Labor Laws & Social

Legislations
Atty. NEPTALI B. SALVANERA
DLSU Manila
Sources of Labor Laws

1. The 1987 Philippine Constitution

2. Labor Code of the Philippines
3. Civil Code of the Philippines
4. Issuances of the Department of Labor and Employment
(DOLE)
5. Other labor laws/special laws/social legislations
6. Jurisprudence
7. International Law
 Labor Standards

General Labor Relations

Classifications

Social Legislations
 Equipoise Rule (Article
4, Labor Code)

Basic Quantum of
Proof/Burden of Proof
Principles
Applicability
Pre-Employment and
Recruitment
1. Applicable laws
2. Regulatory agencies
3. State policies
4. Engagement of private sector in recruitment
5. Requirements and disqualifications
6. Direct hiring (local and overseas)
7. Remittance of salary
Pre-Employment and Recruitment

RECRUITMENT
AND Meaning of recruitment
PLACEMENT

Requirements for deployment

Laws protecting and promoting welfare of

OFWs
Illegal recruitment
Employment of Non-Resident Aliens

Labor Market Test National Interest Test

 Tests to Determine Existence of
Employment Relationship

a. Engagement of Workers
b. Payment of Wages
1. Four-fold test c. Power to discipline
d. Control

Employment
2. Independent contractor test

3. Economic dependency test

 Regular

Casual

Kinds of Project

Employment Seasonal

Fixed-term

Probationary
Kinds of An employment shall be deemed to be regular
where the employee has been engaged to

Employment: perform activities which are usually necessary

or desirable in the usual business or trade of the

Regular
employer, regardless of the written or verbal
agreement of the parties to the contrary.
Kinds of Employment: Casual

There is casual employment where Any casual employee who has

an employee is engaged to rendered at least one (1) year of
perform a job, work or service service, whether such service is
which is merely incidental to the continuous or not, shall be
business of the employer, and such considered a regular employee
job, work or service is for a with respect to the activity in
definite period made known to the which he is employed and his
employee at the time of employment shall continue while
engagement. such activity exists.
 A project employee is:
• 1) one whose employment
Kinds of has been fixed for a specific
project or undertaking;
Employment: • 2) the completion or
Project termination of which has
been determined at the time
of the engagement of the
employee.
Kinds of Employment:
Seasonal
A seasonal employee is one whose work
or service to be performed is seasonal in
nature and the employment is for the
duration of the season.
Kinds of Employment: Fixed-term

Rules:

1) When the fixed-term employment is entered into in good faith, hence, valid, the fact
that the employee performs activities which are necessary or desirable in the usual
business or trade of the employer, and the fact that his length of service is more than a
year, do not make him a regular employee.

2) The clause in Article 295 indiscriminately and completely ruling out all written or
oral agreements conflicting with the concept of regular employment refers only to
agreements entered into precisely to circumvent security of tenure. It should have no
application to instances where a fixed period of employment was validly entered into.
 3) A fixed-term employment contract
is valid, and hence, cannot be said to
be in circumvention of security of
tenure if it was:
Kinds of • Agreed upon knowingly and voluntarily by the
Employment: parties, without any force, duress or improper
pressure being brought to bear upon the
employee and absent any other circumstances
Fixed-term vitiating his consent; or
• Where it satisfactorily appears that the
employer and employee dealt with each other
on more or less equal terms with no moral
dominance whatever being exercised by the
former over the latter.
Kinds of There is probationary employment where the employee,
upon his engagement, is made to undergo a trial period
Employment: during which the employer determines his fitness to
qualify for regular employment, based on reasonable
Probationary standards made known to him at the time of engagement.
 Requirements:
1) there must be regularization standards
Kinds of which the employer must communicate to
the probationary employee;
Employment: 2) the employer must make such
communication at the time of the
Probationary probationary employee's engagement; and
3) the period, as a general rule, should not
exceed six (6) months.
Kinds of Employment: Probationary

1.What, when, how to communicate

2. Period of probation; computation

3. Successive probations

4. Probationary vis-à-vis fixed-term/project

employment

5. Trainees
 Suspension of
Employment

Restrictive covenants
Related
Concepts Occupational
qualifications

Piercing the veil of

corporate fiction
 Applicable laws

Contracting Articles 106-109, Labor Code

Out/
Outsourcing DO 174, series of 2017

Department Circular No. 1, series of

2017
Contracting Out/
Outsourcing

Definition: arrangement whereby a

principal agrees to farm out with a
contractor the performance or
completion of a specific job or work
within a definite or predetermined
period, regardless of whether such job or
work is to be performed or completed
within or outside the premises of the
principal
 Legitimate contracting
Contracting • Distinct and independent
business
Out/ • Substantial capital
Outsourcing • Free from control of
principal
• Service Agreement
Contracting Out/ Outsourcing

Not
legitimate

Labor-only • No substantial capital or investments; and

• Performing directly related activities; or
contracting: • Control
 Arrangements violative of public policy
1) Cabo
2) In-house agency
3) In-house cooperative
Contracting 4) Contracting by reason of strike or lock-out

Out/ 5) Contracting work being performed by union members

Contracting work being performed by regular employees
Outsourcing
6)

7) Antedated resignation letter, blank payroll, etc.

8) Repeated hiring under contract of short duration
9) Shorter employment contract
10) Other schemes
Contracting Out/ Outsourcing

Liabilities A) Legitimate B) Not legitimate

Solidarily liable
Does not cover
with the contractor Liable as the direct
liabilities with
for unpaid wages employer
punitive character
and benefits
 Exclusions (DOLE DC 01, 2017)
• BPOs
• Legal process outsourcing
• IT

Contracting •

•
Application development
Hardware/software support

Out/ • Medical transcription

• Animation services
Outsourcing • Back-office support
• Contractual relationships, e.g. sale, etc.
• Individual independent contractor
• Construction industry
• Private security agencies
Contracting Out/ Outsourcing

Activities
allowed to be Core Peripheral
contracted out
Contracting Out/ Outsourcing

IMPORTANCE OF SUBSTANTIAL ACTIVITIES CONTROL

REGISTRATION CAPITAL OR DIRECTLY RELATED
INVESTMENT
 Labor Standards

 Meaning
 Title I, Book III
Normal hours of work – Arts. 83
and 84
Meal periods – Art. 85
NSD – Art. 86
OT work/premium – Arts. 87-90
Rest day/premium – Arts. 91-93
Holidays/pay – Art. 94
SIL – Art. 95
Service charges - Art. 96
Labor Standards

Other mandatory benefits

13th month pay
Mandatory leaves
SSS, Philhealth, Pag-ibig
EC benefits
Labor Standards

Exempt employees
1) Government employees/GOCCs
2) Managers
3) Officer and members of managerial
staff/supervisors
4) Domestic servants
5) Workers paid by results
6) Field personnel
Labor Standards

Managers

Management of the establishment

Customarily and regularly direct the work of

2 or more employees

Authority to hire and fire; suggestions are

given particular weight
Labor Standards

Officers or members of managerial staff

1) Performance of work directly related to management policies
2) Customarily and regularly exercise discretion
3) (i) regularly and directly assist a manager; or (ii) execute under general
supervision work along specialized or technical limes; or (iii) execute under
general supervision special assignments and tasks; and
4) 20% rule
Labor Standards

Domestic servants – performing services in the employer’s home which are

usually necessary or desirable for the maintenance and enjoyment thereof,
or minister to the personal comfort, convenience, or safety of the employer
and members.

Examples: kasambahays/family drivers

 Field personnel
• Location – regularly perform duties away
from the principal or branch office, or
place of business
Labor • Determination of hours worked – actual
hours of work of the employee in the
Standards field cannot be determined with
reasonable certainty

Examples:
• Drivers
• Salesmen
Labor
Standards
Workers paid by results – piece work,
takay, pakyaw, task basis, other non-
time work
Labor Standards:
Hours of Work

 Normal hours of work – shall not

exceed 8 hours
 Part-time employment (DOLE
Explanatory Bulletin on Part-Time
Employment (2 January 1996)
 Flexible Work Arrangements
 General Principles
• All hours are hours worked which the
employee is required to give his employer,
Labor regardless of whether or not such hours
are spent in productive labor or involve
Standards: physical or mental exertion.
• An employee need not leave the premises
Hours of of the work place in order that he rest
period shall not be counted, it being
Work enough that he stops working, may rest
completely and may leave he work place,
to go elsewhere, whether within or
outside the premises of his work place.
Labor Standards: Hours of Work

The time during which an employee is

If the work performed was necessary, inactive by reason of interruptions in
or it benefited the employer, or the
his work beyond his control shall be
employee could not abandon he work
considered working time either if the
at the end of his normal working hours imminence of the resumption of work
because he had no replacement, all
requires the employee's presence at
time spent for such work shall be
the place of work or if the interval is
considered as hours worked, if the too brief to be utilized effectively and
work was with the knowledge of his
gainfully in the employee's own
employer or immediate supervisor.
interest.
 Compensable hours worked
Labor • All time during which an
employee is required to be on
Standards: duty or to be at the employer’s
premises or to be at a prescribed
Hours of workplace; and
Work • All time during which an
employee is suffered or
permitted to work
 Waiting time

Labor On-call

Standards: Travel time

Hours of
Work Attendance at meetings, seminars, lectures

Sleeping time
Labor Standards: Meal
and Rest Periods

Meal period – 60 minutes

Rules:
1) 1 hour – not compensable
2) 21 minutes to less than 1 hour
3) 5 to 20 minutes
Labor Standards: Meal and Rest Periods

Broken-meal Meal periods in Change in the

periods between shifts meal period
Labor Standards: Night Shift
Differential
Additional exemption: retail and service establishments
regularly employing not more than 5 workers
Exception No. 5: Field personnel and other employees whose
time and performance is unsupervised by the employer
including those who are engaged on task or contract basis,
purely commission basis, or those whoa re paid a fixed amount
for performing work irrespective of the time consumed in the
performance thereof
What is the significance of this? David vs. Macasio (G.R. No.
195466, 2 July 204; Cebu Institute of Technology vs, Ople, G.R.
No. L-58870, 18 December 1987; Auto Bus Transit vs. Bautista,
G.R. No. 156367, 6 May 2005; Serrano vs. Santos Transit, G.R.
No. 187698, 9 August 2010)
Note: 13th month rule is different
 Reckoning of OT
What is OT work? Rationale work; exceptions

Labor
Undertime offset
Standards: Compulsory OT
work/consequence
Permission to
render OT work?
by overtime/vice-
versa

Overtime
Compensatory
leave Waiver of OT pay Built-in OT pay
 Not less than 24 hours

Labor Prerogative: Employer

Standards: Exception: Employee based on religious grounds

Weekly rest
period Exception to the exception/compromise

Compulsory rest day work/consequence

Labor Standards: Holidays

 2 kinds: Legal and Special

 Additional exceptions: less than 10 workers; same
Exception No. 5 for NSD
 Modifications
 Rules
• Absences before the holidays
• Private school teachers, workers paid by result or output,
seasonal workers, workers with no regular working days
• Monthly paid employees (Wellington case; Insular Bank
case)
 SIL – 5 days

Labor Additional exceptions: less than 10 employees;

those who are already enjoying the benefit;
Standards: those with VL with pay of at least 5 days;
“lumped provisions.”
SIL
Rule on unutilized SILs
Labor Standards: Other Mandatory
Leaves

Maternity leave Parental or solo

(RA 8282, as Paternity leave parent leave (RA
amended by RA (RA 8187) 8972, as amended
11210) by RA 11861)

Special leave for VAWC leave (RA

Adoption leave
women (RA 9710) 9262)
Labor Standards: Service Charges

Applicable laws: RA 11360; DOLE DO 242, Series of 2024

Meaning
Coverage
Employees of contractor
Distribution of service charge (how and when)
Abolition of service charge
Non-diminution of benefits
 Meaning/characteristics
• It is the remuneration or earnings, however
designated, for work or services done/rendered or
to be done/rendered;

Labor • It is capable of being expressed in terms of money,

whether fixed or ascertained on a time, task, piece,
or commission basis, or other method of calculating
Standards: the same;
• It is payable by an employer to an employee under
Wages a written or unwritten contract of employment; and
• It includes the fair and reasonable value, as
determined by the DoLE Secretary, of board,
lodging, or other facilities customarily furnished by
the employer to the employee. "Fair and reasonable
value" shall not include any profit to the employer,
or to any person affiliated with the employer.
Labor Standards: Wages

Facilities
1) Customarily furnished
2) Purpose test
3) Voluntarily accepted in writing
4) Fair and reasonable value

Supplements – extra remuneration or special privileges or benefits given to or

received by the workers over and above their ordinary earnings or wages
Labor Standards: Wages

Rules Bonus

Allowance Commission
 13th month pay – PD 851
Who are covered?
Benefit
Labor Payment
Standards: Resigned employee
Wages Part of wage for purposes of OT, etc.?
Multiple employers
Maternity leave
Labor Standards: Wages

Principles
• No-work, no pay
• Fair day’s wage for a fair day’s labor
• Equal pay for equal work vs. equal pay for work of equal
value (International School Alliance of Educators vs.
Quisumbing, et al, G.R. No. 128845, 1 June 2000; Philex
Gold vs. Philex Bulawan Supervisors Union, G.R. No.
149758, 25 August 2005)
Non-Diminution of Benefits (Art. 100)

Meaning

Concept of benefit (Royal Plant Workers Union vs. CCBPI-Cebu,

G.R. No. 198783, 15 April 2013)
• Tools of the trade

OT work/OT pay

Saturday work
Non-Diminution of Benefits (Art. 100)

REQUISITES THE GRANT OR BENEFIT IS PRACTICE IS CONSISTENT PRACTICE IS NOT DUE TO DIMINUTION OR
FOUNDED ON A POLICY OR AND DELIBERATE ERROR IN THE DISCONTINUANCE IS DONE
HAS RIPENED INTO A CONSTRUCTION OR UNILATERALLY BY THE
PRACTICE OVER A LONG APPLICATION OF A EMPLOYER
PERIOD OF TIME DOUBTFUL OR DIFFICULT
QUESTION OF LAW
 Exceptions:
Non-
•Replacement
Diminution •Conditional
of Benefits •Erroneous interpretation
(Art. 100) •CBA/employment
contract
Wage Distortion

Definition - “a situation where an

increase in prescribed wage rates
results in the elimination or severe
contraction of intentional
quantitative differences in wage or
salary rates between and among
employee groups in an
establishment as to effectively
obliterate the distinctions
embodied in such wage structure
based on skills, length of service,
or other logical bases of
differentiation.”
Wage Distortion

Requisites:
1) Increase in prescribed wage
rates
2) Intentional quantitative
differences
3) Results in elimination or severe
contraction
4) Rectification – not necessarily
to restore historical gaps
5) Grievance procedure/CBA
6) Same employer in the same
region
Wages

HOW ARE WAGES FREQUENCY OF PLACE OF TO WHOM WAGES

PAID PAYMENT PAYMENT SHOULD BE PAID
Wages: Prohibitions

1) Interference in the disposal of wages (Art. 112)

2) Wage deduction (Art. 113)
3) Deposits for loss or damage (Art. 114)
4) Withholding of wages or inducing employee to give up
any part of his wages by force, stealth, intimidation,
threat, or by any other means without the consent of
worker (Art. 116)
5) Deduction to ensure employment (Art. 117)
6) Retaliation and discrimination (Art. 118)
7) False reporting (Art. 119)
 Authorized by law
Wages:
Allowable
Deductions Written authorization
 DOLE Advisory 11, Series of 2014

Wages:
Allowable DOLE Advisory 06, Series of 2020

Deductions
Milan vs. NLRC, G.R. No.
202961, 4 February 2015
 RTWPBs

Across the board increase

Minimum Exempted establishments
Wage
Rule on crediting of increase

Penalty for non-compliance