Labor Law Reviewer

By Eunice Malonda

FOUNDATION OF LABOR LAW: employers. This justifies state intervention

1.​ The 1987 Constitution to protect labor rights.
➔​ Article 2, Section 18
➔​ Article 13, Sections 3 and Court Intervention: No, as a general rule,
14 unless rules are oppressive.
2.​ Labor Code of the Philippines
➔​ Article 279 – Security of Involuntary servitude refers to a
Tenure condition where a person is forced to work
➔​ Article 282 – Just Causes against their will, often under threat,
for Termination coercion, or physical restraint. It is a
3.​ Civil Code of the Philippines violation of human rights and is prohibited
under the Philippine Constitution and labor
Due Process in Labor Cases laws.
Substantive: two requisites must concur:
a.​ the dismissal must be for a just or STATE POLICY TOWARD LABOR
authorized cause; and LAW
b.​ the employee must be afforded an
opportunity to be heard and to Security of Tenure: Ensure that
defend himself employees cannot be dismissed from their
Procedural: an opportunity to be heard jobs without just or authorized cause,
and to defend oneself must be observed provided by law, and after due process.
before an employee may be dismissed.
Social Justice: The promotion of the
Rights of an Employee welfare of all the people. It also refers to
General: the principle of balancing the interest of
a.​ Right to Security of Tenure (Article labor and capital by giving priority to the
279, Labor Code) protection of the working class.
b.​ Right to a Living Wage (Article Note: The welfare of the people should be
XIII, Section 3, 1987 Constitution) the supreme law.
c.​ Right to Humane Working
Conditions (Article 3, Labor Code) Equal Work Opportunity guarantees that
Cardinal: all individuals, regardless of gender, age,
a.​ Right to Self-Organization (Article religion, ethnicity, or socio-economic
243, Labor Code) status, have access to employment
b.​ Right to Collective Bargaining and opportunities and are treated equally
Negotiation (Article 253, Labor regarding pay, benefits, and working
Code) conditions for similar work.

The presumption of inherent inequality Right to Self-Organization and

between employers and employees is a Collective Bargaining recognizes the
fundamental principle in labor law, right of workers and employees to form,
recognizing that workers are generally in a join, or support unions, organizations, or
weaker bargaining position compared to associations aimed at collective bargaining
and mutual assistance. It also encompasses

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By Eunice Malonda

the right to participate in peaceful by which the work is

activities and decision-making processes performed.
that impact their rights and benefits. 2.​ Fact of Dismissal: The employee must
initially prove that they were
dismissed. If no dismissal is proven,
Constructions in favor of Labor means
the case may be dismissed outright.
that whenever there is uncertainty,
3.​ Validity of Dismissal: Once dismissal
ambiguity, or conflict in the interpretation is established, the employer has the
or implementation of labor laws, rules, or burden of proving that the dismissal
contracts, the decision should favor the was for a just or authorized cause and
worker (Article 4, Labor Code). This that due process was followed. Failure
ensures that workers are given protection to meet this burden can result in a
and fair treatment in employment judgment in favor of the employee.
relationships.
RECRUITMENT AND PLACEMENT
Art. 1702, Civil Code: In case of doubt, all
legislation and all labor contracts shall be Recruitment and placement refers to any
construed in favor of the safety and decent act of: [CETCHUP-R-CPA] canvassing,
living of the laborer. enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and
Burden of Proof and Quantum of Evidence includes referrals, contract services,
on Labor Cases promising or advertising for employment,
1.​ Existence of Employer-Employee whether for local or overseas employment,
Relationship: The employee has the for a fee or not.
burden of proving that an
employer-employee relationship
Regulatory Authorities
exists. This is typically established
a.​ Philippine Overseas Employment
using the four-fold test, which
examines:
Administration is the primary
●​ Power to hire pertains to the agency responsible for the
employer's authority to recruit regulation of overseas
individuals for work. employment. However, with the
●​ Payment of wages refers to passage of RA No. 11641, POEA
the employer's obligation to has been integrated into the
compensate the worker for Department of Migrant Workers.
services rendered. b.​ Regulatory and Visitorial Powers
●​ Power of dismissal relates to of the Department of Labor and
the employer's authority to
Employment Secretary overseas
terminate the worker’s
and enforce regulations on
employment for valid reasons,
as provided under labor laws.
recruitment and placement, both
●​ Control test (control over the for local and overseas employment.
means and methods of work)
refers to the employer’s Ban on Direct Hiring prohibits foreign
control not only over the employers from directly hiring Filipino
results of the work but also the workers for overseas employment, except
manner, method, and means in specific cases. They must recruit

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through licensed private recruitment Profit Immaterial: Recruitment may be

agencies or government placement "for profit or not." It is the lack of the
agencies. necessary license or authority, and not the
fact of payment, that renders recruitment
Purpose: To protect workers, prevent illegal.
exploitation, government oversight, and
support the welfare of the workers (b) Illegal Recruitment of Migrant
Workers
Entities Prohibited from Recruiting Two Types According to the Offense
For Local Workers: 1.​ Undertakes any recruitment
For Overseas Employment: activity defined in Art. 13(b), LC
without a valid license/authority
ILLEGAL RECRUITMENT 2.​ Commits any of the prohibited acts
in Sec. 6, R.A. No. 8042, as
1st Main Type: Simple Illegal amended by R.A. 10022
Recruitment
2nd Main Type: Illegal Recruitment as
(a) Illegal Recruitment of Local Workers Economic Sabotage
Two Types According to the Kind of
Offender Two Types According to Qualifying
1.​ By a licensee/holder of authority Circumstances
a.​ Offender has a valid license 1.​ By a syndicate - carried out by a
or authority required by law group of 3 or more persons
to enable one to lawfully conspiring and confederating with
engage in the recruitment one another;
and placement of workers; 2.​ On a large scale - committed
b.​ Offender undertakes any of against 3 or more persons
the prohibited acts under individually or as a group.
Art. 34
2.​ By a non-licensee/non-holder of Illegal Recruitment vs. Estafa
authority
a.​ Offender has no valid Illegal Recruitment is malum prohibitum,
license or authority required meaning intent is not necessary for
by law to enable one to conviction. Estafa is malum in se,
lawfully engage in the meaning intent to deceive is required.
recruitment and placement
of workers; Note: A person can be charged with both
b.​ Offender undertakes either illegal recruitment and estafa without
– any activity within the double jeopardy
meaning of recruitment and
placement under or any of Termination of Contract of Migrant
the prohibited practices. Worker

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If a migrant worker’s contract is 6.​ Refugees and stateless persons

terminated without just cause, they are recognized by DOJ; and
entitled to: 7.​ All foreign nationals are granted an
➔​ Full reimbursement of placement exemption by Law.
fees with 12% interest per year.
➔​ All salaries for the unexpired
portion of their contract (or 3
months’ worth if the remaining Excluded from securing an AEP:
term is longer)​ 1.​ Members of the governing board
with voting rights only
Employment of Non-Resident Aliens 2.​ President and Treasurer, who are
(Alien Employment Permit) part-owners of the company.
3.​ Those providing consultancy
Who should apply for an Alien services who do not have
Employment Permit? employers in the Philippines.
a.​ Any alien seeking admission to the 4.​ Intra-corporate transferee who is a
Philippines for employment Manager, Executive, or Specialist
purposes, and 5.​ Contractual service supplier who is
b.​ Any domestic or foreign employer a Manager, Executive, or Specialist
who desires to engage an alien for 6.​ Representative of the foreign
employment in the Philippines. principal/Employer assigned in the
Office of Licensed Manning
Note: An alien cannot file a labor Agency
complaint without having obtained an
employment permit. Validity of AEP and Renewal
The AEP shall be valid for the position
Exempted from securing an AEP: and the company for which it was issued
1.​ All members of the diplomatic for 1 year.
service and foreign government
officials Denial of Application
2.​ Officers and staff of international Grounds for Denial
organizations of which the [Mi-Fa-Co-Mi-CAW-Wo- Ex]:
Philippine government is a member a.​ Misrepresentation of facts
3.​ Owners and representatives of b.​ Submission of falsified documents
foreign principals whose c.​ Conviction to a criminal offense or
companies are accredited by the a fugitive from justice in the
POEA country or abroad
4.​ Foreign national who comes to the d.​ Grave misconduct in dealing with
Philippines to teach, present, or ill-treatment of workers
and/or conduct research studies in e.​ Availability of a Filipino who is
universities and colleges competent, able, and willing to do
5.​ Permanent Resident foreign the job
nationals, probationary or f.​ Worked without valid AEP for
temporary resident visa holders; more than a year

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g.​ Application for renewal with

expired visa or with temporary Night Shift Differential: Employees
visitor’s visa working between 10 PM to 6 AM are
entitled to a 10% additional pay on top of
their regular salary

Overtime Work: If an employee works

Revocation; Cancellation beyond 8 hours, they must be paid at 125%
Grounds for Cancellation [Non-Mi-Fa-Me- of their regular hourly rate for overtime
Con-Te-Mi] work. For work on holidays or rest days,
a.​ Non-compliance with any of the overtime rates increase​.
requirements
b.​ Misrepresentation of facts in the (b) Wages and Benefits
application
c.​ Submission of falsified or Minimum Wage Compliance: Employers
tampered documents must comply with the regional minimum
d.​ Meritorious objection wage set by the Regional Tripartite Wages
e.​ Foreign national has been and Productivity Board. In a case example,
convicted of a criminal offense or a a company attempted to justify lower
fugitive from justice; wages by including food and lodging as
f.​ Employer terminated the part of the salary, but this was ruled invalid
employment of foreign nationals since deductions must be authorized by
g.​ Grave misconduct in dealing with DOLE.
or ill-treatment of workers.
13th Month Pay: All rank-and-file
LABOR STANDARD employees are entitled to a 13th-month
Labor standards refer to the set of salary, equivalent to one-twelfth (1/12) of
minimum employment conditions their total annual basic salary.
mandated by law, covering aspects such as
wages, working hours, overtime pay, rest Service Incentive Leave (SIL):
periods, and other employee benefits. Employees who have worked for at least
one year are entitled to five days of paid
(a) Conditions of Employment leave per year, except for those classified
as managerial staff, government workers,
Normal Hours of Work: Employees must or domestic helpers​.
work a maximum of 8 hours per day as
prescribed by the Labor Code. If they Holiday Pay: Employees who work on
work beyond this, overtime pay is required​ regular holidays must be paid at 200% of
their daily rate, and if they work on a
Meal Periods: Workers are entitled to at double holiday, they must receive 400% of
least one hour of meal break. However, if their regular rate.
an employer shortens this period
(minimum of 30 minutes), the reduction (c) Occupational Safety and Health
must be compensated​

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Employer Obligations: Employers must Hiring and Work Assignments:

provide a safe working environment to Employers can determine the
prevent workplace injuries. This includes qualifications, job responsibilities, and
compliance with R.A. 11058 placement of employees, provided that it
(Occupational Safety and Health Standards does not discriminate or violate labor laws.
Law), requiring companies to implement Work Regulations and Supervision:
safety measures​. Employers have the right to establish
workplace rules and procedures, which
Labor Inspections: DOLE conducts employees must follow unless they are
inspections to check for labor law oppressive or illegal​.
violations, such as unsafe work conditions,
lack of proper wages, and non-compliance Contracting and Subcontracting: A
with benefits​. company may contract out work to
independent contractors for business
Stoppage of Work Due to Hazardous efficiency. However, this must be done in
Conditions: If a workplace is deemed good faith and not as a means to
hazardous, DOLE has the power to halt circumvent labor rights
operations until safety standards are met​.
Discipline and Dismissal:
(d) Special Employment Categories Employers have the right to discipline and
dismiss employees for just causes,
Kasambahay Law (R.A. 10361): including:
Domestic workers (kasambahay) are a.​ Serious misconduct
protected under this law, which guarantees b.​ Willful disobedience
their minimum wage, rest days, and access c.​ Fraud or breach of trust
to social security benefits​. d.​ Gross neglect of duty
However, the employer must observe due
Contractual Employees and Security of process, which includes:
Tenure: Companies cannot hire workers a.​ Notice to explain (stating the cause
on a fixed-term contract (e.g., 5-month of dismissal)
employment cycles) to avoid granting b.​ Opportunity to be heard
them regular employment benefits. The c.​ Final notice of termination
Supreme Court has ruled against such
practices​. Transfer of Employees: Employers may
transfer employees for business necessity.
MANAGEMENT PREROGATIVE However, the transfer must:
refers to the employer’s inherent right to a.​ Not be discriminatory or retaliatory
regulate all aspects of employment. It b.​ Not result in a demotion or a
includes decisions on hiring, work reduction in pay
assignments, discipline, layoffs, transfers, c.​ Not cause undue hardship on the
and dismissals, provided that these employee
decisions comply with laws, contractual d.​ If a transfer is unreasonable or
obligations, and principles of fairness​ forces an employee to resign, it can

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be considered constructive a.​ Employers cannot remove or

dismissal​ reduce bonuses if employees have
a vested right to them​
When is a Transfer Deemed Constructive b.​ However, a company facing
Dismissal? financial difficulties may reduce
-​ A transfer is considered discretionary bonuses, provided it
constructive dismissal when it is is not done in bad faith​
done in bad faith or under
unreasonable conditions, making Change of Working Hours: Employers
continued employment unbearable may change work schedules as part of
for the employee. In such cases, the management's prerogative. However:
transfer is a disguised dismissal, a.​ The change must be reasonable and
forcing the employee to resign justifiable.
against their will. b.​ It should not be used to avoid
Burden of Proof: Employer paying overtime.
c.​ If work schedules are contractual
Constructive Dismissal: If a transfer is or included in a CBA, changes
unreasonable or forces the employee to require employee consent​.
resign, it may be considered constructive
dismissal, which is illegal​. Bona Fide Occupational Qualifications
(BFOQ): A BFOQ is a job requirement
Productivity Standards: Employers can based on a specific qualification, which
set performance and productivity must be:
benchmarks, but such standards: a.​ Work-related
a.​ Must be reasonable and clearly b.​ Necessary for business operations
communicated to employees. c.​ Not discriminatory if based on
b.​ Cannot be used to justify illegal legitimate business needs​
termination. Example: A company prohibited
c.​ Must be consistently applied across employees from marrying competitors'
similar roles​ employees due to a conflict of interest.
The Supreme Court upheld this as a valid
Bonus: A bonus is an act of gratuity on the BFOQ, as it was a legitimate business
part of the employer. and is a management necessity​
prerogative that cannot be forced upon the
employer. Limitations on Management
A bonus is not a demandable right unless: Prerogative: While employers have broad
a.​ It is provided for in a contract or discretion, this prerogative is not absolute
CBA. and must comply with:
b.​ It has been given regularly for a.​ Labor laws (e.g., security of tenure,
years, making it a company minimum wage, benefits)
practice. b.​ Existing Collective Bargaining
c.​ It is included in the computation of Agreements (CBAs)
salaries and wages. c.​ General principles of fairness and
Principle of Non-Diminution of Benefits: equity​

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Note: An employer cannot use

management prerogative to justify mass
layoffs without valid economic grounds or
as a form of retaliation against unionizing
employees.

Supreme Court Rulings on

Management Prerogative
➔​ Contracting out services is valid if
done for legitimate business
reasons and the contractor is a bona
fide independent entity​.
➔​ Unilateral changes in company
policies must still consider
employee rights and fairness. A
company cannot arbitrarily impose
new workplace rules without
proper consultation​.
➔​ Security of tenure takes precedence
over management prerogative.
Employees cannot be dismissed
without just or authorized causes​

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II.​ CASUAL
TYPES OF EMPLOYMENT
Casual employment refers to jobs that are not
I.​ REGULAR usually necessary to the employer’s business.
It is defined as:
A regular employee performs tasks that are a.​ Work that is incidental to the
necessary or desirable for the employer's usual employer’s business, for a definite
business. Regular employment can also period made known at the time of
include casual employees who have rendered hiring
at least 1 year of service, even if the service is b.​ Employment fixed for a specific
broken. project, where the duration is known
at the start.
Regular Employee Definition: Engaged in c.​ Seasonal work, lasting only for the
activities necessary for the employer’s season.
business. Regular employees are not
permanent; they can be terminated for just Transition to Regular Employment
cause. Casual employees become regular employees
after rendering at least one year of service,
Types of Regular Employees: continuous or broken, in relation to the activity
●​ Employees whose tasks are essential they are employed for. Once an employee
to the business. reaches one year of service, they are
●​ Casual employees who have worked at considered regular for the specific activity, and
least one year. their employment continues as long as the
activity exists.
Reasonable Connection: The work must be
reasonably connected to the employer's Key Points to Remember:
business, and repeated need for the role can ●​ Employment is determined by the
make the employment regular. nature of the work, not the contract.
●​ If the job is necessary or desirable to
Probationary Employees: Once probation the employer’s main business, it is
ends, the employee becomes regular. regular.
●​ Casual employees who have been
When Article 295 Doesn't Apply: It's not a employed for at least one year are
test for existence of employment relationships regular with respect to the activity
but determines employee benefits and security performed.
of tenure.
III.​ PROJECT
Project Employees: If their contract is
extended beyond the project, they may be Project employees are hired for specific jobs
considered regular employees. with defined start and end dates. These
projects are separate from the regular business
Repeated Contract Renewals: If a project activities of the employer.
employee’s contract is continuously renewed,
it may be an attempt to avoid regular status, Project Employee Definition: Hired for a
which is not allowed. distinct project, separate from the employer’s
regular business. Employment is tied to the
project’s completion.
Labor Law Reviewer
By Eunice Malonda
Rationale: Employers are not obligated to Seasonal Employee Definition: Workers
keep workers on the payroll once the project is whose tasks are needed only during certain
done. Keeping them would mean paying for times of the year, with no ongoing need for
work not done. their services outside the season.

Types of Project Employees: Regular Seasonal Employees: Those who are

●​ Within the regular business: Jobs like re-hired every season (e.g., summer) are not
construction projects. considered separated from service but on leave
●​ Outside regular business: Jobs not during the off-season. They are considered
related to the employer’s typical regular employees due to the recurring nature
operations. of their employment.

Test for Project Employment: Employment Duration: To be considered a seasonal

is for a specific project or task, with a defined employee, the work must only last for the
end at the time of engagement. duration of one season.

Indicators: Exception: In cases where employees are free

1.​ Employment duration is determined to work for other employers during the
and defined in the contract. off-season (e.g., agricultural workers), they
2.​ Clear understanding that employment may be classified as project employees instead
ends when the project is completed. of seasonal employees.
3.​ Employee is free to work elsewhere
between projects. V.​ FIXED-TERM
4.​ Employer must report termination to
the DOLE after each project ends. Fixed-term employees work for a specified
period, with a contract that outlines the start
Repeated Hiring: Continuous rehiring doesn’t and end dates of employment.
make an employee regular. What matters is
whether the job is for a specific project with a Brent Doctrine
fixed duration. Fixed-term employment is valid if:
a.​ The fixed period was voluntarily
Work Pool: Some project employees may agreed upon by both parties without
belong to a work pool, ready for future any vitiating consent.
projects. Membership doesn’t change their b.​ Both parties dealt on more or less
project employee status unless rehired for equal footing.
vital, ongoing business tasks.
Equal Footing: Skilled employees or those in
Termination: Employers must report project demand may negotiate better terms, needing
employee termination after each project. less protection than ordinary workers.
Failure to do so may suggest they are not
project employees. Distinguished from Project Employees:
Unlike project employees, whose employment
IV.​ SEASONAL is tied to a specific project, fixed-term
employees are hired for a set period regardless
Seasonal employees are hired for work that is of the project.
dependent on specific seasons, with
employment lasting only during those periods. Distinguished from Independent
Contractors: Fixed-term employees have an
Labor Law Reviewer
By Eunice Malonda
employer-employee relationship, unlike Qualification as Regular Employee: If the
independent contractors, who are governed by employee is allowed to work beyond the
contract law. probationary period, they are considered a
regular employee.
Regular Fixed-term Employees: Continuous
extension of a fixed-term contract with the Duration
same duties may lead to regular employee
status, even if the contract initially had a fixed General Rule: The probationary period shall
term. not exceed 6 months from the date the
employee started working.
No Implied Renewal: Once a fixed-term Exceptions:
contract expires, it cannot be renewed unless 1.​ When covered by an apprenticeship
explicitly agreed upon by both parties. agreement that specifies a longer
period.
Pre-termination: If a fixed-term contract is 2.​ When the employment contract or
terminated early, due process must be followed company policy requires a longer
to avoid illegal dismissal claims. probationary period, depending on the
nature of the work performed.
VI.​ PROBATIONARY 3.​ When it involves a 3-year
probationary period for teachers .
A probationary employee is one who is 4.​ When there is an act of liberality on
engaged for a trial period, during which the the employer's part, allowing a second
employer determines if the employee is chance after initial failure.
qualified for permanent employment. The
employer uses reasonable standards made Purpose of Probationary Employment:
known to the employee at the time of ●​ Observation Period: For the employer
engagement to assess qualification. to assess the employee’s skills and
determine whether they are qualified
Rules for Probationary Employment for permanent employment.
●​ Restrictive: Termination can occur
Duration: The probationary period shall not anytime before the probationary
exceed 6 months from the date of period ends, and the employer can
commencement of employment, unless it is decide whether to continue the
covered by an apprenticeship agreement employee’s services.
stipulating a longer period.
Requirements for Validity of Qualification
Termination: The employer can terminate a Standards:
probationary employee for just cause or when ●​ The employer must communicate to
the employee fails to meet the reasonable the employee the standards for regular
standards made known at the time of employment at the time of
engagement. engagement.
●​ The employer must inform the ●​ The employee must be made aware of
employee of these standards when the their probationary status, the length of
employee is engaged. the probationary period, and the
●​ If no standards are communicated, the standards to meet during the trial
employee is considered a regular period.
employee. ●​ In cases where the job is
self-descriptive (e.g., laborers), the
Labor Law Reviewer
By Eunice Malonda
employer still needs to make 3.​ Be based on real dissatisfaction, in
reasonable efforts to inform the good faith, not as a means to
employee. circumvent the contract or the law.
4.​ Not involve unlawful discrimination in
Effect of Failure to Comply: If the employer the dismissal.
fails to comply with the requirement to inform
the employee of the standards, the employee is VII.​ DOMESTIC HELPERS
deemed a regular employee. (KASAMBAHAY)

Burden of Proof: The employer has the Any person engaged in domestic work within
burden to prove that the standards were an employment relationship, such as:
communicated and applied, and that the a.​ General househelp
employee failed to meet them. b.​ Nursemaid or "yaya"
c.​ Cook
Prohibition on Extended/Double Probation: d.​ Gardener
●​ Employers cannot continuously renew e.​ Laundry person
a probationary contract. After 6
months, if the employee is retained, Domestic Work – Work performed in or for a
they are deemed a regular employee. household.
●​ Employees transferred to a sister Household – Immediate family members or
company cannot be subjected to a new occupants regularly provided services by the
probationary period if they have kasambahay.
already attained regular employment.
Who are NOT considered Kasambahays:
Termination of Probationary Employee: 1.​ Persons doing domestic work
A probationary employee has temporary occasionally or sporadically, not
employment status and can be terminated occupationally.
before the expiration of the 6-month 2.​ Children under foster family
probationary period if: arrangements, given access to
1.​ The termination is for just causes. education and educational allowance.
2.​ The employee fails to qualify as a 3.​ Service providers (e.g. outsourced
regular employee according to the workers).
employer’s standards. 4.​ Family drivers.
The employer must observe procedural and
substantial due process during the termination Exclusivity of Function Required
process. A kasambahay must minister exclusively to
The employer must show how the standards the personal comfort and enjoyment of the
have been applied to the employee when employer’s family.
invoking "failure to meet probationary Not covered under the law:
standards" as the reason for termination. ●​ Workers in staffhouses or company
premises, even if performing
Limits to Termination: household-type tasks.
Termination must: ●​ Househelp who also assists in business
1.​ Be exercised in accordance with the operations (dual function).
specific requirements of the contract.
2.​ Be done within the prescribed time
and in the proper form, if necessary.
 Labor Law Reviewer
By Eunice Malonda
VIII.​ PERSONS IN THE PERSONAL arrangement is viewed as familial or domestic
SERVICE OF ANOTHER rather than contractual.

"Persons in the personal service of another" X.​ GOVERNMENT EMPLOYEE

refers to individuals who: General Rule: The terms and conditions of
a.​ Directly assist or serve an employer or employment of all government employees are
the employer’s household, governed by the Civil Service Rules and
b.​ Within the employer’s home, and Regulations, not the Labor Code.
c.​ Whose work is intended for the This includes employees of
comfort, convenience, safety, or Government-Owned or Controlled
personal needs of the employer or Corporations (GOCCs).
their family.
●​ Civil Service Law governs public
Exclusion from Coverage of Title I employment.
(Working Conditions and Rest Periods) ●​ Labor Code governs private
Persons in the personal service of another are employment, including GOCCs not
not covered by Title I, Book III of the Labor created by special law.
Code (re: working conditions and rest periods) ●​ Always check the legal basis of
if: creation of a GOCC to determine the
1.​ They perform services in the applicable law.
employer’s home that are
●​ Necessary or desirable for the XI.​ MANAGERIAL EMPLOYEE
maintenance and enjoyment of
the home; or Two Definitions of “Managerial Employee”
2.​ They minister to the personal comfort, 1.​ Article 82 – For Exemption from
convenience, or safety of the employer Labor Standards
or members of the employer’s A managerial employee is one: Whose
household. primary duty consists of management
of the establishment, department, or
Note: This exclusion is similar to the subdivision thereof. Includes other
treatment of domestic workers under RA officers or members of the managerial
10361, but applies specifically in the context staff.
of Labor Code coverage, particularly on 2.​ Article 219 – For Purposes of Labor
working conditions and rest periods. Relations
A managerial employee is one: Vested
IX.​ DEPENDENT FAMILY with authority to lay down and execute
MEMBERS management policies; and/or Has the
power to hire, transfer, suspend, lay
Not covered under Title I of the Labor Code off, recall, discharge, assign, or
(re: working conditions and rest periods): discipline employees.
Family members of the employer who are:
●​ Working for the employer, and Characteristics of Managerial Employees
●​ Dependent on the employer for To be exempt from Labor Standards, all of the
support following must be met:
1.​ Primary duty is management of the
Key Concept: The law presumes no company or a department/subdivision.
employer-employee relationship when the 2.​ Customarily and regularly directs the
worker is a dependent family member, as the work of two or more employees.
Labor Law Reviewer
By Eunice Malonda
3.​ Has authority to hire or fire, or their XIII.​ PIECE-WORKERS
recommendations are given particular
weight in personnel decisions Workers paid by result are those whose
(promotion, status change, etc.). compensation is based on output, not time.

Exemption from Labor Standards: Nature of Compensation

Managerial employees who meet the 3 ●​ No fixed salary
conditions above are not covered by: ●​ Paid based on accomplished tasks
Articles 83 to 96, which include: ●​ Not time-based; compensation
➔​ Normal hours of work depends on the amount of work
➔​ Overtime pay completed
➔​ Weekly rest periods
➔​ Holiday pay Key Points to Remember:
➔​ Service incentive leave ●​ Supervision is the determining factor
➔​ Night shift differential for exemption from labor standards.
●​ Piece-rate work is valid even if it
Key Points to Remember: causes pay fluctuation.
●​ The test for being a managerial ●​ Constructive dismissal does not arise
employee depends on: merely from changed work
Nature of duties, not title. assignments.
Actual authority exercised. ●​ Must check if DOLE output standards
●​ The exemption from labor standards apply before determining exemption
applies only if all conditions under the from overtime pay.
IRR are fulfilled.
COMPENSABLE TIME
XII.​ FIELD PERSONNEL Compensable time refers to the hours during
which an employee is required to work,
Field personnel are non-agricultural employees permitted to work, or suffered to work. These
who meet both of the following conditions: are hours that are counted as paid working
a.​ Regularly perform duties away from time under the law.
the principal place of business or any
branch office of the employer; AND I.​ NORMAL HOURS OF WORK
b.​ Their actual hours of work cannot be
determined with reasonable certainty. General Rule: 8-Hour Labor Law
The normal hours of work of any employee
Key Points to Remember: shall not exceed eight (8) hours a day.
➔​ Both conditions under Article 82 must Key Point: This sets a maximum—not a
be met to qualify as field personnel. minimum—meaning employers can require
➔​ Field personnel are not entitled to less than 8 hours, and it's still within the law.
benefits under Book III of the Labor
Code (e.g., overtime pay, holiday pay) Exception: Certain health workers may work
if truly unsupervised. under special rules. Who are covered?
➔​ Control and supervision is the Health personnel in:
deciding factor—not just physical 1.​ Cities/municipalities with a population
absence from the office. of at least 1,000,000, OR
2.​ Hospitals/clinics with bed capacity of
at least 100
Labor Law Reviewer
By Eunice Malonda
Standard Work Schedule: 8 hours/day, 5 ➔​ "Day" is normally reckoned from
days/week, excluding time for meals 12:00 midnight to next midnight, but:
When required to work more (6 days / 48 Company policies, CBAs, or contracts
hours/week): They are entitled to an may define the holiday as starting the
additional 30% compensation of their regular night before for night shift employees.
wage for the 6th day.
III.​ OVERTIME WORK
“Health personnel" shall include:
➔​ Resident physicians, nurses, Definition: Overtime is work rendered beyond
nutritionists, dietitians, pharmacists, 8 hours/day. It must be compensated with
social workers, laboratory technicians, additional pay.
paramedical technicians, Rationale: Employees are paid extra for
psychologists, midwives, attendants overtime because they work beyond their
and all other hospital or clinic agreed or statutorily set working hours.
personnel. [Art. 83]
➔​ Medical secretaries Overtime Pay Rates
Situation​ Rate of Pay (per hour)
II.​ NIGHT SHIFT DIFFERENTIAL
Regular Day Hourly Wage × 125%
Definition: Additional 10% pay of the regular
Rest Day / Special Day Hourly Wage × 130%
wage per hour for work done between 10:00
PM and 6:00 AM OT on Rest Day / Hourly Wage × 169%
Special Day (130% + 30% of 130%)
Example: Base Wage: Regular wage (cash wage only)
Regular hourly rate = ₱100 Excludes: Bonuses, fringe benefits
Night shift pay = ₱100 + ₱10 = ₱110/hour BUT: Include premium pay if OT is on a rest
day or holiday.
Exemptions / Not Covered:
Night Shift Differential does not apply to: Illustrations:
1.​ Employees excluded under Article 82 1.​ Overtime on a Regular Day
(e.g., managerial employees, field (OTRD): OTRD = Hourly Wage ×
personnel) 1.25 × OT hours
2.​ Workers in retail or service 2.​ Work on Rest Day (WRD): WRD =
establishments with ≤ 5 regular Hourly Wage × 1.30 × Hours worked
employees 3.​ OT on Scheduled Rest Day
(OTSRD): OTSRD = Hourly Wage ×
Weekly Night-Off / Rest Day 1.69 × OT hours
➔​ Night shift employees are entitled to 1 Note: 169% was derived by adding 39%
rest day per week (often Saturday (which is 30% of 130 or 1.3x.3 to 130%)
night).
➔​ Should be 24 consecutive hours Emergency Overtime (Art. 89)
beginning at the start of their usual Employer may require overtime work in the
night shift following situations:
a.​ War or national/local emergency
Work on Special Days & Holidays b.​ To prevent loss of life/property due to
➔​ Night shift workers are entitled to calamities
premium pay when working during c.​ Urgent repair/maintenance to avoid
special days or holidays. serious damage
Labor Law Reviewer
By Eunice Malonda
d.​ To prevent loss/damage to perishable Effects of CWW:
goods 1.​ No OT pay up to 12 hours/day
e.​ To prevent serious business 2.​ Mandatory 60-minute meal period
obstruction 3.​ No reduction of rest day, holiday, or
f.​ To maximize favorable leave benefits
weather/environmental conditions 4.​ Reverting to 8-hour shift not
diminution of benefits
Working beyond 8 hours at night
(10PM–6AM) entitles the worker to: Built-in Overtime (Package Pay)
Overtime pay + Night Shift Differential A salary that includes overtime pay already
computed in advance.
Rules on Overtime: Such arrangement is valid provided that:
1.​ Employer cannot compel ➔​ Clear written agreement
overtime—except in emergency cases. ➔​ Computation shows that the total pay
2.​ Consent or knowledge of employer meets or exceeds the required wage +
needed. OT
Exception:
➔​ Work was necessary or NON-COMPENSABLE HOURS; WHEN
company benefited; OR COMPENSABLE
➔​ No reliever available at shift
end I.​ MEAL BREAKS
3.​ Compensation for work rendered in
excess of the 8 normal working hours General Rule: Meal periods are NOT
in a day: compensable.
a.​ For ordinary days, additional ●​ 1-hour meal break excluded from
25% of the basic hourly rate. 8-hour workday
b.​ For rest day/special
day/holiday, additional 30% of Exceptions:
the basic hourly rate. Meal break is compensable if:
4.​ A given day is considered an ordinary 1.​ Work is predominantly for the
day, unless it is a rest day. employer’s benefit
5.​ No offsetting: Undertime can't cancel 2.​ Employee is on continuous shift
out OT. 3.​ Meal period is < 1 hour (e.g., 30 mins)
➔​ Must be at least 20 minutes to
Compressed Work Week (CWW) be valid.
CWW = 48 hours/week over less than 6 days If < 20 minutes → it’s a REST PERIOD =
(e.g., 10 hrs/day for 5 days) compensable
●​ Allowed without OT pay for up to 12
hours/day Exception to the Exception:
●​ Beyond 12 hrs/day or 48 hrs/week = If a shortened meal break is requested by the
OT applies employee, then it’s NOT compensable, subject
Conditions: to 6 conditions:
1.​ Voluntary agreement by majority of 1.​ Written agreement
employees 2.​ No reduction in pay/benefits
2.​ Safety certification if exposed to 3.​ Light work + coffee breaks
hazardous conditions 4.​ Value of benefit ≈ compensation for
3.​ Employer must notify DOLE (submit lost meal time
CWW Report Form) 5.​ OT after 4:30 PM is compensable
Labor Law Reviewer
By Eunice Malonda
6.​ Temporary arrangement only
Lectures, Meetings, Trainings
II.​ POWER INTERRUPTIONS OR NOT Compensable IF ALL of the following
BROWNOUTS are met:
●​ Outside of regular working hours
< 20 mins = always counted as work time ●​ Voluntary attendance
20 mins = compensable if: ●​ No productive work is performed
➔​ Worker must stay nearby for imminent Compensable if:
work resumption ●​ Required or sanctioned by employer
➔​ Time is too short to use effectively for ●​ Attendance is during regular hours
personal matters ●​ Employee does productive work
Not compensable if: Employees are free to Special Cases:
leave or use time as they please ●​ CBA negotiations/grievance meetings
III.​ IDLE TIME = compensable if CBA provides for it
Not counted if: Employee is allowed to rest or ●​ Hearings filed by the employee = not
leave their work spot, even if not off company compensable
premises ●​ Participation in strikes = not
Counted if: Rest isn’t complete or presence at compensable
workstation is still required
Bottom line: If the meeting/training benefits
IV.​ TRAVEL TIME the employer and is required, it is
compensable.
NOT Compensable: Home-to-work travel
(normal daily commute) is not counted as V.​ COMMUTING TIME
worktime.
Exceptions: General Rule: Ordinary commuting time
Home-to-work travel becomes worktime if: (home to work and vice versa) is not
a.​ Travel during emergency situations compensable.
b.​ Travel using employer-furnished
conveyance Exception:
c.​ Travel under vexing or dangerous Compensable if the employee performs tasks
conditions during the commute that:
d.​ Travel under employer's supervision ●​ Are not merely incidental to the job,
and control and
●​ Are primarily for the employer’s
Compensable: benefit

Jobsite-to-jobsite travel during workday VI.​ WAITING TIME

●​ Considered part of the day’s work
●​ Also includes travel from a designated Short Rest or Coffee Breaks
meeting place to the jobsite 5 to 20 minutes = Compensable working time

Travel away from home (overnight On-Call Time

assignments) Compensable if:
Compensable when it cuts across work hours, 1.​ Employee must remain on employer’s
whether it happens on: premises or so close to it
●​ Regular working days, or 2.​ Cannot use time effectively for own
●​ Non-working days (e.g., weekends) purposes
Labor Law Reviewer
By Eunice Malonda
NOT compensable if: 5.​ Output rate follows DOLE-prescribed
1.​ Employee is free to move, and standards
2.​ No requirement to leave word on 6.​ Field personnel whose hours can't be
where they can be reached determined with certainty

Inactive Time Due to Work Interruptions Premium Pay Rates [Handbook on Workers
Considered working time if: Statutory Monetary Benefits, 2018]
1.​ Employee’s presence is required due Work Performed Premium Pay
to imminent resumption of work; OR
2.​ Interval is too short to use effectively On scheduled rest day​ 130% of regular wage
for personal interest
On Sunday (if it is the 130% of regular wage
established rest day)​
REGULAR HOLIDAY
RA 9492 and 9849 (which added the two On Sunday/holiday, if no 130% of regular wage
fixed work/rest days​
Muslim holidays) provide for the observance
of the following regular holidays: On any special holiday​ 130% of regular wage
a.​ New Year’s Day – Jan. 1
b.​ Maundy Thursday – Movable date On special holiday falling 150% of regular wage
on rest day​
c.​ Good Friday – Movable date
d.​ Araw ng Kagitingan – Monday nearest On regular holiday falling 260% of regular wage
Apr. on rest day​
e.​ Labor Day – Monday nearest May 1
f.​ Independence Day – Monday nearest Rules & Clarifications:
June Employees working on Sundays/holidays must
g.​ Eid’l Fitr – Movable date be given:
h.​ Eid’l Adha – Movable date 1.​ Weekly rest day
i.​ National Heroes Day – Last Monday 2.​ Premium pay benefits per IRR [Sec. 2,
of August Rule III]
j.​ Bonifacio Day – Monday nearest Nov.
30 Compensation Rules:
k.​ Christmas Day – Dec. 25 1.​ Work on rest day = +30% of regular
l.​ Rizal Day – Monday nearest Dec. 30 wage
2.​ Work on Sunday = compensable only
PREMIUM PAY if it is the employee’s established rest
Definition: Additional pay for work day
performed within 8 hours on non-work days 3.​ For employees with no fixed work/rest
(rest days, Sundays, special holidays). days:
General Rule: Applies to all employees ➔​ Sunday/holiday work = +30%
Exceptions: premium pay
1.​ Government employees (including
GOCCs with original charters) CBAs and More Favorable Terms
2.​ Managerial employees (Book III ●​ CBA or contract with higher premium
definition) pay prevails
3.​ Househelpers/personal service ●​ Employers cannot reduce existing
workers benefits (e.g., paid Sundays/holidays)
4.​ Workers paid by results (e.g., piece due to Code
rate, pakyaw, task basis), if:
Labor Law Reviewer
By Eunice Malonda
Basis of Output Pay Rate
WAGE vs. SALARY DOLE, on its own initiative or via petition by
Wages and salary are in essence synonymous. an interested party, shall:
●​ Use time and motion studies
Wage Salary ●​ Consult with employers' and workers'
groups
Paid for manual labor, Paid to white-collar ●​ Determine if employees are paid in
skilled or unskilled employees accordance with minimum wage laws
Usually computed by Typically monthly or Standard Basis for Rate Setting: Rates
the hour, day, or piece semimonthly rate should be based on the performance of an
ordinary worker of minimum skill or ability.
Denotes lower grade Denotes higher grade or
or blue-collar professional
employment​ employment Ordinary worker = average worker from the
lowest-producing 50%, excluding learners,
Not subject to Subject to apprentices, and PWDs.
execution/garnishment execution/garnishment,
except for debts even for other debts
related to necessities Adjustment of Non-Compliant Rates
If the employer’s piece/output rates:
●​ Do not conform to DOLE standards or
MINIMUM WAGE LAW
applicable laws,
Definition: Statutory minimum wage is the
●​ Then employees are entitled to the pay
lowest wage that an employer can legally pay
difference between:
a worker. [RA 6727]
➔​ What they should have
received under the proper
MANDATORY Payment
standard/rate, and
●​ Minimum wage must be paid – It is a
➔​ What was actually paid
statutory obligation.
●​ Lack of funds is NOT a valid excuse.
Two Categories of Piece Rates Workers
1.​ Piece Rates Prescribed by DOLE
I.​ PAYMENT BY HOURS WORKED
●​ Multiplied per unit produced.
●​ Not covered by rules on hours
Minimum wage rates vary per region, as
of work → No premium or
determined by the Regional Tripartite Wages
OT pay.
and Productivity Boards (RTWPB).
2.​ Piece Rates Prescribed by Employer
→ [Labor Code, Art. 99]
(Not DOLE-approved)
●​ If total pay ≥ minimum wage
II.​ PAYMENT BY RESULTS
→ No problem.
(OUTPUT-BASED)
●​ If total pay < minimum wage
The Secretary of Labor and Employment shall → Employer must pay the
regulate the payment of wages by results, difference.
including pakyao, piecework, and other non-
time work, to ensure the payment of fair and SERVICE CHARGE LAW
reasonable wage rates, preferably through time
and motion studies or in consultation with Coverage: Only applies to establishments that
representatives of worker’s and employer’s collect service charges, such as:
organizations. [Art. 101] a.​ Hotels, restaurants, lodging houses
b.​ Night clubs, cocktail lounges, massage
clinics
Labor Law Reviewer
By Eunice Malonda
c.​ Bars, casinos, gambling houses APPLICATION OF 13TH MONTH PAY
d.​ Similar enterprises (including private
subsidiaries of the government) Legal Basis
●​ Presidential Decree No. 851 (13th
Distribution Rules (as amended by R.A. Month Pay Law)
11360) ●​ Revised Guidelines on the
●​ 100% of collected service charges Implementation of the 13th Month Pay
shall be equally distributed among Law
covered employees (excluding ●​ Memorandum Order No. 28
managers).
●​ Basis: Actual hours or days worked. Coverage
●​ Includes employees already receiving Entitled Employees:
a share prior to the amendment. ●​ All rank-and-file employees who have
worked at least one (1) month during
Key Notes: the calendar year.
●​ P2,000 salary ceiling no longer Not Entitled:
applies. ●​ Managerial employees
●​ Service charge is not a substitute for ●​ Employees paid purely on
other benefits like ECOLA. commission, boundary, or task basis
●​ Service charge is not credited toward (e.g., taxi drivers)
minimum wage compliance if there's a ●​ Those paid a fixed amount for
wage increase by law/wage order. performing specific work, regardless
of time spent (e.g., freelancers)
Synthesis Summary Exceptions to Non-Entitlement:
●​ Piece-rate workers (paid per unit
Rule Description
produced regularly) ARE entitled.
Pooling All service charges must
be pooled. Exempted Employers:
●​ Government (and its political
Coverage Applies to all employees
subdivisions, including GOCCs not
(except managers).
operating like private entities)
Distribution Must be distributed twice a ●​ Employers already providing an
month, not more than 16 equivalent benefit (at least 1/12 of
days apart. annual basic salary)
●​ Employers of workers paid on
Equality Distributed equally based
on hours/days worked. commission/task/boundary basis
(except for piece-rate)
Wage Not considered as
Compliance compliance with wage Minimum Amount
increase mandates. 1/12 of the total basic salary earned by the
CBAs CBAs and better company employee in a calendar year.
practices take precedence.
Inclusions in the Base for Computation
Tips Pooled tips treated like General Rule: Basic salary shall include:
service charges if ●​ COLA (only if integrated into the
monitored by employer.
basic salary by law, e.g., via EO 178)
●​ All remunerations or earnings paid by
this employer for services rendered.
Labor Law Reviewer
By Eunice Malonda
Not included:
●​ Overtime pay
●​ Premium pay
●​ Holiday pay
●​ Night differential
●​ Cash equivalents of unused leaves
●​ Non-integrated COLA
●​ Other allowances or non-monetary
benefits
BUT if employer has a company practice of
including such benefits in 13th month
computation, this cannot be withdrawn
unilaterally.

Time of Payment: On or before December 24

every year
Optional scheme:
a.​ Half may be given before the school
year opens
b.​ Remaining half before December 24
c.​ Payment frequency can also be agreed
upon in the CBA (Collective
Bargaining Agreement)

Rationale
●​ To protect real wages from inflation
●​ No wage increase since 1970 (at time
of law’s passage)
●​ To help workers celebrate holidays
with dignity

Enforcement: Employers who fail to comply

may be held liable under labor law, subject to
enforcement by the DOLE (Department of
Labor and Employment).