. No. 117418. 24 Jan. 1996)
willful on the part of the Ees. (Sec. 5.2 [g], D.O.
No. 147-15) Doctrine of Incompatibility

Examples of Analogous Cases Where the Ee has done something that is contrary
or incompatible with the faithful performance of his
1. Violation of company rules and regulations; duties, his Er has a just cause for terminating his
2. Immorality, Drunkenness or Fighting inside employment. (Manila Chauffeur’s League v.
the premise; Bachrach Motor Co., G.R. No. L-47071, 29 June 1940)
3. Gross inefficiency;
4. Illegally diverting Er’s products;
5. Failure to heed an order not to join an illegal
picket;
6. Violation of safety rules and code of discipline;

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Doctrine of Commensurate Penalty or en route from Manila to Pangasinan, a PRBLI
“Proportionality Rule” field inspector caught Mapili extending a free
ride to a co-Ee’s wife. Noting that this was
In this regard, it is a hornbook doctrine that already the third time that Mapili committed the
infractions committed by an Ee should merit only said violation, the company terminated his
the corresponding penalty demanded by the employment. Is Mapili illegally dismissed?
circumstance. The penalty must be commensurate
with the act, conduct or omission imputed to the Ee A: NO. It is apparent that the bus conductor is aware
and must be imposed in connection with the that the infraction he committed constituted a grave
disciplinary authority of the Er. (Sagales v. Rustans offense, but he persisted in committing the same out
Commercial Corporation, G.R. No. 166554, 27 Nov. of gratitude to the passenger. Hence, there was a
2008) deliberate intent on the part of the petitioner to
commit the violation. An Ee’s propensity to commit
Factors that can be considered repetitious infractions evinces wrongful intent,
making him undeserving of the compassion
1. Length of service; accorded by law to labor; thus, dismissal of said Ee
2. Gravity of the offense; would be justified. (Jerry Mapili v. Philippine Rabbit
3. Nature of the position; Bus Lines, Inc., G.R. No. 172506, 27 July 2011)
4. Nature of the business;
5. First offense rule; Guidelines to Determine the Validity Of
6. Totality of infractions; Termination
7. Principle of charity, compassion and
understanding; and Validity of termination per se is determined by
8. Principle of equity. compliance with two-notice rule, hearing
(opportunity to be heard), and the presence of a just
Totality of Infractions Doctrine or authorized cause.

The totality of infractions or the number of 2. AUTHORIZED CAUSES

violations committed during the period of
employment shall be considered in determining the
Authorized causes are initiated by the Er’s exercise
penalty to be imposed upon an erring Ee. The
of management prerogative, who shall be liable to
offenses committed by an Ee should not be taken
pay separation pay as mandated by law. It does not
singly and separately. Fitness for continued
usually require delinquency or culpability on the
employment cannot be compartmentalized into
part of the Ee.
tight little cubicles of aspects of character, conduct
and ability separate and independent of each other.
Authorized causes of termination by the Er:
While it may be true that an Ee was penalized for his
previous infractions, this does not and should not
1. Installation of labor-saving devices;
mean that his employment record would be wiped
2. Redundancy;
clean of his infractions. After all, the record of an Ee
3. Retrenchment ;
is a relevant consideration in determining the
4. Closing or cessation of operation of the
penalty that should be meted out since an Ee's past
establishment or undertaking; and
misconduct and present behavior must be taken
5. Disease.
together in determining the proper imposable
penalty. (Cebu People’s Multi-Purpose Cooperative v.
Carbonilla, G.R. No. 212070, 27 Jan. 2016)

Q: Mapili works as a bus conductor for

Philippine Rabbit Bus Lines, Inc. While on duty

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INSTALLATION OF LABOR-SAVING DEVICES or on the part of the Er. The Er has no legal obligation
AUTOMATION to keep in its payroll more Ees that are necessary for
the operation of its business. (Wiltshire File Co., Inc.
Automation is a management prerogative of v. NLRC, G.R. No. 82249, 07 Feb. 1991)
replacing manpower with machine power in order
to effect more economy and greater efficiency in NOTE: A position is redundant when it is
method of production. superfluous. Superfluity is the outcome of some
factors:
Requisites for a Valid Automation 1. Overhiring of workers;
2. Decline in volume of business;
1. Written notice to the Ee and to the DOLE at 3. Closure of a particular product line of an
least one (1) month before the intended date economic activity previously engaged by the
of termination; Er; and
2. Payment of separation pay of at least one (1) 4. Phasing out of service activity priorly
month for every year of service; undertaken by the business. (Chan, 2019)
3. Good faith in the discharge of Ees; and,
4. Reasonable criteria to be used in Requisites of Redundancy
implementing automation.
1. There must be superfluous positions or
Robotics services of Ees;

It is the switch from “men” employment to 2. The positions or services are in excess of what
‘mechanical’ employment. is reasonably demanded by the actual
requirements of the enterprise to operate in an
The purpose for such installation must be valid such economical and efficient manner;
as to save on cost, enhance efficiency, and other
justifiable economic reasons. (Chan, 2019) 3. There must be good faith in abolishing
redundant positions;
Reduction of the number of workers in a company’s
factory made necessary by the introduction of 4. There must be fair and reasonable criteria in
machinery in the manufacture of its products is selecting the Ees to be terminated; and
justified. There can be no question as to the right of
the manufacturer to use new labor-saving devices 5. There must be an adequate proof of
with a view to affect more economy and efficiency redundancy such as but not limited to the new
in its method of production. (Philippine Sheet Metal staffing patter, feasibility studies or proposal,
Workers’ Union v. CIR. G.R. No. L-2028; 28 Apr. 1949) on the viability of the newly created positions,
job description and the approval by the
REDUNDANCY management of the restructuring.

It is the superfluity in the performance of a Procedure

particular work. It exists where the services of an Ee
are in excess of what is reasonably demanded by the 1. Written notice served on both the Ees and the
actual requirements of the enterprise. DOLE at least one (1) month prior to
separation from work;
Redundancy in an Er’s personnel does not
necessarily or even ordinarily refer to duplication of 2. Payment of separation pay equivalent to at
work. The characterization of services as no longer least one (1) month pay or to at least one (1)
necessary or sustainable and therefore properly month pay for every year of service, whichever
terminable, was an exercise of business judgment is higher;

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3. Good faith in abolishing redundant position; A: NO. Redundancy is recognized as one of the
and authorized causes for dismissing an Ee under the LC
as provided under Art. 298.
4. Fair and reasonable criteria in ascertaining
what positions are to be declared redundant. For the implementation of a redundancy program to
(SPI Technologies v. Mapua, G.R. No. 191154, 07 be valid, the Er must comply with the following
Apr. 2014) requisites: (1) written notice served on both the Ees
and the Department of Labor and Employment at
NOTE: Fair and reasonable criteria may least one month prior to the intended date of
include the following, but not limited to: retrenchment; (2) payment of separation pay
equivalent to at least one month pay or at least one
a. Less preferred status, e.g., temporary Ee month pay for every year of service, whichever is
b. Efficiency higher; (3) good faith in abolishing the redundant
c. Seniority (Golden Thread Knitting positions; and (4) fair and reasonable criteria in
Industries, Inc. v. NLRC, G.R. No. 119157, ascertaining what positions are to be declared
11 Mar. 1999) redundant and accordingly abolished.

Q: Matiere SAS hired Acosta as Technical Matiere SAS complied with the first and second
Assistant. Uner the Employment Agreement requisites; notifying both Acosta and DOLE at least
Acosta was tasked to: (1) Prepare reports a month prior planned redundancy and providing
regarding Woodfields Consultants, Inc. (WCI) Acosta computation of his separation pay. However,
consultants; (2) Be the intermediary between the third and fourth requisites are wanting. To
the operators in WCI and the management; (3) establish good faith, the company must provide
Attend coordination meetings; (4) Evaluate substantial proof that the services of the Ees are in
billings; (5) Follow the SIT and prepare reports; excess of what is required of the company, and that
and (7) Site visits. fair and reasonable criteria were used to determine
the redundant positions. Here, Matiere SAS' only
Later, Matiere SAS sent a letter to Acosta basis for declaring Acosta's position redundant was
informing him that his employment contract that his function, which was to monitor the delivery
will end on 31 July 2013 due to the cessation of of supplies, became unnecessary upon completion
the company’s delivery operations and the of the shipments.
diminution of activities and that it cannot find
any reinstatement at the office. He also received However, upon scrutiny, the Employment
a calculation of his separation pay. On 26 June Agreement itself contradicts Matiere SAS'
2013, Matiere SAS informed DOLE that it would allegation. Under Acosta's job description listed in
have to terminate five (5) of its workers which his tasks as a technical assistant, there was no
includes Acosta. Matiere SAS also filed an mention of monitoring shipments. If his work
Establishment Employment Report, citing pertains mainly to the delivery of supplies, it should
redundancy and the completion of delivery of have been specifically stated in his job description.
supplies as its reasons for dismissing its Ees. There was no basis for respondents to consider his
position irrelevant when the shipments had been
Acosta filed a complaint to NLRC for illegal completed.
dismissal alleging that the declaration of
redundancy of his position was not based on fair Matiere SAS also failed to show that they used fair
and reasonable criteria pointing out that he, the and reasonable criteria in determining what
most senior engineer, was dismissed while the positions should be declared redundant. Although
other engineers remained. Was Acosta validly Acosta was among the five (5) Ees dismissed, he
dismissed on the ground of redundancy? cannot be similarly situated with the other Ees since
his duty is not limited to the monitoring of

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 IV. POST-EMPLOYMENT
deliveries. Accordingly, this Court declares retrenchment program as a cost-cutting measure,
petitioner to have been illegally dismissed. (Manuel SCA, however, did not out rightly dismiss the
Acosta v. Matiere SAS and Philippe Gouvary, G.R. No. workers affected by the closure of PM No. 4 but gave
232870, 03 June 2019) them an option to be transferred to posts of equal
rank and pay. SCA did not proceed directly to
Redundancy in Bad Faith retrench. This is an indication of good faith on SCA’s
part as it exhausted other possible measures other
The Ee was terminated on the ground of than retrenchment. (Dannie Pantoja v. SCA Hygiene
redundancy. But it was found out that the Er had Products Corporation, G.R. No. 163554, 23 Apr. 2010)
been hiring new Ees while it was firing the old ones,
negating the claim of redundancy. (General Milling NOTE: The losses which the company may suffer or
Corp., v. V.L. Viajar, G.R. No. 181738, 30 Jan. 2013) is suffering may be proved by financial statements
audited by independent auditor. (Asian Alcohol
NOTE: Jurisprudence provides that “basic is the Corporation v. NLRC, G.R. No. 131108, 25 Mar. 1999)
principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same.” By RETRENCHMENT
imputing bad faith to the actuations of [the Er], [the
Ee] has the burden of proof to present substantial It is the reduction of personnel usually due to poor
evidence to support the allegation of unfair labor financial returns as to cut down on costs of
practice. (Culili v. Eastern Telecommunications Phil., operations in terms of salaries and wages to prevent
G.R. No. 165381, 09 Feb. 2011) bankruptcy of the company. (Poquiz, 2018)

Q: Pantoja was assigned at SCA Corporation’s Cutting of expenses includes the reduction of
Paper Mill No. 4, the section that manufactures personnel; it is a management prerogative, a means
the company’s industrial paper products. In a to protect and preserve the Er’s viability and ensure
Notice of Transfer, SCA informed Pantoja of its his survival. To be an authorized cause it must be
reorganization plan and offered him a position effected in good faith and for the retrenchment,
at Paper Mill No. 5 under the same terms and which is after all a drastic recourse with serious
conditions of employment in anticipation of the consequences for the livelihood of the Ee is or
eventual closure and permanent shutdown of otherwise laid-off. (Poquiz, 2018)
PM No. 4 due to financial difficulties brought
about by the low volume of sales and orders. NOTE: The kind of losses contemplated under the
However, Pantoja rejected the offer of transfer. Labor Code is actual or anticipated/impending
A notice of termination of employment was sent losses. There is NO prohibition for the ER to embark
to Pantoja as his position was declared on retrenchment program if he could perceive that
redundant by the closure of PM No. 4. SCA its economy will go down the drain. (Poquiz, 2018)
informed the DOLE of its reorganization and Proof of actual losses or possible imminent losses is
partial closure. Petitioner filed a complaint for the most singular distinctive requisite of
illegal dismissal assailing his termination as retrenchment, which the installation of labor-saving
without any valid cause. Was the petitioner device and redundancy do not have. (Chan, 2019)
illegally dismissed?
Preventive Retrenchment is Allowed
A: NO. Exercising its management prerogative and
sound business judgment, SCA decided to cut down “To prevent losses” justifies retrenchment. Such
on operational costs by shutting down one of its phrase means that retrenchment or termination of
paper mills. The abolishment of PM No. 4 was a the services of some Ees is authorized to be
business judgment arrived at in the face of the low undertaken by the Er sometime before the losses
demand for the production of industrial paper at the anticipated are sustained or realized. It is not the
time. Despite an apparent reason to implement a intention of the lawmaker to compel the Er to stay

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his hand and keep all his Ees until sometime after 6. The Er used fair and reasonable criteria in
losses shall have been materialized. (Lopez Sugar ascertaining who would be retained among
Corporation v. Federation of Free Workers, et al., G.R. the Ees, such as status, efficiency, seniority,
Nos. 75700-01 Aug. 1990) physical fitness, age, and financial hardship of
certain workers. (FASAP v. PAL, G.R. No.
Standards of Preventive Retrenchment 178083, 02 Oct. 2009)

1. The losses expected should be substantial and Criteria In Selecting Ees To Be Retrenched
not merely de minimis in extent; The
substantial loss apprehended must be There must be fair and reasonable criteria to be
reasonably imminent; used in selecting Ees to be dismissed such as:

2. It must be reasonably necessary and likely to 1. Less preferred status;

effectively prevent the expected losses; and,
2. Efficiency rating;
3. Alleged losses if already realized, and the
expected imminent losses sought to be 3. Seniority (Phil. Tuberculosis Society, Inc. v.
forestalled, must be proven by sufficient and National Labor Union, G.R. No. 115414, 25 Aug.
convincing evidence. (Lopez Sugar Corporation 1998)
v. Federation of Free Workers, et al., G.R. Nos.
75700-01 Aug. 1990) 4. Contribution to income (Talam v. NLRC, The
Software Factory, etc., G.R. No. 175040, 06 Apr.
Causes of Retrenchment 2010)

1. Lack of Work; “Last In First Out” (L-I-F-O) Rule

2. Business Recession;
3. Fire; and It applies to termination of employment in the same
4. Conservatorship. line of work. What is contemplated in the LIFO rule
is that when there are two or more Ees occupying
Requisites of a Valid Retrenchment the same position in the company affected by the
retrenchment program, the last one employed will
1. Written notice served on both the Ee and the necessarily be the first one to go. (Maya Farms Ees
DOLE at least one (1) month prior to the Organization v. NLRC, G.R. No. 106256, 28 Dec. 1994)
intended date of retrenchment;
“Last In First Out” Rule Mandatory
2. Payment of separation pay equivalent to at
least one month pay or at least one-half (1/2) GR: In cases of installation of labor-saving devices,
month pay for every year of service, whichever redundancy and retrenchment, the LIFO rule shall
is higher; apply.

3. Good faith in effecting retrenchment; XPN: When an Ee volunteers to be separated from

employment. (DOLE D.O. No. 147-15, Series of 2015)
4. Proof of expected or actual losses;
Q: Due to mounting losses, the former owners of
5. To show that the Er first instituted cost Asian Alcohol Corporation sold its stake in the
reduction measures in other measures in other company to Prior Holdings. Upon taking control
areas of production before undertaking of the company, Prior Holdings, to prevent
retrenchment as a last resort; and losses, implemented a reorganization plan and
other cost-saving measures including the

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retrenchment of 117 Ees some of which are Financial Statements must be audited by
members of the union and the majority held by independent external auditors, and for GOCCs,
non-union members. financial statements must be audited by the
Commission on Audit. (Chan, 2019)
Some retrenched workers filed a complaint for
illegal dismissal alleging that the retrenchment CLOSURE OF BUSINESS
was a subterfuge for union busting activities.
Was the retrenchment made by Asian Alcohol A firm which faces serious business decline and
valid and justified? losses is entiled to close its business in order to
avoid further economic loss, and a court has no
A: YES. Even though the bulk of the losses were power to require such firm to continue operating at
suffered under the old management and continued a loss. (Unicorn Safety Glass v. Basarte, et. Al., G.R. No.
only under the new management, ultimately the 154689, 25 Nov. 2004)
new management of Prior Holdings will absorb such
losses. The law gives the new management every It must be done in good faith and not for the purpose
right to undertake measures to save the company of circumventing pertinent labor laws.
from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R.
No. 131108, 25 Mar. 1999) A change of business ownership does not create an
obligation on the part of the new owner to absorb
Retrenchment vs Redundancy the Ees of the previous owner, unless expressly
assumed. Labor contracts being in personam, are
RETRENCHMENT REDUNDANCY generally not enforceable against a transferee.
(Fernando v. Angat Labor Union, G.R. No. L-17896, 30
Involves losses, May 1962)
closures, or cessation Does not involve losses
of operations of or the closing or Closure contemplated is a unilateral and voluntary
establishment or cessation of operations act on the part of the Er to close the business
undertaking due to of the establishment. establishment.
serious business losses Results from the fact
or financial reverses. that the position of the Kinds of Closure:
Ee has become
In preventive superfluous, an excess 1. Partial Closure – although grounded on
retrenchment, of what is actually economic losses, partial closure is a form of
retrenchment may be needed, even if the retrenchment.
undertaken by the Er business has not
before losses are suffered reverses. Requirements:
sustained.
1. Written notice to the EE and to the DOLE
at least 1 month before the intended date
of termination;
Evidence to Prove Losses
2. Separation pay equivalent to at least 1/2
Alleged losses if already realized and the expected
month pay for every year of service; and
imminent losses must be proved by sufficient and
convincing evidence. (Uichico, et.al. v. NLRC and
3. Cessation of business is bona fide in
Santos, et. Al., G.R. No. 121434, 02 June 1997)
character.

Evidence presented in NLRC Proceedings must have

modicum of admissibility. (Azucena, 2016)

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2. Total Closure due to economic reverses or Corp v. NLRC, G.R. No. 112546, 13 Mar. 1996, and NFL
losses v. NLRC, G.R. No. 127718, 02 Mar. 2000)

Requirements: Basis for computation: latest salary rate, unless

1. Written notice to the EE and to the reduced by the Er to circumvent the law, in which
DOLE at least 1 month before the case, it shall be based on the rate before its
intended date of termination; and deduction. (Sec. 10, Book IV, Rule I, IRR)

2. Cessation of business is due to serious There is no obligation to pay separation pay

economic reverses or losses.
1. When the closure of the business is due to
Requisites serious business loss; and

a. Written notice served on both the Ees and 2. Where closure of business is by compulsion of
the DOLE at least 1 month prior to the law because closure of business is not
intended date of closure; attributed to Er’s will. (e.g., the land where the
building is situated was declared covered by
b. Payment of separation pay equivalent to at the CARL)
least one month pay or at least 1/2 month
pay for every year of service, whichever is Q: Galaxie Steel Corp. decided to close down
higher, except when closure is due to because of serious business loses. It filed a
serious business losses; written notice with the DOLE informing its
intended closure and the termination of
c. Good faith; employment. It posted the notice of closure on
d. No circumvention of the law; and the corporate bulletin board.
e. No other option available to the Er.
a. Does the written notice posted by Galaxie
Test for the validity of closure or cessation of on the bulletin board sufficiently comply
establishment or undertaking with the notice requirement under Art. 298
of the LC?
To be a valid ground for termination the following
must be present: A: NO. In order to meet the purpose, service of the
written notice must be made individually upon each
1. There must be a decision to close or cease Ee of the company. However, the Supreme Court
operation of the enterprise by the held that where the dismissal is for an authorized
management; cause, non-compliance with statutory due process
should not nullify the dismissal, or render it illegal,
2. The decision was made in good faith; and, or ineffectual. Still, the Er should indemnify the Ee,
in the form of nominal damages, for the violation of
3. There is no other option available to the Er his right to statutory due process. (Galaxie Steel
except to close or cease operations. (Sec. Workers Union v. NLRC, G.R. No. 165757, 17 Oct.
5.4(d), D.O. No. 147, Series of 2015) 2006)

Payment of separation pay in case of closure b. Are Galaxie Ees entitled to separation pay?

Payment of separation pay is required only where A: NO. Galaxie had been experiencing serious
closure is neither due to serious business losses nor financial losses at the time it closed business
due to an act of government. (North Davao Mining operations. Art. 298 of the LC governs the grant of
separation benefits "in case of closures or cessation

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 IV. POST-EMPLOYMENT
of operation" of business establishments "not due to separation pay under the law. The buyer in good
serious business losses or financial reverses." faith, on the other hand, is not obliged to absorb
the employees affected by the sale, nor is it liable
Where, the closure then is due to serious business for the payment of their claims.
losses, the LC does not impose any obligation upon
the Er to pay separation benefits. (Galaxie Steel In contrast with asset sales, in which the assets of
Workers Union v. NLRC, G.R. No. 165757, 17 Oct. the selling corporation are transferred to another
2006) entity, the transaction in stock sales takes place at
the shareholder level. Because the corporation
Obligation of a Transferee to absorb the Ees of possesses a personality separate and distinct
the Old Corporation from that of its shareholders, a shift in the
composition of its shareholders will not affect its
GR: There is no law requiring a bona fide purchaser existence and continuity. Thus, notwithstanding
of assets of an on-going concern to absorb in its the stock sale, the corporation continues to be the
employ the Ee’s of the transferor. employer of its people and continues to be liable
for the payment of their just claims. Furthermore,
XPNs: the corporation or its new majority shareholders
1. When the transaction between the parties is are not entitled to lawfully dismiss corporate
colored or clothed with bad faith. (Sundowner employees absent a just or authorized cause.
Dev’t Corp. v. Drilon, G.R. No. 82341, 06 Dec. (SME Bank, Inc. v. De Guzman, G.R. Nos. 184517 &
1989) 186641, 08 Oct. 2013)

2. Where the transferee was found to be merely Q: Zienna Corporation (Zienna) informed the
an alter ego of the different merging firms. Department of Labor and Employment
(Filipinas Port Services, Inc. v. NLRC, G.R. No. Regional Director of the end of its operations.
97237, 16 Aug. 1991) To carry out the cessation, Zienna sent a Letter
Request for Intervention to the NLRC for
3. Where the transferee voluntarily agrees to do permission and guidance in effecting payment
so. (Marina Port Services, Inc. v. Iniego, G.R. No. of separation benefits for its fifty (50)
77853, 22 Jan. 1990) terminated employees.

Successor-employer Doctrine Each of the terminated employees executed a

Quitclaim and Release before Labor Arbiter
The "successor employer" doctrine refers to a sale Nocomora, to whom the case was assigned.
or transfer in ownership of an entity that has been After the erstwhile employees received their
done in bad faith or to defeat the rights of labor. In separation pay, the Labor Arbiter declared the
such a case, it is as if there have been no changes in labor dispute dismissed with prejudice on the
employer-employee relationship between the seller ground of settlement. Thereafter, Zienna sold
and its employees. The buyer becomes a "successor all of its assets to Zandra Company (Zandra),
employer" and is obliged to absorb the displaced which in turn hired its own employees.
employees. (Philippine Airlines, Inc. v. National
Labor Relations Commission, G.R. No. 125792, 9 Nov. Nelle, one of the fifty (50) terminated
1998) employees, filed a case for illegal dismissal
against Zienna. She argued that Zienna did not
Asset Sales vs. Stocks Sales cease from operating since the corporation
subsists as Zandra. Nelle pointed out that
In asset sales, the rule is that the seller in good aside from the two companies having
faith is authorized to dismiss the affected essentially the same equipment, the managers
employees, but is liable for the payment of

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and owners of Zandra and Zienna are likewise filed an illegal dismissal case against DMI. Thus,
one and the same. Ees prayed that officers named in DMI’s Article
of Incorporation be impleaded and be held
For its part, Zienna countered that Nelle is solidarily liable with DMI in paying the
barred from filing a complaint for illegal judgment awards.
dismissal against the corporation in view of
her prior acceptance of separation pay. However, spouses Smith, officers named in the
AOI, merely lent their names to spouses LEE,
Is Nelle correct in claiming that she was alleged owner, to assist them in incorporating
illegally dismissed? (2016 BAR) DMI and after such undertaking; spouses SMITH
transferred their rights in DMI in favor of
A: NO. In SME Bank v. De Guzman (G.R. No. 184517 spouses LEE.
and 186641, 08 Oct. 2013), there are two (2) types
of corporate acquisitions: asset sales and stock Now, spouses LEE contends that DMI had a
sales. In asset sales, the corporate entity sells all separate and distinct personality from the
or substantially all of its assets to another entity. officers comprising it. Hence, they cannot be
In stock sales, the individual or corporate held personally liable for the judgment awards.
shareholders sell a controlling block of stock to Is the contention of spouses LEE tenable?
new or existing shareholders.
A: NO. As a general rule, a corporation has a
Asset sales happened in this case; hence, Zienna is separate and distinct personality from its
authorized to dismiss its employees, but must pay stockholders, and from other corporations it may be
separation pay. The buyer Zandra, is not obliged to connected with.
absorb the employees affected by the sale, nor is it
liable for the payment of their claims. The most that However, such personality may be disregarded, or
Zandra may do, for reasons of public policy and the veil of corporate fiction may be pierced
social justice, is to give preference in hiring qualified attaching personal liability against responsible
separated personnel of Zienna. person if the corporation’s personality, is used to
defeat public convenience, justify wrong, protect
Merger of Corporations fraud or defend crime, or is used as a device to
defeat the labor laws.
The merger of a corporation does not operate to
dismiss the Ees of the corporation absorbed by the Here, petitioners should be held personally liable
surviving corporation. This is in keeping with the for having controlled DMI and actively participated
nature and effects of a merger as provided under in its management, and for having used it to evade
law and the constitutional policy protecting the legal obligations to respondents.
rights of labor. The employment of the absorbed Ees
subsists. Necessarily, these absorbed Ees are not While it is true that one’s control does not by itself
entitled to separation pay. (The Philippine result in the disregard of corporate fiction;
Geothermal, Inc. Ees Union v. Unocal Philippines, Inc. however, considering the irregularity in the
[now known as Chevron Geothermal Philippines incorporation of DMI, then there is sufficient basis
Holdings, Inc.] G.R. No. 190187, 28 Sept. 2016) to hold that such corporation was used for an illegal
purpose, including evasion of legal duties to its Ees.
Piercing the Veil of Corporate Fiction (Dutch Movers Inc., et al. v. Lequin, et al., G.R. No.
210032, 25 Apr. 2017)
Q: The Dutch Movers, Inc., (DMI), informed their
Ees that it would cease its hauling operation for Q: Crisologo was employed by petitioner NEC
no reason and it did not file any notice of System Integrated Construction Phils., Inc.
business closure before the DOLE. Their Ees (NESIC) as Manager of Communication Facilities.

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A cost-cutting measure was implemented,
specifically terminating all project and In the case of
contractual Ees and withheld some of the Ees’ retrenchment,
benefits. however, for the
closure of a business
Notwithstanding with the cost cutting measures or a department due
One of the
NESIC still incurred financial losses an to serious business
prerogatives of
announced retrenchment which causes losses to be regarded
management is the
respondent’s dismissal. He however voluntarily as an authorized
decision to close the
sign quitclaim and receipt of separation pay. cause for terminating
entire establishment
Upon learning that NESIC employed other Ees, it must be proven
or to close or abolish a
person to fill the vacancy in the company that the losses
department or
respondent filed a case for illegal dismissal. Will incurred are
section thereof for
the case prosper? substantial and actual
economic reasons,
or reasonably
such as to minimize
A: NO. Not all waivers and quitclaims are invalid as imminent; that the
expenses and reduce
against public policy. If the agreement was same increased
capitalization.
voluntarily entered into and represents a through a period of
reasonable settlement, it is binding on the parties time; and that the
and may not later be disowned simply because of a condition of the
change of mind. company is not likely
to improve in the near
It is only where there is clear proof that the waiver future.
was wangled from an unsuspecting or gullible
person, or the terms of settlement are
unconscionable on its face, that the law will step in Does not obligate the
LC provides for the
to annul the questionable transaction. (NEC System Er for the payment of
payment of
Integrated Construction Phils., Inc. v. Crisologo, G.R. separation package if
separation package in
No. 201535, 05 Oct. 2015) there is closure of
case of retrenchment
business due to
to prevent losses.
Closure vs. Retrenchment serious losses.

CLOSURE RETRENCHMENT
DISEASE
Is the reduction of
Substantive Elements for Disease as a Ground
personnel for the
It is the reversal of for Dismissal
purpose of cutting
fortune of the Er
down on costs of
whereby there is a 1. An Ee has been found to be suffering from any
operations in terms of
complete cessation of disease, whether contagious or not;
salaries and wages
business operations
resorted to by an Er
to prevent further 2. His continued employment is prohibited by
because of losses in
financial drain upon law or prejudicial to his health or to the health
operation of a
an Er who cannot pay of his co-Ees; and (Sec. 8, Book VI, Rule I, IRR)
business occasioned
anymore his Ees since
by lack of work and
business has already 3. A competent public health authority certifies
considerable
stopped. that the disease is of such nature or at such a
reduction in the
stage that it cannot be cured within a period
volume of business.

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of six months even with proper medical a. The notice to apprise the Ee of the ground
treatment; for which his dismissal is sought; and

4. Payment of separation pay equivalent to at b. The notice informing the Ee of his

least one month salary or to one-half month dismissal, to be issued after the Ee has
salary for every year of service, whichever is been given reasonable opportunity to
greater, a fraction of six months being answer and to be heard on his defense.
considered as one whole year. (Jiao, et. al. v.
NLRC, Global Business Bank, et. al., G.R. No. NOTE: These rulings reinforce the State policy
182331, 18 Apr. 2012) of protecting the workers from being
terminated without cause and without
NOTE: The requirement for a medical certification affording them the opportunity to explain
cannot be dispensed with; otherwise, it would their side of the controversy. (Deoferio v. Intel
sanction the unilateral and arbitrary determination Technology, G.R. No. 202996, 18 June 2014)
by the Er of the gravity or extent of the Ee’s illness
and thus defeat the public policy on the protection 2. If the disease or ailment can be cured within the
of labor. (Manly Express v. Payong, G.R. No. 167462, period, the Er shall not terminate the Ee’s
25 Oct. 2005) employment but shall ask the Ee to take a leave.
The Er shall reinstate such Ee to his former
A medical certificate issued by the company’s own position immediately upon the restoration of
physician is not a certificate by “competent public his normal health. (Sec. 8, Book VI, Rule I, IRR)
health authority.” (Cebu Royal Plant [San Miguel
Corporation] v. Deputy Minister of Labor, G.R. No. HIV-positive Status and AIDS, not a Ground for
58639, 12 Aug. 1987) Termination

Procedure in terminating an Ee’s employment Discrimination in any form from pre-employment

on the ground of disease to post-employment, including hiring, promotion,
or assignment, based on the actual, perceived or
1. The Er shall not terminate his employment suspected HIV status of an individual is prohibited.
unless: Termination from work on the sole basis of actual,
perceived, or suspected HIV status is deemed
a. There is a certification by a competent unlawful. (Sec. 35, R.A. No. 8504)
public health authority; and
Disability, not a Ground for Termination
b. That the disease is of such nature or at
such a stage that it cannot be cured within GR: Dismissing or terminating the services of a
a period of six (6) months even with disabled Ee by reason of his disability is not a valid
proper medical treatment. ground.

NOTE: In terminating employment on the ground of XPN: The Er can prove that he impairs the
disease, the Er must comply with the twin-notice satisfactory performance of the work involve to the
rule. prejudice of the business entities provided,
however, that the Er first sought provide reasonable
In Sy v. CA (G.R. No. 127263, 12 Apr. 2000) and Manly accommodations for disabled persons.
Express, Inc. v. Payong, Jr. (G.R. No. 167462, 25 Oct.
2005), the Court finally pronounced the rule that the
Er must furnish the Ee two written notices in
terminations due to disease, namely:

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 IV. POST-EMPLOYMENT
Entitlement to reinstatement Rule 1, Sec. 8)

An Ee suffering from a disease is entitled to a Q: Ron was hired for an overseas work as an
reinstatement, provided he presents a certification Expediter by ABC Manpower Corp. and deployed
by a competent public health authority that he is fit to DEF Corp. in Saudi Arabia. Ron’s employment
to return to work. (Cebu Royal Plant v. Deputy contract provides that in the event of the Ee
Minister, G.R. No. L-58639, 12 Aug. 1987) being unable to discharge his duties through
accident or illness incurred while working on
Medical Certificate as mandatory requirement the project or projects, medical treatment will
be provided free by the Er. After nine months
The requirements of a medical certificate are since he started working, Ron experienced chest
mandatory. Only where there is a prior certification pains and was confined twice at a local hospital.
from a competent public authority that the disease His severe chest pain was diagnosed as a heart
afflicting the Ee sought to be dismissed is of such disease but he was discharged as his health was
nature or at such stage that it cannot be cured regarded in good condition. However, Ron
within six (6) months even with proper medical claimed that against his will, DEF Corp.
treatment that the latter could be validly terminated requested ABC Manpower Corp. to immediately
from his job. (Tan v. NLRC, G.R. No. 116807, 14 Apr. repatriate him due to his serious medical
1997) condition and Ron was repatriated. Ron sought
reimbursement for his medical expenses,
Q: Anna Ferrer has been working as a however, petitioners did not accede to his
bookkeeper at Great Foods, Inc., which operates demands. Was Ron illegally dismissed?
a chain of high-end restaurants throughout the
country, since 1970 when it was still a small A: YES. The Court held that for a dismissal on the
eatery at Binondo. In the early part of the year ground of disease to be considered valid, two
2003, Anna, who was already 50 years old, requisites must concur: (a) the Ee suffers from a
reported for work after a week-long vacation in disease which cannot be cured within six months
her province. It was the height of the SARS scare, and his/her continued employment is prohibited by
and management learned that the first law or prejudicial to his/her health or to the health
confirmed SARS death case in the Phils, a of his/her co-Ees, and (b) a certification to that
“balikbayan” nurse from Canada, is a townmate effect must be issued by a competent public health
of Anna. authority.

Immediately, a memorandum was issued by In the instant case, petitioners did not comply with
management terminating the services of Anna the foregoing requirements to justify Ron's
on the ground that she is a probable carrier of termination on the ground of a disease. DEF Corp.
SARS virus and that her continued employment repatriated Ron to the Philippines without any
is prejudicial to the health of her co-Ees. Is the showing that he had a prolonged and permanent
action taken by the Er justified? (2004 BAR) disease. Thus, when Ron was repatriated, none of
his medical records showed that his ailment was
A: The Er’s act of terminating the employment of permanent or that he suffered from a disease which
Anna is not justified. There is no showing that said could not be cured within six months and that his
Ee is sick with SARS, or that she associated or had continued employment was prohibited by law or
contact with the deceased nurse. They are merely prejudicial to his health or to the health of his co-
town mates. Furthermore, there is no certification Ees. This is validated by the absence of the required
by a competent public health authority that the Certification from a competent public authority
disease is of such a nature or such a stage that it certifying to such a health condition on his part. The
cannot be cured within a period of six (6) months CA therefore properly held that petitioners failed to
even with proper medical treatment. (IRR, Book VI, comply with the provisions of Ron's Employment

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Agreement/Contract, and with the provisions of Procedural Requirements of Dismissal for Just
Article 284 of the Labor Code and Section 8, Rule I Causes
of the Omnibus Rules Implementing the Labor Code.
Had they done so, Ron's Ischaemic Heart Disease 1. Notice (Two-notice rule) – the Er is required to
could have been considered as an authorized cause furnish an Ee who is to be dismissed with two
for his dismissal. (Omanfil International Manpower (2) written notices before such termination:
Development Corp. v. Rolando Mesina, G.R. No.
217169, November 4, 2020, as penned by J. a. Pre-notice – the notice to apprise the Ee
Hernando) of the particular acts or omissions for
which dismissal is sought and is
Other authorized causes considered as the proper charge;

1. Total and permanent disability of Ee; NOTE: The first written notice to be
2. Valid application of union security clause; served on the Ees should contain the
3. Expiration of period in term of employment; specific causes or grounds for
4. Completion of project in project employment; termination against them, and a directive
5. Failure in probation; that the Ees are given the opportunity to
6. Relocation of business to a distant place; submit their written explanation within a
7. Defiance of return-to work-order; reasonable period. This should be
8. Commission of Illegal acts in strike; construed as a period of at least five (5)
9. Violation of contractual agreement; and calendar days from receipt of the notice
10. Retirement. to give the Ees an opportunity to study
the accusation against them, consult a
Other Causes of Termination union official or lawyer, gather data and
evidence, and decide on the defenses
An employee shall not be terminated on the basis they will raise against the complaint.
of actual, perceived or suspected: (King of Kings Transport Inc. v. Mamac,
G.R. No. 166208, 29 June 2007)
a) HIV status;
b) Hepatitis B status; b. Post-notice – The notice informing the Ee
c) Has or had Tuberculosis; (Sec. 6, DOLE D.O. of the Er’s decision to dismiss him which
No. 147-15) and notice must come only after the Ee is
d) COVID-19. (Sec. 5, Omnibus Guidelines on given a reasonable period from receipt of
the Implementation of Community the first notice within which to answer
Quarantine in the Philippines, Inter-Agency the charge, and ample opportunity to be
Task Force on Emerging Infectious Diseases) heard and defend himself.

3. DUE PROCESS 2. Hearing (opportunity to be heard) – The

worker may answer the allegations against him
in the notice of dismissal within a reasonable
a) TWIN NOTICE REQUIREMENT period from receipt of the notice of dismissal
with the ample opportunity to be heard.
The Two-Notice Rule requires that:
3. Judgement/Decision to Dismiss – It should be
1. There must be a notice stating the ground
in writing and should clearly state all the
for termination and requiring the Ee to
reasons for dismissal.
explain his side; and
2. There must be a notice for the termination Under the Perez Doctrine, the two-notice-and-a-
itself. hearing rule was not imposed because hearing may

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 IV. POST-EMPLOYMENT
now be dispensed. The Supreme Court held that attitude which warrants the ultimate penalty of
what is important is that the parties are given the dismissal.
opportunity to be heard unless they request in
writing for a hearing. What is required is that the A review of the findings below will reveal that Reyes
complainant is given the opportunity to be heard. refused to certify said report based on his honest
(Perez v. Philippine Telegram and Telephone assessment that the report cannot be completely
Company, G.R. 152048, 07 Apr. 2009) validated for lack of material data and evidence.
(Reyes v. Rural Bank of San Rafael (Bulacan), Inc.,
Where the Er had a valid reason to dismiss the Ee G.R. No. 230597, March 23, 2022, as penned by J.
but failed to comply with the procedural due Hernando)
process requirement, the dismissal may be upheld
but the Er will be penalized to pay an indemnity to Q: A, B, C, D, and E were regular Ees at the
the Ee. (Wenphil Corp. v. NLRC, G.R. No. 80587, 08 accounting and cashier unit of the University.
Feb. 1989) Several irregular and anomalous transactions
were noted in the University’s Accounting Office
The above-cited doctrine was reinstated in the case as follows:
of Agabon v. NLRC (G.R. No. 158693, 17 Nov. 2004).
In cases involving dismissals for cause but without (1) A cash shortage of PHP1,239,856.25
observance of the twin requirements of notice and which represents the net collection of
hearing, the better rule is to abandon the Serrano book remittances. The cash should have
doctrine and to follow Wenphil by holding that the been kept inside the cash vault under
dismissal was for just cause but imposing sanctions the custody of A but it was missing; and
on the Er. Such sanctions, however, must be stiffer
than that imposed in Wenphil. (2) B, C, D, and E were found to have taken
advantage of their positions in the
NOTE: The burden of proving that the termination accounting office by enrolling their
was for a valid or authorized cause shall rest on the children and relatives under the
Er. (Art. 292(b), LC) University’s group enrollment incentive
program despite knowing that they
Q: The Rural Bank of San Rafael (Bulacan), Inc. were unqualified.
(RBSR) issued Reyes two show cause orders and
put him on preventive suspension for neglect of A admitted to the acts and returned the amount
duty. This is due to Reyes’s refusal to certify a to the University. She eventually tendered her
report, reasoning that no independent resignation.
investigation was conducted. Was Reyes
illegally dismissed? On the other hand, B, C, D, and E awere apprised
of the infractions they committed and they
A: YES. The Court cannot help but notice the admitted to the acts. The President of the
muddled and vague charges against him. University verbally informed them that their
Specifically, it cannot be determined with employment will be terminated. On 22 Dec.
reasonable certainty on what grounds the charges 2007, the President issued an office
pressed against Reyes were based on, and which memorandum and informed them that they will
ones were proven. The Court finds that respondents be terminated effective 01 Jan. 2008 on grounds
failed to comply with the due process requirements of dishonesty amounting to malversation of
in dismissing Reyes. In the present case, there is no school funds.
question that Reyes' refusal to certify the Report on
Crimes and Losses was intentional. This is clearly B, C, and D opted to resign and tendered their
disobedience. However, the Court find that the same resignation on 22 Dec. 2007 taking effect on 02
is not attended by a wrongful and perverse mental Jan. 2008.

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A, B, C, D, and E filed for an illegal dismissal Records show that during the events leading to E’s
complaint with money claims against the dismissal, two conferences were held, after which,
University. Will the case prosper? Office Memo was issued to inform her of the
termination of her employment effective 01 Jan.
A: NO. Management prerogative includes the right 2008. Clearly, these are not compliant with the
to discipline Ees, which necessarily includes requirements established by law. Only the second
dismissal of Ees based on just and authorized written notice or Office Memo was served on E. The
causes. For a dismissal from employment to be records show that no first written notice was given
valid, both the substantial and procedural due to E. Conferences and verbal announcements do not
process requirements must be satisfactorily suffice as substitute for the requisite first written
complied with. notice. E is therefore entitled to nominal damages in
the amount of P30,000.00. (Susan M. Bance, Arlene
To comply with the requirements of substantial due C. Dimaiwat, Jean O. Velasco, Nancy M. Aguirre, and
process, the cause of the dismissal must have basis Hazel A. Lobetania v. University of St. Anthony and
under the law. To comply with the requirements of Santiago Ortega Jr., G.R. No. 202724, 03 Feb. 2021,
procedural due process, two notices must be served Third Division, as penned by J. Hernando)
to the Ee.
Indemnity in the Form of Nominal Damages
For resignation from employment to be valid, there
must be an intent to relinquish the position together An Er is liable to pay indemnity in the form of
with the overt act of relinquishment. Resignation nominal damages to an Ee who has been dismissed
must be voluntary. In illegal dismissal cases, the Er, if, in effecting such dismissal, the Er fails to comply
if defense of resignation is presented, must show with the requirements of due process.
that the Ee indeed voluntarily resigned. Thus,
because of the voluntary resignations of A, B, C, and The violation of the petitioners' right to statutory
D prior to the termination of their employment, due process by the private respondent warrants the
their complaints for illegal dismissal have no basis. payment of indemnity in the form of nominal
damages. The amount of such damages is addressed
On the other hand, E’s dismissal was for a just cause. to the sound discretion of the court, considering the
She willfully breached the trust that the University relevant circumstances. (Agabon v. NLRC, G.R. No.
has reposed on her. E’s act of accommodating into 158693, 17 Nov. 2004)
the University's group enrollment incentive
program unqualified beneficiaries, including the Q: The illegal dismissal case was referred to the
children and relatives of the petitioners, constitute LA. Is a formal hearing or trial required to satisfy
willful breach of trust. As stated, to constitute willful the requirement of due process?
breach of trust, the Ee concerned must be holding a
position of trust and confidence, and there must be A: NO. Trial-type hearings are not required in labor
a willful act that would justify the loss of trust and cases, and these may be decided on verified position
confidence. Hence, E’s position as accounts officer, papers, with supporting documents and their
being supervisory in nature, can be considered as a affidavits. The holding of a formal hearing or trial is
position of trust. discretionary with the labor arbiter and is
something that the parties cannot demand as a
However, to comply with the requirement of matter of right. It is entirely within his authority to
procedural due process, two written notices must decide a labor case before him, based on the
be issued. The first written notice should contain position papers and supporting documents of the
the specific causes or grounds for termination parties, without a trial or formal hearing.
against the Ee. The second written notice contains
the decision terminating the employment after The requirements of due process are satisfied when
considering all circumstances involving the charge. the parties are given the opportunity to submit

U N IV E R S I T Y O F S A N T O T O M A S 368
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 IV. POST-EMPLOYMENT
position papers wherein, they are supposed to Guidelines in determining whether the penalty
attach all the documents that would prove their imposed on Ee is proper
claim in case it be decided that no hearing should be
conducted or was necessary. (Shoppes Manila, Inc. v. 1. Gravity of the offense;
NLRC, G.R. No. 147125, 14 Jan. 2004) 2. Position occupied by the Ee;
3. Degree of damage to the Er;
NOTE: It is not necessary for the affiants to appear 4. Previous infractions of the same offense; and
and testify and be cross-examined by the counsel for 5. Length of service. (ALU-TUCP v. NLRC, G.R. No.
the adverse party. It is sufficient that the documents 120450, 10 Feb. 1999; PAL v. PALEA, G.R. No. L-
submitted by the parties have a bearing on the issue 24626, 28 June 1974)
at hand and support the positions taken by them.
(C.F. Sharp & Co., Inc. v. Zialcita, G.R. No. 157619, 17 Q: Felizardo was dismissed from Republic Flour
July 2006) Mills-Selecta Ice Cream Corporation for
dishonesty and theft of company property for
The essence of due process is simply an opportunity bringing out a pair of boots, 1 piece aluminum
to be heard, or as applied to administrative container and 15 pieces of hamburger patties. Is
proceedings, an opportunity to explain one’s side or the penalty of dismissal commensurate with the
an opportunity to seek a reconsideration of the offense committed?
action or ruling complained of. (PLDT v. Bolso, G.R.
No. 159701, 17 Aug. 2007) A: There is no question that the Er has the inherent
right to discipline its Ees which includes the right to
The burden of proof in termination cases dismiss. However, this right is subject to the police
power of the State. As such, the Court finds that the
The burden of proof rest upon the Er to show that penalty imposed upon Felizardo was not
the dismissal of the Ee is for a just cause, and failure commensurate with the offense committed
to do so would necessarily mean that the dismissal considering the value of the articles he pilfered and
is not justified, consonant with the constitutional the fact that he had no previous derogatory record
guarantee of security of tenure. during his two (2) years of employment in the
company.
Due process refers to the process to be followed;
burden of proof refers to the amount of proof to be Moreover, Felizardo was not a managerial or
adduced. In money claims, the burden of proof as to confidential Ee in whom greater trust is reposed by
the amount to be paid the Ees rests upon the Er management and from whom greater fidelity to
since he is in custody of documents that would be duty is correspondingly expected. (ALU-TUCP v.
able to prove the amount due, such as the payroll. NLRC, G.R. No. 120450, 10 Feb. 1999)

Degree of proof required b) HEARING

In illegal dismissal cases, the Er is burdened to Hearing is not an indispensable part of due
prove just cause for terminating the employment of process
its Ee with clear and convincing evidence to give
flesh and blood to the guaranty of security of tenure Sec. 2(d), Rule I of the IRR of Book VI of the LC
granted by the Constitution to Ees under the LC. provides that the so-called standards of due process
(Duty Free Phils. Services, Inc. v. Tria, G.R. No. 174809, outlined therein shall be observed “substantially,”
27 June 2012) not strictly. This is a recognition that while a formal
hearing or conference is ideal, it is not an absolute,
mandatory or exclusive avenue of due process.
(Perez v. PT&T, G.R. No. 152048, 29 Apr. 2009)

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Ample Opportunity to be Heard Rowena received a memorandum from her
immediate supervisor stating the charges
While “ample opportunity to be heard” may in fact against her relative to her failure to remit her
include an actual hearing, it is not limited to formal collections and to return the CareSens POP
hearing. In other words, the existence of an actual demonstration unit to the office, at a specified
formal “trial type” hearing, although preferred, is time, habitual tardiness, and her act of
not absolutely necessary to satisfy the Ee’s right to deliberately misdeclaring or overstating her
be heard. actual travelling expense. In the same
memorandum, she was required to submit a
In summary the following are the guiding principles written explanation within 24 hours.
in connection with the hearing requirement in
dismissal cases: Rowena, however, refused to accept said
1. “Ample opportunity to be heard” means any memorandum. Subsequently, Rowena received
meaningful opportunity (verbal or written) through registered mail another memorandum,
given to Ees to answer the charges against him but already denominated as Termination of
and submit evidence in support of his defense, Employment. Rowena thus filed a complaint for
whether in a hearing, conference or some other illegal dismissal. Is the dismissal valid despite
fair, just and reasonable way. Rowena not being accorded due process?

2. A formal hearing or conference becomes A: YES. If the dismissal is based on a just cause
mandatory only when requested by the Ee in under Art. 297 of the LC, as in this case, the Er must
writing or subtantial evidentiary disputes exists give the Ee two written notices and conduct a
or a company rule or practice requires it, or hearing. The first written notice is intended to
when similar circumstances justify it. apprise the Ee of the particular acts or omissions for
which the Er seeks her dismissal; while the second
3. The “ample opportunity to be heard” standard in is intended to inform the Ee of the Er's decision to
the LC prevails over the “hearing conference” terminate him.
requirement in the IRR. (Perez, et.al. v. Philippine
Telegraph and Telephone, Co., et.al., G.R. No. In the present case, Integrated Pharma presented
152048, 07 Apr. 2009) two first written notices charging Rowena with
various offenses. Both notices, however, fell short of
Liability for Nominal Damages When Due the requirements of the law. Integrated Pharma did
Process is Not Observed not afford Rowena ample opportunity to
intelligently respond to the accusations hurled
It was held that when dismissal is for just or against her as she was not given a reasonable period
authorized cause, but due process was not of at least five days to prepare for her defense.
observed, the dismissal should be upheld. (Agabon
v. NLRC, G.R. No. 158693, 17 Nov. 2004) Failure to comply strictly with the requirements-of
procedural due process for dismissing an Ee will not
The Er, however, should be held liable for non- render such dismissal ineffectual if it is based on a
compliance with the procedural requirements of just or an authorized cause.
due process in the form of damages.
The Er, however, must be held liable for nominal
Q: Integrated Pharma, engaged the services of damages for non-compliance with the requirements
Rowena as "Clinician," tasked with the duty of of procedural due process. (Santos v. Integrated
promoting and selling Integrated Pharma's Pharmaceutical, Inc., G.R. No. 204620, 11 July 2016)
products.

U N IV E R S I T Y O F S A N T O T O M A S 370
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 IV. POST-EMPLOYMENT
Procedural Due Process under Art. 297-299 of the LC
as applied in the Agabon Case
Art. 297 Art. 298 Art. 299
The Er must give the Ee a notice
specifying the grounds for which
The Er must give the Ee and the
dismissal is sought a hearing or an
DOLE written notices 30 days Er may terminate the services of
opportunity to be heard and after
prior to the effectivity of his his Ee.
hearing or opportunity to be
separation.
heard, a notice of the decision to
dismiss.
Worker is an inactive party in the
cause for termination.

Only notice with DOLE and notice

The requirement under Art. 292 to worker is required. No need for
(b) of notice and hearing applies a hearing because due process is
There is no hearing requirement in
only in Art. 297 because the Er is found in LC (Art. 298) not in
diseases but there is notice
accusing the worker that the latter Constitution according to Agabon.
requirement to worker, but no
committed an act or omission
notice to DOLE.
constituting a cause for NOTE: in Art. 292 (b) in relation to
termination of his employment. Art. 298, if the closure of business
will result in a mass layoff and
serious labor dispute, the SOLE can
enjoin the Er as regards mass
termination

EFFECT OF
POSSIBLE SITUATIONS LIABILITY OF ER
TERMINATION

a. With Just or Authorized NO Liability

Cause VALID
b. With Due Process NOTE: Separation Pay if for Authorized Cause.

Reinstatement + Full Backwages

a. Without Just or
Authorized Cause INVALID
NOTE: If Reinstatement not possible —Separation
b. With Due Process
Pay

Reinstatement + Full Backwages

a. Without Just or
Authorized Cause INVALID
NOTE: If Reinstatement not possible —Separation
b. Without Due Process
Pay

Liable for noncompliance with procedural

a. With Just or Authorized
requirements
Cause VALID
b. Without Due Process
NOTE: Separation Pay if for Authorized Cause

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 LABOR LAW AND SOCIAL LEGISLATION

4. TERMINATION OF CONTRACT OF MIGRANT his contract, leaving an unexpired portion of 9

WORKERS (R.A. No. 8042, as amended by R.A. No. months & 23 days.
10022)
Serrano filed with the LA a Complaint against
Gallant Maritime and Marlow for constructive
Relief of a Worker When Terminated Without
dismissal and for payment of his money claims.
Valid Cause
The LA rendered a favorable decision to Serrano
awarding him $8,770.00, representing his salary
1. Full reimbursement of his placement fee with
for 3 months of the unexpired portion of his
12% interest per annum; and
contract of employment applying R.A. No. 8042,
Sec 10(5):
2. Salaries for the unexpired portion of his
employment contract. (R.A. No. 8042, as
Money Claims. - In case of termination of
amended by R.A. No. 10022)
overseas employment without just, valid
or authorized cause as defined by law or
NOTE: The three-month option is declared
contract, the workers shall be entitled to
unconstitutional for violating the equal protection
the full reimbursement of his placement
clause and the substantive due process rule in the
fee with interest of 12% per annum, plus
Constitution. (Serrano v. Gallant Maritime Services
his salaries for the unexpired portion of his
Inc. and Marlow Navigation Company, Inc., G.R. No.
employment contract or for 3 months for
167614, 24 Mar. 2009)
every year of the unexpired term,
whichever is less.
This shall be given retroactive effect, because an
unconstitutional clause in the law confers no rights,
Is the subject clause constitutional?
imposes no duties, and affords no protection. The
unconstitutional provision is inoperative, as if it
A: NO. The subject clause contains a “suspect
were not passed into law at all. (Skippers United
classification” in that, in the computation of the
Pacific, Inc. v. Doza, et. al, G.R. No. 175558, 08 Feb.
monetary benefits of fixed-term Ees who are
2012)
illegally discharged, it imposes a three-month cap
on the claim of OFWs with an unexpired portion of
However, Sec. 7 of RA 10022 amended Sec. 10 of the
one year or more in their contracts, but none on the
Migrant Workers Act, and once again reiterated the
claims of other OFWs or local workers with fixed-
provision as above quoted. Nonetheless, the Court
term employment. The subject clause singles out
in the en banc case of Sameer Overseas Placement
one classification of OFWs and burdens it with a
Agency, Inc. v. Joy C. Cabiles still declared such as
peculiar disadvantage. The clause is a violation of
unconstitutional despite its replication. (G.R. No.
the right of Serrano to equal protection and right to
170139, 05 Aug. 2014)
substantive due process, for it deprives him of
property, consisting of monetary benefits, without
Q: Serrano, a seafarer, was hired by Gallant
any existing valid governmental purpose.
Maritime and Marlow Navigation Co. for 12
months as Chief Officer. On the date of his
Thus, Serrano is entitled to his salaries for the entire
departure, he was constrained to accept a
unexpired period of nine months and 23 days of his
downgraded employment contract for the
employment contract, pursuant to law and
position of Second Officer, upon the assurance
jurisprudence prior to the enactment of R.A. No.
that he would be made Chief Officer after a
8042. (Serrano v. Gallant Maritime Services &
month. It was not done; hence, he refused to stay
Marlow Navigation Co., Inc., G.R. No. 167614, 24 Mar.
on as Second Officer and was repatriated to the
2009)
Phils. He had served only 2 months & 7 days of

372 U N IV E R S I T Y O F S A N T O T O M A S
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 IV. POST-EMPLOYMENT
Q: Joy was deployed to work for Taiwan Wacoal,
Co. Ltd. on 26 June 1997 for 1 year. She alleged C. TERMINATION OF EMPLOYMENT BY
that Sameer Overseas Agency required her to EMPLOYEEE
pay a placement fee of P70,000.00. On 14 July
1997, Mr. Huwang of Wacoal informed Joy,
without prior notice, that she was terminated
Two Types of Resignation
and was given a salary from 26 June to 14 July
1. Voluntary Resignation; and
1997 only.
2. Involuntary Resignation or Constructive
Dismissal.
Joy filed a complaint for illegal dismissal with
the NLRC. She asked for the return of her
placement fee, the withheld amount for 1. RESIGNATION vs. CONSTRUCTIVE DISMISSAL
repatriation costs, payment of her salary for 23
months as well as moral and exemplary CONSTRUCTIVE
RESIGNATION
damages. DISMISSAL
As to Definition
The NLRC ruled that Joy was illegally dismissed
and awarded her three months’ worth of salary,
the reimbursement of the cost of her
repatriation, and attorney’s fees. Should Joy be
awarded three months’ worth of salary and
reimbursement of the cost of her repatriation?
It occurs when there is
A: NO. Joy is entitled to her salary for the unexpired cessation of work
portion of her contract, in accordance with Sec. 10 because continued
of R.A. No. 8042. Since she started working on 26 It is the voluntary act of employment is
June 1997 and was terminated from employment on an Ee who “finds rendered impossible,
14 July 1997, Joy is entitled to her salary from 15 himself in a situation unreasonable, or
July 1997 to 25 June 1998. where he believes that unlikely as when there
personal reasons is a demotion in rank
Furthermore, there is an implied stipulation in cannot be sacrificed in or diminution in pay or
contracts between the placement agency and the favor of the exigency of when a clear
overseas worker that in case the overseas worker is the service, then he has discrimination,
adjudged as entitled to reimbursement of his or her no other choice but to insensibility, or disdain
placement fees, the amount shall be subject to a disassociate himself by an Er becomes
12% interest per annum. This implied stipulation from his employment.” unbearable to the Ee
has the effect of removing awards for (Intertrod Maritime, leaving the latter with
reimbursement of placement fees from Circular No. Inc. v. NLRC, G.R. No. no other option but to
799’s coverage. 81087, 19 June 1991) quit (The University of
Immaculate Conception
However, if judgment did not become final and v. NLRC, G.R. No.
executory before 01 July 2013 and there was no 181146, 26 Jan. 2011)
stipulation in the contract providing for a different
interest rate, other money claims under Sec. 10 of
R.A. No. 8042 shall be subject to the six percent (6%)
interest per annum in accordance with Circular No.
799. (Sameer Overseas Placement Agency v. Cabiles,
G.R. No. 170139, 05 Aug. 2014)

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 LABOR LAW AND SOCIAL LEGISLATION
As to Voluntariness a. Serious insult by the Er or his
representative on the honor and person
Involuntary or forced of the Ee;
Voluntary
resignation
b. Inhuman and unbearable treatment
As to Entitlement to Separation Pay accorded the Ee by the Er or his
representative;
Not entitled to
separation pay unless c. Commission of a crime or offense by the
it is a company practice Entitled to either Er or his representative against the
or provided in the CBA. reinstatement or person of the Ee or any of the immediate
(Hanford Philippines separation pay and members of his family; and
Inc. v. Shirley Joseph, backwages
G.R. No. 158251, 31 d. Other causes analogous to any of the
Mar. 2005) foregoing.

As to Burden of Proof NOTE: If resignation is not voluntary, the same can

be deemed to be a constructive dismissal.

Burden of proving Burden of proving Withdrawal of Resignation

voluntariness is on the constructive dismissal
Er. is on the Ee. Resignation is withdrawable even if the Ee has
called it irrevocable. (Custodio v. Ministry of Labor
and Employment, G.R. No. 643174, 19 July 1990) But
Resignation after it is accepted or approved by the Er, its
withdrawal needs the Er’s consent. (Azucena, 2016)
1. With written notice - An Ee may terminate
without just cause the Er-Ee relationship by Intention to Resign
serving a written notice on the Er at least one
(1) month in advance. (Art. 300(a), LC) An Ee may be deemed to have resigned from his
position, and such resignation may be accepted and
NOTE: The Er upon whom no such notice was made effective by the management, although the Ee
served may hold the Ee liable for damages. (Art. did not mention the word “resign” and/or
300[a], LC) “resignation.” (Azucena, 2016)

The Er has no control over resignations and so, Q: ANZ Global Services and Operations Manila,
the notification requirement was devised in Inc. (respondent) hired John Roger Nino S.
order to ensure that no disruption of work Vergara (petitioner) as Risk Manager. On 05
would be involved by reason of the resignation. Aug. 2016 petitioner handed his resignation
(Intertrod Maritime, Inc. v. NLRC, G.R. No. 81087, letter dated 05 Aug. 2016 to Line Manager,
supra.) Kristine Gorospe. Petitioner learned that there
would be a restructuring in the company where
2. Without written notice – An Ee may put an end the displaced workers would receive a lump
to the relationship without serving any notice sum severance payment. Petitioner's position
on the Er for any of the following just causes. was included in the positions to be affected by
(Art. 300(b), LC): the restructuring program.

On 01 Sept. 2016, petitioner checked if the

Resignation Acceptance Form (RAF) had already

U N IV E R S I T Y O F S A N T O T O M A S 374
2023 GOLDEN NOTES
 IV. POST-EMPLOYMENT
been accomplished. He learned that it has not would suggest that respondent had accepted
yet been signed by Gorospe. Petitioner sent an petitioner's resignation. Pineda's email to petitioner
email to Roscoe Pineda (Pineda), Head of Risk on 05 September 2016 is informative. If the ELA
Service, to inform him that he was formally constituted as respondent's acceptance of
withdrawing his resignation. Pineda replied to petitioner's resignation, as respondent insists, then
the email stating that petitioner's resignation why would Pineda, in his email, suggest to
would take effect the following day. However, petitioner to talk to Hutton to see if retraction was
Pineda suggested for petitioner to speak to the still possible? This, and all the other circumstances
Human Resources (HR) to confirm if retraction considered, only shows that 05 Sept. 2016, there
was still possible. was still no acceptance on the part of respondent of
petitioner's resignation. (Gergara v. ANZ Global
On 06 Sept. 2016, the head of HR, Nicola Hutton Services and Operations Manila, Inc., G.R. No. 250205,
(Hutton), sent petitioner an email informing 17 Feb. 2021)
him that his resignation had already been
accepted and that he could no longer withdraw Resignation Pay
it. The predicament prompted petitioner to file
a complaint for illegal dismissal and recovery of GR: An Ee who voluntarily resigns from
monetary claims against respondent. Petitioner employment is not entitled to separation pay.
contended that even if he had tendered his
resignation, it was validly revoked prior to XPNs:
respondent's acceptance thereof.
1. There is a stipulation for payment of such in
Was there an acceptance of petitioner's the employment contract or CBA; or
resignation prior to the retraction thereof?
2. Payment of the amount is sanctioned by
A: NO. Acceptance of a resignation tendered by an established employment practice or policy.
Ee is necessary to make the resignation effective. In (Travelaire & Tours Corp. v. NLRC, G.R. No.
this case, no such acceptance was shown. 131523, 20 Aug. 1998)

Petitioner had validly retracted his resignation Constructive Dismissal

prior to its effective date and respondent's
acceptance thereof. Indeed, Gorospe's act of It is an Er’s act amounting to dismissal but made to
"triggering" the ELA, following petitioner's tender of appear as if it were not. It is a dismissal in disguise.
resignation, cannot at all be taken as respondent's (Uniwide Sales Warehouse Club v. NLRC, G.R. No.
acceptance of the resignation. Even respondent 154503, 29 Feb. 2008)
itself claimed that the ELA was just proof that it,
through Gorospe, had acted on the resignation Constructive dismissal does not always involve
letter. That it was not an act of acceptance on the fortright dismissal or diminution in rank,
part of respondent of petitioner's resignation is compensation, benefit and privileges. There may be
proven by the nature and contents of the email constructive dismissal if an act of clear
dated 19 Aug. 2016 about ELA. The email sender discrimination, insensibility, or disdain by an Er
was PeopleAssist@anz.com, addressed to Gorospe, becomes so unbearable on the part of the Ee that it
with subject "For action: Ee Leaving Advice next could not foreclose any choice by him except to
steps." forego his continued employment. (Hyatt Taxi
Services, Inc. v. Catinoy, G.R. No. 143204, 26 June
The "company emails," presented as proof that 2001)
petitioner's resignation had been accepted also lack
merit. Like the affidavits of Hutton and Gorospe, the
emails prior to 06 Sept. 2016 contain nothing that

375
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 LABOR LAW AND SOCIAL LEGISLATION
Burden of proof on the Ee vindictive nature and oppressive conduct, as well as
his reckless disregard for Ees’ rights. The act of
The Ee who is complaining of constructive dismissal tearing timecards may be considered an outright –
has the burden of proof “to prove that her not only symbolic – termination of employment
resignation was not voluntary, but was actually a relationship, a categorical indication of an Ee’s
case of constructive dismissal, with clear, positive, dismissal from employment. (Ang v. San Joaquin,
and convincing evidence.” (Hechanova v. Atty. G.R. No. 185549, 07 Aug. 2013)
Matorre, G.R. No. 198261, 16 Oct. 2013)
Relief entitled to illegally or constructively
Shortening the resignation’s 30-day period of dismissed Ees
effectivity does not prove forced resignation
An illegally or constructively dismissed Ee is
The 30-day notice requirement for an Ee’s entitled to: (1) either reinstatement, if viable, or
resignation is for the benefit of the Er who has the separation pay, if reinstatement is no longer viable;
discretion to waive such period. Its purpose is to and (2) backwages. These two reliefs are separate
afford the Er enough time to hire another Ee if and distinct from each other and are awarded
needed and to see to it that there is proper turn-over conjunctively. (Robinsons Galleria v. Ranchez, G.R.
of the tasks which the resigning Ee may be handling. No. 177937, 09 Jan. 2011)
(Ibid.)
Q: Monica is a customer associate in LBC Danao.
The rule requiring an Ee to stay or complete the 30- Arturo, her immediate superior, started
day period prior to the effectivity of his resignation sexually harassing her. On 05 May 2010, she
becomes discretionary on the part of the reported the incident to the LBC Head Office. On
management as an Ee who intends to resign may be 14 May 2010, sensing that management did not
allowed a shorter period before his resignation immediately act on her complaint, Monica
becomes effective. (Phimco Industries v. NLRC, G.R. resigned. She asserted that she was forced to
No. 118041, 11 June 1997) quit since she no longer felt safe at work. On 15
June 2010, Monica was served a copy of a Notice
Shortening the required period for the resigning Ee to Explain. On 20 July 2010, LBC held the
from 30 days to 15 days does not prove forced or administrative hearing for the incident. On the
constructive dismissal. (Hechanova v. Atty. Matorre, same day, Monica filed a Complaint for Illegal
supra.) Dismissal against the company. On 27 Sept.
2010, the area head of LBC Cebu sent a letter
Q: Can the Er require an Ee to serve a written addressed to Arturo containing a suspension
notice more than the 30-day period under the LC with last warning.
prior to the effectivity of his resignation?
LBC argues that it should not be held liable for
A: YES. The LC provides that an Ee may terminate constructive dismissal. It argues that it cannot
without just cause the Er-Ee relationship by serving be held liable for the hostile work environment
a written notice on the Er at least one (1) month in that Monica experienced because it was Arturo
advance. (Art. 300(a), LC) who committed the acts subject of her
complaint. It asserts that four (4) months is not
Act of Tearing Timecards Constitutes an unreasonable period to resolve a sexual
Constructive Dismissal harassment complaint. Is LBC liable for
constructive dismissal?
A daily time record is a mandatory requirement for
inclusion in the payroll, and in the absence of an A: YES. Constructive dismissal occurs when an Er
employment agreement, it constitutes evidence of makes an Ee's continued employment impossible,
employment. The tearing of timecards confirms Er’s unreasonable, or unlikely, or has made an Ee's

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working conditions or environment harsh, hostile Jacob and Bermido filed a case before the Labor
and unfavorable, such that the Ee feels obliged to Arbiter for constructive illegal dismissal,
resign from his or her employment. One of the ways maltreatment, and nonpayment of wages for the
by which a hostile or offensive work environment is unexpired portion of their contract with claims
created is through the sexual harassment of an Ee. of moral and exemplary damages, medical
Under Section 5 of the Anti-Sexual Harassment Act, expenses, and attorney's fees. The Complaint
the Er is only solidarily liable for damages with the filed was directed against First Step and its
perpetrator in case an act of sexual harassment was President, Elnor Tapnio, as well as against
reported, and it did not take immediate action on Jacob's foreign Er, Muhammad. Jacob insisted on
the matter. having been constructively dismissed because
her working environment allegedly became so
There is no showing that LBC acted on Monica’s intolerable that she was impelled to leave her
report before they issued Arturo a Notice to Explain. job. Was she constructively dismissed?
Thus, the formal investigation is deemed to have
commenced only 41 days after the incident was A: YES. Constructive dismissal does not always
reported. LBC likewise offered no explanation as to entail a "forthright dismissal or diminution in rank,
why it took another month before it held an compensation, benefit and privileges." Pertinent in
administrative hearing for the case. Worse, it took the case at hand, there can also be constructive
LBC another two months to resolve the matter. dismissal in cases where "an act of clear
discrimination, insensibility, or disdain by an Er
LBC’s insensibility to Monica’s sexual harassment becomes so unbearable on the part of the Ee that it
case is a ground for constructive dismissal. In this could foreclose any choice by him [or her] except to
instance, it cannot be denied that Monica was forego his [or her] continued employment."
compelled to leave her employment because of the
hostile and offensive work environment created and To gauge if constructive dismissal exists, the test is
reinforced by Arturo and LBC. She was thus clearly whether a reasonable person in the Ee's standing
constructively dismissed. (LBC Express-Vis, Inc. v. was impelled to surrender his or her post under the
Monica C. Palco, G.R. No. 217101, 12 Feb. 2020) given situation. It is a dismissal in disguise because
the doing equates to a "dismissal but made to
Q: Donna Jacob sought employment with First appear as if it were not." Hence, the law “recognizes
Step Manpower International Services, Inc. as a and resolves this situation in favor of Ees in order to
household service worker. When First Step protect their rights and interests from the coercive
accepted her application, she signed a two-year acts of the Er."
contract where she would be deployed to
Riyadh, Kingdom of Saudi Arabia. Jacob It is discernable from petitioner's declaration that
narrated several events that caused her to only the controversy emanated from the lewd actuations
stay in her Er for only three (3) months. First is of her male foreign Er. To avert a commotion, she
that her male Er had attempted to rape her while reported the matter to her female Er but
she was washing the dishes, and when she unfortunately, she was merely discredited and even
reported such matter to her female Er, the latter blamed for the incident. From then on, petitioner's
did not believe her, and another event is when female foreign Er treated her differently. Jacob was
her female Er hit her with a shoe that was subjected to physical and verbal harm that she was
“violently thrown at her.” Unable to take this, left with no other choice but to relinquish her
she escaped her Ers and met Bermido, a fellow employment. Certainly, the treatment petitioner
Filipina worker, that was being maltreated by experienced in the hands of her foreign Ers fostered
her Ers as well. a hostile and unbearable work setting which
impelled her not only to leave her Ers but also, as in
petitioner's words, to escape (“Tumakas”).

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The conclusion is all too clear that there exists a dismissal. Furthermore, an Ee’s security of tenure
well-grounded fear on her part prompting her to does not give him a vested right in his position as
run away despite having been employed overseas would deprive the company of its prerogative to
for barely two (2) months. The cessation of change his assignment or transfer him where he will
petitioner's employment was not of her own doing be most useful. (Philippine Japan Active Carbon Corp.
but was brought about by unfavorable v. NLRC, G.R. No. 83239, 08 Mar. 1999)
circumstances created by her foreign Ers. To put in
simply, if petitioner failed to continue her job, it was Q: Sangil was a utility man/assistant steward of
because she refused to be further subjected to the the passenger cruise vessel Crown Odyssey
ordeal caused by her Ers' conduct. (Donna Jacob v. under a one-year contract. Sangil suffered head
First Step Manpower Int’l Services, Inc., G.R. No. injuries after an altercation with a Greek
229984, 08 July 2020) member of the crew. He informed the captain
that he no longer intends to return aboard the
Q: Flores, a conductor of JAM Transportation Co., vessel for fear that further trouble may erupt
Inc., had an accident where he had to be between him and the other Greek crewmembers
hospitalized for a number of days. Upon of the ship. Was Sangil constructively dismissed?
reporting back to the company, he was told to
wait. For several days, this continued and he was A: YES. There is constructive dismissal where the
promised a route assignment which did not act of a seaman in leaving ship was not voluntary but
materialize. Upon speaking to Personnel was impelled by a legitimate desire for self-
Manager Medrano, he was told that he will be preservation or because of fear for his life.
accepted back to work but as a new Ee. Flores Constructive dismissal does not always involve
rejected the offer because it would mean diminution in pay or rank but may be inferred from
forfeiture of his 18 years of service to the an act of clear discrimination, insensibility, or
company. Is the offer for reinstatement as a new disdain by an Er may become unbearable on the part
Ee a constructive dismissal? of the Ee that it could foreclose any choice by him
except to forego his continued employment. (Ibid.)
A: YES. Flores’ re-employment as a new Ee would be
very prejudicial to him as it would mean a demotion Q: In October 1988, Dela Torre R. Dela Torre was
in rank and privileges and the retirement benefits employed as a security guard by Twinstar
for his previous 18 years of service with the Professional Protective Services, Inc.
company would simply be considered as non- (Twinstar). He was deployed at the Las
existent. It amounts to constructive dismissal. (JAM Haciendas in Tarlac City and was paid a daily
Transportation Co., Inc. v. Flores, G.R. No. 82829, 19 wage of P 240.00. Sometime in January 2011,
Mar. 1993) Dela Torre sought assistance from the program
of a certain Mr. Tulfo to complain about the
Q: Quinanola was transferred from the position underpayment of his salaries. On 24 Jan. 2011,
of Executive Secretary to the Executive Vice Commander Cesario Guhilde directed Dela
President and General Manager to the Torre to report to Twinstar's office in Quezon
Production Dep’t as Production Secretary. City. Upon reporting to the office the next day, he
Quinanola rejected the assignment and filed a was informed by Twinstar's administrative
complaint for illegal dismissal due to officer that he was being placed on floating
constructive dismissal. Did the transfer of status. Dela Torre alleged that he was on floating
Quinanola amount to constructive dismissal? status for more than six (6) months which
prompted him to file a complaint for to illegal
A: NO. Quinanola’s transfer was reasonable since it dismissal and non-payment of separation pay.
did not involve a demotion in rank or a change in her Was Dela Torre illegally dismissed?
place of work nor a diminution in pay, benefits, and
privileges. It did not constitute constructive

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A: NO. There is no illegal dismissal that took place in employment. Be this as it may, the Court found that
this case. There is constructive dismissal when an Twinstar was remiss in following the due process
Er's act of clear discrimination, insensibility or required by law and that Dela Torre should be
disdain becomes so unbearable on the part of the Ee entitled to nominal damages as will be discussed
to foreclose any choice on his part except to resign below. (Dela Torre v. Twinstar Professional
from such employment. It exists where there is Protective Services, Inc., G.R. No. 222992, 23 June
involuntary resignation because of the harsh, 2021)
hostile, and unfavorable conditions set by the Er.
The standard for constructive dismissal is "whether
a reasonable person in the Ee's position would have D. PREVENTIVE SUSPENSION
felt compelled to give up his employment under the
circumstances.”

Preventive suspension
However, it must be emphasized that “not every
inconvenience, disruption, difficulty, or
It means that during the pendency of the
disadvantage that an Ee must endure sustains a
investigation, the Er may place the Ee under
finding of constructive dismissal.” What is vital is
preventive suspension leading to termination when
the weighing of the evidence presented and a
there is an imminent threat or a reasonable
consideration of whether, given the totality of
possibility of a threat to the lives and properties of
circumstances, the Er acted fairly in exercising a
the Er, his family and representatives as well as the
prerogative.
offender’s co-workers by the continued service of
the Ee. (Sec. 8, Rule XXIII, Book V, IRR)
Applying the foregoing standards to this case, Dela
Torre utterly failed to prove that he was
Duration of preventive suspension
constructively dismissed. He never presented any
evidence, aside from his self-serving allegations,
It should not last for more than 30 days. The Ee
that he was forced to be on floating status for more
should be made to resume his work after 30 days. It
than six (6) months without being given new
can be extended provided the Ee’s wages are paid
assignment by Twinstar. In comparison, Twinstar
after the 30-day period.
was able to establish that Dela Torre went on
absence without leave on or about 21 Jan. 2011 and
This period is intended only for the purpose of
that it had subsequently sent several notices to Dela
investigating the offense to determine whether he is
Torre. Dela Torre himself admitted declining the
to be dismissed or not. It is not a penalty.
assignment offered to him by the Twinstar within
Preventive suspension exceeding 30 days will
six (6) months from the time he was placed on
amount to constructive dismissal.
floating status. Dela Torre's flimsy claim that he did
not understand the question of the LA and the
NOTE: If more than one (1) month, the Ee must be
Minutes of the said hearing, as both were in the
reinstated or reinstated in the payroll. Officers are
English language, would seem like a desperate
liable only for the offense committed if done with
attempt to feign ignorance in order to retract such
malice.
statements.

Q: Cantor and Pepito were preventively

The circumstances would show the stubborn
suspended pending application for their
unwillingness of Dela Torre to return to work
dismissal by Manila Doctor’s Hospital after
despite being required by Twinstar to report to
being implicated by one Macatubal when they
work multiple times within six (6) months from
refused to help him when he was caught stealing
January 21, 2011, even assuming arguendo that he
x-ray films from the hospital. Was the
was indeed placed on floating status. Thus, Twinstar
preventive suspension of Cantor and Pepito
had just cause to terminate Dela Torre's
proper?
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A: NO. Where the continued employment of an Ee NOTE: Actual reinstatement or payroll
poses a serious and imminent threat to the life and reinstatement;
property of the Er or on his co-Ees, the Ees’
preventive suspension is proper. In this case, no b. Full backwages
such threat to the life and property of the Er or of
their co-Ees’ is present and they were merely NOTE: Full backwages means no
implicated by Macatubal. (Manila Doctors Hospital v. deduction;
NLRC, G.R. No. L-64897, 28 Feb. 1985)
c. Separation pay in lieu of reinstatement;
Q: Karina Santos is a famous news anchor d. Damages, including Attorney’s fees; and
appearing nightly in the country’s most watched e. 6% Legal Interest on monetary award.
newscast. She is surprised, after one newscast,
to receive a notice of hearing before the station’s Q: Does the offer to reinstate the illegally
Vice-President for Human Resources and calls dismissed Ee affect the liability of the erring Er?
the VP immediately to ask what was wrong.
Karina is told over the phone that one of her A: NO. Sincere or not, the offer of reinstatement
crew filed a complaint against her for verbal could not correct the earlier illegal dismissal of the
abuse and that management is duty bound to Ee. The Er incurred liability under the LC from the
investigate and give her a chance to air her side. moment an Ee was illegally dismissed, and the
liability did not abate as a result of the Er’s
Karina objects and denies that she had ever repentance. (Ranara v. NLRC, G.R. No. 100969, 14
verbally assaulted her crew. The VP then Aug. 1992)
informed her that pending the investigation she
will be placed on a 30-day preventive Q: Juan was hired by business process
suspension without pay and that she will not be outsourcing corporation Teletech as technical
allowed to appear in the newscast during this support representative and was assigned to the
time. Is the preventive suspension of Karina Accenture account. Teletech's human resource
valid? Discuss the reasons for your answer. office informed Juan that he would be
(2015 BAR) transferred to the Telstra account upon
successfully passing the training, assessment
A: NO. The preventive suspension of Karina is not and examination. Teletech gave him a copy of
valid. The Er may place an Ee under preventive the Transfer Agreement and informed him that
suspension if his/her continued employment would his refusal to take the examinations would
pose a serious and imminent threat to the life or result in the termination of his services on the
property of the Er or of his/her co-Ees. These ground of redundancy. Juan refused to undergo
requirements are not present here. training and take the examinations under the
belief that he was entitled to security of tenure.
He was dismissed. Is Juan's dismissal on grounds
E. RELIEFS FROM ILLEGAL DISMISSAL of redundancy proper?

A: NO. To successfully invoke a valid dismissal due

to redundancy, there must be: (1) a written notice
Remedies of Ee in case of Illegal Dismissal
served on both the Ees and the DOLE at least one
month prior to the intended date of termination of
In case where the worker is illegally terminated, his
employment; (2) payment of separation pay
remedies are: (Re-F-D-I-S)
equivalent to at least one month pay for every year
of service; (3) good faith in abolishing the
a. Reinstatement without loss of seniority
redundant positions; and (4) fair and reasonable
rights
criteria in ascertaining what positions are to be

U N IV E R S I T Y O F S A N T O T O M A S 380
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 IV. POST-EMPLOYMENT
declared redundant and accordingly abolished. When the pilots tendered their respective
Moreover, the company must provide substantial retirement or resignation and PAL immediately
proof that the services of the Ees are in excess of accepted them, both parties mutually terminated
what is required of the company. the contractual employment relationship between
them thereby curtailing whatever seniority rights
Teletech fails to convincingly show the alleged and privileges the pilots had earned through the
decline in Accenture's business and that the years. (Enriquez v. PAL, et al., G.R. No. L-51382, 29
expected volume of calls for its Accenture account Dec. 1986)
would not materialize. In other words, redundancy
was not proven. Teletech should have presented any Q: Remoticado was absent for 14 days without
document proving the decline in Accenture's an official leave. He then informs Nielo, HR
volume of calls for the past months, or affidavits of officer, that he was resigning due to personal
the Accenture and Teletech officers who reasons. After receiving his final pay, he
determined that business was slowing down and protested that he was entitled to separation pay
their basis thereof. (Teletech Customer Care computed at two (2) months for his services for
Management Philippines, Inc v. Marui Gerona, Jr., G.R. two (2) years. Nielo averred that he could not be
No. 219166, November 10, 2021, as penned by J. entitled to separation pay considering that he
Hernando) voluntarily resigned. Remoticado then filed a
complaint for illegal dismissal claiming that he
Q: PAL dismissed strike leader Capt. Gaston, as a was told to stop reporting for work due to a
result of which, the Union resolved to undertake "debt at the canteen" and thereafter was
the grounding of all PAL planes and the filing of prevented from the company’s premises. Was
applications for “protest retirement” of there an illegal dismissal?
members who had completed 5 years of
continuous service, and “protest resignation” A: NO. There can be no illegal termination when
for those who had rendered less than 5 years of there was no termination. Before the Er must bear
service in the company. PAL acknowledged the burden of proving that the dismissal was legal,
receipt of said letters and among the pilots the Ee must first establish by substantial evidence
whose “protest resignation or retirement” was the fact of his dismissal from service. If there is no
accepted by PAL were Enriquez and Ecarma. dismissal, then there can be no question as to the
legality or illegality thereof. Petitioner insists on his
Before their readmission, PAL required version of events, that is, that on Dec. 23, 2010, he
Enriquez and Ecarma to accept 2 conditions, was told to stop reporting for work on account of his
namely: that they sign conformity to PAL’s letter supposed indebtedness at the canteen. This bare
of acceptance of their retirement and or insistence, however, is all that petitioner has. He
resignation, and that they submit an application failed to present convincing evidence. (Remoticado
for employment as new Ees without protest or v. Typical Construction Trading Corp., and Alignay,
reservation. As a result of this, their seniority G.R. No. 206529, 23 Apr. 2018)
rights were lost. Are the pilots entitled to the
restoration of their seniority rights? Q: On July 1986, Arriola was employed as a
correspondent assigned in Olongapo City and
A: NO. An Ee has no inherent right to seniority. He Zambales under Pilipino Star Ngayon, Inc.
only has such rights as may be based on a contract, (Pilipino Star). Sometime in November 2002,
statute, or an administrative regulation relative after his column was removed from publication,
thereto. Seniority rights which are acquired by an Ee Arriola never returned for work. Three years
through long-time employment are contractual and later, Arriola filed an illegal dismissal complaint
not constitutional. The discharge of an Ee thereby against Pilipino Star stating that he was
terminating such rights would not violate the “arbitrarily dismissed.”
Constitution.

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Arguing that he was a regular Ee, Arriola Forms of reinstatement
contended that his rights to security of tenure
and due process were violated. On the other 1. Actual or physical - The Ee should be
hand, Pilipino Star claims that he was never reinstated to his position which he occupies
dismissed, in fact, they tried calling and sending prior to his illegal dismissal under the same
him messages to report for work but to no avail terms and conditions prevailing prior to his
until such time that they discovered that Arriola dismissal or separation or, if no longer
transferred to a rival newspaper publisher. The available, to a substantially equivalent
Labor Arbiter dismissed the case stating that position.
there was no illegal dismissal for Arriola was the
one who abandoned his work. Is the Labor 2. Payroll – The Ee is merely reinstated in the
Arbiter correct in dismissing the complaint? payroll. The Ee although not admitted back to
work, would nevertheless be included in the
A: YES. Pilipino Star Ngayon, Inc. did not illegally payroll and entitled to receive salary and other
dismiss Ariolla. The removal of Arriola’s column benefits as if she were in fact working.
from Pilipino Star’s newspaper is not tantamount to (Azucena, 2016)
a termination of his employment as his job is not
dependent on the existence of the column. NOTE: Er is given the option to reinstate either
Moreover, a newspaper publisher has the actual or in payroll.
management prerogative to determine what
columns to print in its newspaper. Furthermore, it An Er can reinstate an Ee in payroll when actual
took him three years to file the complaint of illegal reinstatement is no longer possible in instances
dismissal which is a clear intention to sever his wherein:
employment with Pilipino Star Ngayon, Inc. (Arriola
v. Pilipino Star Ngayon, Inc, and/or Belmonte, G.R. No. 1. The Er believes that there was a valid cause for
175689, 13 Aug. 2014) dismissal; or

REINSTATEMENT 2. Er does not want to see anymore an unwanted

face in the company premise because it may
It is the restoration of the Ee to the state from which demoralize Ees.
he has been unjustly removed or separated without
loss of seniority rights and other privileges. The NOTE: An order of reinstatement by the LA is not
person reinstated assumes the position he had the same as actual reinstatement of a dismissed or
occupied prior to his dismissal, and is, ordinarily, separated Ee, however it is immediately executory
entitled only to the last salary in that position. even pending appeal. Thus, until the Er continuously
(Azucena, 2016) fails to implement the reinstatement aspect of the
Reinstatement presupposes that the previous decision of the LA, their obligation to the illegally
position from which one had been removed still dismissed Ee, insofar as accrued backwages and
exists, or that there is an unfilled position which is other benefits are concerned, continues to
substantially equivalent or of similar nature as the accumulate. It is only when the illegally dismissed
one previously occupied by the Ee. Ee receives the separation pay (in case of strained
relations) that it could be claimed with certainty
that the Er-Ee relationship has formally ceased
thereby precluding the possibility of reinstatement.
(Triad Security & Allied Services, Inc. et al v. Ortega,
G.R. No. 160871, 06 Feb. 2006)

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 IV. POST-EMPLOYMENT
Q: Is an illegally dismissed Ee entitled to Art. 229 vs. Art. 294
reinstatement as a matter of right?
ART. 229 ART. 294
A: YES.
May be availed of as Presupposes that the
XPNs: Proceeds from an illegal dismissal wherein soon as the LA renders judgment has already
reinstatement is ordered but cannot be carried out a judgment declaring become final and
as in the following cases: that the dismissal of executory.
the Ee is illegal and
1. Reinstatement cannot be effected in view of the ordering said Consequently, there is
long passage of time or because of the realities reinstatement. It may nothing left to be done
of the situation; be availed of even except the execution
pending appeal thereof.
2. It would be inimical to the Er’s interest;

3. When reinstatement is no longer feasible; NOTE: An award or order for reinstatement is self-
executory. It does not require the issuance of a writ
4. When it will not serve the best interest of the of execution. (Pioneer Texturizing Corp. v. NLRC, G.R.
parties involved; No. 118651, 06 Oct. 1997)

5. Company will be prejudiced by reinstatement; Reinstatement Pending Appeal

6. When it will not serve a prudent purpose; A dismissed Ee whose case was favorably decided
by the LA is entitled to receive wages pending
7. When there is resultant strained relation; or appeal upon reinstatement, which is immediately
executory. Unless there is a restraining order, it is
NOTE: applies to both confidential and ministerial upon the LA to implement the order of
managerial Ees only. reinstatement and it is mandatory on the Er to
comply therewith.
8. When the position has been abolished.
NOTE: After the LA’s decision is reversed by a
NOTE: Applies to managerial, supervisory and higher tribunal, the Ee may be barred from
rank-and-file Ees. collecting the accrued wages, if it is shown that the
delay in enforcing the reinstatement pending appeal
NOTE: In such cases, it would be more prudent to was without fault on the part of the Er.
order payment of separation pay instead of
reinstatement. (Quijano v. Mercury Drug Two-Fold Test
Corporation, G.R. No. 126561, 08 July 1998)
1. There must be actual delay or the fact that the
Order of Reinstatement order of reinstatement pending appeal was not
executed prior to its reversal; and
An order of reinstatement entitles an Ee to receive
his accrued backwages from the moment the 2. The delay must not be due to the Er’s
reinstatement order was issued up to the date when unjustified act or omission. If the delay is due
the same was reversed by a higher court without to the Er’s unjustified refusal, the Er may still
fear of refunding what he had received. (Pfizer v. be required to pay the salaries
Velasco, G.R. No. 177467, 09 Mar. 2011) notwithstanding the reversal of the LA’s
decision. (Garcia v. PAL, G.R. No. 164856, 29
Aug. 2009)

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Q: What happens if there is an Order of
Q: May the Court order the reinstatement of a Reinstatement but the position is no longer
dismissed Ee even if the prayer of the complaint available?
did not include such relief?
A: The Ee should be given a substantially equivalent
A: YES. So long as there is a finding that the Ee was position. If no substantially equivalent position is
illegally dismissed, the court can order the available, reinstatement should not be ordered
reinstatement of an Ee even if the complaint does because that would in effect compel the Er to do the
not include a prayer for reinstatement, unless of impossible. In such a situation, the Ee should merely
course the Ee has waived his right to reinstatement. be given a separation pay consisting of one (1)
By law, an Ee who is unjustly dismissed is entitled to month salary for every year of service. (Grolier Int’l
reinstatement among others. The mere fact that the Inc. v. ELA, G.R. No. 83523, 31 Aug. 1989)
complaint did not pray for reinstatement will not
prejudice the Ee, because technicalities of law and Q: Eteliano Reyes, Jr. was employed by Asian
procedure are frowned upon in labor proceedings. Terminals, Inc. (ATI) as Supervisor III/Foreman
(Pheschem Industrial Corp. v. Moldez, G.R. No. on Board who shall be responsible in ensuring
116158, 09 May 2005) that shift vessel operations are carried in
accordance with ATI standards. He first went to
NOTE: Reinstatement ordered by LA is self- Bay 30, but he had to leave the All Purpose
executory as provided under Art. 229 while the one Personnel (APP) tasked to finish the lashing
by the NLRC is not because it awaits the issuance of operations as he needed to supervise the
a writ of execution under Art. 230. (Azucena, 2016) loading operations at Bay 38.

Q: A complaining Ee obtained a favorable With a twist of fate, an accident occurred at Bay

decision in an illegal dismissal case. The LA 30 wherein a lashing bar fell on the pier apron
ordered her immediate reinstatement. The Er hitting Manuel Quiban a vessel security guard.
opted payroll reinstatement pending appeal. As expected, ATI directed Reyes to explain why
The NLRC ruled that the dismissal was valid. The he should not be penalized for negligence. In his
Er stopped the payroll reinstatement. The Ee response, Reyes clarified that while completing
elevated the case to the CA, and eventually to the the lashing operations at Bay 30, "EC Planner"
SC. The SC upheld the dismissal. Is the Ee entitled directed him to transfer to Bay 38 to supervise
to continued payroll reinstatement after the the commencement of loading operations.
NLRC decision? Pursuant to said instruction, Reyes left the four
(4) APPs to complete lashing operations at Bay
A: NO. The Ee is not entitled to continued payroll 30 and proceeded to Bay 38 where a loading
reinstatement. The decision of the NLRC on appeals operation was about to start and the crane was
from decisions of the LA shall become final and already positioned.
executory after ten (10) calendar days from receipt
thereof by the parties. That the CA may take In a Notice to Explain with Preventive
cognizance of and resolve a petition for certiorari Suspension, the ATI informed Reyes that his
for the nullification of the decisions of the NLRC on failure to ensure that the safeguards for works
jurisdictional and due process considerations does on board the vessel were faithfully observed
not affect the statutory finality of the NLRC decision. constitutes probable violation under Section 2.2
Since the NLRC decision which upheld the dismissal of the CTOP (neglect of work, incompetence,
became final, the Er was correct in stopping the inefficiency, negligence, failure to perform
payroll reinstatement of the Ee. (Bago v. NLRC, G.R. duties and/or responsibilities, or failure to
No. 170001, 04 Apr. 2007) observe standard operating procedures, in any
case resulting in injury or death) and may merit

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the penalty of dismissal. Is Reyes, Jr. illegally Q: What is the basis of awarding backwages to an
dismissed? illegally dismissed Ee?

A: NO. Indeed, as pointed out by the CA, ATI failed A: The payment of backwages is generally granted
to present clear, accurate, positive, and convincing on the ground of equity. It is a form of relief that
evidence that there is just cause to terminate Reyes' restores the income that was lost by reason of the
employment. First, Reyes merely followed the rules unlawful dismissal; the grant thereof is intended to
in the performance of his job. In fact, his transfer to restore the earnings that would have accrued to the
Bay 38 was by instructions of the EC Planner. dismissed Ee during the period of dismissal until it
Second, his transfer to Bay 38 was necessary is determined that the termination of employment
because a quay crane has already been is for a just cause. It is not private compensation or
prepositioned and loading operation was about to damages but is awarded in furtherance and
commence. effectuation of the public objective of the LC. Nor is
it a redress of a private right but rather in the nature
Reinstatement cannot be barred especially when of a command to the Er to make public reparation
the Ee has not indicated an aversion to returning to for dismissing an Ee either due to the former’s
work or does not occupy a position of trust and unlawful act or bad faith. (Tomas Claudio Memorial
confidence or has no say in the operation of the Er's College Inc., v. CA, G.R. No. 152568, 16 Feb. 2004)
business. Here, aside from the fact that this issue
was only raised for the first time, there is also no Q: What is the period covered by the payment of
compelling evidence presented to support the backwages?
conclusion that the parties' relationship has gone so
sour to render reinstatement impracticable. Also, A: The backwages shall, from the time that wages
Reyes has not demonstrated unwillingness to be are unlawfully withheld until the time of actual
reinstated and the existence of a confidential reinstatement or, if reinstatement is no longer
relationship between him, as a supervisory Ee, and feasible, until the finality of judgment awarding
ATI, has not been established. For lack of evidence backwages, cover the period from the date of
on record, it appears that his position was not a dismissal of the Ee up to the date of:
sensitive position as would require complete trust
and confidence, and where personal ill will would 1. Actual reinstatement, or if reinstatement is no
foreclose his reinstatement. (Asian Terminals, Inc. v. longer feasible;
Reyes, Jr., G.R. No. 240507, 28 Apr. 2021)
2. Finality of judgment awarding backwages.
BACKWAGES (Buhain v. CA, G.R. No. 143709, 02 July 2002)

Backwages refers to the relief given to an Ee to The backwages to be awarded should not be
compensate him for the lost earnings during the diminished or reduced by earnings elsewhere
period of his dismissal. It presupposes illegal during the period of his illegal dismissal. The reason
termination. (Azucena, 2016) is that the Ee while litigating the illegality of his
dismissal must earn a living to support himself and
NOTE: Entitlement to backwages of the illegally his family. (Bustamante v. NLRC, G.R. No. 111651, 15
dismissed Ee flows from law. Even if he does not ask March 1996; Buenviaje v. CA, G.R. No. 147806, 12 Nov.
for it, it may be given. The failure to claim 2002)
backwages in the complaint for illegal dismissal is a
mere procedural lapse which cannot defeat a right Full backwages
granted under substantive law. (St. Michael’s
Institute v. Santos, G.R. No. 145280, 04 Dec. 2001) The LC points to "full backwages" as meaning
exactly that, i.e., without deducting from backwages,
the earnings derived elsewhere by the concerned Ee

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during the period of his illegal dismissal. (Buenviaje NOTE: Under the circumstances where the
v. CA, G.R. No. 147806, 12 Nov. 2002) employment relationship has become so strained to
preclude a harmonious working relationship and
NOTE: The award of backwages is computed based that all hopes at reconciliation are naught after
on a 30-day month. reinstatement, it would be more beneficial to accord
the Ee backwages and separation pay.
Period covered by full backwages
The following must be proven before the
From the date of illegal dismissal to the Ee’s date of Doctrine of Strained Relations can be applied
actual reinstatement.
1. The Ee concerned occupies a position
SEPARATION PAY where he enjoys the trust and confidence of
his Er; and
Separation Pay in lieu of Reinstatement
2. That it is likely if the Ee is reinstated, an
GR: Separation pay is not a usual consequence of atmosphere of antipathy and antagonism
illegal dismissal because if there is a finding of illegal may be generated as to adversely affect the
dismissal, the Ee shall be entitled to reinstatement efficiency and productivity of the Ee
and backwages. concerned. (Ibid.)

XPNs: Separation pay takes the place of Requisites of the Doctrine of Strained Relations
reinstatement in the following instances:
1. It must be alleged and proved by the Er;
1. When Ee’s previous position or its
substantial equivalent position is not 2. The evidence that should sustain the
anymore existing, i.e., occupied by another application of strained relations should be
Ee or the business is already closed; and more than just the illegal dismissal case
that has been filed by the Ee; and
2. When there is an application of the doctrine
of strained relations. NOTE: There must be independent
evidence showing that the relations have
Instances when Separation Pay must be Paid been strained.

1. Termination due to authorized causes; 3. The position must involve a position of

2. Separation pay in lieu of reinstatement; trust and confidence.
3. By way of financial assistance; and
4. In case of termination, when it is mandated Q: Does the strained relations rule always bar
to be paid under a CBA or explicit company reinstatement in all cases?
policy.
A: NO. The rule should be applied on a case-to-case
Doctrine of Strained Relations basis, based on each case’s peculiar conditions and
not universally. Otherwise, reinstatement can never
It is when the Er can no longer trust the Ee and vice be possible simply because some hostility is
versa or there were imputations of bad faith to each invariably engendered between the parties as a
other, reinstatement could not effectively serve as a result of litigation. That is human nature. (Anscor
remedy. This rule applies only to positions which Transport v. NLRC, G.R. No. 85894, 28 Sept. 1990)
require trust and confidence. (Globe Mackay v. NLRC, Besides, no strained relations should arise from a
G.R. No. 82511, 03 Mar. 1992) valid and legal act of asserting one's right;
otherwise, an Ee who shall assert his right could be

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 IV. POST-EMPLOYMENT
easily separated from the service, by merely paying he believes that personal reasons cannot be
his separation pay on the pretext that his sacrificed in favor of the exigency of the service, and
relationship with his Er had already become he has no other choice but to disassociate himself
strained. (Globe Mackay Cable & Wire Corp. v. NLRC, from his employment. Romeo is not entitled to
supra.) separation pay. There is no provision in the LC
which grants separation pay to voluntarily
Q: Delfin and Luisito are licensed drivers of resigning Ees. In fact, the rule is that an Ee who
public utility jeepneys owned by Moises Capili. voluntarily resigns from employment is not entitled
When Capili assumed ownership and operation to separation pay, except when it is stipulated in the
of the jeepneys, the drivers were required to employment contract or CBA, or it is sanctioned by
sign individual contracts of lease of the established Er practice or policy. Hence, Romeo is
jeepneys. The drivers gathered the impression not entitled to separation pay in the absence of a
that signing the contract was a condition Labor provision and a stipulation in his employment
precedent before they could continue driving. contract or CBA. (Villaruel v. Yeo Han Guan, G.R. No.
The drivers stopped plying their assigned routes 169191, 01 June 2011)
and a week later filed with the LA a complaint for
illegal dismissal praying not for reinstatement Q: Two groups of seasonal workers claimed
but for separation pay. Are the respondents separation benefits after the closure of Phil.
entitled to separation pay? Tobacco processing plant in Balintawak and the
transfer of its tobacco operations to Candon,
A: NO. When the drivers voluntarily chose not to Ilocos Sur. Phil. Tobacco refused to grant
return to work anymore, they must be considered as separation pay to the workers belonging to the
having resigned from their employment. The first batch, because they had not been given
common denominator of those instances where work during the preceding year and, hence,
payment of separation pay is warranted is that the were no longer in its employ at the time it closed
Ee was dismissed by the Er. (Capili v. NLRC, G.R. its Balintawak plant. Likewise, it claims
117378, 26 Mar. 1997) exemption from awarding separation pay to the
second batch, because the closure of its plant
Q: Romeo has been an Ee of AAA Company from was due to "serious business losses," as defined
1993 to 1999 but was unable to report to work in Art. 298 of the LC.
due to some illness. Romeo claimed that he was
offered by AAA of Php 15,000 separation pay, on Both labor agencies held that the two groups
the contrary AAA claimed Romeo was never were entitled to separation pay equivalent to ½-
terminated and even told the latter that Romeo month salary for every year of service, provided
could go back to work anytime but Romeo that the Ee worked at least 1 month in a given
clearly manifested that he was no longer year. Is the separation pay granted to an illegally
interested in returning to work and instead dismissed Ee the same as that provided under
asked for separation pay. Is Romeo terminated Art. 298 of the LC in case of retrenchment to
or considered resigned? Is Romeo entitled to prevent losses?
separation pay?
A: NO. The separation pay awarded to Ees due to
A: NO. Romeo is considered resigned. Romeo’s illegal dismissal is different from the amount of
various pleadings support his intention of not separation pay provided for in Art. 298 of the LC.
returning to work on the ground that his health is Proceeding from the above, Phil. Tobacco is liable
failing. Moreover, Romeo did not ask for for illegal dismissal and should be responsible for
reinstatement and rejected AAA Company’s offer for the reinstatement of the first group and the
him to return to work. This is tantamount to payment of their backwages. However, since
resignation. Resignation is defined as the voluntary reinstatement is no longer possible as Phil. Tobacco
act of an Ee who finds himself in a situation where have already closed its Balintawak plant, members

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of the said group should instead be awarded normal Moral Damages
separation pay (in lieu of reinstatement) equivalent
to at least one (1) month pay, or one month pay for Moral damages may be awarded to compensate one
every year of service, whichever is higher. for diverse injuries such as mental anguish,
besmirched reputation, wounded feelings, and
It must be stressed that the separation pay being social humiliation. It is however not enough that
awarded to the first group is due to illegal dismissal; such injuries have arisen; it is essential that they
hence, it is different from the amount of separation have sprung from a wrongful act or omission of the
pay provided for in Art. 298 in case of retrenchment defendant which was the proximate cause thereof
to prevent losses or in case of closure or cessation of e.g., breach of contract. (Suario v. BPI, G.R. No. 50459,
the Er’s business, in either of which the separation 25 Apr. 1989)
pay is equivalent to at least one (1) month or one-
half (1/2) month pay for every year of service, NOTE: There should be proof of bad faith on the part
whichever is higher. (Phil. Tobacco Flue-Curing & of the Er for moral damages to be awarded.
Redrying Corp. v. NLRC, G.R. No. 127395, 10 Dec.
1998) Exemplary damages

Q: Does separation pay apply in cases of legal It may be awarded only if the dismissal was shown
dismissal? to have been effected in a wanton, oppressive or
malevolent manner. (Cocoland Development Corp. v.
A: YES. Separation pay is warranted when the cause NLRC and Mago, G.R. No. 98458, 17 July 1996)
for termination is not attributable to the Ee's fault,
such as those provided in Arts. 298 and 299 of the Nominal Damages
Labor Code, as well as in cases of illegal dismissal
where reinstatement is no longer feasible. On the In the determination of the amount of nominal
other hand, an Ee dismissed for any of the just damages which is addressed to the sound discretion
causes enumerated under Art. 297 of the same Code, of the court, several factors are taken into account:
being causes attributable to the Ee's fault, is not, as
a general rule, entitled to separation pay. As an 1. The authorized cause invoked;
exception, case law allows the grant of separation
pay or financial assistance to a legally-dismissed Ee 2. The number of Ees to be awarded;
as a measure of social justice or on grounds of
equity. (Claudia’s Kitchen, Inc. v. Tanguin, G.R. No. 3. The capacity of the Ers to satisfy the awards,
221096, June 28, 2017) taken into account their prevailing financial
status as borne by the records;
DAMAGES
4. The Er’s grant of other termination benefits in
When the termination of the services of an favor of the Ees;
employee is attended by fraud or bad faith on the
part of the employer as when the latter knowingly 5. Whether there was a bona fide attempt to
made false allegations of a supposed valid cause comply with the notice requirements as
when none existed, moral and exemplary damages opposed to giving no notice at all. (Industrial
may be awarded in favor of the former. (Lirag Timber Corp. et al. v. Ababan, et al., G.R. No.
Textile Mills, Inc. et al. v. Court of Appeals, et al., (GR 164518, March 30, 2006)
No. L-30786, 14 Apr. 1975)
6. The Er’s financial, medical, and/or moral
assistance to the sick Ee; and

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 IV. POST-EMPLOYMENT
7. The flexibility and leeway that the Er allowed wages. There need only be a showing that the lawful
the sick Ee in performing his duties while wages were not paid accordingly
attending to his medical needs. (Deoferio v.
Intel Technology Phil., G.R. No. 202996, 18 June Commonly Accepted Concepts of Attorney's Fees
2014)
In its ordinary concept, an attorney's fee is the
NOTE: Actual damages cannot be awarded because reasonable compensation paid to a lawyer by his
that is already represented by the backwages client for the legal services he has rendered to the
payable to the Ee. That is the actual damages he latter. The basis of this compensation is the fact of
suffered. his employment by and his agreement with the
client.
ATTORNEY’S FEES
In its extraordinary concept, attorney's fees are
In employment termination cases, attorney’s fees deemed indemnity for damages ordered by the
are not recoverable where there is no sufficient court to be paid by the losing party in a litigation.
showing of bad faith on the part of private
respondent (Er) there must always be a factual basis LIABILITIES OF CORPORATE OFFICERS
for the award of attorney’s fee. (Pepsi Cola Products,
et al. v. E.V. Santos, G.R. No. 165968, 14 Apr. 2008) It is basic that a corporation is invested by law with
a personality separate and distinct from those of the
Q: What is the condition before attorney’s fees persons composing it as well as from that of any
can be awarded? other legal entity to which it may be related.
(Asionics Phil., et al. v. NLRC, G.R. No. 124950, 19 May
A: If there is unlawful withholding of wages and 1998)
benefits, then there is going to be an award of 10%
of the monetary award by way of Attorney’s Fees. The mere fact that the officer is part of the family
corporation does not mean that all its acts are
Since the Ee was illegally dismissed, and by virtue of imputed to him directly and personally, in the
the illegal dismissal, he was deprived of wages and absence of a showing that he acted without or in
benefits that he should have gotten if he was not excess of his authority or was motivated by personal
illegally dismissed. The award of ten percent (10%) ill-will against the Ee. (Sweet Lines, Inc. v. NLRC, G.R.
becomes automatic in illegal dismissal cases. No. 79975, 16 Mar. 1989)

Therefore, there is no need to prove bad faith in so GR: Officers of a corporation are not personally
far as attorney’s fees is concerned. liable for their official acts unless it is shown that
they have exceeded their authority.
NOTE: Attorney’s fees is dependent on the question
of whether there is unlawful withholding of wages XPN: Where the incorporators and directors belong
and benefits or not. And that is, precisely because, to a single family, the corporation and its members
there is a finding of illegal dismissal. (Art. 111, LC) It can be considered as one in order to avoid its being
is not dependent on bad faith, but is automatic when used as an instrument to commit injustice, or to
there is a finding of illegal dismissal. Article 111 is further an end subversive of justice. The shield of
an exception to the declared policy of strict corporate fiction shall be pierced when it is
construction in the awarding of attorney’s fees. deliberately and maliciously designed to evade
Although an express finding of facts and law is still financial obligations to Ees. (Pabalan v. NLRC, G.R.
necessary to prove the merit of the award, there No. 898799, 20 Apr. 1990) Officers, then, become
need not be any showing that the employer acted personally liable.
maliciously or in bad faith when it withheld the

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Doctrine of Piercing the Corporate Veil Applies Much later on, it is discovered that Carlo had
Only in Three Basic Areas: engaged in unethical conduct, which caused
embarrassment to the company. Mario is forced
1. Defeat public convenience as when the to terminate Carlo, but he does so without giving
corporate fiction is used as a vehicle for the Carlo the opportunity to explain.
evasion of an existing obligation;
Carlo filed a case against Mario and the company
2. Fraud cases or when the corporate entity is for illegal dismissal. Mario objected on the
used to justify a wrong, protect fraud, or ground that the Labor Arbiter had no
defend a crime; or jurisdiction over the case as it would properly
be considered as an intracorporate controversy
3. Alter ego cases, where a corporation is merely cognizable by the RTC. Further, Mario claimed
a farce since it is a mere alter ego or business that because Carlo's dismissal was a corporate
conduit of a person, or where the corporation act, he cannot be held personally liable.
is so organized and controlled and its affairs
are so conducted as to make it merely an What is the rule on the personal liability of
instrumentality, agency, conduit or adjunct of corporate officers for a corporate act declared
another corporation. (Sarona v. NLRC, G.R. No. to be unlawful? (2015 BAR)
185280, 18 Jan. 2012)
A: Corporate officers are not, as a general rule,
NOTE: For the piercing-the-veil doctrine to apply, it personally liable for the corporate acts they
is of no consequence if the entity is single perform in behalf of the corporation they represent.
proprietorship. It is the act of hiding behind the They are, however, personally liable for their
personalities of juridical entities that the equitable corporate acts if they acted with malice or bad faith.
piercing doctrine was formulated to address and (Girly Ico v. Systems Technology Institute, Inc., G.R.
prevent. (Ibid.) No. 185100, 09 July 2014; 2009-2017 UST FCL Bar
Q&A)
In labor cases, particularly, corporate directors and
officers are solidarily liable with the corporation for LIABILITY OF BARANGAY MICRO BUSINESS
the termination of employment of corporate Ees ENTERPRISES (BMBEs)
done with malice or in bad faith. (Uichico, et al. v.
NLRC, et al., G.R. No. 121434, 02 June 1997) BMBEs are exempted from the coverage of
the Minimum Wage Law. (Sec. (7)(8), R.A. No. 9178)
Q: Mario comes from a family of coffee bean
growers. Deciding to incorporate his fledgling The protection of labor, however, must be balanced
coffee venture, he invites his best friend, Carlo, with the protection of establishments whose
to join him. Carlo is hesitant because he does not clientele mainly consists of the working class and
have money to invest but Mario suggests a the urban poor. When awarding labor claims, the
scheme where Carlo can be the Chief Marketing tribunal must also consider the type of
Agent of the company, earning a salary and establishment employing the laborer.
commissions. Carlo agrees, and the venture is
formed. After one year, the business was so Workers in the informal sector are no less deserving
successful that they were able to declare of protection than those in the formal sector.
dividends. Mario is so happy with Carlo's work However, labor tribunals must always find a way to
that he assigns 100 shares of stock to Carlo as balance the rights and interests of even those that
part of the latter's bonus. are often overlooked and underserved. It cannot
expect a tindahan with minuscule profits to apply
the same labor conditions as a multi-national

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 IV. POST-EMPLOYMENT
corporation. (Cabug-os v. Espina, G.R. No. 228719, 08 Ee to prove those circumstances that proves that
Aug. 2022) there is constructive dismissal.

NOTE: This case is beyond the cut-off date provided In constructive dismissal, it is often referred to as
in the 2023 Bar Syllabus. dismissal in disguise because there is really no
actual dismissal. It is the Ee who has no other choice
Q: In the case above, petitioner employes two due to circumstances that push her to relinquish her
tinderas. The SC affirmed that there was illegal employment. Therefore, the burden of proof is not
dismissal. Is the owner of the sari-sari store with the Er but with the Ee. The basic rule is that
liable for the amount awarded? whoever alleges something must prove it.

A: NO. A sari-sari store is a retail establishment Indeed, in illegal dismissal cases, the burden of
regulated by Barangay Micro Business Enterprises proof is on the Er in proving the validity of dismissal.
Act of 2002. Among the benefits granted by law to However, the fact of dismissal, if disputed, must be
registered barangay micro business enterprises is duly proven by the complainant.
the exemption from the coverage of the Minimum
Wage Law. Considering a sarisari store's ubiquity The rule is that one who alleges a fact has the
and the State's recognition of the informality of its burden of proving it; thus, petitioners were
operations, it is baffling why the NLRC and the CA burdened to prove their allegation that respondents
would treat petitioner's sarisari store as it would dismissed them from their employment. It must be
any large-scale commercial enterprise. To award stressed that the evidence to prove this fact must be
labor claims on this presumption would be unfair, clear, positive, and convincing. The rule that the Er
unreasonable, and unconscionable. When awarding bears the burden of proof in illegal dismissal cases
labor claims, the tribunal must also consider the finds no application here because the respondents
type of establishment employing the laborer. deny having dismissed the petitioners. (Italkarat 18,
Inc. v. Gerasmio, G.R. No. 221411, 28 Sept. 2020)
The NLRC computed respondent's backwages,
salary differentials, 13th month pay, and separation Actual Illegal Dismissal Cases
pay based on the prevailing minimum wage. As a
result, respondent was awarded a total of In actual illegal dismissal cases, the Er has the
P678,804.69; an amount petitioner claims is six burden to really prove that there is just or
times the inventory value of her sarisari store. authorized cause or the Ee is validly terminated.

Considering that petitioner's store is a barangay NOTE: In actual illegal dismissal cases, there is
micro business enterprise and considering further really termination done by the Er. Therefore, the
the discussion on the informality of a sarisari store burden of proof is on the Er to show that the
operation, petitioner is exempt from the payment of termination is legal and valid.
minimum wage. Thus, the judgment award should
be recomputed as a matter of equity. Q: Marion filed a complaint for illegal dismissal
against Aciee, Inc. and were awarded a total of
BURDEN OF PROOF P4 million in backwages, money claims, moral
and exemplary damages, and attorney's fees.
Constructive Dismissal Cases Marion filed a motion to treat Gecher
Corporation one and the same with Aciee, Inc.
In constructive dismissal cases, it is the Ee who because the said corporations are using their
bears the burden of proof since it is the Ee who is respective distinct corporate personalities in
alleging that he is being placed under circumstances bad faith to frustrate and render impossible the
that is unbearable to him. It is incumbent upon the execution of the judgment award in favor of
Marion. Aciee, Inc. allegedly transferred the

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motor vehicles registered under the name of the
former, to Gecher Corp while its appeal F. RETIREMENT
remained pending. The RTC has observed a
pattern adopted by the officers of Aciee, Inc. of
creating run-away companies every time their
Retirement
companies are embroiled in labor cases to
deliberately circumvent the law, and evade their
It is the withdrawal from office, public station,
obligations to their Ees. Can the veil of corporate
business, occupation, or public duty. (Brion v. South
fiction be pierced?
Phil. Union Mission of the Seventh Day Adventist
A: YES. In the case of Guillermo v. Uson, the Court
Church, G.R. No. 135136, 19 May 1999)
stressed that the veil of corporate fiction can be
pierced, and responsible corporate directors and
It is the result of a bilateral act of the parties, a
officers or even a separate but related corporation,
voluntary agreement between the Er and the Ee
may be impleaded and held answerable solidarily in
whereby the latter after reaching a certain age
a labor case, even after final judgment and on
agrees and/or consents to sever his employment
execution, so long as it is established that such
with the former. (Ariola v. Philex Mining Corp, G.R.
persons have deliberately used the corporate
No. 147756, 09 Aug. 2005)
vehicle to unjustly evade the judgment obligation, or
have resorted to fraud, bad faith or malice in doing
Persons covered by retirement benefit
so.

All Ees in the private sector:

In this case, factual circumstances necessitate the
application of the doctrine of piercing the veil of
1. Regardless of their position, designation or
corporate fiction as there is evidence establishing
status;
the scheme employed by Aciee, Inc. to avoid their
legal obligations. It was shown that Aciee, Inc. and
2. Irrespective of the method by which their
Gecher Corp. are using their respective distinct
wages are paid (Sec. 1, Rule II, Book VI, IRR);
corporate personalities in bad faith to frustrate and
render impossible the execution of the judgment
3. Part-time Ees;
award in favor of Marion. Bad faith on the part of the
corporations was demonstrated when motor
4. Ees of service and other job contractors;
vehicles registered under the name of Aciee, Inc.
were suddenly transferred to Gecher Corp. while its
5. Domestic helpers or persons in the personal
appeal remained pending. (Eduardo Gilbert Dinoyo,
service of another (D.O. No. 20, s. 1994);
et al. v. Undaloc Construction Company, Inc., et. al.
G.R. No. 249638, 23 June 2021)
6. Underground mine workers (RA 8558); and

LEGAL INTEREST
7. Ees of GOCCs organized under the Corporation
Code (without original charters) (Postigo, et al.
It is now well-settled that generally, legal interest
v. Philippine Tubercolosis Society, Inc., G.R. No.
may be imposed upon any unpaid wages, salary
155146, 24 Jan. 2006)
differential, merit increases, productivity bonuses,
separation pay, back wages on other monetary
Retirement benefits under the LC
claims, and benefits awarded illegally dismissed
employees. Its grant, however, remains
The retirement benefit provided under the Labor
discretionary upon the courts. (Conrado A. Lim v.
Code is one-half (½) month pay for every year of
HMR Philippines, G.R. No. 189871, 13 Aug. 2013)
service which shall include:

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Kinds of retirement schemes
1. 15 days salaries;
2. 1/12 of the 13th month pay; (30 days / 12 = 1. Compulsory and contributory in nature;
2.5 days) and
3. Cash equivalent of 5 days incentive leave. 2. One set up by the agreement between the Er
and Ees in the CBA or other agreements
NOTE: All in all, 22.5 days for every year of service. between them (other applicable employment
This will apply in the absence of any agreement in contract); and
the CBA or employment contract providing for
retirement benefits, or even if there is an agreement, 3. One that is voluntarily given by the Er,
but such is inferior to those benefits under the Labor expressly as announced company policy or
Code. impliedly as in the failure to contest the Ee’s
claim for retirement benefits. (Gerlach v.
This is the minimum. The retirement pay package Reuters Limited Phils., G.R. No. 148542, 17 Jan.
can be improved upon by voluntary company policy, 2005)
or particular agreement with the Ee, or through a
CBA. (Azucena, 2016) Retroactive application of Art. 302 of the LC (on
retirement) as amended by R.A. No. 7641
A fraction of at least six (6) months shall be
considered as one whole year. (Art. 302, LC) Art. 302 of the LC, as amended by RA 7641 can be
The retirement pay payable under Art. 302, as applied retroactively, provided that:
amended, is apart from the retirement benefit
claimable by the qualified Ee under the social 1. The claimant for retirement benefits was still
security law. This has to be so because R.A. No. 7641 the Ee of the Er at the time the statute took
in its Sec. 2 states that, “Nothing in this Act shall effect; and
deprive any Ee of benefits to which he may be
entitled under existing law or company policies or 2. The claimant was in compliance with the
practices.” (Azucena, 2016) requirements for eligibility under the statute
for such retirement benefits. (PSVSIA v. NLRC,
NOTE: A taxi driver paid according to the "boundary G.R. No. 115019, 14 April 1997)
system" is not entitled to the 13th month and the
SIL pay, hence, his retirement pay should be Provisions of the retirement plan binding as
computed on the sole basis of his salary. (R&E part of the employment contract
Transport, Inc. v. Latag, G.R. No. 155214, 13 Feb.
2004) The retirement plan forms part of the employment
contract since it is made known to the Ees and
Persons NOT covered by retirement benefits accepted by them, and such plan has an express
provision that the company has the choice to retire
1. Ees of the National Government and its an Ee regardless of age, with 20 years of service, said
political subdivisions, including GOCCs (if they policy is within the bounds contemplated by the LC.
are covered by the Civil Service Law); and Moreover, the manner of computation of retirement
benefits depends on the stipulation provided in the
2. Ees of retail, service, and agricultural company retirement plan. (Progressive Development
establishments or operations employing not Corporation v. NLRC, G.R. No. 138826, 30 Oct. 2000)
more than ten (10) Ees. (Sec. 2, Rule II, Book VI,
IRR)

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Retirement age upon reaching the age of 50 with at least 10
years of service.
It is the age of retirement that is specified in the:
Flordeliza replied to Riingen's query and
1. CBA; forwarded a computation of the latter's
2. Employment contract; retirement benefits prepared by Laura
3. Retirement plan (Sec. 3, Rule II, Book VI, IRR); Manganotti, Western Union's Senior Manager
or for Compensation and Benefits. Flordeliza
4. Optional retirement age for underground confirmed that the retirement benefits of
mining Ees. Riingen is free from tax. Riingen formalized her
intent to retire by 31 Aug. 2016. Flordeliza sent
Retirement age in the absence of a retirement to Riingen a revised computation of the latter's
plan or other applicable agreement retirement package reiterating that "As the age
[of Riingen] is not more than 50, the lump sum is
1. Optional – Upon reaching 60 years old not taxable." However, Manganotti informed
provided that Ee has rendered five (5) years of Riingen that her retirement benefits are not tax-
service. free. Manganotti explained that Western Union's
Retirement Plan does not match certain
The option to retire upon reaching the age of requirements that would grant the tax
60 years or more but not beyond 65 is the exemption to qualified retirees.
exclusive prerogative of the Ee if there is no
provision on retirement in a CBA or any other On the day of her retirement, Western Union's
agreement or if the Er has no retirement plan. external auditor informed Riingen that Western
(Capili v. NLRC, G.R. No. 117378, 26 March Union failed to register its Ees' Retirement Plan
1997) in accordance with the requirements of the
Bureau of Internal Revenue (BIR). Western
2. Compulsory – 65 years old, regardless of years Union withheld from Riingen the amount of
of service. (Sec. 4, Rule II, Book VI, IRR) P4,243,191.80 as tax liability. Riingen prayed
that the amount withheld by Western Union
Retirement benefits not mandated by law may corresponding to the tax should be returned to
be granted by agreement of the Ees and their her. In addition, she asked the LA to award
Er or as a voluntary act on the part of the Er. moral damages, exemplary damages, and
Retirement benefits are intended to help the attorney's fees. For its part, Western Union
Ee enjoy the remaining years of his life, countered that Riingen's early retirement
lessening the burden of worrying for his benefit is subject to withholding tax in
financial support, and are a form of reward for accordance with the provisions of the National
his loyalty and service to the Er. (Aquino v. Internal Revenue Code since the Ees' Retirement
NLRC, G.R. No. 87653, 11 Feb. 1992) Plan did not meet the requirements for tax
exemption under Revenue Regulations (RR) No.
Q: Riingen alleged that she joined Western 1-68, as amended. Should Western Union refund
Union as Marketing Director in 2005. She to Riingen the amount of taxes withheld from
retired from Western Union on 31 Aug. 2016. In her retirement pay?
June 2016, Riingen informally expressed her
interest in availing of the early retirement A: YES. According to Art. 1431 of the NCC, "through
package under the Ees' Retirement Plan through estoppel, an admission or representation is
an e-mail sent to Jocelyn Flordeliza, Western rendered conclusive upon the person making it and
Union's Manager for Human Relations in the cannot be denied or disproved as against the person
Philippines. According to such Plan, the Ees of relying thereon." There are three kinds of estoppels,
Western Union are given the option to retire to wit: (1) estoppel in pais; (2) estoppel by deed; and

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 IV. POST-EMPLOYMENT
(3) estoppel by laches. Under estoppel in pais, a certain age. In any case, the CBA does not mandate
person is considered in estoppel if by his conduct, that an application must first be filed by the Ee
representations, admissions or silence when he before the right to the optional retirement benefits
ought to speak out, whether intentionally or may vest. Thus, this ambiguity should be resolved in
through culpable negligence, "causes another to favor of the retiree. Leonila, being the surviving
believe certain facts to exist and such other spouse, is entitled to claim the optional retirement
rightfully relies and acts on such belief, as a benefits on his behalf. (UDMC v. Bernadas, G.R. No.
consequence of which he would be prejudiced if the 209468, 13 Dec. 2017)
former is permitted to deny the existence of such
facts." Five (5)-year service requirement only applies
in the absence of a retirement plan
In this case, although Western Union, in the strict
sense, did not make any promise to Riingen and the Being in a nature of “minimum requirement,” the
other Ees that the early retirement benefit under the parties cannot stipulate a period higher than five (5)
Ees' Retirement Plan is tax-free so as to fall under years since this will run counter to the law. (Chan,
the doctrine of promissory estoppel, nevertheless, 2014)
the conduct, representations, and silence of
Western Union and its responsible officers, before, The minimum length of service includes authorized
during, and subsequent to Riingen's application to absences and vacations, regular holidays, and
avail of the early retirement option under the Plan mandatory fulfillment of a military or civic duty.
led her to believe that the benefit she will receive (Sec. 4.4, Rule II, Book VI, IRR)
under the Plan is free of tax. (Ringen v. Western
Union Financial Services (Hong Kong) Limited, Ee must have met the conditions of eligibility as
Philippines Representative Office, G.R. No. 252716, 03 condition precedent
Mar. 2021)
Although retirement plan forms part of the
Q: Cesario started working as an orderly in employment contract, before a right to retirement
United Doctors Medical Center’s (UDMC) benefits or pension vests in an Ee, he must have met
housekeeping department. UDMC and its rank- the stated conditions of eligibility with respect to
and-file Ees had a CBA, under which, rank-and- the nature of employment, age, and length of
file Ees were entitled to optional retirement service. This is a condition precedent to his
benefits. Leonila, representing her deceased acquisition of rights thereunder. (Brion v. South Phil.
husband, filed a Complaint for payment of Union Mission of the Seventh Day Adventist Church,
retirement benefits against UDMC. However, G.R. No. 135136, 19 May 1999)
UDMC argued that Leonila does not have legal
capacity to apply for Cesario’s optional NOTE: SC ruled that the conditions of eligibility for
retirement benefits since Cesario never applied retirement must be met at the time of retirement at
for during lifetime. It asserted that even which juncture the right to retirement benefits or
assuming Cesario was already qualified to apply pension, if the Ee is eligible, vests in him. (Ibid.)
for optional retirement three (3) years prior to
his death, he never did. Is UDMC correct? Compulsory retirement age below 60 allowed by
mutual agreement
A: NO. Under the law, retirement benefits are the
property interests of the retiree and his or her Art. 302 permits Er and Ee to fix the applicable
beneficiaries. The CBA does not prohibit the Ee’s retirement age at below 60. The same is legal and
beneficiaries from claiming retirement benefits if enforceable so long as the parties agree to be
the retiree dies before the proceeds could be governed by such CBA. (Pantranco North Express v.
released. Here, UDMC’s optional retirement plan is NLRC, G.R. No. 95940, 24 July 1996)
premised on length of service, not upon reaching a

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NOTE: For retirement at an earlier age to be valid, it the social justice policy. (Conrado Aquino, et al. v.
must be shown that the Ee’s participation in the plan NLRC, et al., G.R. No. 87653, 11 Feb. 1992)
is voluntary. (Jaculbe v. Siliman University, G.R. No.
156934, 16 March 2007) Q: After thirty (30) years of service, Beta
Company compulsorily retired Albert at age 65
When provisions on retirement under the LC pursuant to the company’s Retirement Plan.
cannot be applied Albert was duly paid his full retirement benefits
of one (1) month pay for every year of service
1. If there is a provision on retirement in the under the Plan. Thereafter, out of compassion,
CBA, or in the employment contract; and the company allowed Albert to continue
working and paid him his old monthly salary
2. Such provision on retirement benefits rate, but without the allowances that he used to
provides for benefits at par or greater than enjoy. After five (5) years under this
the benefits granted under the Labor Code. arrangement, the company finally severed all
employment relations with Albert; he was
Different Retirement Age for mine workers declared fully retired in a fitting ceremony but
under RA 8558 the company did not give him any further
retirement benefits.
The optional retirement age of underground mine
workers is 50 years of age, while the compulsory Albert thought this treatment unfair as he had
retirement age is 60 years old. (Sec. 2, D.O. No. 167, rendered full service at his usual hours in the
s. 2016) past five (5) years. Thus, he filed a complaint for
the allowances that were not paid to him, and for
Rule for extension of service of retiree upon retirement benefits for his additional five (5)
reaching the compulsory retirement age working years, based either on the company’s
Retirement Plan or the Retirement Pay Law,
Upon the compulsory retirement of an Ee or official whichever is applicable.
in the public or private service, his employment is
deemed terminated. The matter of extension of a. After Albert’s retirement at age 65, should
service of such Ee or official is addressed to the he be considered a regular Ee entitled to all
sound discretion of the Er. (UST Faculty Union v. his previous salaries and benefits when the
NLRC, G.R. No. 89885, 6 Aug. 1990) company allowed him to continue
working?
Retirement Benefits aside from Separation Pay
A: NO. He would be considered a contractual Ee,
Separation pay arising from forced termination on not a regular Ee. His salaries and benefits will be in
one hand, and benefits given as a contractual right accordance with the stipulations of the contract he
due to many years of faithful service, on the other signed with the company.
hand, do not necessarily exclude each other.
(University of the East v. UE Faculty Association, G.R. The present case is similar to a case decided by the
No. 74007, 31 July 1987) Supreme Court in Rivera v. United Laboratories.
(G.R. No. 155639, 22 April 2009), where the Court
NOTE: Company policy or CBA may make held that the company, in employing a retired Ee
Separation Pay and Retirement Benefit mutually whose knowledge, experience, and expertise the
exclusive. In the absence of a categorical provision company recognized, as an Ee or as a consultant, is
in the Retirement Plan and the CBA that an not an illegality; on the contrary, it is a recognized
employee who receives separation pay is no longer practice in this country.
entitled to retirement benefits, the employee is
entitled to the payment of both benefits pursuant to

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 IV. POST-EMPLOYMENT
b. Is he entitled to additional retirement Sec. 1 of RA 9946 yields two instances of retirement
benefits for the additional service he available to a magistrate — first, a compulsory
rendered after age 65? (2013 BAR) retirement at 70 years old; and second, an optional
retirement upon reaching 60 years of age. The
A: NO. He cannot compulsorily retire twice in the following legal requisites must concur for the
same company. optional retirement of a magistrate and the
consequent entitlement to the benefits under RA
Q: Should retirement benefits, other gratuities, 9946:
and survivorship pension be accorded to Mrs.
Corona as the spouse of the late Chief Justice 1. That the retiree be a magistrate,i.e., a Justice of
Corona despite the latter's ouster by the Supreme Court, the Court of Appeals, the
impeachment? Sandiganbayan, or of the Court of Tax Appeals,
or a judge of the trial courts, shari'a court, or of
A: YES. An impeached public officer whose civil, any other judicial court;
criminal, or administrative liability was not
judicially established may be considered 2. That the retiring magistrate has rendered at
involuntarily retired from service and is entitled to least 15 years of service in the judiciary, in any
the retirement benefits provided under R.A. Nos. other branch of the government, or in both;
9946 and 8291.
3. That the retiring magistrate be at least 60 years
Retirement is the termination of one's own of age at the time of retirement; and
employment or career, especially upon reaching a
certain age or for health reasons. Retirement then 4. That the last 3 years of public service by the
may be voluntary or involuntary. Retirement is retiring magistrate be continuously rendered in
voluntary when one decides upon one's own the Judiciary.
unilateral and independent volition to permanently
cease the exercise of one's occupation. Retirement is The requirements are straightforward and have all
deemed involuntary when one's profession is been satisfactorily complied with by the late Chief
terminated for reasons outside the control and Justice. (Re: Letter of Mrs. Ma. Cristina Roco Corona
discretion of the worker. Impeachment resulting in Requesting the Grant of Retirement and Other
removal from holding office falls under the column Benefits to the Late Former Chief Justice Renato C.
on involuntary retirement. Corona and her Claim For Survivorship Pension as his
Wife Under Republic Act No. 9946, A.M. No. 20-07-10-
The Court deems Chief Justice Corona to have been SC, January 12, 2021, as penned by J. Hernando)
involuntarily retired from public service due to the
peculiar circumstances surrounding his removal by Retirement Coverage of Racehorse Jockeys
impeachment, without forfeiture of his retirement
benefits and other allowances. ALL professional racehorse jockeys who are duly
licensed by the Philippine Racing Commission
The OCA posits that the late Chief Justice failed to (PHILRACOM) (Sec. 1, D.O. 169, s. 2017)
qualify under R.A. No. 9946 or An Act Granting
Additional Retirement, Survivorship, and Other Requirements
Benefits to Members of the Judiciary, Amending for
the Purpose R.A. No. 910, as Amended, Providing 1. Age - In the absence of a retirement plan or
Funds Therefor and for Other Purposes. However, other applicable agreement providing for
the Court disagrees. retirement benefits of racehorse jockeys,
any such employee shall be compulsorily
retired upon reaching the age of 55 years;

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2. Service - He/she has served for at least 5
years as racehorse jockey; and

3. He/she has paid additional premiums to

the SSS. (Sec. 2.1, D.O. 169, s. 2017)

NOTE: The racehorse jockey shall be entitled to

receive such retirement benefits as he/she may
have earned under existing laws and any CBA and
other agreements.

Employee's retirement benefits under any CBA and

other agreement shall NOT be less than those
provided under this Rule.

If such benefits are less, the employer shall pay the

difference between the amount due the employer
under this Rule and that provided under the
collective bargaining agreement or other applicable
employment contract. (Sec. 3.1, D.O. 169, s. 2017)

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 V. JURISDICTION AND REMEDIES
4. Claims for actual, moral, exemplary and other
V. JURISDICTION AND REMEDIES forms of damages arising from the Er-Ee
relations;

5. Cases arising from any violation of Art. 264

(now Art. 274) of this Code, including questions
A. LABOR ARBITER involving the legality of strikes and lockouts;
and

1. JURISDICTION OF LABOR ARBITER VS. 6. Except claims for Ees Compensation, Social
JURISDICTION OF REGIONAL DIRECTOR Security, Medicare and maternity benefits, all
other claims arising from Er-Ee relations,
including those of persons in domestic or
Nature of jurisdiction of Labor Arbiters (LAs)
household service, involving an amount
exceeding P5,000.00 regardless of whether
LAs only have original and exclusive jurisdiction.
accompanied with a claim for reinstatement.
They have no appellate jurisdiction.

7. Money claims arising out of Er-Ee relationship

The cases that the LA can hear and decide are
or by virtue of any law and contract, involving a
employment related. Where no Er-Ee relationship
Filipino worker for overseas deployment,
exists between the parties and no issue is involved
including claims for actual, moral, exemplary
which may be resolved by reference to the LC, other
and other forms of damages as well as
labor statutes, or any CBA, it is the RTC that has
employment termination of OFWs;
jurisdiction. (Lapanday Agricultural Dev’t. Corp v.
CA, G.R. No. 112139, 31 Jan. 2000)
8. Wage distortion disputes in unorganized
establishments not voluntarily settled by the
The LA has jurisdiction over controversies involving
parties pursuant to R.A. 6727 as reflected in Art.
Ers and Ees only if there is a “reasonable causal
124;
connection” between the claim asserted and the Er-
Ee relations. Absent such link, the complaint is
9. Enforcement of compromised agreements
cognizable by the regular court. (Eviota v. CA, G.R.
when there is non-compliance by any of the
No. 152121, 29 July 2003)
parties pursuant to Art. 233 of the LC, as
amended;
Original and Exclusive Jurisdiction of LA

10. Contested cases under the exception clause of

The LA has original and exclusive jurisdiction over
Art. 128(b) of the LC; and
the following cases:

11. Other cases as may be provided by law.

1. Unfair labor practice cases;

NOTE: Claims for Employment Compensation,

2. Termination disputes or illegal dismissal
Social Security, PhilHealth and maternity benefits
complaints;
do not fall under the jurisdiction of the LA because
these fall under the jurisdiction of other
3. If accompanied with a claim for reinstatement,
government agencies mandated by law.
those cases that workers may file involving
wages, rates of pay, hours of work and other
Although the provision speaks of exclusive and
terms and conditions of employment;
original jurisdiction of LAs, the cases enumerated
may instead be submitted to a voluntary arbitrator
by agreement of the parties under Art. 275 of the LC.

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The law prefers voluntary over compulsory sign the quitclaim. The document should be
arbitration. subscribed and sworn to under oath preferably
before any administering official of the DOLE or
Compromise Agreements its regional office, the Bureau of Labor
Relations, the NLRC or a labor attaché in a
Any compromise settlement, including those foreign country. Such official shall assist the
involving labor standard laws, voluntarily agreed parties regarding the execution of the quitclaim
upon by the parties with the assistance of the Bureau and waiver. This compromise settlement
or the regional office of the DOLE, shall be final and becomes final and binding under Art. 227 of the
binding upon the parties. The NLRC or any court, LC. (EDI-Staffbuilders International, Inc. v.
shall not assume jurisdiction over issues involved National Labor Relations Commission, G.R. No.
therein except in case of non-compliance thereof or 145587, 26 Oct. 2007)
if there is prima facie evidence that the settlement
was obtained through fraud, misrepresentation, or Exceptions to the Original and Exclusive
coercion. (Art. 233, LC) jurisdiction of LAs

Requisites for validity and enforceability of 1. In assumed cases - When the SOLE or the
quitclaims and waivers of employees President exercises his power under Art.
278(g) of the LC to assume jurisdiction over
1. A fixed amount as full and final national interest cases and decide them
compromise settlement; himself.

2. The benefits of the employees if possible 2. In certified cases - When the NLRC exercises
with the corresponding amounts, which its power of compulsory arbitration over
the employees are giving up in similar national interest cases that are
consideration of the fixed compromise certified to it by the SOLE pursuant to the
amount; exercise by the latter of his certification power
under Art. 263(g).
3. A statement that the employer has clearly
explained to the employee in English, 3. In cases arising from CBA - When the cases
Filipino, or in the dialect known to the arise from the interpretation or
employees — that by signing the waiver implementation of CBAs and from the
or quitclaim, they are forfeiting or interpretation or enforcement of company
relinquishing their right to receive the personnel policies which shall be disposed of
benefits which are due them under the by the LA by referring the same to the
law; and grievance machinery and voluntary
arbitration, as may be provided in said
4. A statement that the employees signed agreements.
and executed the document voluntarily,
and had fully understood the contents of 4. In cases submitted for voluntary arbitration
the document and that their consent was - When the parties agree to submit the case to
freely given without any threat, violence, voluntary arbitration before a VA or panel of
duress, intimidation, or undue influence VAs who, under Arts. 274 and 275 of the LC,
exerted on their person. are also possessed of original and exclusive
jurisdiction to hear and decide cases mutually
It is advisable that the stipulations be made in submitted to them by the parties for
English and Tagalog or in the dialect known to arbitration and adjudication.
the employee. There should be two witnesses to
the execution of the quitclaim who must also

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Q: May a money claim arising from corporate officer unravels the conundrum” of
implementation of the CBA be filed with a labor whether a complaint for illegal dismissal is
arbiter? cognizable by the LA or by the RTC. In case of the
regular employee, the LA has jurisdiction otherwise,
A: The original and exclusive jurisdiction of the LA the RTC exercises the legal authority to adjudicate.”
under Art. 224(c) for money claims is limited only (Cosare v. Broadcom Asia, Inc., G.R. No. 201298, 05
to those arising from statutes or contracts other Feb. 2014)
than a CBA. The Voluntary Arbitrator or Panel of
Voluntary Arbitrators will have original and Q: Malcaba has been employed with ProHealth
exclusive jurisdiction over money claims “arising since it started in 1997. He was initially the Vice
from the interpretation or implementation of the President for Sales until he became the
CBA, and those arising from the interpretation or President in 2005. Malcaba alleged that Del
enforcement of company personnel policies,” under Castillo, the Chair of the Board of Directors and
Art. 274. (San Jose v. NLRC and Ocean Terminal Chief Executive Officer, did acts that made his
Services, Inc., G.R. No. 121227, 17 Aug. 1998) job difficult. He asked to take a leave on 23 Oct
2007. When he attempted to return on 05 Nov.
Extent of the jurisdiction of the LA if there are 2007, Del Castillo insisted that had already
unresolved matters arising from the resigned and had his things removed from his
interpretation of the CBA office. He attested that he was paid a lower
salary in December 2007 and his benefits were
GR: LAs have no jurisdiction over unresolved or withheld. On 07 Jan. 2008, Malcaba tendered his
unsettled grievances arising from the interpretation resignation effective 01 Feb. 2008.
or implementation of the CBA and those arising
from the interpretation or enforcement of company Does the LA or the NLRC have jurisdiction over
personnel policies. petitioner Malcaba’s termination dispute
considering the allegation that he was a
XPN: Actual termination disputes. corporate officer, and not a mere Ee?

NOTE: Where the dispute is just in the A: NO. Under the LC, the LA exercises original and
interpretation, implementation, or enforcement exclusive jurisdiction over termination disputes
stage of the termination, it may be referred to the between an employer and an employee while the
grievance machinery set up by the CBA or by NLRC exercises exclusive appellate jurisdiction over
voluntary arbitration. Where there was already the cases provided in Art. 244.
actual termination, i.e., violation of rights, it is
already cognizable by the LA. (Maneja v. NLRC, G.R. Under Sec. 25 of the Corporation Code, the President
No. 124013, 05 June 1998) of a corporation is considered a corporate officer.
The dismissal of a corporate officer is considered an
Q: Who has jurisdiction over intra-corporate intra-corporate dispute, not a labor dispute.
controversies? (Nicanor Malcaba v. Prohealth Pharma Philippines,
Inc., G.R. No. 209085, 06 June 2018)
A: The RTC. In Matling Industrial and Commercial
Corporation v. Coros (G.R. No. 157802, 13 Oct. 2010), Q: Mario comes from a family of coffee bean
the Court distinguished between a “regular growers. Deciding to incorporate his fledgling
employee” and a “corporate officer” for purposes of coffee venture, he invites his best friend, Carlo,
establishing the true nature of a dispute or to join him. Carlo is hesitant because he does not
complaint for illegal dismissal and determining have money to invest but Mario suggests a
which body has jurisdiction over it. Succinctly, it scheme where Carlo can be the Chief Marketing
was explained that “the determination of whether Agent of the company, earning a salary and
the dismissed officer was a regular employee or commissions. Carlo agrees, and the venture is

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formed. After one year, the business was so Ministerial duty of LA to implement
successful that they were able to declare reinstatement orders
dividends. Mario is so happy with Carlo's work
that he assigns 100 shares of stock to Carlo as Unless there is a restraining order, it is ministerial
part of the latter's bonus. upon the LA to implement the order of
reinstatement and it is mandatory on the Er to
Much later on, it is discovered that Carlo had comply therewith. (Garcia v. PAL, G.R. No. 164856, 20
engaged in unethical conduct, which caused Jan. 2009)
embarrassment to the company. Mario is forced
to terminate Carlo, but he does so without giving NOTE: Reinstatement pending appeal is applicable
Carlo the opportunity to explain. only to the reinstatement order issued by the LA.
Writ of execution is required when reinstatement is
Carlo filed a case against Mario and the company ordered by the NLRC on appeal, or subsequently by
for illegal dismissal. Mario objected on the the CA or Supreme Court, as the case may be.
ground that the Labor Arbiter had no
jurisdiction over the case as it would properly Art. 223 vs. Art. 224
be considered as an intracorporate controversy
cognizable by the RTC. Further, Mario claimed ART. 223 ART. 224
that because Carlo's dismissal was a corporate The SOLE or any Regional
act, he cannot be held personally liable. (2015 Director, the Commission or
BAR) any LA, or med-arbiter or
voluntary arbitrator
As the Labor Arbiter assigned to this case, how may, motu proprio or on
would you resolve the jurisdiction question. motion of any interested
party, issue a writ of
A: The LA has jurisdiction over Carlo’s illegal execution on a judgment
dismissal complaint as he was hired by Mario on a within 5 years from the date
“salary and commission” basis. In Grepalife v. Judico Art. 223 of the LC it becomes final and
(G.R. No. 73887, 21 Dec. 1989) it was held that a provides that executory.
worker who is paid on a salary plus commission reinstatement is
basis is an employee. While regular courts have immediately Consequently, under Rule III
jurisdiction over Mario’s corporate act of severing executory even of the NLRC Manual on the
ties with Carlo, the Labor Arbiter, pursuant to Art. pending appeal Execution of Judgment, it is
217(a)(2) (now 224(a)(2)) of the LC, has only when the LA provided that if the
jurisdiction over Carlo’s illegal dismissal complaint. himself ordered execution be for the
the reinstatement of any person
Labor Arbiter conducts compulsory arbitration reinstatement. to a position, an office or an
employment, such writ shall
Compulsory arbitration is the process of settlement be served by the sheriff upon
of labor disputes by a government agency which has the losing party or upon any
the authority to investigate and make an award other person required by
binding on all the parties. law to obey the same, and
such party or person may be
Under the LC, it is the LA who is clothed with the punished for contempt if he
authority to conduct compulsory arbitration on disobeys such decision or
cases involving termination disputes. (PAL v. NLRC, order for reinstatement.
G.R. No. 55159, 22 Dec. 1989) (Mt. Carmel College v. Resuena, G.R. No. 173076, 10
Oct. 2007)

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Effect of Appeal to the Order of Reinstatement by Effect of Reversal of Reinstatement Order
the LA
1. Actually reinstated: The Bergonio Rule
In any event, the decision of the LA reinstating a
dismissed or separated employee, in so far as the After reversal of LA’s decision, the Er’s duty
reinstatement aspect is concerned, shall be to reinstate the dismissed Ee in the actual
immediately executory, even pending appeal. service or in the payroll is effectively
terminated. The Ee, in turn is not required
The employee shall either be admitted back to work to return the wages that he had received
under the same terms and conditions prevailing prior to the reversal of the LA’s decision.
prior to his dismissal or separation or, at the option (Bergonio Jr. v. South East Asian Airlines, 21
of the employer, merely reinstated in the payroll. Apr. 2014)
The posting of a bond by the employer shall not stay
the execution for reinstatement provided herein. 2. Payroll reinstatement: The Wenphil Rule
(Baronda v. CA, G.R. No. 161006, 14 Oct. 2015, citing
now Art. 229, LC) The period for computing the backwages
due to the dismissed Ees during the period
Instances when writ of execution of LA’s of appeal should end on the date that a
reinstatement order is still required higher court reversed the labor arbitration
ruling of illegal dismissal. (Wenphil
The following are the instances when a writ of Corporation v. Abing, G.R. 207983, 07 Apr.
execution should still be issued immediately, even 2014)
pending appeal, by the Labor Arbiter to implement
his order of reinstatement: Q: Where do you appeal the decision, award, or
order of the Labor Arbiter?
1. When the Er disobeys the prescribed
directive to submit a report of compliance A: To the NLRC, within the reglementary period of
within 10 calendar days from receipt of the ten (10) calendar days from receipt.
decision; or
JURISDICTION OF THE REGIONAL DIRECTORS
2. When the Er refused to reinstate the
dismissed Ee. The DOLE Regional Directors have original and
exclusive jurisdiction over:
The LA shall motu proprio issue a corresponding
writ to satisfy the reinstatement wages as they 1. Labor standards enforcement cases under Art.
accrue until actual reinstatement or reversal of the 128;
order of reinstatement. (Sec. 19, Rule V, NRLC 2011
Rules and Procedures) 2. Small money claims cases arising from labor
standards violations in the amount not
exceeding P5,000.00 and not accompanied
with a claim or reinstatement under Art. 129;

3. Occupational safety and health violation;

4. Registration of unions and cancellation

thereof, cases filed against unions and other
labor relations related cases;

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5. Complaints against private recruitment and Such matters are not initiated any claim or
placement agencies for local employment; and verifiable in the normal complaint with the
course of inspection (Ex- DOLE Regional Director
6. Cases submitted for voluntary arbitration in Bataan Veterans Security under Art. 129, or the LA
their capacity as Ex- Officio Voluntary Agency v. Secretary of under Art. 224 (People’s
Arbitrators under D.O. No. 83 - 07, Series of Labor, G.R. No. 152396, 20 Broadcasting Service v.
2007. Nov. 2007) Secretary of DOLE, G.R.
No. 179652, 06 Mar.
LABOR ARBITER REGIONAL DIRECTOR 2012)
Money Claims
Claims arising from Er- 2. REQUISITES TO PERFECT AN APPEAL WITH
Any matter involving the
Ee Ee relations: THE NATIONAL LABOR RELATIONS
recovery of wages and
COMMISSION
other monetary claims
1. Aggregate amount
and benefits, arising
exceeding five Grounds for filing an appeal
from Er-Ee relations;
thousand pesos
provided that:
(P5,000.00); The appeal may be entertained only on any of the
2. Regardless if following grounds:
a) There is no claim
accompanied with a
for reinstatement;
claim for 1. If there is prima facie evidence of abuse of
and
reinstatement. discretion on the part of the LA or RD;
b) Aggregate of money
claim does not 2. If the decision, award or order was secured
exceed P5,000.00. through fraud or coercion, including graft and
(Art. 129, LC, as corruption; and
amended)
3. If made purely on questions of law; or
Issuance of Labor Injunction
4. If serious errors in the findings of facts are
Labor Arbiter cannot NLRC can issue an
raised which, if not corrected, would cause
issue an injunctive writ. injunctive writ.
grave or irreparable damage or injury to the
appellant. (Sec. 2, Rule VI, NLRC 2011 Rules of
Exercise of Jurisdiction; Requisites
Procedure)
LA may exercise RD is not divested of its
jurisdiction pursuant to jurisdiction under Art.
Requirements to Perfect an Appeal before the
Art. 128(b) if: 128(b) if:
NLRC
1. The Er contests the 1. The Er-Ee
1. Filed within the reglementary period of 10
findings of the labor relationship should
calendar days from receipt if it involves a
regulations officer still exist;
decision, award, or order of the LA, or 5
and raises issues
calendar days from receipt if it involves a
thereon; 2. The findings in
decision or resolution of the RD;
question were
2. In order to resolve made in the course
2. Verified by the appellant himself in accordance
such issues; there is of inspection by
with Sec. 4, Rule 7 of the ROC, as amended;
need to examine labor inspectors;
evidentiary matters; and
3. In the form of a memorandum of appeal which
and
shall state the grounds relied upon and
The Ees have not yet

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 V. JURISDICTION AND REMEDIES
arguments in support thereof, the relief never acted on it. Instead, the NLRC resolved the
prayed for, and with a statement of the date case on all its substantial points. Would an
the appellant received the appealed decision, implied approval of a motion to reduce bond,
resolution or order; i.e., the NLRC’s disposal of the appeal by final
decision, suffice as a grant of the PRBFI’s motion
4. In three legibly typewritten or printed copies; to reduce bond, which is a presupposed
requirement before the Er’s appeal is deemed
5. Accompanied by: perfected?

a. Proof of payment of the required appeal A: NO. Sec. 6, Rule VI of the 2011 NLRC Rules provides
fee; that an appeal may be perfected by the appellant-Er
b. Posting of a cash or surety bond as only by the posting of a bond in the equivalent
provided in Sec. 6 of this Rule; amount of the full monetary award granted to the
c. A certificate of non-forum shopping; and appellee-Ee. The perfection of an appeal in the
d. Proof of service upon the other parties. manner and within the period set by law is not only
(Sec. 4, Rule VI, NLRC 2011 Rules of mandatory but jurisdictional. Consequently, there
Procedure) should be no implied approval of a jurisdictional
requirement that has not been complied with.
NOTE: Mere notice of appeal without complying Otherwise, the ground of lack of jurisdiction
with the requisites shall not stop the running of the becomes a waivable defect in procedure. Whether
period for perfecting an appeal. the NLRC accepts or rejects the appellant’s motion
to reduce bond, the ruling must be unequivocal, and
While Art. 229 of the LC and Sec. 3(a), Rule VI of the such ruling must be issued before or at the time the
then New Rules of Procedure of the NLRC require NLRC resolves the appeal by final judgment. Failure
the party intending to appeal from the LA’s ruling to to do so shall render the NLRC liable for grave abuse
furnish the other party a copy of his memorandum of discretion for having ruled on an appeal without
of appeal, the Court has held that the mere failure to acquiring jurisdiction over the same, and the
serve the same upon the opposing party does not judgment it had issued shall be vacated as null and
bar the NLRC from giving due course to an appeal. void. (Pacific Royal Basic Foods, Inc. v. Noche, et al.,
G.R. No. 202392, October 4, 2021, as penned by J.
Such failure is only treated as a formal lapse, an Hernando)
excusable neglect, and, hence, not a jurisdictional
defect warranting the dismissal of an appeal. Forms of the Appeal Bond
Instead, the NLRC should require the appellant to
provide the opposing party copies of the notice of It shall either be in the form of cash deposit or surety
appeal and memorandum of appeal. (Lei Sheryll bond equivalent in amount to the monetary award,
Fernandez v. Botica Claudio, G.R. No. 205870, 13 Aug. exclusive of damages and attorney’s fees. (Sec. 6,
2014) Rule VI, NLRC 2011 Rules of Procedure)

Perfection of appeal, mandatory and Period within which a cash or surety bond shall
jurisdictional be valid and effective

The perfection of appeal within the period and in From the date of deposit or posting, until the case is
the manner prescribed by the law is jurisdictional finally decided, resolved, or terminated, or the
and non-compliance with the legal requirements is award satisfied. This condition shall be deemed
fatal and has the effect of rendering the judgment incorporated in the terms and conditions of the
final and executor, hence, unacceptable. surety bond and shall be binding on the appellants
Q: In appealing its case, PRBFI filed a motion to and the bonding company. (Sec. 6, Rule VI, NLRC
reduce bond before the NLRC, but the latter 2011 Rules of Procedure)

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 LABOR LAW AND SOCIAL LEGISLATION
Effect if the bond is verified to be irregular or not 4. The appellants, at the very least, exhibited
genuine their willingness and/or good faith by posting
a partial bond during the reglementary period.
The Commission shall cause the immediate
dismissal of the appeal, and censure or cite in The first and second instances are present in this
contempt the responsible parties and their case. As correctly found by the CA, respondents
counsels, or subject them to reasonable fine or substantially complied with the rules as shown by
penalty. (Sec. 6, Rule VI, NLRC 2011 Rules of their lack of intention to evade the requirement of
Procedure) appeal bond. We adhere to a strict application of Art.
229 of the Labor Code when appellants do not post
NOTE: The appellee shall verify the regularity and an appeal bond at all; but here an appeal bond was
genuineness of the bond and immediately report filed. Strict application of the rules is therefore
any irregularity to the NLRC. uncalled for.

Q: Respondents seasonably filed a Further, Art. 227 of the same Code authorizes the
memorandum of appeal and posted a surety NLRC to use every and all reasonable means to
bond in an amount equivalent to the monetary ascertain the facts in each case speedily and
award of the LA, but the bond turned out to be objectively, without regard to technicalities of law
spurious upon verification of the petitioner. or procedure. In the case before us, the NLRC opined
Upon being informed of the spuriousness of the that it is in the best interest of justice that the appeal
bond, the respondents dismissed their counsel be allowed so that the case could be resolved on its
of record who was allegedly responsible for its merits. (Tolentino-Prieto v. Elvas, G.R. No. 192369, 09
submission and hired another lawyer who Nov. 2016)
submitted a genuine bond. Both the NLRC and
the CA found good faith on the part of Motion to Reduce Bond
respondents, stating that the filing of the alleged
fake bond was without their knowledge and that GR: No motion to reduce bond shall be entertained.
they did not purposely post a spurious bond. Are
the NLRC and CA correct in allowing the appeal? XPNs: Only when there are:
1. Meritorious grounds; and
A: YES. While posting of an appeal bond is 2. Upon posting of a bond in reasonable amount
mandatory and jurisdictional, we sanction the in relation to the monetary award.
relaxation of the rule in certain meritorious cases.
These cases include instances in which: NOTE: The mere filing of a motion to reduce bond
without complying with the requisites in the
1. There was substantial compliance with the preceding paragraphs shall not stop the running of
Rules; the period to perfect an appeal. (Sec. 6, Rule VI, NLRC
2011 Rules of Procedure)
2. Surrounding facts and circumstances
constitute meritorious grounds to reduce the McBurnie Guidelines
bond;
The following guidelines shall be observed:
3. A liberal interpretation of the requirement of
an appeal bond would serve the desired 1. The filing of a motion to reduce appeal bond
objective of resolving controversies on the shall be entertained by the NLRC subject to
merits; or the following conditions:

(1) There is meritorious ground; and

(2) A bond in reasonable amount is posted;

U N IV E R S I T Y O F S A N T O T O M A S 406
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 V. JURISDICTION AND REMEDIES
2. For purposes of compliance with condition which, specific to this case, is assurance that in case
no. (2), a motion shall be accompanied by the of affirmance of the award, recovery is not negated;
posting of a provisional cash or surety bond and on the other end of the spectrum, the
equivalent to 10% of the monetary award opportunity of the Er to appeal. By reducing the
subject of the appeal, exclusive of damages amount of the appeal bond in this case, the Ees
and attorney’s fees; would still be assured of at least substantial
compensation, in case a judgment award is affirmed.
3. Compliance with the foregoing conditions On the other hand, management will not be
shall suffice to suspend the running of the effectively denied of its statutory privilege of appeal.
ten-day reglementary period to perfect an
appeal from the Labor Arbiter’s decision to In line with Sara Lee and the objective that the
the NLRC; appeal on the merits to be threshed out soonest by
the NLRC, the appeal bond posted by the respondent
4. The NLRC retains its authority and duty to in the amount of P100,000.00 which is equivalent to
resolve the motion to reduce bond and around 20% of the total amount of monetary bond
determine the final amount of bond that shall is sufficient to perfect an appeal. With the Er’s
be posted by the appellant, still in accordance demonstrated good faith in filing the motion to
with the standards of “meritorious grounds” reduce the bond on demonstrable grounds coupled
and “reasonable amount”; and with the posting of the appeal bond in the requested
amount, as well as the filing of the memorandum of
5. If the NLRC denies the motion to reduce bond appeal, the right of the Er to appeal must be upheld.
or requires a bond that exceeds the amount of This is in recognition of the importance of the
the provisional bond, the appellant shall be remedy of appeal, which is an essential part of our
given a fresh period of ten (10) days from judicial system and the need to ensure that every
notice of the NLRC order within which to party litigant is given the amplest opportunity for
perfect the appeal by posting the required the proper and just disposition of his cause freed
appeal bond. (McBurnie v. Gauzon, G.R. No. from the constraints of technicalities. (Balite v. SS
178034, 13 Oct. 2013) Ventures, G.R. No. 195109, 04 Feb. 2015)

NOTE: When the appellant Er prayed for the Motion for reconsideration (MR) of the NLRC
reduction of the bond in view of serious liquidity decision required before certiorari may be
problems evidenced by audited financial availed
statements, while simultaneously posting a surety
bond which is more than 10% of the full judgment A motion for reconsideration shall be filed before a
award, the bond may be reduced, and the appeal is petition for certiorari to enable NLRC to correct its
considered perfected. (Philippine Touristers, Inc. mistakes. Otherwise, NLRC’s decision becomes final
and/or Alejandro R. Yague, Jr. v. MAS Transit Workers and executory.
Union-ANGLO-KMU, G.R. No. 201237, 03 Sept. 2014)
Remedy in case of denial of the MR
In Sara Lee (G.R. No. 180147, 04 June 2014), the Court
deemed it reasonable to reduce the amount of the If the motion is denied, the aggrieved party may file
appeal bond from P2.9 Billion to P725 Million. The a petition for certiorari under Rule 65 of the ROC not
Court provided that such already considers that the later than 60 days from notice of the judgment,
award, if not illegal, is extraordinarily huge and no order, or resolution. In case a motion for
insurance company would be willing to issue a bond reconsideration or new trial is timely filed, whether
for such big money. The amount of P725 Million is such motion is required or not, the 60-day period
also approximately 25% of the basis above shall be counted from notice of the denial of said
calculated. It is a balancing of the constitutional motion. No extension of time to file the petition shall
obligation of the state to afford protection to labor be granted except for compelling reason and in no

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 LABOR LAW AND SOCIAL LEGISLATION
case exceeding 15 days. (Sec. 4, Rule 65, Rules of A: NO. The Amended Decision is an entirely new
Court) decision which supersedes the original decision, for
which a new motion for reconsideration may be
Q: Cristobal became a pilot for PAL on 16 Oct. filed again. Here, the NLRC 31 May 2011 Decision
1971. In May 1998, in line with a downsizing substantially modified its 30 Sept. 2010 Decision.
program of PAL, Cristobal applied for leave Thus, petitioner was not precluded from seeking
without pay to enter into a four (4)-year reconsideration of the new decision of the NLRC,
contract with EVA Air. Cristobal advised PAL of and it was clearly an error for the Court of Appeals
his intent to retire. In response, PAL advised him to find that petitioner’s petition for certiorari was
that he was deemed to have lost his employment filed out of time on that ground. (Cristobal v. PAL and
status. Thus, on 12 May 1999, Cristobal filed a Lucio Tan, G.R. No. 201622, 04 Oct. 2017)
complaint with the NLRC.
3. REINSTATEMENT AND/OR EXECUTION
The LA found Cristobal’s dismissal illegal. On the PENDING APPEAL
matter of retirement benefits, the LA noted
PAL’s claim that Cristobal could only be entitled
Reinstatement
to a retirement pay of P5,000.00 per year,
pursuant to the Philippine Airlines, Inc.-Airline
It is the restoration of the Ee to the state from which
Pilots Association of the Philippines (PAL-
he has been unjustly removed or separated without
ALPAP) Retirement Plan of 1967. However, he
loss of seniority rights and other privileges. The
found that Cristobal’s retirement benefits
person reinstated assumes the position he had
should not be less than the amount provided
occupied prior to his dismissal, and is, ordinarily,
under the law. He is entitled to a retirement pay
entitled only to the last salary in that position.
in the amount of P1,575,964.30. NLRC affirmed
(Azucena, 2016)
the LA Decision.

Reinstatement presupposes that the previous

Later, Cristobal filed a Motion for Partial
position from which one had been removed still
Reconsideration while PAL also filed a motion
exists, or that there is an unfilled position which is
for reconsideration, claiming that it was error to
substantially equivalent or of similar nature as the
find that Cristobal was illegally dismissed and to
one previously occupied by the Ee.
base his retirement benefits on Art. 287 of
the Code. NLRC affirmed that Cristobal’s
Forms of reinstatement
retirement benefits should not be computed in
accordance with Art. 287 of the Code as Cristobal
1. Actual or physical – The Ee should be
was not yet 60 years old when he retired on 10
reinstated to his position which he occupies
Mar. 1999. Accordingly, Cristobal is only entitled
prior to his illegal dismissal under the same
to receive retirement benefits from the 1967
terms and conditions prevailing prior to his
PAL-ALPAP Retirement Plan in an amount equal
dismissal or separation or, if no longer
to P5,000.00 for every year of service.
available, to a substantially equivalent
position.
Cristobal filed his Motion for
Reconsideration, seeking reconsideration of the
2. Payroll – The Ee is merely reinstated in the
reduction of retirement benefits. NLRC denied
payroll. The Ee although not admitted back to
Cristobal’s Motion for Reconsideration, deeming
work, would nevertheless be included in the
it a second motion for reconsideration of its 31
payroll and entitled to receive salary and other
May 2011 Decision. Was the Motion for
benefits as if she were in fact working.
Reconsideration filed by Cristobal assailing the
(Azucena, 2016)
NLRC 31 May 2011 Decision a prohibited second
motion for reconsideration?

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 V. JURISDICTION AND REMEDIES
NOTE: Er is given the option to reinstate either 4. When it will not serve the best interest
actually or in payroll. of the parties involved;

An Er can reinstate an Ee in payroll when actual 5. Company will be prejudiced by

reinstatement is no longer possible in instances reinstatement;
wherein:
6. When it will not serve a prudent
1. The Er believes that there was a valid cause for purpose;
dismissal; or
7. When there is resultant strained
2. Er does not want to see anymore an unwanted relation (applies to both confidential
face in the company premise because it may and managerial Ees only); or
demoralize Ees.
8. When the position has been abolished.
NOTE: An order of reinstatement by the LA is not (Applies to managerial, supervisory and
the same as actual reinstatement of a dismissed or rank-and-file Ees).
separated Ee, however it is immediately executory
even pending appeal. Thus, until the Er continuously NOTE: In such cases, it would be more prudent to
fails to implement the reinstatement aspect of the order payment of separation pay instead of
decision of the LA, their obligation to the illegally reinstatement. (Quijano v. Mercury Drug
dismissed Ee, insofar as accrued backwages and Corporation, G.R. No. 126561, 08 July 1998)
other benefits are concerned, continues to
accumulate. It is only when the illegally dismissed Q: Is there any violation of the “No work, No pay”
Ee receives the separation pay (in case of strained in payroll reinstatement?
relations) that it could be claimed with certainty
that the Er-Ee relationship has formally ceased A: Generally, YES. However, since it is the mandate
thereby precluding the possibility of reinstatement. of the law, although it is harsh, there is no violation
(Triad Security & Allied Services, Inc. et al v. Ortega, under the dictum of dura lex sed lex. (Poquiz, 2018)
G.R. No. 160871, 06 Feb. 2006)
The option in Art. 229 of the LC is exclusively
Q: Is an illegally dismissed Ee entitled to granted to the Er. The event that gives rise for its
reinstatement as a matter of right? exercise is not the reinstatement decree of a LA but
the writ for its execution commanding the Er to
A: GR: YES. reinstate the Ee, while the final act which compels
the Er to exercise the option is the service upon it of
XPNs: Proceeds from an illegal dismissal the writ of execution when, instead of admitting the
wherein reinstatement is ordered but cannot be Ee back to his work, the Er chooses to reinstate the
carried out as in the following cases: Ee in the payroll only.

1. Reinstatement cannot be effected in This option is based on practical considerations. The

view of the long passage of time or Er may insist that the dismissal of the Ee was for a
because of the realities of the situation; just and valid cause and the latter's presence within
its premises is intolerable by any standard; or such
2. It would be inimical to the Ers’ interest; presence would be inimical to its interest or would
demoralize the co-Ees.
3. When reinstatement is no longer
feasible; Thus, while payroll reinstatement would in fact be
unacceptable because it sanctions the payment of
salaries to one not rendering service, it may still be

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the lesser evil compared to the intolerable presence Two-Fold Test
in the workplace of an unwanted. Ee. (Maranao
Hotel v. NLRC, G.R. No. 110027, 16 Nov. 1994) 1. There must be actual delay or the fact that the
order of reinstatement pending appeal was not
Order of Reinstatement executed prior to its reversal; and

An order for reinstatement entitles an Ee to receive 2. The delay must not be due to the Er’s
his accrued backwages from the moment the unjustified act or omission. If the delay is due
reinstatement order was issued up to the date when to the Er’s unjustified refusal, the Er may still
the same was reversed by a higher court without be required to pay the salaries
fear of refunding what he had received. (Pfizer v. notwithstanding the reversal of the LA’s
Velasco, G.R. No. 177467, 09 Mar. 2011) decision. (Garcia v. PAL, G.R. No. 164856, 29
Aug. 2009)
Art. 229 vs. Art. 294
Q: May the Court order the reinstatement of a
Art. 229 Art. 294 dismissed Ee even if the prayer of the complaint
did not include such relief?
May be availed of as Presupposes that the
soon as the LA renders judgment has already A: YES. So long as there is a finding that the Ee was
a judgment declaring become final and illegally dismissed, the court can order the
that the dismissal of executory. reinstatement of an Ee even if the complaint does
the Ee is illegal and not include a prayer for reinstatement, unless of
ordering said Consequently, there is course the Ee has waived his right to reinstatement.
reinstatement. It may nothing left to be done By law, an Ee who is unjustly dismissed is entitled to
be availed of even except the execution reinstatement among others. The mere fact that the
pending appeal thereof. complaint did not pray for reinstatement will not
prejudice the Ee, because technicalities of law and
procedure are frowned upon in labor proceedings.
NOTE: An award or order for reinstatement is self- (Pheschem Industrial Corp. v. Moldez, G.R. No.
executory. It does not require the issuance of a writ 116158, 09 May 2005)
of execution. (Pioneer Texturizing Corp. v. NLRC, G.R.
No. 118651, 06 Oct. 1997) NOTE: Reinstatement ordered by LA is self-
executory as provided under Art. 229 while the one
Reinstatement Pending Appeal by the NLRC is not because it awaits the issuance of
a writ of execution under Art. 230. (Azucena, 2016)
A dismissed Ee whose case was favorably decided
by the LA is entitled to receive wages pending Q: A complaining Ee obtained a favorable
appeal upon reinstatement, which is immediately decision in an illegal dismissal case. The LA
executory. Unless there is a restraining order, it is ordered her immediate reinstatement. The Er
ministerial upon the LA to implement the order of opted payroll reinstatement pending appeal.
reinstatement and it is mandatory on the Er to The NLRC ruled that the dismissal was valid. The
comply therewith. Er stopped the payroll reinstatement. The Ee
elevated the case to the CA, and eventually to the
NOTE: After the LA’s decision is reversed by a SC. The SC upheld the dismissal. Is the Ee entitled
higher tribunal, the Ee may be barred from to continued payroll reinstatement after the
collecting the accrued wages, if it is shown that the NLRC decision?
delay in enforcing the reinstatement pending appeal
was without fault on the part of the Er. A: NO. The Ee is not entitled to continued payroll
reinstatement. The decision of the NLRC on appeals

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 V. JURISDICTION AND REMEDIES
from decisions of the LA shall become final and In a Notice to Explain with Preventive
executory after 10 calendar days from receipt Suspension, the ATI informed Reyes that his
thereof by the parties. That the CA may take failure to ensure that the safeguards for works
cognizance of and resolve a petition for certiorari on board the vessel were faithfully observed
for the nullification of the decisions of the NLRC on constitutes probable violation under Section 2.2
jurisdictional and due process considerations does of the CTOP (neglect of work, incompetence,
not affect the statutory finality of the NLRC decision. inefficiency, negligence, failure to perform
Since the NLRC decision which upheld the dismissal duties and/or responsibilities, or failure to
became final, the Er was correct in stopping the observe standard operating procedures, in any
payroll reinstatement of the Ee. (Bago v. NLRC, G.R. case resulting in injury or death) and may merit
No. 170001, 04 Apr. 2007) the penalty of dismissal. Is Reyes, Jr. illegally
dismissed?
Q: What happens if there is an Order of
Reinstatement but the position is no longer A: NO. Indeed, as pointed out by the CA, ATI failed
available? to present clear, accurate, positive, and convincing
evidence that there is just cause to terminate Reyes'
A: The Ee should be given a substantially equivalent employment. First, Reyes merely followed the rules
position. If no substantially equivalent position is in the performance of his job. In fact, his transfer to
available, reinstatement should not be ordered Bay 38 was by instructions of the EC Planner.
because that would in effect compel the Er to do the Second, his transfer to Bay 38 was necessary
impossible. In such a situation, the Ee should merely because a quay crane has already been
be given a separation pay consisting of one (1) prepositioned and loading operation was about to
month salary for every year of service. (Grolier Int’l commence.
Inc. v. ELA, G.R. No. 83523, 31 Aug. 1989)
Reinstatement cannot be barred especially when
Q: Eteliano Reyes, Jr. was employed by Asian the Ee has not indicated an aversion to returning to
Terminals, Inc. (ATI) as Supervisor III/Foreman work or does not occupy a position of trust and
on Board who shall be responsible in ensuring confidence or has no say in the operation of the Er's
that shift vessel operations are carried in business. Here, aside from the fact that this issue
accordance with ATI standards. He first went to was only raised for the first time, there is also no
Bay 30, but he had to leave the All Purpose compelling evidence presented to support the
Personnel (APP) tasked to finish the lashing conclusion that the parties' relationship has gone so
operations as he needed to supervise the sour to render reinstatement impracticable. Also,
loading operations at Bay 38. Reyes has not demonstrated unwillingness to be
reinstated and the existence of a confidential
With a twist of fate, an accident occurred at Bay relationship between him, as a supervisory Ee, and
30 wherein a lashing bar fell on the pier apron ATI, has not been established. For lack of evidence
hitting Manuel Quiban a vessel security guard. on record, it appears that his position was not a
As expected, ATI directed Reyes to explain why sensitive position as would require complete trust
he should not be penalized for negligence. In his and confidence, and where personal ill will would
response, Reyes clarified that while completing foreclose his reinstatement. (Asian Terminals, Inc. v.
the lashing operations at Bay 30, "EC Planner" Reyes, Jr., G.R. No. 240507, 28 Apr. 2021)
directed him to transfer to Bay 38 to supervise
the commencement of loading operations. Refund Doctrine
Pursuant to said instruction, Reyes left the four
(4) APPs to complete lashing operations at Bay The refund doctrine easily demonstrates how a
30 and proceeded to Bay 38 where a loading favorable decision by the LA could harm, more than
operation was about to start and the crane was help, a dismissed employee. (Garcia v. Philippine
already positioned. Airlines, Inc., G.R. No. 164856, 20 Jan. 2009)

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Q: Juanito initiated a case for illegal dismissal Essentially, NLRC continues to act collegially,
against Mandarin Company. The Labor Arbiter whether it performs administrative or rule-making
decided in his favor, and ordered his immediate functions or exercises appellate jurisdiction to
reinstatement with full backwages and without review decisions and final orders of the Labor
loss of seniority and other benefits. Mandarin Arbiters. (Azucena, 2016)
Company did not like to allow him back in its
premises to prevent him from influencing his Powers and Functions of the NLRC
co-workers to move against the interest of the
company; hence, it directed his payroll 1. NLRC En Banc
reinstatement and paid his full backwages and
other benefits even as it appealed to the NLRC. A a. Rule Making Power – To promulgate rules
few months later, the NLRC reversed the ruling and regulations governing the hearing and
of the Labor Arbiter and declared that Juanito’s disposition of cases before it and its
dismissal was valid. The reversal ultimately regional branches, as well as those
became final. pertaining to its internal functions and such
rules and regulations as may be necessary
May Mandarin Company recover the backwages to carry out the purposes of this Code; (Art.
and other benefits paid to Juanito pursuant to 225, LC)
the decision of the LA in view of the reversal by
the NLRC? Rule, with reasons. (2017 BAR) b. Power to Issue Compulsory Processes –
Under Art. 225 (b) of the LC, the Commission
A: NO. Mandarin Company may not recover the has the power to administer oaths, summon
backwages and other benefits paid to Juanito. parties, and issue subpoena ad
testificandum and duces tecum; (Azucena,
In Garcia v. Philippine Airlines, Inc. (G.R. No. 164856, 2016)
20 Jan. 2009), the Supreme Court held that a
reinstated employee need not refund the c. Power to Investigate and Hear Disputes
backwages and other benefits paid pursuant to an within its Jurisdiction – Under Art. 225 (c)
order of reinstatement by the Labor Arbiter. The of the LC, the Commission has the power to
rationale is to help the employee make both ends conduct investigations for the
meet during the pendency of the appeal and to determination of a question, matter, or
prevent a situation where the dismissed employee controversy within its jurisdiction; and
will not spend the reinstatement wages for fear of proceed to hear and determine the disputes;
refunding the same if the decision of the Labor (Azucena, 2016)
Arbiter is subsequently reversed.

d. Contempt Power – Under Art. 225 (d) of the

B. NATIONAL LABOR RELATIONS COMMISSION LC and Rule 11 of the NLRC 2011 Rules of
Procedure, the Commission has the power to
hold any person in direct or indirect
contempt; (Azucena, 2016)
National Labor Relations Commission (NLRC)

e. Power to Conduct Ocular Inspection -

It is an administrative body with quasi-judicial
Under Art. 226 of the LC, the chairman, any
functions and the principal government agency that
commissioner, labor arbiter or their duly
hears and decides labor-management disputes. It is
authorized representatives may, at anytime
attached to the DOLE solely for program and policy
during working hours:
coordination only.

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 V. JURISDICTION AND REMEDIES
1. Conduct an ocular inspection on c. Has exclusive appellate jurisdiction over
any establishment, building, ship cases within their respective territorial
or vessel, place or premises, jurisdiction.
including any work, material
implement, machinery, appliance Allocation of Powers Between NLRC En Banc and
or any object therein; and its Divisions

2. Ask any Ee, laborer or any person, The Commission shall sit en banc only for purposes
as the case may be, for any of promulgating rules and regulations governing the
information or data concerning hearing and disposition of cases before any of its
any matter or question relative to divisions and regional branches and formulating
the object of the investigation. policies affecting its administration and operations.
(Azucena, 2016) RA 7700 requires an en banc decision so that a case
within the jurisdiction of one division may be heard
f. Adjudicatory Power: Original and decided by another division whose docket can
accommodate the additional workload. (Azucena,
g. Adjudicatory Power: Appellate 2016)

h. Power to Issue Injunction or T.R.O - The Individual Commissioner does not have
Commission has injunction power or, adjudicatory power
simply, the power to command that an act
be done or not done. Art. 225(e) explains the The law lodges the adjudicatory power on each of the
injunctive power of the Commission and the eight divisions, neither on the individual
prerequisites for its exercised. (Azucena, commissioners nor on the whole commission. The
2016) “division” is a legal identity, not the person who sits
in it. Hence, an individual commissioner has no
NOTE: The NLRC shall have exclusive appellate adjudicatory power, although of course, he can
jurisdiction over all cases decided by labor concur or dissent in deciding a case.
arbiters as provided in Article 217(b) of the
Labor Code. In short, the jurisdiction of the EXCLUSIVE ORIGINAL JURISDICTION OF THE
NLRC in illegal dismissal cases is appellate in NLRC
nature and, therefore, it cannot entertain the
private respondents' petition for injunction The NLRC has exclusive original jurisdiction over
which challenges the dismissal orders of the following cases: (In2Cert-CoVe)
petitioner. Article 218(e) of the Labor Code
does not provide blanket authority to the NLRC 1. Certified labor disputes causing or likely to
or any of its divisions to issue writs of cause a strike or lockout in an industry
injunction, considering that Section 1 of Rule XI indispensable to national interest, certified
of the New Rules of Procedure of the NLRC to it by the SOLE or the President of the
makes injunction only an ancillary remedy in Philippines for compulsory arbitration;
ordinary labor disputes. (PAL Inc v. NLRC, G.R.
No. 120567, 20 Mar. 1998) 2. Injunction in ordinary labor disputes to
enjoin or restrain any actual or threatened
2. NLRC Division (Eight Divisions with three commission of any or all prohibited or
members) unlawful acts or to require the performance
of a particular act in any labor dispute
a. Adjudicatory; which, if not restrained or performed
b. Exercises all other powers, functions and forthwith, may cause grave or irreparable
duties; and damage to any party;

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3. Injunction in strikes or lockouts under Art. resolution.
279 of the LC;
NOTE: Whenever the required membership in
4. Contempt cases; and a division is not complete and the concurrence
5. Verified petitions (Sec. 3, Rule XII, 2011 of the Commissioners to arrive at judgment or
NLRC Rules of Procedure) resolution cannot be obtained, the Chairman
shall designate such number of additional
EXCLUSIVE APPELLATE JURISDICTION OF THE Commissioners from the other divisions as may
NLRC be necessary. (Art. 220, LC)

The NLRC shall have exclusive appellate jurisdiction 3. It shall be mandatory for the division to meet
over: for purposes of consultation.

1. Decisions, awards, or orders of the Labor NOTE: The conclusion of a division on any case
Arbiter over: submitted to it for decision should be reached
a. Cases covered by Art. 224(b); in consultation before the case is assigned to a
b. Cases covered by Sec. 10 of member for the writing of the opinion. (Art.
Migrant Worker’s Act; and 220, LC)
c. Cases decided under Art. 124 on
wage distortion in non-unionized 4. A certification that a consultation has been
establishment; conducted, signed by the presiding
commissioner of the division, shall be issued. A
2. Denial of the claim of the third-party copy of which shall be attached to the record of
claimant where property was levied by the the case and served upon the parties. (Art. 220,
Sheriff of LA LC)

3. Cases decided by the Regional Offices of Q: Philippine News Network (PNN) engages the
DOLE in the exercise of its adjudicatory services of Anya, a prominent news anchor from
function under Art. 129 of the LC over a rival station, National News Network (NNN).
monetary claims of workers amounting to NNN objects to the transfer of Anya claiming that
not more than P5,000 and not accompanied she is barred from working in a competing
by claim for reinstatement; and company for a period of three years from the
expiration of her contract. Anya proceeds to sign
4. Decision by the LA in contempt cases. (Art. with PNN which then asks her to anchor their
225(d), LC) nightly newscast. NNN sues Anya and PNN before
the NLRC, asking for a labor injunction. Anya and
Adjudication of cases by the NLRC PNN object claiming that it is a matter
cognizable by a regular court and not the NLRC.
1. The NLRC adjudicates cases by division - The Is NNN’s remedy correct? Why or why not?
Commission shall exercise its adjudicatory and
all other powers, functions and duties through A: NO. The NLRC has no jurisdiction because of the
its divisions. (Art. 220, LC) following reasons: (1) As to PNN, there is no Er-Ee
relationship between itself and NNN; hence, the
2. Two votes requirement - The presence of a NLRC cannot hear and resolve their dispute
majority of all the members of the Commission (Reasonable Causal Connection (RCC) Rule); (2) As
en banc or of a Division, as the case may be, to Anya, the injunctive power of the NLRC is
shall constitute a quorum. The vote of the ancillary in nature; hence, it requires a principal
majority of the members constituting a quorum case, which is absent. Besides, the dispute between
shall be necessary to pronounce a decision or her and PNN is not resolvable solely through the

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 V. JURISDICTION AND REMEDIES
application of the Labor Code, other labor statutes, b. The Chairman and the 7 remaining
CBA or employment contract. members shall come from the public
sector, with the latter to be chosen
Q: Some disgruntled members of Bantay Labor preferably from among the incumbent LAs;
Union filed with the Regional Office of the DOLE and
a written complaint against their union officers
for mismanagement of union funds. The RD c. Upon assumption into office, the members
dismissed their complaint. Hence, they elevated nominated by the workers and Ers
the RD’s decision to the NLRC. The union officers organization shall divest themselves of any
moved to dismiss on the ground of lack of affiliation with or interest in the federation
jurisdiction. Are the union officers correct? Why? or association to which they belong. (Art.
220, LC)
A: YES. The union officers are correct in claiming
that the NLRC has no jurisdiction over the appealed NOTE: There is no need for the COA to confirm the
ruling of the RD. In Barles v. Bitonio (G.R. No. 120220, positions in the NLRC. Such requirement has no
16 June 1999), the SC ruled that “appellate authority constitutional basis. (Calderon v. Carale, G.R. No.
over decisions of the RD involving examination of 91636, 23 Apr. 1992)
union account is expressly conferred on the BLR
under the Rule of Procedure on Mediation- Qualifications of the Chairman and the
Arbitration.” Commissioners

Q: May the NLRC or the courts take 1. Member of the Philippine Bar;
jurisdictional cognizance over compromise 2. Engaged in the practice of law in the
agreements or settlements involving labor Philippines for at least 15 years;
matters? 3. At least 5 years of experience or exposure in
handling labor management relations; and
A: NO. Any compromise agreement, including those 4. Preferably a resident of the region where he is
involving labor standards laws, voluntarily agreed to hold office. (Art. 222, LC)
upon by the parties with the assistance of the
Bureau or the regional office of DOLE, shall be final Qualifications of an Executive Labor Arbiter
and binding upon the parties. The NLRC or any
court shall not assume jurisdiction over issues 1. Member of the Philippine Bar;
involved therein except in case of non-compliance 2. Engaged in the practice of law in the
thereof or if there is prima facie evidence that the Philippines for at least 10 years;
settlement was obtained through fraud, 3. At least 5 years of experience or exposure in
misrepresentation, or coercion. (Art. 227, LC) handling labor management relations. (Art.
222, LC)
Composition of the NLRC
Terms of office of the Chairman, Commissioners,
The Commission may sit en banc or in eight (8) and Labor Arbiters
divisions, each composed of three (3) members.
(Art. 220, LC) They shall hold office during good behavior until
they reach the age of 65 unless removed for causes
1. Chairman; and as provided by law or become incapacitated to
2. 23 Members. discharge the function of his office. Provided,
however, that the President of the Philippines may
a. 8 members each of whom shall be chosen extend the services of the Commissioners and Las up
only from among the nominees of the to the maximum age of 70 years upon the
workers and Er organization respectively; recommendation of the Commission en banc. (Art.

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 LABOR LAW AND SOCIAL LEGISLATION
222, LC) 3. On cases already filed or may be filed – All
cases between the same parties, except where
Certified Cases the certification order specifies otherwise the
issues submitted for arbitration which are
It is the declared policy of certification of labor already filed or may be filed and are relevant
disputes for compulsory arbitration to ensure and to or are proper incidents of the certified case,
maintain industrial peace based on social justice shall be considered subsumed or aborted by
and national interest by having a full, complete and the certified case, and shall be decided by the
immediate settlement or adjudication of all labor appropriate Division of the Commission;
disputes between the parties, as well as issues that
are relevant to or incidents of the certified issues. 4. On other pending cases – The parties to a
(Rule VIII, NLRC Rules of Procedure) certified case, under pain of contempt, shall
inform their counsels and the Division
These are cases certified or referred to the concerned of all cases pending with the
Commission for compulsory arbitration under Art. Regional Arbitration Branches and the
263(g) of the LC dealing about national interest Voluntary Arbitrators relative or incident to
cases. (Sec. 2, Rule VIII, NLRC Rules of Procedure) the certified case before it; and

A national interest dispute may be certified to the 5. On which Division should take cognizance of
NLRC even before a strike is declared since Art. the certified case in case entity has several
263(g) of the LC does not require the existence of a workplaces in different regions - Whenever a
strike, but only of an industrial dispute. certified labor dispute involves a business
(Government Service Insurance System Ees entity with several workplaces located
Association (GSISEA), et al. v. Court of Industrial indifferent regions, the Division having
Relations, G.R. No. L-18734, 30 Dec. 1961) territorial jurisdiction over the principal office
of the company shall acquire jurisdiction to
Effects of Certification of Labor Disputes decide such labor dispute, unless the
certification order provides otherwise.
The certification of a labor dispute to the NLRC has
the following effects: NOTE: Same effect of certification to the NLRC as in
cases assumed directly by DOLE Secretary. The
1. On intended or impending strike or lockout effects described above are also applicable when the
– Upon certification, the intended or DOLE Secretary directly assumes jurisdiction over a
impending strike is automatically enjoined, labor dispute affecting industries imbued with
notwithstanding the thing of any motion for national interest and decides it himself.
reconsideration of the certification order or
the non-resolution of any such motion which Function of the NLRC in certified cases
may have been duly submitted to the SOLE;
When sitting in a compulsory arbitration certified to
2. On actual strike or lockout – If a work by the SOLE, the NLRC is not sitting as a judicial
stoppage has already taken place at the time of court but as an administrative body charged with
the certification, all striking or locked out Ees the duty to implement the order of the SOLE. As an
shall immediately return to work and the Er implementing body, its authority does not include
shall immediately resume operations and the power to amend the Secretary’s order. (UST v.
readmit all workers under the same terms and NLRC and UST Faculty Union, G.R. No. 89920, 18 Oct.
conditions prevailing before the strike or 1990)
lockout;

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Effect of defiance from the certification order Remedy of aggrieved party by the NLRC
decision: availability of judicial review of the
Non-compliance with the certification order of the NLRC’s decision
SOLE shall be considered as an illegal act committed
during the strike or lockout and shall authorize the Judicial review of NLRC’s decision is available
Commission to enforce the same under pain of through a petition for certiorari (Rule 65, ROC)
immediate disciplinary action, including dismissal which should be initially filed with the CA in strict
or loss of employment status or payment by the observance of the doctrine on the hierarchy of
locking-out Er of backwages, damages and/or other courts as the appropriate forum for the relief
affirmative relief, even criminal prosecution against desired. The CA is procedurally equipped to resolve
the liable parties. (Sec. 4, Rule VIII, NLRC 2011 Rules unclear or ambiguous factual finding, aside from the
of Procedure) increased number of its component divisions. (St.
Martin Funeral Home v. NLRC, G.R. No. 130866, 16
The Commission may also seek the assistance of law Sept. 1998)
enforcement agencies to ensure compliance and
enforcement of its orders and resolutions. (Ibid.)
C. COURT OF APPEALS
Procedure in deciding certified cases

1. When there is no need to conduct a clarificatory

Court of Appeals
hearing, the Commission shall resolve all
certified cases within 30 calendar days from
GR: Decisions of the DOLE secretary, NLRC, and BLR
receipt by the assigned Commissioner of the
in its appellate jurisdiction, are NOT appealable to
complete records, which shall include the
the CA as per the St. Martin Ruling (G.R. No. 130866,
position papers of the parties and the order of
16 Sept. 1998). However, their decisions may be
the Secretary of Labor and Employment
elevated to the CA via petition for certiorari under
denying the motion for reconsideration of the
Rule 65.
certification order, if any.

XPN: Orders or awards of the VA may be appealed

2. Where a clarificatory hearing is needed, the
to the CA via Petition for Review under Rule 43.
Commission shall, within five (5) calendar days
from receipt of the records, issue a notice to be
Requisites for filing a Petition for Certiorari
served on the parties through the fastest means
available, requiring them to appear and submit
1. Allegation that such tribunal, board or officer
additional evidence, if any. All certified cases
has acted:
shall be resolved by the Commission within
sixty (60) calendar days from receipt of the
a.
Without or in excess its or his
complete records by the assigned
jurisdiction, or
Commissioner.
b. With grave abuse of discretion
amounting to lack or excess of
3. No motion for extension or postponement shall
jurisdiction;and
be entertained. (Sec. 5, Rule VIII, NLRC 2011
2. There is no appeal, or any plain, speedy, and
Rules of Procedure)
adequate remedy in the ordinary course of law;

NOTE: In order for the special civil actions for

certiorari and prohibition under Rule 65 of the
ROC to prosper, there must be a showing that
there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.
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(Pichay, Jr. v. The Law Department, G.R. No.
258393, 04 Jan. 2022) Hence, a Motion for NOTE: Reglementary period referred to calendar
Reconsideration must have been filed before and not working days. (Pacana v. National Labor
the DOLE Secretary, NLRC, or BLR Director, as Relations Commission, et al., G.R. No. 83513, 18 Apr.
the case may be. 1989)

Q: When may grave abuse of discretion may be Q: An employee filed a complaint against his
ascribed to the NLRC? employer before the National Labor Relations
Commission (NLRC). The labor arbiter decided
A: In labor disputes, grave abuse of discretion may the case in favor of the employee. The employer
be ascribed to the NLRC when, inter alia, its findings received a copy of the decision on 10 Apr. 1984.
and the conclusions reached thereby are not April 20 being a Good Friday and the following
supported by substantial evidence. (Ma. Charito C. Saturday having been declared a non-working
Gadia, et al., v. Sykes Asia, Inc., Chuck Sykes, Mike public holiday by the President, the employer
Hinds, Michael Henderson, G.R. No. 209499, 28 Jan. filed his appeal with the NLRC from the said
2015) decision on 23 Apr. 1984.

Period when the petition for certiorari should be Assuming the decision of the labor arbiter is
filed with the Court of Appeals affirmed by the NLRC. What is the recourse of
the employer? State the nature of the action, the
Under Sec. 4, Rule 65 (as amended by A.M. No. 00-2- court which has jurisdiction over the action, and
03-SC) of the Rules of Civil Procedure, the petition the period within which the same must be filed.
must be filed within 60 days from notice of the
judgment or from notice of the resolution denying A: In the exercise of its appellate jurisdiction over
the petitioner’s motion for reconsideration. This decisions of labor arbiters, a decision of the National
amendment is effective 1 Sept. 2000 but being Labor Relations Commission is final and executory
curative may be given retroactive application. after 10 calendar days from receipt thereof by the
(Narzoles v. NLRC, G.R. No. 141959, 29 Sept. 2000) parties. (Art. 223, LC)

The petition must be filed within 60 days from In view of the above provision, the employer in the
notice of the judgment or from notice of the case in the question who is aggrieved by the
resolution denying the petitioner’s motion for decision of the NLRC should file a petition for
reconsideration. (Sec. 4, Rule 65 [as amended by A.M. certiorari with the Supreme Court under Rule 65 of
No. 00-2-03-SC] of the Rules of Civil Procedure) the Rules of Court within 60 days from receipt of the
decision which is the subject of the petition for
NOTE: The above-mentioned amendment is certiorari.
effective 01 Sept. 2000 but being curative may be
given retroactive application. (Narzoles v. NLRC, G.R.
No. 141959, 29 Sept. 2000)

Computation of period for filing

The period within which a petition for certiorari

against a decision of the NLRC may be filed should
be computed from the date counsel of record of the
party receives a copy of the decision or resolution,
and not from the date the party himself receives a
copy thereof. (Ginete v. Sunrise Manning Agency, G.R.
No. 142023, 21 June 2001)

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 V. JURISDICTION AND REMEDIES
returning or was deprived of work. Brown was
D. SUPREME COURT not dismissed but was only informed of the
complaints against him.

In turn, Brown filed a Petition in the Supreme

Appeal from a Judgment, or Final Order or
Court under Rule 45. Brown contends that
Resolution of the CA
Marswin failed to discharge its burden to prove
that he committed abandonment. On the other
A party desiring to appeal may file with the Supreme
hand, Marswin (Er) counters that the Court
Court a verified petition for review on certiorari
should not give due course to the Petition
under Rule 45 within 15 days from notice of the
because it raises factual issues which are not
judgment, final order or resolution appealed from.
within the ambit of a petition under Rule 45 of
(Sea Power Shipping Enterprises, Inc. v. CA, G.R. No.
the Rules of Court. Should the petition under
138270, 28 June 2001)
Rule 45 be given due course?

NOTE: Filing of petition with Supreme Court under

A: YES. As a rule, the Court is not a trier of facts and
Sec.1, Rule 45, Rules of Court — A party desiring to
only questions of law may be raised in a petition
appeal by certiorari from a judgment, final order or
under Rule 45. A departure from this rule is
resolution of the CA, the Sandiganbayan, the CTA,
nevertheless allowed where the factual findings of
the RTC, or other courts, whenever authorized by
the CA are contrary to those of the lower courts or
law, may file with the Supreme Court a verified
tribunals. Here, the findings of the CA vary with
petition for review on certiorari. The petition may
those of the NLRC and LA. As such, the Court deems
include an application for a writ of preliminary
it necessary to review the records and determine
injunction or other provisional remedies and shall
which findings and conclusion truly conform to the
raise only questions of law, which must be distinctly
evidence adduced by the parties. (Ernesto Brown v.
set forth. The petitioner may seek the same
Marswin Marketing Inc., G.R. No. 206891, 15 Mar.
provisional remedies by verified motion filed in the
2017)
same action or proceeding at any time during its
pendency.
Remedies in Summary
Policy of the Supreme Court regarding appeals
in labor cases File a petition for review on certiorari under
Rule 45 before the SC
The Supreme Court is very strict regarding appeals
filed outside the reglementary period for filing the File a petition for certiorari under Rule 65
same. To extend the period of the appeal is to delay before the CA
the case, a circumstance which could give the Er the
chance to wear out the efforts and meager resources File a MR before the NLRC
of the worker that the latter is constrained to give
up for less than what is due him. (Firestone Tire and File an appeal to the NLRC
Rubber Co. of the Philippines v. Firestone Tire and (Art. 229)
Rubber Co. Ees Union, G.R. No. 75363, 04 Aug. 1992)

Decision of Labor Arbiter

Q: The Labor Arbiter ruled in favor of Brown and
MR is not allowed
declared his dismissal illegal, holding. that
(Sec. 5, Rule V, NLRC 2011 Rules)
Brown was regular Ee. On appeal, the NLRC
affirmed the LA decision. Through a petition for
Certiorari with the CA, the CA ruled that Brown
was legally dismissed. According to the CA, there
was no showing that Brown was prevented from
419
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 LABOR LAW AND SOCIAL LEGISLATION
Writ of Execution 1. All inter-union and intra-union conflicts;
(Art. 226, LC)
It is a court order to carry out, to implement, a final
judgment. (Azucena, 2016) 2. All disputes, grievances or problems arising
from or affecting labor-management
The issuance of a writ of execution is a matter of relations in all workplaces, except those
right on the part of the prevailing party once a arising from the implementation or
judgment becomes final and executory. The interpretation of collective bargaining
issuance thereof is a ministerial duty on the part of agreements. (Art. 226, LC)
the Labor Arbiter. (ABC Manpower Agency, Inc. v.
Villena, G.R. No. 243680 (Notice), 04 Mar. 2019) 3. Complaints involving federations, national
unions, industry unions, its officers or
Q: Who may issue writ of execution in labor member organizations (Sec. 4, Rule XI, Book
cases V, Omnibus Rules)

A: A writ of execution may be issued by the 4. Petition for the conduct of election of
following officials: officers in the case of federations, national
1. Secretary of Labor and Employment; or industry unions and trade union centers.
2. DOLE Regional Director; (Sec. 2, Rule XII, Book V, Ominibus Rules)
3. NLRC;
4. Labor Arbiter; 5. A request for examination of books of
5. Med-Arbiter; accounts of federations or national unions
6. Voluntary Arbitrator; and and trade union centers pursuant to Article
7. Panel of Arbitrators (Azucena, 2016) 274. (Sec. 3, Rule XIII, Book V, Omnibus
Rules)
Injunction Against LA/NLRC Decision
Jurisdiction over labor management problems
GR: A regular court has no jurisdiction to hear and or disputes is also exercised by other offices
decide questions which arise and are incidental to
the enforcement of decisions, orders or awards 1. DOLE Regional Offices;
rendered in labor cases by appropriate officers and 2. Office of the Secretary of Labor;
tribunals of the DOLE. 3. NLRC;
XPN: A separate civil action for recovery of 4. POEA;
ownership of the property would not constitute 5. OWWA;
interference with the powers or processes of the LA 6. SSS-ECC;
and NLRC which rendered the judgment to enforce 7. RTWPB;
and execute upon the levied properties. (Azucena, 8. NWPC; and
2016) 9. Regular courts over intra-corporate
disputes.

E. BUREAU OF LABOR RELATIONS Mediator-arbiter

An officer in the Regional Office or Bureau

authorized to hear, conciliate, and decide
Coverage of the BLR’s jurisdiction and functions
representation cases or assist in the disposition of
intra or inter-union disputes.
The BLR no longer handles all labor management
disputes. Its functions and jurisdiction are largely
confined to:

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Kinds of cases within BLR’s jurisdiction 10. Violations of the rights and conditions of
membership in a union or workers’
The BLR has original and exclusive jurisdiction association;
over:
11. Violations of the rights of LLO, except
1. Inter-union disputes; interpretation of CBAs;
2. Intra-union disputes; and
3. Other related labor relations disputes. 12. Validity/invalidity of impeachment/
expulsion/suspension or any disciplinary
Inter-union disputes action meted against any officer and member,
including those arising from non-compliance
1. Validity/invalidity of SEBA, certification with the reportorial requirements under Rule
election, consent election, run-off election or re- V; and
run election.
13. Such other disputes or conflicts involving the
2. Such other disputes or conflicts involving the rights to self-organization, union
rights to self-organization, union membership membership and collective bargaining
and collective bargaining between and among a. Between and among LLO; and
legitimate labor organizations. (Sec. 1, Rule XI, b. Between and among members of a
Book V, IRR as amended by D.O. 40-F-03) union or workers’ association. (Sec. 1,
Rule XI, Book V, IRR as amended by D.O.
Intra-union disputes 40-F-03)

1. Conduct or nullification of election of union Coverage of the phrase “other related labor
and workers’ association officers; relations disputes”

2. Audit/accounts examination of union or 1. Any conflict between:

workers’ association funds; a. A labor union and the Er;
b. A labor union and a group that is not a LO;
3. Deregistration of CBAs; or
c. A labor union and an individual who is
4. Validity/invalidity of union affiliation or not a member of such union;
disaffiliation;
2. Cancellation of registration of unions and
5. Validity/invalidity of acceptance/ non- worker’s associations filed by individual/s
acceptance for union membership; other than its members, or group that is not a
LO; and
6. Validity/invalidity of voluntary recognition;
3. A petition for Interpleader involving labor
7. Opposition to application for union or CBA relations. (Sec. 2 Rule XI, Book V, IRR as
registration; amended by D.O. 40-F-03)

8. Violations of or disagreements over any Filing a Complaint or Petition Involving

provision of the constitution and by-laws of Intra/Inter-Union Disputes
union or workers’ association;
A legitimate labor organization or its members may
9. Disagreements over chartering or file a complaint or petition involving intra/inter-
registration of labor organizations or the union disputes. (Sec. 5, Rule XI, Book V, IRR as
registration of CBAs amended by D.O. 40-F-03)

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Filing a complaint or petition if the issue iii. With supporting arguments and
involves the entire membership. evidence.

The complaint must be signed by at least 30% of the 2. Period – Within 10 days from receipt of
entire membership of the union. decision. (Sec. 16, Rule XI, Book V, IRR as
amended by D.O. 40-F-03)
Filing a complaint or petition if the issue
involves a member only 3. To whom appealable

Only the affected member may file the complaint. a. BLR – If the case originated from the Med-
(Rule XI, Sec. 5, Book V, IRR as amended by D.O. 40-F- Arbiter/Regional Director
03) b. SOLE – If the case originated from the BLR

GR: Redress must first be sought within the union 4. Where Filed – Regional Office or to the BLR,
itself in accordance with its constitution and by- where the complaint originated. Records are
laws. transmitted to the BLR or Sec. within 24 hours
from the receipt of the memorandum of appeal.
XPNs: (Sec. 17, Rule XI, Book V, IRR as amended by D.O.
40-F-03)
1. Futility of intra-union remedies;
2. Improper expulsion procedure; Extent of authority of the Bureau of Labor
3. Undue delay in appeal as to constitute Relations
substantial injustice;
4. The action is for damages; 1. It may hold a referendum election among the
members of a union for the purpose of
5. Lack of jurisdiction of the investigating body; determining whether or not they desire to be
action for the administrative agency is affiliated with a federation.
patently illegal, arbitrary and oppressive;
2. But the BLR has no authority to:
6. Issue is purely a question of law; a. Order a referendum among union
members to decide whether to expel or
7. Where the administrative agency had already suspend union officers;
prejudged the case; and
b. Forward a case to the Trade Union
8. Where the administrative agency was Congress of the Philippines for
practically given the opportunity to act on the arbitration and decision.
case but it did not.
Administrative functions of the Bureau of Labor
Appeal of a decision in inter/intra-union dispute Relations

A decision in an inter/intra-union dispute may be 1. Regulation of the labor unions;

appealed, upon compliance with the following rules: 2. Keeping the registry of labor unions;
3. Maintenance of a file of the CBA; and
1. Formal Requirements 4. Maintenance of a file of all settlements or final
a. Under oath decisions of the SC, CA, NLRC, and other
b. Consist of a memorandum of appeal agencies on labor disputes.
c. Based on either of the following grounds:
i. Grave abuse of discretion;
ii. Gross violation of the rules;

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 V. JURISDICTION AND REMEDIES
Effects of filing or pendency of inter/intra-union
dispute and other labor relations disputes F. NATIONAL CONCILIATION AND MEDIATION
BOARD
1. The rights, relationships, and obligations of the
party-litigants against each other and other
parties-in-interest prior to the institution of
National Concilliation and Mediation Board
the petition shall continue to remain during
(NCMB)
the pendency of the petition and until the date
of the decision rendered therein. Thereafter,
The NCMB refers to the agency attached to the DOLE
they shall be governed by the decision
principally in-charge of the settlement of labor
ordered.
disputes through conciliation, mediation, and of the
promotion of voluntary approaches to labor dispute
2. The filing or pendency of any inter/intra union
prevention and settlement.
disputes is not a prejudicial question to any
petition for certification election; hence it shall
Q: Is NCMB a quasi-judicial agency?
not be a ground for the dismissal of a petition
for certification of election or suspension of
A: NO. The NCMB cannot be considered a quasi-
the proceedings for the certification of
judicial agency. (Tabigue v. International Copra
election. (Sec. 3, Rule XI, Book V, IRR as
Export Corp., G.R. No. 183335, 23 Dec. 2009) Thus, its
amended by D.O. 40-F-03)
ruling cannot be elevated to, and be cognizable by,
the Court of Appeals.
Q: Some disgruntled members of Bantay Labor
Union filed with the Regional Office of the DOLE
Rule 43 of the Rules of Court applies only to awards,
a written complaint against their union officers
judgments, final orders, or resolutions of or
for mismanagement of union funds. The
authorized by any quasi-judicial agency in the
Regional Director did not rule in the
exercise of its quasi-judicial functions. Hence, the
complainants' favor. Not satisfied, the
NCMB’s decision, not having been rendered by a
complainants elevated the Regional Director's
quasi-judicial body, cannot be elevated to the Court
decision to the NLRC. The union officers moved
of Appeals under the said rule.
to dismiss on the ground of lack of Jurisdiction.
Are the union officers correct? Why? (2001
NCMB’s Functions
BAR)

The following are NCMB's functions, as enumerated

A: YES. NLRC has no jurisdiction over the appealed
in Sec. 22 of E.O. No. 126 or the Reorganization Act of
ruling since the appellate authority over decisions
the Ministry of Labor and Employment, viz:
of the Regional Director involving examination of
union accounts is expressly conferred upon the
a. Formulate policies, programs, standards,
Bureau of Labor Relations of DOLE by the Rule of
procedures, manuals of operation and
Procedure on Mediation Arbitration. (Barles v.
guidelines pertaining to effective mediation
Bitonio, G.R. No. 120270, 16 June 1999)
and conciliation of labor disputes;

b. Perform preventive mediation and

conciliation functions;

c. Coordinate and maintain linkages with

other sectors or institutions, and other
government authorities concerned with
matters relative to the prevention and
settlement of labor disputes;
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The proceedings are non-litigious.
d. Formulate policies, plans, programs,
standards, procedures, manuals of All labor disputes are required to be submitted
operation and guidelines pertaining to the to mandatory conciliation-mediation
promotion of cooperative and non-
adversarial schemes, grievance handling, GR: All issues arising from labor and employment
voluntary arbitration and other voluntary shall be subject to mandatory conciliation-
modes of dispute settlement; mediation. The LA or the appropriate DOLE agency
or office that has jurisdiction over the dispute shall
e. Administer the voluntary arbitration entertain only endorsed or referred cases by the
program; maintain/update a list of duly authorized officer. (Art. 228(a), LC, as amended
voluntary arbitrations; compile arbitration by R.A. No. 103960)
awards and decisions;
XPNs:
f. Provide counseling and preventive
mediation assistance particularly in the 1. Grievance machinery and Voluntary
administration of collective agreements; Arbitration, in which case, their agreement
will govern; and
g. Monitor and exercise technical supervision
over the Board programs being 2. When excepted by the SOLE. (Ibid.)
implemented in the regional offices; and
NOTE: Any or both parties involved in the dispute
h. Perform such other functions as may be may pre-terminate the conciliation-mediation
provided by law or assigned by the proceedings and request referral or endorsement to
Minister. (Tabigue v. International Copra the appropriate DOLE agency or office which has
Export Corp., supra.) jurisdiction over the dispute, or if both parties so
agree, refer the unresolved issues to voluntary
NOTE: The NCMB’s conciliation and mediation arbitration. (Art. 228(a), LC as amended by R.A. No.
functions are discharged by its Conciliator- 103960)
Mediators. (Poquiz, 2018)
Q: Nelson complained before the DOLE Regional
Conciliator-Mediator Office about Needy Corporation's failure 10 pay
his wage increase amounting to PhP5,000.00 as
An officer of the NCMB whose principal function is mandated in a Wage Order issued by the
to assist in the settlement and disposition of labor Regional Tripartite Wages and Productivity
management disputes through conciliation and Board. Consequently, Nelson asked the DOLE to
mediation, including the promotion and immediately Issue an Order sustaining his
encouragement of voluntary approaches to labor money claim. To his surprise, he received a
disputes prevention and settlement. (Sec. 1(k), Rule notice from the DOLE to appear before the
I, Book V, IRR as amended by D.O. 40-F-03) Regional Director for purposes of conciliating
the dispute between him and Needy
Alternative modes of settlement of labor dispute Corporation. When conciliation before the
Regional Director failed, the latter proceeded to
1. Voluntary Arbitration; direct both parties to submit their respective
2. Conciliation; and position papers in relation to the dispute. Needy
3. Mediation. Corporation argued that since Nelson was
willing to settle for 75% of his money claim
Nature of the proceedings during conciliation proceedings, only a

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 V. JURISDICTION AND REMEDIES
maximum of 75% of the said money claim may is to provide a speedy and inexpensive method of
be awarded to him. (2018 BAR) settling disputes by allowing the parties to avoid the
formalities, delay, expense and aggravation which
a) Was DOLE's action to conduct mandatory commonly accompany ordinary litigation especially
conciliation in light of Nelson's complaint valid? litigation which goes through the entire hierarchy of
courts. (Hi-Precision Steel Center, Inc. v. Lim Kim
A: YES. In relation R.A. 10396 or the "Mandatory Steel Builders, Inc., G.R. No. 110434, 13 Dec. 1993)
Conciliation-Mediation Law", Art. 234 of the LC
provides that "all issues arising from labor and Court cannot fix resort to voluntary arbitration
employment shall be subject to mandatory
conciliation-mediation. The Labor Arbiter or Resort to VA dispute should not be fixed by the court
appropriate DOLE agency or office that has but by the parties relying on their strengths and
jurisdiction over the dispute shall entertain only resources.
endorsed or referred cases by the duly authorized
officer." Parties to labor relations cases

b) Should the Regional Director sustain Needy 1. Ee’s organization

Corporation's argument? 2. Management
3. The public
A: NO. Art. 239 of the LC provides that the
information and statements given in confidence at NOTE: Er and Ees are active parties while the public
the conciliation-mediation proceedings shall be and the State are passive parties. (Poquiz, 2006)
treated as privileged communication and shall not
be used as evidence in any arbitration proceeding, Tripartism
except when there is a waiver of confidentiality. In
the present case, Nelson's willingness to settle for It is the representation of three sectors in policy-
75% of his money claim may not be used against making bodies of the government. These are:
him in the money claims case before the Regional
Director due to the confidentiality rule. 1. The public or the government;
2. The Ers; and
Arbitration 3. The workers.

It is the submission of a dispute to an impartial NOTE: Workers cannot insist that they be
person for determination, based on evidence and represented in the policymaking in the company.
arguments of the parties. The arbiter’s decision or Such kind of representation in the policy-making
award is enforceable upon the disputants. It may be bodies of private enterprises is not ordained, not
voluntary, by agreement, or compulsory which is even by the Constitution. What is provided for is
required by statutory provision. (Luzon Dev’t Bank workers' participation in policy and decision-
v. Ass’n of Luzon Dev’t Bank Ees, G.R. No. 120319, 06 making process directly affecting their rights,
Oct. 1995) benefits, and welfare.

Voluntary Arbitration

Voluntary arbitration involves the reference of a

dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties
freely consent in advance to abide by the arbitral
award issued after proceedings where both parties
had the opportunity to be heard. The basic objection

425
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1. CONCILIATION vs. MEDIATION Persons who can avail of conciliation and

mediation services of the NCMB

CONCILIATION MEDIATION
Any party to a labor dispute, either the union or
An intervention by a An intervention by a management, may seek the assistance of NCMB or
neutral third party neutral third party any of its Regional Branches by means of formal
request for conciliation and preventive
mediation. Depending on the nature of the
The conciliator relies on problem, a request may be filed in the form of
his persuasive expertise consultation, notice of preventive mediation, or
The mediator starts
and takes an active role notice of strike or lockout.
advising the parties or
in assisting parties by
offering solutions or
trying to keep Where to file a request for conciliation and
alternatives to the
disputants talking, mediation
problems with the
facilitating other
end in view of
procedural niceties, An informal or formal request for conciliation and
assisting them
carrying messages back mediation service can be filed at the NCMB
towards voluntarily
and forth between the Central Office or any of its Regional Branches.
reaching their own
parties, and generally
mutually acceptable
being a good fellow who There are at present 14 regional offices of the
settlement of the
tries to keep things calm NCMB which are strategically located all over the
dispute.
and forward-looking in country for the convenient use of prospective
a tense situation. clients.

Preventive Mediation
It is the process where a
It is when a third-
disinterested third
party studies each It refers to the potential labor dispute which is the
party meets with
side of the dispute subject of a formal or informal request for
management and labor,
then makes proposals conciliation and mediation assistance sought by
at their request or
for the disputants to either or both parties or upon the initiative of the
otherwise, during a
consider. NCMB to avoid the occurrence of an actual labor
labor dispute or in CB
The mediator cannot dispute. (DOLE DO No. 40-03, s. 2003)
conferences, and by
make an award nor
cooling tempers, aids in
render a decision. How to initiate preventive mediation
reaching an agreement.
Preventive mediation proceeding may be initiated
Legal basis of Conciliation and Mediation in two (2) ways:

The State shall promote... the preferential use of 1. By filing a notice or request of preventive
voluntary modes of settling disputes including mediation, as distinguished from a notice of
conciliation and shall ensure mutual compliance strike/lockout; or
by the parties thereof in order to foster industrial
peace. (Sec. 3, Art. VIII, 1987 Constitution) 2. By conversion of the notice of strike/lockout
into a preventive mediation case.
NOTE: A similar provision is echoed in the
Declaration of Policy under Art. 211(a) of the LC,
as amended.

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 V. JURISDICTION AND REMEDIES
Authority to convert a notice of strike/lockout In the absence of a certified or duly recognized
into a preventive mediation case bargaining representative, any LLO in the
establishment may file a notice, request preventive
The NCMB has the authority to convert a notice of mediation or declare a strike, but only on grounds of
strike or lockout filed by the union/Er into a ULP. (Sec. 3, Rule IV, NCMB Manual of Procedure)
preventive mediation case under any of the
following circumstances: NOTE: Only a certified or duly recognized
bargaining agent may file a notice or request for
1. When the issues raised in the notice of preventive mediation. If the notice was filed not by
strike/lockout are not strike-able in character; the Union but by its individual members, the NCMB
had no jurisdiction to entertain it. (Insular Hotel Ees
2. When the party which filed the notice of Union-NFL v. Waterfront Insular Hotel Davao, G.R.
strike/lockout voluntarily asks for the Nos. 174040-41, 22 Sept. 2010)
conversion;
Filing of notice or request for preventive
3. When both parties to a labor dispute mutually mediation cannot be filed by the Federation
agree to have it subjected to preventive
mediation proceeding. The notice or request for preventive mediation
cannot be filed by the Federation on behalf of its
NOTE: Such authority is in pursuance of the NCMB’s local/chapter. A local union does not owe its
duty to enable the parties to settle their dispute existence to the federation with which it is affiliated.
amicably and in line with the State policy of favoring It is a separate and distinct voluntary association
voluntary modes of settling labor disputes. owing its creation to the will of its members.

Conversion of a notice of strike or notice of Mere affiliation does not divest the local union of its
lockout into a preventive mediation case will own personality; neither does it give the mother
result in its dismissal federation the license to act independently of the
local union. It only gives rise to a contract of agency,
Once the notice of strike is converted into a where the former acts in representation of the
preventive mediation case, the notice is deemed latter. Hence, local unions are considered principals
dropped from the dockets as if no notice of strike while the federation is deemed to be merely their
has been filed. agent. (National Union Bank Employees v.
Philnabank Employees Association and PNB, G.R.
Since there is no more notice of strike to speak No.174287, 12 Aug. 2013)
about, any strike subsequently staged by the union
after the conversion is deemed not to have complied Valid issues for a notice of strike/lockout or
with the requirements of a valid strike and therefore preventive mediation
illegal. The same rule applies in the case of lockout
by an Er. A notice of strike or lockout maybe filed on ground
of ULP acts, gross violation of the CBA, or deadlock
Persons who may file a notice for preventive in CBAs. A complaint on any of the above grounds
mediation must be specified in the NCMB Form or the proper
form used in the filing of complaint.
Any certified or duly recognized bargaining
representative may file a notice or declare a strike In case of preventive mediation, any issue may be
or request for preventive mediation in cases of brought before the NCMB Central Office or its
bargaining deadlocks and ULPs. The Er may file a regional offices for conciliation and possible
notice or declare a lockout or request for preventive settlement through a letter. This method is
mediation in the same cases. preferable than a notice of strike/lockout because

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of the non-adversarial atmosphere that pervades Conciliation is so pervasive in application that,
during the conciliation conferences. prior to a compulsory arbitration award, the parties
are encouraged to continue to exhaust all possible
Advantages that can be derived from avenues of mutually resolving their dispute,
conciliation and mediation services especially through conciliation and mediation
services.
Conciliation and mediation are non-litigious/non-
adversarial, less expensive, and expeditious. Under Benefits that the parties can have in appearing
this informal set-up, the parties find it more during conciliation conferences
expedient to fully ventilate their respective
positions without running around with legal Generally speaking, any party appearing during
technicalities and, in the course thereof, afford scheduled conciliation conferences has the
them wider latitude of possible approaches to the advantage of presenting its position on the labor
problem. controversy. The issue raised in the complaint can
be better ventilated with the presence of the
Parties are bound by the agreement entered concerned parties. Moreover, the parties can
observe a norm of conduct usually followed in like
The parties are bound to honor any agreement forum.
entered by them. It must be pointed out that such
an agreement came into existence as a result of
painstaking efforts among the union, management, G. DOLE REGIONAL DIRECTORS
and the Conciliator-Mediator. Therefore, it is only
logical to assume that the Conciliator assigned to
the case has to follow up and monitor the
Jurisdiction of the DOLE Regional Directors
implementation of the agreement.
(RDs)

Conciliation and mediation service still possible

The DOLE RDs have original and exclusive
during actual strike or lockout
jurisdiction over:

It is possible to subject an actual strike or actual

1. Labor standards enforcement cases; (Art. 128,
lockout to continuing conciliation and mediation
LC)
services. In fact, it is at this critical stage that such
conciliation and mediation services be fully given a
2. Small money claims cases arising from labor
chance to work out possible solution to the labor
standards violations in the amount not
dispute. With the ability of the Conciliator-
exceeding P5,000.00 and not accompanied
Mediator to put the parties at ease and place them
with a claim or reinstatement; (Art. 129, LC)
at a cooperative mood, the final solution/s of the
issues involved may still be settled.
3. Occupational safety and health violation; (Rule
6, Rules on the Disposition of Labor Standards
Possibility of remanding the dispute already
Cases in the Regional Offices)
been assumed or certified to the NLRC to
conciliation and mediation
4. Complaints against private recruitment and
placement agencies for local employment;
The parties are not precluded from availing the
(DOLE DO No. 141-14, s. 2014)
services of an NCMB Conciliator-Mediator as the
duty to bargain collectively subsists until the final
5. Cases submitted for voluntary arbitration in
resolution of all issues involved in the dispute.
their capacity as Ex- Officio Voluntary
Arbitrators (DO No. 83 - 07, s. 2007)

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 V. JURISDICTION AND REMEDIES
6. Applications for registration of independent on the Disposition of Labor Standards Cases in the
labor unions, chartered locals, workers' Regional Offices)
associations. (Sec. 1, Rule III, Book V, Omnibus
Rules) Money claims should be filed within 3 years from
the time the cause of action accrued. (Art. 306, LC)
7. Requests for SEBA certification (Sec. 1, Rule VII,
Book V, Omnibus Rules) Q: Inggo is a drama talent hired on a per drama
"participation basis" by DJN Radio Company. He
8. Petitions for certification election. worked from 8:00 a.m. until 5:00 p.m., six days a
week, on a gross rate of P80.00 per script,
9. Complaints or petitions involving labor unions earning an average of P20,000.00 per month.
with independent registrations, chartered Inggo filed a complaint before the DOLE against
locals, workers' associations, its officers or DJN Radio for illegal deduction, non-payment of
members (Sec. 4, Rule XI, Book V, Omnibus service incentive leave, and 13th month pay,
Rules) among others. On the basis of the complaint, the
10. Petitions for cancellation of registration of DOLE conducted a plant level inspection. The
labor unions with independent registration, DOLE Regional Director issued an order ruling
chartered locals and workers association (Sec. that Inggo is an employee of DJN Radio and that
4, Rule XI, Book V, Omnibus Rules) Inggo is entitled to his monetary claims in the
total amount of P30,000.00. DJN Radio elevated
11. Petitions for deregistration of collective the case to the Secretary of Labor who affirmed
bargaining agreements (Sec. 4, Rule XI, Book V, the order. The case was brought to the Court of
Omnibus Rules) Appeals. The radio station contended that there
is no employer-employee relationship because
12. Dispute over conduct of election of officers of it was the drama directors and producers who
labor organizations (Sec. 2, Rule XII, Book V, paid, supervised, and disciplined him.
Omnibus Rules) Moreover, it argued that the case falls under the
jurisdiction of the NLRC and not the DOLE
Money claims falling under the jurisdiction of because Inggo's claim exceeded P5,000.00.
the DOLE Regional Directors (2016 BAR)

Under Art. 129 of the LC, the RDs have jurisdiction a) If the DOLE finds that there is an employee-
over claims for recovery of wages, simple money employer relationship, does the case fall under
claims and other benefits, provided that: the jurisdiction of the Labor Arbiter considering
that the claim of Inggo is more than P5,000.00.
1. The claim must arise from Er-Ee relationship; Explain.
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each Ee does not A: NO. As held in the case of Meteoro v. Creative
exceed P5,000.00. Creatures, Inc. (G.R. No. 171275, 13 July 2009), the
visitorial and enforcement powers of the Secretary,
NOTE: In the absence of any of the above requisites, exercised through his representatives, encompass
it is the LA who shall have the jurisdiction over the compliance with all labor standards laws and other
claims arising from Er-Ee relations, except claims labor legislation, regardless of the amount of the
for Ee’s compensation, SSS, PhilHealth, and claims filed by workers; thus, even claims exceeding
maternity benefits, pursuant to Art. 217. P5,000.00. (2009-2017 UST FCL Bar Q&A)

The proceedings before the Regional Office shall be NOTE: Jurisprudence provides the elements under
summary and non-litigious in nature. (Sec. 12, Rules the exception clause:

429
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(a) that the employer contests the findings of the abovementioned employment permit so that AB can
labor regulations officer and raises issues assume as Vice President of the Telecommunication
thereon; Company.

(b) that in order to resolve such issues, there is a Appeal to the NLRC
need to examine evidentiary matters; and
Any decision or resolution of the RD or hearing
(c) that such matters are not verifiable in the officer may be appealed, within five (5) calendar
normal course of the inspection. (Meteoro v. days from receipt of a copy of said decision or
Creative Creatures, Inc. (G.R. No. 171275, 13 resolution, to the NLRC. The NLRC shall resolve the
July 2009) appeal within ten (10) calendar days from the
submission of the last pleading. (Art.129, LC)
Adjudicatory power of the Regional Director
Visitorial Power of Regional Directors
The RD or any of his duly authorized hearing officers
is empowered through summary proceeding and The visitorial and enforcement powers empowered
after due notice, to hear and decide cases involving the SOLE, or his or her authorized representative,
recovery of wages and other monetary claims and to: (1) access the Er's records and premises at any
benefits, including legal interests. time of the day or night, so long as work is being
undertaken; (2) issue compliance orders to give
A Regional Director exercises both visitorial and effect to the labor standards provisions of the Labor
enforcement power over labor standard cases, and Code; and (3) order work stoppage or suspend an
is therefore empowered to adjudicate money establishment's operations when noncompliance
claims, provided there still exists an Er-Ee with labor standards poses grave and imminent
relationship, and the findings of the regional office danger to the health and safety of workers. (Ang v.
is not contested by the Er concerned. (Maternity Avila, G.R. No. 222889, 26 Feb. 2020
Children's Hospital v. Secretary of Labor, G.R. No.
78909, 30 June 1989) Authorized Representatives of the SOLE

Q: AB, a non-resident American, seeks entry to The Regional Directors shall be the duly authorized
the country to work as Vice-President of a local representatives of the SOLE in the administration
telecommunications company. You are with the and enforcement of labor standards within their
Department of Labor and Employment (DOLE). respective territorial jurisdictions. (Sec. 3, Rules on
What permit, if any, can the DOLE issue so that the Disposition of Labor Standards Cases in the
AB can assume as Vice-President in the Regional Offices)
telecommunications company? Discuss fully.
Q: Uniden contracted the services of Nationwide
A: Art. 40 of the LC states that “Any alien seeking Security to provide the former security guard
admission to the Philippines for employment services. However, upon exercise of the Regional
purposes and any domestic or foreign employer Director’s enforcement and visitorial powers it
who desires to engage an alien for employment in found Uniden violated several labor standard
the Philippines shall obtain an employment permit laws. Thus, the RD directed Nationwide Security
from the DOLE. The employment permit may be and Uniden liable to solidarily pay 40 security
issued to a nonresident alien or to the applicant personnel including Ceprado, Sebial, Olivar,
employer after a determination of the non- Villegas, and Manato. Nationwide Security filed
availability of a person in the Philippines who is a motion for reconsideration of the order, which
competent, able, and willing at the time of granted by the RD. On appeal, the SOLE reversed
application to perform the services for which the the RD. It ruled that Ceprado, Jr. et al. were
alien is desired.” Thus, AB should be issued the deprived of their right to due process for

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Nationwide Security’s failure to serve the must have a reasonable causal connection with any
motion for reconsideration to the former. Is the of the claims provided for in the article in order to
SOLE correct? be cognizable by the labor arbiter. Only if there is
such a connection with the other claims can the
A: YES. Motions for reconsideration not served on claim for damages be considered as arising from Er-
the adverse party do not toll the running of the Ee relations.
reglementary period for filing an appeal. Upon lapse
of the reglementary period, the judgment sought to In the present case, Ubana’s claim for damages is not
be reconsidered becomes immutable. Sec. 19, Rule related to any other claim under Art. 217, other
II of the Rules on the Disposition of Labor Standards labor statutes, or collective bargaining agreements.
Cases in the Regional Offices allows an aggrieved (SSS v. Debbie Ubana, G.R. No. 200114, 24 Aug. 2015)
party to file a motion for reconsideration of the
Order of the Regional Office. Q: Are claims of drivers and conductors who
were hired by DLTB in various dates that the
In this case, respondent filed a Motion for start of their employment they have not
Reconsideration of Regional Director Martinez's 19 received their 13th month pay, incentive leave,
Apr. 2001 Order. (Alejandro Ceprado, Jr. et al. v. rest per day, OT pay and ECOLA with daily
Nationwide Security and Allied Services, Inc./Romeo salaries way below the prevailing minimum
T. Nolasco, G.R. No. 175198, 23 Sept. 2015) wage is violation of DOLE D.O. No. 118-12?

Q: Debie Ubana filed a civil case for damages A: Drivers and Conductors are entitled to their
against DBP Services Corporation, Social claims since the complaint is brought before the
Security System (SSS), and the SSS Retirees DOLE to which it should give effect to the Er-Ee
Association before the RTC. She alleged that she relationship regardless of jurisdiction (Del Monte
was required to work for SSS continuously Land Transport Bus, Co. v. Renante A. Armenta Et Al.,
under different assignments and was constantly G.R. No. 240144, February 3, 2021, as penned by J.
assured that she was being absorbed into the Hernando)
SSS plantilla. However, she was never absorbed
into SSS plantilla until she resigned because of
the prejudicial treatment and false promises by H. DOLE SECRETARY
SSS.

The latter, in its answer, contends that RTC has

no jurisdiction because the claim arose from and 1. JURISDICTION
Er-Ee relationship and that it is cognizble by
NLRC. The RTC assumed jurisdiction on the SOLE has jurisdiction over the following cases:
ground that the claim of damages was based on
Civil Code Provision which was affirmed by CA 1. Assumption of jurisdiction over cases where
on the appeal of SSS. Does the RTC have labor disputes are likely to cause a strike or
jurisdiction over the case? lockout in an industry indispensable to
national interes in the exercise of its Power of
A: YES. The RTC has jurisdiction over the case. Assumption of Jurisdiction; (D.O. 40-G03, S
Labor arbiters and the NLRC have jurisdiction to 2010)
award not only reliefs provided by labor laws, but
also damages governed by the Civil Code. However, 2. Visitorial powers to over Ers; (Art. 128, LC)
these reliefs must still be based on an action that has
a reasonable causal connection with the Labor Code, 3. Issue a writ of execution on a judgment; and
other labor statutes, or collective bargaining (Art. 224, LC)
agreements. Claims for damages under Art. 224(4)

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4. Suspend the effects of the termination pending 5. Such other industries as may be
resolution of the dispute in the event of a recommended by the NTIPC; and
prima facie finding by the appropriate official 6. Banking institutions. (Azucena, 2016)
of the Department of Labor and Employment
before whom such dispute is pending that the NOTE: The above enumerated industries are NOT
termination may cause a serious labor dispute exclusive as other industries may be considered
or is in implementation of a mass lay-off. (Art. indispensable to the national interest based on the
277 (b), LC) appreciation and discretion of the SOLE or as may
be recommended by TIPC.
Requisites for Power of Assumption of
Jurisdiction Q: Under what conditions may the Secretary of
Labor or his duly authorized representative
1) Parties requested the SOLE to assume inquire into the financial activities or legitimate
jurisdiction; or labor organizations?

2) After a conference called by the Office of the A: The LC authorizes the SOLE or his duly
SOLE on the propriety of its issuance, motu authorized representative to inquire into the
proprio or upon a request or petition by financial activities of any labor organization on the
either party to the labor dispute. (Book V, basis of a complaint under oath, supported by 20%
IRR Rule XXII, sec. 15, IRR, as amended by of the membership, in order to determine
D.O. No. 40-H-13 s 2013). compliance or noncompliance with the law and to
aid in the prosecution of any violation thereof. (Art.
Q: Who has unlimited discretion to determine 274 (now 289), LC)
what industries are considered indispensable to
national interest? Q: Liwanag Corporation is engaged in the power
generation business. A stalemate was reached
A: during the collective bargaining negotiations
1) President of the Philippines; and between its management and the union. After
2) Secretary of Labor and Employment following all the requisites provided by law, the
union decided to stage a strike. The
Industries Considered as Indispensable to the management sought the assistance of the
National Interest Secretary of Labor and Employment, who
assumed jurisdiction over the strike and issued
The LC vests in the SOLE the discretion to determine a return-to-work order. The union defied the
what industries are indispensable to the national latter and continued the strike. Without
interest. Accordingly, upon the determination by providing any notice, Liwanag Corporation
the SOLE that such industry is indispensable to the declared everyone who participated in the
national interest, he has authority to assume strike as having lost their employment. (2014
jurisdiction over the labor dispute. BAR)

The following industries/services are deemed Was Liwanag Corporation’s action valid?
indispensable to the national interest:
A: YES. A strike that is undertaken despite the
1. Hospital sector; issuance by the SOLE of an assumption or
2. Electric power industry; certification order becomes an illegal act committed
3. Water supply services, to exclude small in the course of a strike. It rendered the strike illegal.
water supply services such as bottling and The Union officers and members, as a result, are
refilling stations; deemed to have lost their employment status for
4. Air traffic control; having knowingly participated in an illegal act.

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 V. JURISDICTION AND REMEDIES
(Union of Filipro Employees v. NLRC, G.R. No. 91025; Secs. 7 to 9 of Rule II, Book V of the IRR of the LC
19 Dec. 1990) Such kind of dismissal under Art. 264 provides for two situations:
can immediately be resorted to as an exercise of
management prerogative. (Biflex v. Filflex Industrial, a. The first situation involves a petition for
G.R. NO. 155679, 19 Dec. 2006) cancellation of union registration which is
filed with a Regional Office. A decision of a
Appellate Jurisdiction Regional Office cancelling a union's certificate
of registration may be appealed to the BLR
1. Appeal from and adverse decision of the whose decision on the matter shall be final
POEA. (2003 POEA Rules and Regulations, and unappealable; and
Rule V, Part VII, Sec. 1; Eastern
Mediterranean Maritime Ltd. And Agemar b. The second situation involves a petition for
Manning Agency Inc., v. Surio et. al., G.R. No. cancellation of certificate of union
154213, Aug. 23, 2012) registration which is filed directly with the
BLR. A decision of the BLR cancelling a
2. Appeal the order or results of a certification union's certificate of registration may be
election on the ground that the Rules and appealed to the SLE whose decision on the
Regulations or parts thereof established by matter shall be final and unappealable. (Ibid.)
the SLE for the conduct of election have
been violated. (LC, Art. 259) NOTE: The certificate of registration of any
legitimate labor organization including labor
3. A review of cancellation proceedings federations or national unions may be cancelled by
decided by the BLR in the exercise of its the Bureau or the Regional Office on any of the
exclusive and original jurisdiction. (Abbott following grounds:
Laboratories Philippines, Inc. v. Abbott
Laboratories Ees Union, G.R. No. 131374, Jan. 1. Violation of Arts. 234, 237, and 239 of the
26, 2000) Code;

4. Appeals from the order/decision of the 2. Failure to comply with Art. 238 of the Code;
Med-Arbiter involving certification and
election. (Sec. 25, Rule VII, Book IX, Omnibus
Rules) 3. Violation of any of the provisions of Art. 241 of
the Code.
5. The decision of the Bureau Director in the
exercise of his/her original jurisdiction NOTE: SOLE has no appellate jurisdiction over
involving inter/intra union disputes may decisions of RD involving petitions for examinations
be appealed to the Office of the Secretary of union accounts. It is the BLR which exercises
appellate jurisdiction in such case. (Barles v. Bitonio,
NOTE: The SOLE has no jurisdiction over decisions G.R. No. 120270, June 16, 1999)
of the BLR rendered in the exercise of its appellate
power to review the decision of the RD in a petition Some Principles on Assumption or Certification
to cancel the union's certificate of registration, said Power of the DOLE Secretary
decisions being final and unappealable. (Ibid.)
Prior notice and hearing are NOT required in the
issuance of the assumption or certification order.

The SOLE may seek the assistance of law

enforcement agencies like the Philippine National
Police to ensure compliance with the provision

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thereof as well as with such orders as he may issue Instances where the visitorial power of the SOLE
to enforce the same. may be exercised under the LC

Assumption or certification orders are immediately Power to:

executory and are to be strictly complied with even
during the pendency of a motion for reconsideration 1. Inspect books of accounts and records of any
or petition questioning its validity. (St. Scholastica’s person or entity engaged in recruitment and
College v. Torres, G.R. No. 100158, 02 June 1992) placement, require it to submit reports
regularly on prescribed forms and act in
This extraordinary authority given to the Secretary violations of any provisions of the LC on
of Labor is aimed at arriving at a peaceful and recruitment and placement. (Art. 37, LC)
speedy solution to labor disputes, without
jeopardizing national interests. (Steel Corporation v. 2. Have access to Er’s records and premises to
SCP Employees Union, G.R. Nos. 169829-30, 16 Apr. determine violations of any provisions of the
2008) LC on recruitment and placement. (Art. 128,
LC)
2. VISITORIAL AND ENFORCEMENT POWERS
3. Conduct industrial safety inspections of
establishments. (Art. 165, LC)
Visitorial Powers and Enforcement Powers

4. Inquire into the financial activities of LLO and

The DOLE issued D.O. No. 57-04, also called the
examine their books of accounts upon the filing
Labor Standards Enforcement Framework (LSEF).
of the complaint under oath and duly
supported by the written consent of at least
The framework comprises three approaches:
20% of the total membership of the LO
concerned.
1. Self-assessment;
2. Inspection; and
Enforcement power
3. Advisory service.

Power to:
Visitorial power

1. Issue compliance orders;

It constitutes:

2. Issue writs of execution for the enforcement of

1. Access to Er’s records and premises at any time
their orders, except in cases where the Er
of the day or night, whenever work is being
contests the findings of the labor officer and
undertaken;
raise issues supported by documentary proof
which were not considered in the course of
2. Right to copy from said records; and
inspection;
3. Right to question any Ee and investigate any
3. Order stoppage of work or suspension of
fact, condition or matter which may be
operation when non-compliance with the law
necessary to determine violations, or which
or implementing rules and regulations poses
may aid in the enforcement of the LC and of any
grave and imminent danger to health and
wage order, or rules and regulation issued
safety of workers in the workplace;
pursuant thereto.

4. Require Ers to keep and maintain such

employment records as may be necessary in

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 V. JURISDICTION AND REMEDIES
aid to the visitorial and enforcement powers; The Supreme Court revisited the Bombo Radyo
and Ruling of 2009 and modified it in March 2012
through an en banc resolution. The Court now
5. Conduct hearings within 24 hours to concedes that DOLE has the authority to determine
determine whether: the existence of an Er-Ee relationship, “subject to
judicial review, not review by NLRC”.
a. An order for stoppage of work or
suspension of operations shall be lifted or 3. POWER TO SUSPEND EFFECTS OF
not; and TERMINATION

b. Er shall pay the concerned Ees their

The SOLE may suspend the effects of the
salaries in case the violation is
termination pending resolution of the dispute upon
attributable to his fault. (As amended by
prima facie finding by the appropriate official of the
RA 7730; Guico v. Secretary, G.R. No.
DOLE before whom such dispute is pending that the
131750, 16 Nov. 1998)
termination may cause serious labor dispute or is in
implementation of a mass layoff. (Art. 277(b), LC)
Violations under Art. 128 of the LC
NOTE: Art. 277(b) of LC is applicable on suspension
1. To obstruct, impede, delay, or otherwise
of the effects of termination if there is a showing that
render ineffective the orders of the SOLE or
the termination may cause serious labor dispute
his authorized representatives; and
within the company while Art. 263(g) of LC on
assumption of jurisdiction is applicable in cases of
2. Any government Ee found guilty of, or
strike in establishments affecting national interest,
abuse of authority, shall be subject to
not just the company.
administrative investigation and summary
dismissal from service.
Reinstatement Pending Resolution of The
Termination Dispute
Limitations to other courts
Suspension of the effects of termination will
In relation to enforcement orders issued under Art.
necessarily result in the immediate reinstatement of
128 of the LC, no inferior court or entity shall:
the terminated Ees. An order of reinstatement
pending resolution of the case may thus be issued by
1. Issue temporary or permanent injunction
the SOLE pursuant to this power.
or restraining order; or
2. Assume jurisdiction over any case.
SOLE can assume jurisdiction over a labor
dispute
Instances when Enforcement Power may not be
used
When there is a labor dispute causing or likely to
cause a strike affecting national interest, the SOLE,
1. Case does not arise from the exercise of
on his own initiative or upon petition by any of the
visitorial power;
parties, may either assume jurisdiction or certify the
dispute to the NLRC for compulsory arbitration.
2. When Er-Ee relationship ceased to exist at
the time of the inspection; and
NOTE: Art. 263(g) of the LC is both an extraordinary
and a pre-emptive power to address an
3. If Er contests the finding of the Labor
extraordinary situation (a strike or lockout in an
Regulation Officer and such contestable
industry indispensable to the national interest). The
issue is not verifiable in the normal course
term “assume jurisdiction” connotes the intent of
of inspection.
the law to give the SOLE full authority to resolve all
435
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 LABOR LAW AND SOCIAL LEGISLATION
matters within the dispute that gave rise to or which Q: Philippine Electric Company is engaged in
arose out of the strike or lockout—it includes and electric power generation and distribution. It is
extends to all questions and controversies arising a unionized company with Kilusang Makatao as
from or related to the dispute, including cases over. the union representing its rank-and-file
(Bagong Pagkakaisa ng Manggagawa ng Triumph employees. During the negotiations for their
International v. Secretary of the DOLE, G.R. No. expired CBA, the parties duly served their
167401, 05 July 2010) proposals and counter-proposals on one
another. The parties, however, failed to discuss
Assumption of jurisdiction can be exercised the merits of their proposals and counter-
without the necessity of prior notice or hearing proposals in any formal negotiation meeting
given to any of the party disputants because their talks already bogged down on the
negotiation ground rules, i.e., on the question of
The rationale for the SOLE’s assumption of how they would conduct their negotiations,
jurisdiction can justifiably rest on his own particularly on whether to consider retirement
consideration of the exigency of the situation in as a negotiable issue.
relation to the national interests. (Capitol Medical
Center v. Trajano, G.R. No. 155690, 30 June 2005) Because of the continued impasse, the union
went on strike. The Secretary of Labor and
Delegated Administrative Supervision Employment immediately assumed jurisdiction
over the dispute to avert widespread electric
SOLE has an administrative supervision over the power interruption in the country. After
NLRC, its regional branches and all its personnel to: extensive discussions and the filing of position
papers (before the National Conciliation and
1. to further improve the rate of disposition Mediation Board and before the Secretary
of cases; and himself) on the validity of the union's strike and
on the wage and other economic issues
2. to enhance existing measures for the (including the retirement issue), the DOLE
prevention of graft and corruption in the Secretary ruled on the validity of the strike and
NLRC. (E.O. No. 204, s. 2003) on the disputed CBA issues, and ordered the
parties to execute a CBA based on his rulings.
The Secretary was tasked to:
Did the Secretary of Labor exceed his
1. enhance existing measures within the jurisdiction when he proceeded to rule on the
agency, or initiate new ones, to prevent parties' CBA positions even though the parties
graft and corruption, and including such did not fully negotiate on their own? (2013 BAR)
measures as management audit,
performance evaluations and inspections A: The power of the SOLE under Art. 263(g) of the
to determine compliance with policies, LC is plenary. He can rule on all issues, questions, or
standards, and guidelines; and controversies arising from the labor dispute,
including the legality of the strike, even those over
2. to investigate, on its own or upon which the Labor Arbiter has exclusive jurisdiction.
complaint, matters invoking disciplinary (Bagong Pagkakaisa ng mga Manggagawa sa
action against any presidential appointees Triumph International v. Secretary, G.R. Nos. 167401
in the NLRC in accordance with existing and 167407, 05 July 2010; 2009-2017 UST FCL Bar
law and regulations. Q&A)

NOTE: The term “assume jurisdiction” connotes the

intent of the law is to give the SOLE full authority to
resolve all matters within the dispute that gave rise

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 V. JURISDICTION AND REMEDIES
to, or which arose out of the strike or lockout. It Q: What would be nature of the power of the
includes and extends to all questions and voluntary arbitrators in so far as the case
controversies arising from or related to the dispute, submitted for voluntary arbitration is
including cases over which the labor arbiter has concerned?
exclusive jurisdiction. (Bagong Pagkakaisa ng mga
Manggagawa sa Triumph International v. Secretary, A: The VA may decide on those issues submitted to
G.R. Nos. 167401 and 167407, 05 July 2010) him for voluntary arbitration. However, he may also
resolve matters that are related to the issues in
4. REMEDIES order to avoid multiplicity of suits.

Voluntary arbitrator
The remedy of an aggrieved party in a decision or
resolution of the SOLE is to timely file a motion for
1. Any person accredited by the NCMB as such;
reconsideration as a precondition for any further or
subsequent remedy, and then seasonably file a
2. Any person named or designated in the CBA by
special civil action for certiorari under Rule 65 of
the parties to act as their VA;
the 1997 Rules on Civil Procedure. (Pildtranco
Service Enterprises, Inc. v. PHILTRANCO Worker’s
3. One chosen with or without the assistance of
Association, G.R. No. 180962, 26 Feb. 2014)
the NCMB, pursuant to a selection procedure
agreed upon in the CBA;
Powers of SOLE regarding voluntary arbitration

4. Any official that may be authorized by the

The SOLE may authorize any official to act as
SOLE to act as VA upon the written request and
Voluntary Arbitrator upon the written request and
agreement of the parties to a labor dispute.
agreement of the parties to a labor dispute. (Art.
(Art. 262, LC)
212(n), LC)

NOTE: Labor Arbiters can be designated as

He shall also approve, upon recommendation of the
voluntary arbitrators. There is nothing in the law
NCMB the guidelines in administering the Voluntary
that prohibits LAs from also acting as voluntary
Arbitration Fund. (Art. 276(f), LC)
arbitrators if the parties agree to have him hear and
decide their dispute. (Manila Central Line Free
Workers Union v. Manila Central Line Corp., G.R. No.
I. VOLUNTARY ARBITRATOR 109383, 15 June, 1998)

Powers of a VA
Jurisdiction of the Voluntary Arbitrators (VAs)
1. Hold hearings;
Generally, the arbitrator is expected to decide only 2. Receive evidence; and
those questions expressly delineated by the 3. Take whatever action necessary to resolve the
submission agreement. Nevertheless, the arbitrator dispute including efforts to effect a voluntary
can assume that he has the necessary power to settlement between parties. (Art. 262-A, LC)
make a final settlement since arbitration is the final
resort for the adjudication of the disputes. (Ludo and Alternative answer to Powers of a Voluntary
Luym Corp. v. Saornido, G.R. No. 140960, 20 Jan. Arbitrators
2003)
a. Adjudicatory power; (No. 64, NCMB Primer on
Grievance Settlement and Voluntary
Arbitration)

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 LABOR LAW AND SOCIAL LEGISLATION
b. Compulsory power; (No. 80, Ibid) 2. Wage distortion issues arising from the
application of any wage orders in organized
c. Power to conciliate and mediate; (No. 65, establishments;
Ibid.)
3. Those arising from interpretation and
d. Power to encourage the parties to enter into implementation of productivity incentive
a stipulation of facts; (Rule V, NCMB Revised programs under R.A. No. 6971;
Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings) and 4. Violations of CBA provisions which are not
gross in character are no longer treated as ULP
e. Power to issue writ of execution. (Sec. 3, Ibid.) and shall be resolved as grievances under the
(Poquiz, 2018) CBA; and

Original and exclusive jurisdiction of VAs NOTE: Gross violation of CBA provisions shall
mean flagrant and/or malicious refusal to
1. All unresolved grievances arising from the: comply with the economic provisions of such
agreement. Total disregard of the CBA
a. Implementation or interpretation of the constitutes ULP. (Ees’ Union of Bayer v. Bayer
CBA; and Phil. G.R. No. 162943, 06 Dec. 2010)
b. Interpretation or enforcement of
company personnel policies 5. Any other labor disputes upon agreement by
the parties including ULP and bargaining
NOTE: Under Art. 217, it is clear that a LA has deadlock. (Art. 275, LC)
original and exclusive jurisdiction over
termination disputes. However, under Art. NLRC and DOLE cannot entertain disputes,
261, a VA has original and exclusive grievances, or matters under the exclusive and
jurisdiction over grievances arising from the original jurisdiction of the Voluntary Arbitrator
interpretation or enforcement of company
policies. As a general rule then, termination They must immediately dispose and refer the same
disputes should be brought before a LA, to the grievance machinery or voluntary arbitration
except when the parties unmistakably provided in the CBA.
express that they agree to submit the same to
voluntary arbitration. (Negros Metal The parties may choose to submit the dispute to
Corporation v. Armelo Lamayo, G.R. No. voluntary arbitration proceedings before or at the
186557, 25 Aug. 2010) As long as the stage of compulsory arbitration proceedings.
termination is still an unresolved grievance,
meaning there is no actual termination yet or Original and exclusive power over unresolved
serving of notice of dismissal, it may still be grievance appellate in nature
subject to the jurisdiction of the VA.
Pursuant to Art. 273 and in relation to Art. 274, all
The reference to a Grievance Machinery and grievances which are not settled within 7 calendar
Voluntary Arbitrators for the adjustment or days from the date of its submission for resolution
resolution of grievances arising from the to the last step of the grievance machinery shall
interpretation or implementation of their automatically be referred to voluntary arbitration in
CBA and those arising from the interpretation the CBA. (Poquiz, 2018)
or enforcement of company personnel
policies is mandatory. (Sanyo Philippine NOTE: The VA’s original and exclusive power over
Workers Union v. Canizares, G.R. No. 101619, 8 unresolved grievance is appellate in nature. (Poquiz,
July 1992) 2018)

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 V. JURISDICTION AND REMEDIES
Jurisdiction over actual termination disputes Procedure for choosing voluntary
and complaints for illegal dismissal arbitrator/panel

The LA has jurisdiction over actual termination 1. The parties in a CBA shall designate in advance
disputes and complaints for illegal dismissal filed by a VA/panel, preferably from the listing of
workers pursuant to the union security clause and qualified VAs duly accredited by or the NCMB;
not the grievance machinery. and

Voluntary Arbitration as the “Master Procedure” 2. Include in the agreement a procedure for the
selection of such VA or panel of VAs, preferably
In labor-management relations voluntary from the listing of qualified VAs duly
arbitration is master procedure in the sense that all accredited by the NCMB. (Art. 260(3), LC)
kinds of labor disputes may be submitted to, settled,
or resolved through voluntary arbitration by Who will designate the voluntary arbitrator or
voluntary agreement of the parties. panel in case the parties fail to select

As a master procedure, voluntary arbitration takes It is the NCMB that shall designate the VA panel
precedence over other dispute settlement devices. based on the selection procedure provided by the
When a labor arbiter, for instance, is presented with CBA. (Manila Central Line Free Workers Union v.
a case falling under his “original and exclusive” Manila Central Line Corp., G.R. No. 109383, 15 June,
jurisdiction, the parties may withdraw it from him, 1998)
no matter at what stage it may be, if the parties
mutually decide to bring the dispute instead to Effect of the award of voluntary arbitrator
voluntary arbitration.
The decision or award of the VA acting within the
NOTE: The proper subjects of voluntary arbitration scope of its authority shall determine the rights of
are really those unresolved grievances arising from the parties and their decisions shall have the same
the interpretation or implementation of the CBA legal effects as judgment of the courts. Such matters
and those arising from the interpretation or on fact and law are conclusive.
enforcement of company personnel policies. But
there is nothing that prevents the parties from NOTE: Arbitral award is not subject to ratification of
submitting from voluntary arbitration any other the Ees.
labor disputes. Thus, even if it is a termination case,
bargaining deadlock case, ULP case, they can submit Both the Er and the bargaining representative of
it for voluntary arbitration by voluntary agreement the Ees are required to go through the grievance
of the parties. machinery

Procedure It is but logical, just, and equitable that whoever is

aggrieved should initiate settlement of grievance
Arbitration is initiated by: through the grievance machinery. To impose
compulsory procedure on Ers alone would be
1. Submission Agreement – Where the parties oppressive of capital.
define the disputes to be resolved;

2. Demand/notice to arbitrate – Invoking

collective agreement arbitration clause

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Voluntary arbitration vs. Compulsory Decisions of voluntary arbitrators appealable
arbitration
GR: Decisions of VA are final and executory after 10
VOLUNTARY COMPULSORY calendar days from receipt of the copy of the award
ARBITRATION ARBITRATION or decision by the parties. (Art. 262-A, LC)

Process of settlement XPN: Decisions of VA may still be subject to judicial

Referral of a dispute by
of labor disputes by a review.
the parties.
government agency.
NOTE: Art. 262-A deleted the word “unappealable”
from Art. 263. It makes the voluntary arbitration
Appointment of the
Arbitrator is the Labor award final and executory after 10 calendar days
Arbitrator by the
Arbiter or NLRC. from receipt of the copy of the award or decision by
parties.
the parties. Presumably, the decision may still be
reconsidered by the VA based on a motion for
NOTE: Before or at any stage of the compulsory reconsideration duly filed during that period.
arbitration process, parties may opt to submit their (Albert Teng v. Alfredo Pahagac, G.R. No. 169704, 17
dispute to VA. Nov. 2010)

Cost of Voluntary Arbitration and Voluntary Motion for Reconsideration

Arbitrator’s Fee
As a general rule, pursuant to Sec. 7, Rule XIX of D.O.
The parties to a CBA shall provide a proportionate No. 40-03, decision, order, resolution, or award of
sharing scheme on the cost of VA. the VA shall not be subject of a motion for
reconsideration. However, this rule cannot stand in
The fixing of fee of VA, shall consider the following a petition for a writ of certiorari because such
factors: petition inherently requires having filed a motion
for reconsideration. (Azucena, 2016)
1. Nature of the Case;
2. Time consumed in hearing the case; NOTE: The propriety of filing a motion for
3. Professional standing of the VA; reconsideration was confirmed in Coca-Cola
4. Capacity to pay of the parties; and Bottlers Phil., etc. v. Coca-Cola, G.R. No. 155651, 28
5. Fees provided for in the Revised Rules of July 2005.
Court. (Art. 277, LC)
Mode of appeal from VA to CA
Nature of power of the voluntary arbitrator
GR: A decision or award of a voluntary arbitrator is
Arbitrators by the nature of their functions act in a appealable to the CA via petition for review under
quasi-judicial capacity. (BP 129, as amended by RA Rule 43, not Rule 65. (Samahan ng Mangagawa sa
9702) Where a question of law is involved or there HYATT v. Bacungan, G.R. No. 149050, 25 Mar. 2009)
is abuse of discretion, courts will not hesitate to pass
upon review of their acts. The SC explained in the case of Nippon Paint Union
v. CA (G.R. No. 159010, 19 Nov. 2004) that it is not
NOTE: Voluntary Arbitration proceedings are non- Rule 65 because a petition for certiorari under that
litigious or non-adversary in nature. (Poquiz, 2018) Rule lies only where there is “no appeal” and “no
plain, speed, and adequate remedy in the ordinary
course of law.” Certiorari is not a substitute for a
lapsed appeal.

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XPNs: The Court cited situations when petition for Nov. 2017, the arbitrator denied the motion for
certiorari, despite availability of appeal, may be lack of merit. On 27 Nov. 2017, the Union
entertained, such as: received a copy of the voluntary arbitrator's
resolution. On 12 Dec. 2017, the Union elevated
1. When public welfare and advancement of the case to the Court of Appeals (CA) through a
public policy dictates; Petition for Review under Rule 43 docketed as
CA-G.R. CEB-SP No. 11429.
2. When the broader interest of justice so
requires; On 08 Mar. 2018, the CA dismissed the petition.
The CA explained that the voluntary arbitrator's
3. When the writs issued are null and void; or ruling is not subject to a motion for
reconsideration and becomes final and
4. When the questioned order amounts to an executory unless appealed within 10 calendar
oppressive exercise of judicial authority. days from notice. The Union sought
(Azucena, 2016) reconsideration invoking the pronouncement in
Teng v. Pahagac (G.R. No. 169704, 17 Nov. 2010)
Period of Appeal is 10 days, not 15 that the 10-day period gave the aggrieved
parties the opportunity to move for a
In Coca-Cola Bottlers PH, Inc. Sales Force Union v. reconsideration from the voluntary arbitrator's
Coca-Cola Bottlers PH., Inc, (G.R. No. 155651, 28 July decision consistent with the principle of
2005), the Court declared that the decision of the VA exhaustion of administrative remedies. On 21
had become final and executory because it was May 2018, the CA denied the motion. The CA
appealed beyond the 10-day reglementary period. cited the ruling in Philippine Electric Corp.
Despite Rule 43 providing for a 15-day period to (PHILEC) v. CA that a party may choose to
appeal, the SC ruled that the VA’s decision must be reconsider or appeal the voluntary arbitrator's
appealed before the CA within 10 calendar days decision within 10 calendar days from notice.
from receipt of decision. The 10-day period to Yet, the Union filed its appeal beyond the 10-day
appeal under LC being a substantive right, this reglementary period. Specifically, the Union
period cannot be diminished, increased, or modified received the denial of its motion for
through the Rules of Court because the Rules of reconsideration on 27 Nov. 2017 but filed a
Court are subordinate to the statute. petition for review before the CA only on 12 Dec.
2017 or five days late. Is the dismissal proper?
NOTE: A VA by the nature of his functions acts in
quasi-judicial capacity. There is no reason why the A: NO. Under Art. 276 of the LC, the award or
VA’s decisions involving interpretation of law decision of voluntary arbitrators shall be final and
should be beyond the SC’s review. Administrative executory after ten (10) calendar days from notice.
officials are presumed to act in accordance with law, On the other hand, Rule 43 of the Rules of Court
yet the SC will not hesitate to pass upon their work provides that an appeal from the judgment or final
where a question of law is involved or where a orders of voluntary arbitrators must be made
showing of abuse of authority or discretion in their within 15 days from notice. With these, the Court
official acts is properly raised in petitions for has alternatively used the (10) day or 15-day
certiorari. (Continental Marble Corporation v. NLRC, reglementary periods. In Guagua National Colleges
G.R. No. L-43825, 09 May 1988) v. CA (G.R. No. 188492, 28 Aug. 2018), the Court en
banc settled the confusion and clarified that the ten
Q: On 22 Sept. 2017, the voluntary arbitrator (10) day period in Art. 276 should be understood as
held that Lumbre, et al., are not entitled to the the time within which the adverse party may move
salary increases since they had executed for a reconsideration from the decision or award of
quitclaims upon their retirement. Dissatisfied, the voluntary arbitrators. Thereafter, the aggrieved
the Union moved for a reconsideration. On 09

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party may appeal to the CA within 15 days from Philippines Workers Union-PSSLU v. Canizares, G.R.
notice pursuant to Rule 43 of the Rules of Court. No. 101619, 08 June 1992)

Here, the records reveal that the Union received the Q: X was employed as a telephone operator of
voluntary arbitrator's resolution denying its motion Manila Midtown Hotel. She was dismissed from
for reconsideration on 27 Nov. 2017. As such, the her employment for committing the following
Union had 15 days or until 12 Dec. 2017 within violations of offenses subject to disciplinary
which to perfect an appeal. Verily, the Union filed a actions, namely: falsifying official documents
petition for review well within the prescribed and culpable carelessness-negligence or failure
period. The CA erred in dismissing the petition to follow specific instructions or established
outright based solely on procedural grounds. Thus, procedures. X then filed a complaint for illegal
a remand of the case for a resolution on the merits dismissal with the Arbitration branch of the
is warranted. (DORELCO Emplovees Union-ALU- NLRC. The Hotel challenged the jurisdiction of
TUCP v. Don Orestes Romualdez Electric Cooperative. the Labor Arbitrator on the ground that the case
Inc., G.R. No. 240130, 15 Mar. 2021) falls within the jurisdictional ambit of the
grievance procedure and voluntary arbitration
Q: PSSLU had an existing CBA with Sanyo Phils., under the CBA. Does the LA have jurisdiction
Inc. with a union security clause which provides over the case?
that: “all members of the union covered by this
agreement must retain their membership in A: YES. The LA has jurisdiction. The dismissal of X
good standing in the union as condition of does not call for the interpretation or enforcement
his/her continued employment with the of company personnel policies but is a termination
company.” On account of anti-union activities, dispute which comes under the jurisdiction of the
disloyalty and for joining another union, PSSLU LA. The dismissal of X is not an unresolved
expelled 12 Ees from the union. As a result, grievance. Neither does it pertain to interpretation
PSSLU recommended the dismissal of said Ees of company personnel policy. (Maneja v. NLRC, G.R.
pursuant to the union security clause. Sanyo No. 124013, 05 June 1998)
approved the recommendation and considered
the said Ees dismissed. Thereafter, the Q: Sime Darby Salaried Ees Association-ALU
dismissed Ees filed with the Arbitration Branch (SDSEA-ALU) wrote petitioner Sime Darby
of the NLRC a complaint for illegal dismissal. Pilipinas (SDP) demanding the implementation
Does the voluntary arbitrator have jurisdiction of a performance bonus provision identical to
over the case? the one contained in their own CBA with SDP.
Subsequently, SDP called both respondents
A: NO. The VA has no jurisdiction over the case. SDEA and SDEA-ALU to a meeting wherein SDEA
Although the dismissal of the Ees concerned was explained that it was unable to grant the
made pursuant to the union security clause performance bonus. In a conciliation meeting,
provided in the CBA, there was no dispute both parties agreed to submit their dispute to
whatsoever between PSSLU and Sanyo as regards voluntary arbitration. Their agreement to
the interpretation or implementation of the said arbitrate stated, among other things, that they
union security clause. Both PSSLU and Sanyo are were "submitting the issue of performance
united and have come to an agreement regarding bonus to voluntary arbitration." Does the
the dismissal of the Ees concerned. Thus, there is no voluntary arbitrator have the power to pass
grievance between the union and management upon the question of whether to grant the
which could be brought to the grievance machinery. performance bonus and to determine the
The dispute is between PSSLU and Sanyo. The amount thereof?
dispute, therefore, does not involve the
interpretation or implementation of a CBA. (Sanyo

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 V. JURISDICTION AND REMEDIES
A: YES. In their agreement to arbitrate, the parties
submitted to the VA the “issue of performance J. PRESCRIPTION OF ACTIONS
bonus.” The language of the agreement to arbitrate
may be seen to be quite cryptic. There is no
indication at all that the parties to the arbitration
Prescriptive Period
agreement regarded the “issue of performance
bonus” as a two-tiered issue, only one tier of which
Refers to the length of time within which an action
was being submitted to arbitration. Possibly, Sime
or complaint can be filed. After that period the
Darby’s counsel considered that issue as having
complaint will not prosper, it will be dismissed.
dual aspects and intended in his own mind to submit
(Azucena, 2021)
only one of those aspects to the VA, if he did,
however, he failed to reflect his thinking and intent
in the arbitration agreement. (Sime Darby Phils. v. 1. MONEY CLAIMS
Magsalin, G.R. No. 90426, 15 Dec. 1989)
Coverage
Q: Apalisok, production chief for RPN Station,
was dismissed due to her alleged hostile, All money claims arising from Ee-Er relations
arrogant, disrespectful, and defiant behavior accruing during the effectivity of the Labor Code
towards the Station Manager. She informed RPN (Art. 306, LC)
that she is waiving her right to resolve her case
through the grievance machinery provided in Article 306 cover claims for OT pay, holiday pay, SIL,
the CBA. The voluntary arbitrator resolved the salary differentials, and illegal deductions by an Er.
case in the Ee’s favor. It also covers money claims arising from seafarer’s
contract. (Azucena, 2021)
On appeal, the CA ruled in favor of RPN because
it considered Apalisok’s waiver to file her NOTE: It does not cover “money claims”
complaint before the grievance machinery as a consequent to an illegal dismissal, such as
relinquishment of her right to avail herself of backwages and damages due to illegal dismissal.
the aid of the voluntary arbitrator. The CA said (Protective Maximum Security Agency, Inc. vs.
that the waiver had the effect of resolving an Fuentes, G.R. No. 169303, 11 Feb. 2015)
otherwise unresolved grievance, thus the
decision of the VA should be set aside for lack of GR: 3 years from the time the cause of action
jurisdiction. Is the ruling of the CA correct? accrued; otherwise forever barred (Art. 306, LC)

A: NO. Art. 262 of the LC provides that upon XPN: Promissory Estoppel
agreement of the parties, the VA can hear and decide
all other labor disputes. The Ees waiver of her Promissory estoppel
option to submit her case to grievance machinery
did not amount to relinquishing her right to avail It may arise from the making of a promise, even
herself of voluntary arbitration. Contrary to the though without consideration, if it was intended
finding of the CA, voluntary arbitration as a mode of that the promise should be relied upon. If in fact it
settling the dispute was not forced upon RPN. Both was relied on, a refusal to enforce it would virtually
parties indeed agreed to submit the issue of validity sanction the perpetration of fraud or would result in
of the dismissal of petitioner to the jurisdiction of other injustice. It presupposes the existence of a
the VA by the Submission Agreement duly signed by promise on the part of one against whom estoppel is
their respective counsels. The VA had jurisdiction claimed. The promise must be plain and
over the parties’ controversy. (Apalisok v. RPN, G.R. unambiguous and sufficiently specific so that the
No. 138094, 29 May 2003) court can understand the obligation assumed and
enforce the promise according to its terms.

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NOTE: To make out a claim of promissory estoppel, Prescriptive period not suspended by Criminal
a party bears the burden of establishing the Case
following elements:
The filing of the criminal case against the Ee does
a. A promise was reasonably expected to not have the effect of suspending or interrupting the
induce action or forbearance; prescriptive period for the filing of an action for
illegal dismissal. An action for illegal dismissal is an
b. Such promise did, in fact, induce such administrative case which is entirely separate and
action or forbearance; and distinct from a criminal action for estafa. Each may
proceed independently of the other. (Pepsi Cola
c. The party suffered detriment as a result. Bottling Company v. Guanzon, G.R. No. 81162, 19 Apr.
(Accessories Specialists, et al. v. Alabanza, 1989)
G.R. No. 168985, 23 June 2008)
Backwages and damages by reason of illegal
Elements of Promissory Estoppel dismissal

1. A promise was reasonably expected to Claims for backwages, damages, and attorney's fees
induce action or forbearance; arising from the Ee's claim of illegal dismissal shall
2. Such promise induce action or prescribe in 4 years, NOT the three (3)-year period
forbearance; and for filing money claims under Art. 306 of the LC.
3. The party suffered detriment as a result. (Arriola v. Pilipino Star Ngayon, G.R. No. 175689, 13
(Poquiz, 2018) August 2014)

2. ILLEGAL DISMISSAL Effect of filing then withdrawing a complaint

The filing of the illegal dismissal complaint

Actions based on injury to rights prescribe in four
interrupts the running of the prescriptive period. If
(4) years under Art. 1146 of the NCC rather than
such complaint, however, is dismissed or
three (3) years as provided for under the LC. An
voluntarily withdrawn, the dismissal or voluntary
action for damages involving a plaintiff separated
withdrawal is effectively erased.
from his employment for alleged unjustifiable cause
is one for injury to the rights of the plaintiff and
Q: Workers were terminated in
must be brought within four (4) years. (Callanta v.
October/November 1997. They filed illegal
Carnation Phils., 145 SCRA 268; Teekay Shipping
dismissal complaint in May 1998 but withdraw
Phils., Inc. v. Concha, G.R. No. 185463, 22 Feb. 2012).
it voluntarily in March 1999. Few years later,
however, they again filed the same kind of
Simply stated, when one is arbitrarily and unjustly
complaint in June 2002 or almost five years after
deprived of his job or means of livelihood, the action
their dismissal in 1997. Is the complaint filed
instituted to contest the legality of one's dismissal of
out of time?
employment constitutes, in essence, an action
predicated upon an injury to the rights of the
A: YES. The four (4)-year period to file an illegal
plaintiff, as contemplated under Art. 1146 of the
dismissal complaint had lapsed. The eight-month
NCC, which must be brought within four (4) years.
period during which their cases were pending
(Callanta v. Carnation Philippines, Inc., 229 Phil. 279,
should not be excluded from the four (4)-year
289, 1986).
prescriptive period. (Montero, et al. v. Times
Transportation, G.R. No. 190828, 16 Mar. 2015)

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 V. JURISDICTION AND REMEDIES
Laches 3. UNFAIR LABOR PRACTICES

Laches or sleeping on one’s right, can defeat an

Unfair labor practices prescribe in one (1) year from
action such as a complaint for illegal dismissal,
the date of commission, otherwise, they shall be
because if one has a right to assert, he should assert
forever barred. However, the running of the one-
it in due time. (Azucena, 2016)
year period is interrupted during the pendency of
the labor case (Art. 305, LC)
NOTE: Laches cannot be taken against the
complainant if there is a valid reason for the delay
in filing the action. When an employee was 4. OFFENSES UNDER THE LABOR CODE
dismissed, and the matter of his dismissal was then
referred to the grievance machinery pursuant to the Offenses penalized under this Code and the rules
provision in the existing collective bargaining and regulations issued pursuant thereto shall
agreement, and the grievance machinery had a final prescribe in three (3) years. (Art. 305, LC)
meeting after quite a long while thereafter, the
complaint for illegal dismissal was then filed, the Acts considered as criminal violations of the LC
action was not barred by laches, as the pendency of
the matter before the grievance machinery affected Except as otherwise provided in the LC, or unless
the ripeness of the cause of action for illegal the acts complained of hinge on a question of
dismissal. (Radio Communications of the Philippines, interpretation or implementation of ambiguous
Inc., v. NLRC, et al., G.R No. 102958, 25 June 1993) provisions of an existing CBA, any violation of the
provisions of the LC declared to be unlawful or
Elements of Laches penal in nature shall be punished with a fine of not
less than P1,000.00 nor more than P10,000.00 or
1. Conduct of the defendant or one under whom imprisonment of not less than three months nor
he claims, giving rise to the situation of which more than three (3) years, or both such fine and
the complaint is made and for which the imprisonment at the discretion of the court. (Art.
complaint seeks remedy; 288, LC)

2. Delay in asserting the complaint’s rights. The 1. Prohibition against transfer of employment
complainant having had knowledge or notice – After the issuance of an employment permit,
of the part of the defendant’s conduct and the alien shall not transfer to another job or
having the opportunity to institute the suit; change his Er without prior approval of the
SOLE. (Art. 41, LC)
3. Lack of knowledge or notice on the part of the
defendant that the complainant would assert 2. Violation of the provisions on learnership
the right on which he bases his suit; and (Art. 77, LC)

4. Injury or prejudice to the defendant in the 3. Unlawful withholding of wages, where the
event relief is accorded to the complainant, or culpable party may be assessed attorney’s fees
the suit is not held to be barred. (RCPI v. NLRC, equivalent to 10 percent (10%) of the amount
G.R. No. 102958, 25 June 1993) of wages recovered. (Art. 111, LC)

4. Unlawful demanding or accepting, in any

judicial or administrative proceedings for the
recovery of wages, attorney’s fees which
exceed 10 percent (10%) of the amount of
wages recovered. (Art. 111, LC)

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 LABOR LAW AND SOCIAL LEGISLATION
5. Unlawful withholding, directly or indirectly, Ee merely by reason of her marriage. (Art. 136,
any amount from the wages of a worker or LC)
induce him to give up any part of his wages by
force, stealth, intimidation, threat or by any 12. It shall be unlawful for any Er:
other means whatsoever without the worker’s
consent. (Art. 116, LC) a. To deny any woman Ee the benefits
provided for in this Chapter or to
6. Unlawful deduction from the wages of any Ee discharge any woman employed by him
for the benefit of the Er or his representative for the purpose of preventing her from
or intermediary as consideration of a promise enjoying any of the benefits provided
of employment or retention in employment. under this Code;
(Ibid.)
b. To discharge such woman on account of
7. Unlawful refusal to pay or reduction of her pregnancy, or while on leave or in
wages and benefits, or discharge or confinement due to her pregnancy; or
discrimination against any Ee who has filed
any complaint or instituted any proceeding c. To discharge or refuse the admission of
under this Title or has testified or is about to such woman upon returning to her work
testify in such proceedings. (Art. 118, LC) for fear that she may again be pregnant.

8. Unlawful making of any statement, report, or 13. Violations of rights and conditions of
record filed or kept pursuant to the provisions membership in a labor organization; (Art.
of this Code knowing such to be false in any 241, LC)
material respect. (Art. 119, LC)
14. ULP of Ers; (Art. 259, LC)
9. Unlawful obstruction, impediment, delay, or
rendering ineffective the orders of the SOLE or 15. ULP of labor organizations; (Art. 260 in
his duly authorized representatives issued relation to Art. 258, LC) and
pursuant to the authority granted under this
Article. No inferior court or entity shall issue 16. Violation of the provision on retirement
temporary or permanent injunction or benefits. (Art. 302, LC)
restraining order or otherwise assume
jurisdiction over any case involving the NOTE: In addition to the penalty prescribed under
enforcement orders issued in accordance with Art. 303, any alien found guilty shall be summarily
this Article. (Art. 128(4), LC) deported upon completion of service of sentence.
(Art. 303, LC)
10. Unlawful discrimination against any woman
Ee with respect to terms and conditions of If the offense is committed by a corporation, trust,
employment solely on account of her sex. (Art. firm, partnership, association or any other entity,
135, LC) the penalty shall be imposed upon the guilty officer
or officers of such corporation, trust, firm,
11. Unlawful for an Er to require as a condition of partnership, association or entity. (Art. 28, LC)
employment or continuation of employment
that a woman Ee shall not get married, or to
stipulate expressly or tacitly that upon getting
married, a woman Ee shall be deemed resigned
or separated, or to dismiss, discharge,
discriminate or otherwise prejudice a woman

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 V. JURISDICTION AND REMEDIES

5. ILLEGAL RECRUITMENT

Illegal recruitment cases under this Act shall

prescribe in five (5) years.

However, illegal recruitment cases involving

economic sabotage shall prescribe in 20 years. (Sec.
12, Migrant Workers and Overseas Filipinos Act of
1995, R.A. 8042, 07 June 1995)

NOTE: R.A. 8042 only applies to Migrant Workers.

Illegal recruitment for local employment is subject
to the provisions of the LC, in particular, Art. 305(1),
to wit: offenses penalized under this Code x x x shall
prescribe in three (3) years.

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 APPENDIX

SUMMARY OF PRESCRIPTION OF ACTIONS

Rules Regarding to the Prescriptive Period Provided for Under the LC and Special Laws on Labor

SUBJECT PRESCRIPTIVE PERIOD

Criminal Offenses penalized under 3 years from the date of commission or discovery thereof
the LC and its IRR (People v. Duque, G.R. 100285, 13 Aug. 1992)

1 year from accrual of such ULP; otherwise forever barred

ULP
(Art. 305, LC)
Money Claims, including incremental GR: 3 years from the time the cause of action accrued;
proceeds arising from tuition fees under otherwise forever barred (Art. 306, LC)
PD 451 (MLQU Association v. MLQU, G.R.
No. 82312, 19 Apr. 1989) XPN: Promissory Estoppel
All money claims accruing prior to the Within 1 year from the date of effectivity, in accordance with
effectivity of the LC IRR; otherwise, they shall forever be barred

4 years. It commences to run from the date of formal

Illegal Dismissal
dismissal. (Mendoza v. NLRC, G.R. No. 12248, 05 Mar. 1998)

4 years – Since an award of backwages is merely consequent

to a declaration of illegal dismissal. (Arriola v. Pilipino Star
Claim for backwages
Ngayon, Inc. and Miguel G. Belmonte, G.R. No. 175689, 13 Aug.
2014)
Workmen’s Compensation claims
They shall be filed not later than Mar. 31, 1975 before the
accruing prior to the effectivity of the LC
appropriate regional offices of the DOLE. (Art. 291, LC)
and between 01 Nov. 1974-31 Dec. 1974
Reinstatement 4 years (Callanta v. Carnation, G.R. No. 70615, 28 Oct. 1986)
Simple Illegal Recruitment 5 years (RA 8042)
Syndicated or Large-scale Illegal
20 years (RA 8042)
Recruitment

After 3 years from the date of submission of the annual

financial report to the DOLE or from the date the same should
Union funds
have been submitted as required by law, whichever comes
earlier. (Sec. 5, Book VII, Rule II, IRR)

20 years from the time of delinquency is known or the

SSS Violations assessment is made or the benefit accrues as the case may be
(RA 8282; Lo v. CA, G.R. No. 128667, 17 Dec. 1999)

GR: 4 years
GSIS Benefits
XPN: Life and retirement benefits – Imprescriptible

Ee’s Compensation Claims 3 years from accrual of cause of action

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 APPENDIX
SUMMARY OF JURISDICTIONS

SOLE vs. RD vs. LA

VISITATION AND
ENFORCEMENT POWER REGIONAL DIRECTOR LABOR ARBITER
OF THE SOLE

LA exercises original and exclusive

jurisdiction on cases involving :

a. ULP;
Enforcement of labor legislation
b. Termination disputes;
in general, such as:
Under Art. 129 of the LC, the c. Wages;
Regional Director has d. Rates of pay;
a. Inspection of establishments;
jurisdiction over money claims e. Hours of work;
and
not exceeding P5,000 arising
from Er-Ee relationship where f. Other terms of employment, claims
b. Issuance of orders to compel
the claimant does not seek for damages arising from Er-Ee
compliance with labor
reinstatement. relationship, legality of strikes and
standards, wage orders and
lockouts; and
other labor laws.

g. All other claims arising from Er-Ee

relationship involving an amount
exceeding Php 5,000.00.

LA decides case within 30 calendar days

Proceeding is an offshoot of Initiated by sworn complaints
after submission of the case by the
routine inspections. filed by any interested party.
parties for decision.

Appealable to Secretary of Labor.

(In case compliance order is Appealable to NLRC Appealable to NLRC
issued by Regional Office)

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 APPENDIX
SEC vs. Regular Trial Courts

SEC REGULAR TRIAL COURTS

Original and Exclusive Jurisdiction

1. Intra-corporate controversies - the

controversy must pertain to any of the
following relationships:

Between the corporation partnership or

associations and:

a. the public;

b. its stockholders, partners, members or

officers;
c. the State as far as its franchise permit or
license to operation is concerned; and
No longer have jurisdiction over intra-corporate
controversies by virtue of PD 902-A d. among stockholders, partners or
associates amongst themselves. (Mailand
v. Movilla, G.R. No. 118088, 23 Nov. 1995)

2. Money claims not arising from or not in

connection with employment; (Azucena,
2016)

3. Actions filed by 3rd parties being affected by

the strike of people who are not the Ees; and
(Azucena, 2016)

4. Criminal acts done in a strike. (Azucena,

2016)

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 APPENDIX
Labor Arbiter vs. NLRC

LA NLRC
Original and Exclusive Jurisdiction
1. ULP cases;

2. Termination disputes or illegal dismissal

complaints;

3. If accompanied with a claim for

reinstatement, those cases that workers may
file involving wages, rates of pay, hours of
work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and

1. Certified labor disputes causing or likely to
other forms of damages arising from the Er-
cause a strike or lockout in an industry
Ee relations;
indispensable to national interest, certified to
it by the SOLE or the President of the
5. Cases arising from any violation of Art. 264
Philippines for compulsory arbitration;
(now Art. 274) of this LC, including questions
involving the legality of strikes and lockouts;
2. Injunction in ordinary labor disputes to
and
enjoin or restrain any actual or threatened
commission of any or all prohibited or
6. Except claims for Ees Compensation, Social
unlawful acts or to require the performance
Security, Medicare and maternity benefits,
of a particular act in any labor dispute which,
all other claims arising from Er-Ee relations,
if not restrained or performed forthwith, may
including those of persons in domestic or
cause grave or irreparable damage to any
household service, involving an amount
party;
exceeding P5,000.00 regardless of whether
accompanied with a claim for reinstatement.
3. Injunction in strikes or lockouts under Art.
7. Money claims arising out of Er-Ee
279 of the LC; and
relationship or by virtue of any law and
contract, involving a Filipino worker for
4. Contempt cases.
overseas deployment, including claims for
actual, moral, exemplary and other forms of
5. Verified petitions (Sec. 3, Rule XII, 2011 NLRC
damages as well as employment termination
Rules of Procedure)
of OFWs;

8. Wage distortion disputes in unorganized

establishments not voluntarily settled by the
parties pursuant to R.A. 6727 as reflected in
Art. 124;

9. Enforcement of compromised agreements

when there is non-compliance by any of the
parties pursuant to Art. 233 of the LC, as
amended;

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 APPENDIX
10. Contested cases under the exception clause
of Art. 128(b) of the LC; and

11. Other cases as may be provided by law.

Appellate Jurisdiction

1. Decisions, awards, or orders of the LA over:

a. Cases covered by Art. 224 (b);

b. Cases covered by Sec. 10 of Migrant
Worker’s Act; and
c. Cases decided under Art. 124 on
wage distortion in non-unionized
establishment;

2. Denial of the claim of the third party claimant

where property was levied by the Sheriff of
[no appellate jurisdiction]
LA;

3. Cases decided by the Regional Offices of DOLE

in the exercise of its adjudicatory function
under Art. 129 of the LC over monetary claims
of workers amounting to not more than
P5,000 and not accompanied by claim for
reinstatement; and

4. Decision by the LA in Contempt contempt

cases. (Art. 225(d), LC)

U N IV E R S I T Y O F S A N T O T O M A S 452
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 APPENDIX
DOLE Regional Director vs. DOLE Secretary

DOLE REGIONAL DIRECTOR DOLE SECRETARY

Original and Exclusive Jurisdiction
1. Labor standards enforcement cases; (Art. 128,
LC)

2. Small money claims cases arising from labor

standards violations in the amount not
exceeding P5,000.00 and not accompanied
with a claim or reinstatement; (Art. 129, LC)

3. Occupational safety and health violation;

(Rule 6, Rules on the Disposition of Labor
Standards Cases in the Regional Offices)

4. Complaints against private recruitment and

placement agencies for local employment;
(DOLE DO No. 141-14, s. 2014) 1. Disputes causing or likely to cause a strike or
lockout in an industry indispensable to the
5. Cases submitted for voluntary arbitration in national interest
their capacity as Ex- Officio Voluntary
Arbitrators (DO No. 83 - 07, s. 2007) 2. Visitorial powers to over Ers; (Art. 128, LC)

6. Applications for registration of independent 3. Issue a writ of execution on a judgment; and

labor unions, chartered locals, workers' (Art. 224, LC)
associations. (Sec. 1, Rule III, Book V, Omnibus
Rules) 4. Suspend the effects of the termination pending
resolution of the dispute in the event of a
7. Requests for SEBA certification (Sec. 1, Rule prima facie finding by the appropriate official
VII, Book V, Omnibus Rules) of the DOLE before whom such dispute is
pending that the termination may cause a
8. Petitions for certification election. serious labor dispute or is in implementation
of a mass lay-off. (Art. 277 (b), LC)
9. Complaints or petitions involving labor
unions with independent registrations,
chartered locals, workers' associations, its
officers or members (Sec. 4, Rule XI, Book V,
Omnibus Rules)

10. Petitions for cancellation of registration of

labor unions with independent registration,
chartered locals and workers association (Sec.
4, Rule XI, Book V, Omnibus Rules)

11. Petitions for deregistration of collective

bargaining agreements (Sec. 4, Rule XI, Book V,
Omnibus Rules) and

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12. Dispute over conduct of election of officers of
labor organizations (Sec. 2, Rule XII, Book V,
Omnibus Rules)
Appellate Jurisdiction

1. Appeal from and adverse decision of the POEA.

(2003 POEA Rules and Regulations, Rule V, Part
VII, Sec. 1; Eastern Mediterranean Maritime Ltd.
And Agemar Manning Agency Inc., v. Surio et. al.,
G.R. No. 154213, Aug. 23, 2012)

2. Appeal the order or results of a certification

election on the ground that the Rules and
Regulations or parts thereof established by the
SLE for the conduct of election have been
violated. (LC, Art. 259)

3. A review of cancellation proceedings decided by

[no appellate jurisdiction]
the BLR in the exercise of its exclusive and
original jurisdiction. (Abbott Laboratories
Philippines, Inc. v. Abbott Laboratories Ees Union,
G.R. No. 131374, Jan. 26, 2000)

4. Appeals from the order/decision of the Med-

Arbiter involving certification election. (Sec. 25,
Rule VII, Book IX, Omnibus Rules)

5. The decision of the Bureau Director in the

exercise of his/her original jurisdiction involving
inter/intra union disputes may be appealed to
the Office of the Secretary

U N IV E R S I T Y O F S A N T O T O M A S 454
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 APPENDIX
Voluntary Arbitrator vs. Bureau of Labor Relations

VA BLR
Original and Exclusive Jurisdiction

1. All inter-union and intra-union conflicts; (Art.

226, LC)

2. All disputes, grievances or problems arising

1. Disputes concerning CBA implementation or from or affecting labor-management relations
personnel policy enforcement (Azucena, in all workplaces, except those arising from the
2016) implementation or interpretation of collective
bargaining agreements; (Art. 226, LC)
2. Disputes regarding ULPs and bargaining
deadlocks; (Azucena, 2016)
3. Complaints involving federations, national
3. Money claims arising from a “interpretation unions, industry unions, its officers or member
and implementation of a CBA, and those organizations; (Sec. 4, Rule XI, Book V, Omnibus
arising from the interpretation or Rules)
enforcement of company personnel policies.
(Del Monte v. Saldivar, G.R. No. 158620, 11 Oct. 4. Petition for the conduct of election of officers
2006) and in the case of federations, national or industry
unions and trade union centers; (Sec. 2, Rule
4. Illegal dismissal cases that are submitted XII, Book V, Ominibus Rules)
before it by the parties upon agreement.
5. A request for examination of books of accounts
of federations or national unions and trade
union centers pursuant to Art. 274. (Sec. 3, Rule
XIII, Book V, Omnibus Rules)

Appellate Jurisdiction

Decisions/order of Med-arbiter or Regional Director

[no appellate jurisdiction] relating to inter-union and intra-union conflicts (Sec.
15, Rule XI, Book V, Omnibus Rules)

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