You are on page 1of 132

Part I

Introductory Materials
Section 1. Labor Law in General
1.1 Labor Law Defined [S, R, J]
1. Labor Legislation Consists of statutes, regulations and
jurisprudence governing the relations between capital and labor
by:
a. providing for certain terms and conditions of employment
or
b. providing a legal framework within which these terms and
conditions and the employment relationships may be
negotiated
adjusted and
administered.
2. Social Legislation Includes all laws that provide particular
kinds of protection or benefits to society or segments thereof in
furtherance of social justice. In that sense, labor laws are
necessarily social legislation.
promote public welfare
1. Law !lassification
1. Labor Standards Law hat which sets out the minimum
terms, conditions and benefits of employment that !"#s must
provide or comply with and to which !!#s are entitled as a matter
of legal right.
!$. %&hour labor law
2. Labor Relations Law hat which defines '( " ) * I+,
the status, rights and duties
and the institutional mechanisms
that govern the individual and collective interaction of !"#s and
!!#s or their representatives.
!$. -ook . of /abor Code
3. Welfare Legislation designed to take care of contingencies
which may affect workers, e.g. where there is loss of income for
research beyond the worker#s control. -!0!1I(
2 (ocial (ecurity /aw.
1." #istory and $rigin
1.% &asis for 'nact(ent
1. )rt. II, Sec.*, !onst. + he maintenance of peace and order,
the protection of life, liberty, and property, and the promotion of
general welfare are essential for the enjoyment by all the people
of the blessing of democracy.
2. )rt. II, Sec. 1,, !onst. : he (tate affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
3. )rt. -III, Sec. I, !onst. : he Congress shall give highest
priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social,
economic and political ine3ualities, and remove cultural
ine3uities by e3uitably diffusing wealth and political power for
the common good.
o this end, the (tate shall regulate the ac3uisition, ownership,
use, and disposition of property and its increments.
2 /abor and social legislation are enacted pursuant to the police
power of the (tate. his is its inherent power to enact wholesome
and reasonable laws to promote order, safety, health, morals and
general welfare of society. In its e$ercise the state may interfere
with personal liberty, with property and with business and
occupation. (Calalang vs. Williams).
2 0o longer may the due process clause and the freedom of
contract be invoked to challenge labor and social legislation. his
has long been discarded since the 4567 case of West Coast Hotel vs.
Parish (US) and the 1924 case of Pp. vs. Pomar (P).
2 /abor relation laws enable workers to obtain from their
employers more than the minimum benefits set by labor
standard laws
1.* Law and .or/er
he (C reaffirms its concern for the lowly worker who, often at the
mercy of his !", must look up to the law for protection. 1ittingly, the
law regards him with tenderness and even favor and always with
hope in his capacity to help in shaping the nation#s future. It is an
error to take him for granted. (Ce!" o#al Plant vs. $ep"t# %inister of
&a!or)
Section . Labor and t0e !onstitution

.1 !onstitutional 1ro2isions
1. )rt. II, Sec. 3, !onst. : he (tate shall promote a just and
dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty
through policies that provide ade3uate social services, promote
full employment, a rising standard of living, and an improved
3uality of life for all.
2. )rt. II, Sec. 14, !onst. : he (tate shall promote social justice
in all phases of national development.
2
3. )rt. II, Sec. 1", !onst. : he (tate recogni8ed the role of the
youth in nation&building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well&being. . .
4. )rt. II, Sec. 1%, !onst. : he (tate recogni8es the role of
women in nation&building, and shall ensure their fundamental
e3uality before the law of women and men.
5. )rt. II, Sec. 1,, !onst. : he (tate affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
6. )rt. -III, Sec. 1, !onst. : he Congress shall give highest
priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social,
economic, and political ine3ualities, and remove cultural
ine3uities by e3uitably diffusing wealth and political power for
the common good.
o this end, the (tate shall regulate the ac3uisition, ownership,
use, and disposition of property and its increments.
7. )rt. -III, Sec. " 51
st
6ar7, !onst. : he (tate shall
2afford full protection to labor, local and overseas, organi8ed and
unorgani8ed, and
2promote full employment and e3uality of employment
opportunities for all . . .
8. )rt. -III, Sec. %, !onst. : he (tate shall, by law, undertake an
agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to win collectively or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof . . .
9. )rt. -III, Sec. 11, !onst. : he (tate shall adopt an integrated
and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost . . .
10. he present Constitution has gone further than the 4576
Constitution in guaranteeing vital social and economic rights to
marginali8ed groups of society, including labor. he framers of
the Constitution intended to give primacy to the rights of labor
and afford the sector 9full protection: regardless of the
geographical location of the workers and whether they are
organi8ed or not ('lo!e %ac(a# vs. )&C).
. 1rotection to Labor
1. )rt. -III, Sec. ", !onst. : he (tate shall afford full protection
to labor, local and overseas, organi8ed and unorgani8ed, and
promote full employment and e3uality of employment
opportunities for all.
It shall guarantee the rights of all workers to 17 self
organi8ation, 7 collective bargaining and negotiations, and "7
3
peaceful and concerted activities including the right to strike in
accordance with law.
hey shall also participate in policy and decision&making
processes affecting their rights and benefits as may be provided by
law.
he (tate shall promote the principle of shared responsibility
between workers and !"#s and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce
mutual compliance therewith to foster industrial peace.
he (tate shall regulate the relations between worker#s and
!"#s, recogni8ing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns in
investment, e$pansion and growth.
456; Const. : he (tate shall afford protection to labor, especially
to working women and minors, and shall regulate the relation
between landowner and tenant, and between labor and capital in
industry and in agriculture. he (tate may provide for compulsory
arbitration.
Three aggregates of power against which the individual
employee needs protection
4. collective labor & <nion
=. collective capital & management
6. collective bargaining relationship
2 he law, while protecting the rights of laborers, does not authori8e
the oppression or destruction of the employer
Laissez Faire
4. /aisse8 faire or the principle of free enterprise never found full
acceptance in this jurisdiction . . . (*CC+* vs. CU'C,)
." Labor Sector
4. )rt. II, Sec. 1,, !onst. : he (tate affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
2.4 Policy Considerations Social Justice
4. )rt. II, Sec. 14, !onst. : he (tate shall promote social justice in
all phases of national development.
=. .0at does social 8ustice en2ision9 It envisions '!, ", C,
a. e3uitable diffusion of wealth and political power for the
common good>
b. regulation of the ac3uisition, ownership, use and
disposition of property and its increments>
c. and creation of economic opportunities based on freedom
of initiative and self&reliance. ?@rt. AIII, (ec. 4 * =, Const. >
@lcantaraB
4
Definition [#, ', 1, )]
1. (ocial justice is neither communism nor despotism, nor atornism,
nor anarchy, but the humani8ation of laws and the e3uali8ation
of social and economic forces so that justice in its rational and
objectively secular conception may at least be appro$imated. It
means the promotion of the welfare of the people, the adoption
of measures by the government to ensure economic stability of
all the competent elements of society, through the e$ercise of
powers underlying the e$istence of all governments on the time&
honored principle of salus populi est suprema lex. (Calalang vs.
Williams)
=. Chat does social justice guaranteeD
(ocial justice does not champion division of property of economic
status> what it guarantees are e3uality of opportunity, e3uality of
political rights, e3uality before the law, e3uality between values
given and received, and e3uitable sharing of the social and
material goods on the basis of efforts e$erted in their production.
('"ido vs. P*)
9hose who have less in life should have more in
law:
9!3ual pay for e3ual wok:
Limits of Use
2 he policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. @t
best it may mitigate the penalty but it certainly will not condone the
offense. hose who invoke social justice may do so only if their hands
are clean and their motives blameless and not simply because they
happen to be poor. (P&$- vs. )&C)
.* S6ecific Labor Rig0ts
2 @rt. AIII, (ec. 6, Const. : 'In the relation between workers and !"#s
the following rights shall be assured by the (tate:
a. "ights to self&organi8ation
b. "ight to collective bargaining
c. "ight to collective negotiations
d. "ight to peaceful and concerted @ctivities including the
right to strike
e. "ight to security of enure
f. "ight to just and humane Conditions of work
g. "ight to a living Cage
h. "ight to participate in policy and )ecision&making
processes ?C@C -E0)B
2 Enly to those that affect the rights of employees and have
repercussions on their right to security of tenure.
Protection to Labor
4. he law must protect labor, at least to the e$tent of raising him
to e3ual footing in bargaining relations with capital and to shield
him from abuses brought about by the necessity for survival. It is
5
safe to presume, therefore, that an !! or laborer who waives in
advance any benefit granted him by law does so, certainly not in
his interest or through generosity but under the forceful
intimidation of urgent need> and hence, he could not have so
acted, freely and voluntarily. (Sanche. vs. Harr# &#ons)
.: $t0er Rig0ts
1. )rt. II, Sec. 14, !onst. : 0o law impairing the obligation of
contracts shall be passed.
;;; !o(6assionate Justice
- disregarding rigid rules and giving due weight to all the
e3uities of the case
- years of service without derogatory record taken into
account
- harshness of penalty also taken into account
2. )rt. III, Sec. 1:, !onst. : @ll persons shall have the right to a
speedy disposition of their cases before all judicial, 3uasi&judicial
or administrative bodies.
3. )rt. III, Sec. 1, 57, !onst. : 0o involuntary servitude in any
form shall e$ist e$cept as a punishment for a crime whereof the
party shall have been duly convicted.
Labor as Property
2 he right of a person to his labor is deemed property within the
meaning of the Constitutional guarantees. hat is his means of
livelihood. Fe cannot be deprived of his labor or work without due
process of law. ?Phil. +ovieworkers @ssn. .s. Premiere ProductionsB
ue Process Re!uirements
2 he twin re3uirements of notice and hearing constitutes essential
elements of due process in cases of !! dismissal: the re3uirement of
notice is intended to inform the !! of the !"#s intent to dismiss and the
reason for the proposed dismissal> upon the other hand, the
re3uirement of hearing affords the !! an opportunity to answer his
!"#s charges against him and accordingly to defend himself therefrom
before dismissal is effected. 0either of these = re3uirements can be
dispensed with without running afoul of the Constitution. "#entury
Te$tile vs% &LR#'
Liberty of #ontract and State (nterference
2 /egislation appropriate to safeguard to people#s vital interests may
modify or abrogate contracts already in effect. "eservation of essential
attributes of sovereign power is read into contracts as a postulate of
the legal order. @ll contracts made with reference to any matter that is
subject to regulation under the police power must be understood as
made in reference to the possible e$ercise of that power. ?@bellaGFad.
)anao vs. 0/"CB such was the case when @rt. =%6 of the /abor Code
granted severance pay to workers who at the time of their employment
were not entitled under the law to receive such pay. ?Id.B
6
22 !mployees have a vested and demandable right over e$isting
benefits voluntarily granted to them by their employer.
MG<. Rig0ts [! 1 S <]
4. "ight to conduct business
=. "ight to prescribe rules
6. "ight to select employees
H. "ight to transfer and discharge employees
Waiver and #ompromise
2 =ot all wai2ers and >uitclai(s are in2alid as against 6ublic
6olicy
4. It is only when there is clear proof that the waiver was wangled
an unsuspecting person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
3uestionable transaction.
2. -ut where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and
the consideration for the 3uitclaim is credible and reasonable,
the transaction must be recogni8ed as a valid and binding
undertaking. (Sicangco vs. )&C)
6. (hould a party fail or refuse to comply with the terms of a valid
compromise or amicable settlement, the other party could either
enforce the compromise by a writ of e$ecution, or regard it as
rescinded and to insist upon his original demand. ?+orales vs.
0/"CB
- .oluntary consideration not unconscionable
- Caiver of future benefits is not valid and binding
- he law does not consider as valid any agreement
a. to receive less compensation on what a worker is
entitled to recover
b. to prevent him from demanding benefits to which
he is entitled
2 Instances w0en >uitclai(, wai2er or co(6ro(ise is 2alid+
1. C, a national promoter salesman, with high educational
attainment, tendered his resignation after a spot audit found out
that he had a tentative shortage of PhpH5,II;.;5. It is
unbelievable that C, occupying a responsible position, and with
high education attainment, can be rattled and confused into
signing a resignation letter, on account of a mere spot audit.
(Callanta vs. )&C)
2. -ank and !!#s association, entered into a C-@ providing for the
withdrawal of the pending case of the association against the
bank for non&payment of PhpJI.II !CE/@. There is nothing in
the compromise which contravenes the law, morals, good
customs, public order, or public policy. (%onte de Piedad vs. %,&/)
3. )uring pendency of appeal before the 0/"C, workers e$ecuted a
voluntary affidavit before the /abor @rbiter declaring intention to
withdraw appeal in lieu of payment of severance pay. The
affidavits executed voluntarily and knowingly in the presence of
7
the Labor rbiter has the effect and authority of res judicata.
(,la#!ar vs. )&C)
4. @ number of !!#s made 3uitclaims in e$change for the dropping
of charges of embe88lement of P=; million which the !!#s
allegedly embe88led. The consideration for the waiver is
ade!uate. (P0C vs. /chiveri)
Instances w0en >uitclai(, wai2er or co(6ro(ise in2alid+
1. @ worker hospitali8ed for several times for work&related accidents
was told by an immediate supervisor and a personnel officer to
retire and e$ecute a 3uitclaim or else would be dismissed and
got nothing. The retirement and !uitclaim was made under
threat of dismissal. (*lcantara)
2. @ messenger with ; years employment resigned and e$ecuted a
3uitclaim after being told by his manager to resign or else
charges will be filed against him. The threat was unjust since the
messenger did not commit any unlawful act. There was
intimidation, which vitiated consent. ('"atson -o"rs vs. )&C)
3. @ 3uitclaim of future benefits made by an !! at the time of
employment (*lcantara)
4. @fter the CI" rendered a decision ordering the !" to pay wage
differentials, the !!#s e$ecuted a 3uitclaim waiving their rights
under the decision. The !uitclaim contravenes public policy since
after a civil action is filed in court, the cause of action may not
be subject of compromise unless the same is with leave of court.
( Pampanga S"gar $evt. 1s. S"gar Wor(ers *ssn.)
5. @ 3uitclaim e$ecuted by an E1C repatriated to the Philippines
because of an illness re3uiring surgical treatment in
consideration of the return travel fund. There was no
consideration since the "" regularly contributed to the fund.
#esides, the !uitclaim is negotiable and in congruous to the
declared policy of the $tate to afford protection to labor and to
assure the right of workers to security of tenure. (C"ales vs. )&C)
6. !" appealed the decision of the PE!@ awarding K6,%II.II
disability benefits to worker. )uring pendency of appeal, the
worker e$ecuted a 3uitclaim in e$change for Php4%,III.II since
at the time the worker needed money for medical treatment. The
law does not consider valid any agreement to receive less
compensation than what the workers should receive. %t was clear
that the worker was forced to accept the payment out of
necessity.(P2SC vs. )&C)
7. @fter the finality of judgment awarding them severance pay, the
workers e$ecuted a 3uitclaim before labor arbiter who had no
participation in the case. $uch settlements must be approved by
the labor arbiter before whom the case is being heard. (St. 'othard
P"! vs. )&C)
Luitclaims are ineffective to bar recovery of the full
measure of the worker#s rights
8
)ire 0ecessity is not an acceptable ground to annul
releases unless there is showing that
a. workers were forced to e$ecute them
b. the considerations for the 3uitclaims where unconscionably
low
Manage(ent 1rerogati2es
4. "ight to select and discharge employees with valid cause
=. promulgate reasonable employment rules and regulation
6. designation of work to employees
H. transfer and promote employees
;. control company operations
J. install money&saving devices
7. re&clarify or abolish positions
%. sell or close business
Drug <esting
G. R. : cannot right to privacy
'?ce6tion+
- if job or occupation involve public safety
!$.ample:
a. bus drivers
b. security guards
Participation in ecision)ma*ing Process
Enly if it affects his '", ), C,:
c. rights
d. duties
e. welfare
- not management prerogatives regarding business
operation
- must at least be informed
1. he law e$plicitly considers it a (tate Policy 9to ensure the
participation of workers in decision and policy&making
processes affecting their rights, duties and welfare. Fowever, a
line must be drawn between management prerogatives
regarding business operations per se and those which affect
the rights of !!#s. in treating the latter, management should
see to it that !!#s are at least properly informed of its decisions
or modes of action. ?P@/ vs. 0/"CB In this respect, a legislation
providing a worker#s representation in the -oard of )irectors of
corporations is not valid since the constitutional guaranty does
not include the worker#s right to participate in the management
of the enterprise. "+lcantara'
2. +ay the !" be compelled to share with its !!#s the prerogative
of formulating a code of disciplineD I a code of discipline
unilaterally formulated by the !" enforceableD Mes, the !" has
the obligation to share with its !!#s its prerogative of
formulating a code of discipline since this will be affecting their
rights and benefits. @ code of discipline unilaterally formulated
and promulgated by the !" would be unenforceable. &%d.'
(ection 6. /abor and the Civil Code
9
6. 4 "ole of /aw
1. )rt. 1@44, =!! : he relation between capital and labor are
merely contractual. hey are so impressed with public interest
that labor contracts must yield to common good. herefore, such
contracts are subject to special laws on labor unions, collective
bargaining, strikes, lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.
6.= !"&!! (tandard of Conduct
2 )rt. 1@41 : 0either capital nor labor shall act oppressively against
the other, or impair the convenience of the public.
Fair Treatment
2 he 0CC states that every person must in the e$ercise of his rights,
and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith. (*HS Phils. vs. )&C)
10
Law #ompliance
( he return&to&work order in this case not so much confers a right as it
imposes a duty and while as a right it may be waived, it must be
discharged as a duty even against a worker#s will. hus, it does not
constitute a violation of the right against involuntary servitude.
(Sarmiento vs. -"ico) his is differentiated from the instance where there
is a mere breach of contractual stipulation. Chile the !! may be held
liable for damages by virtue of the breach of contract, he may not be
compelled to work against his will because this will be involuntary
servitude. (*lcantara)
'' $bedience and !o(6laince 'R $rders
; It is a recogni8ed principle that company policies and regulations are,
unless shown to be grossly oppressive or contrary to law, generally
binding and valid on the parties and must be complied with until finally
revised or amended unilaterally or preferable through negotiation or by
a competent authority. (S%C vs. U!aldo) )eliberate disregard or
disobedience of rules, defiance of management authority by the !!#s
cannot be countenance. <ntil and unless the rules or orders imposed
by the !" are declared to be illegal or improper by competent
authority, the !!#s ignore or disobey them at their own peril. ?N!
)irectories vs. (anche8B
'R $bligation
2 @n !! must be treated as a disdained subordinate but with respect
and fairness, if not affection and gratitude due to an e3ual partner.
(&agniton vs. )&C)
Section %. <0e Labor !ode of t0e 10ili66ines
H.4 )ecree itle 2 @rt. 4 : 9/abor Code of the Philippines:
H.= !ffectivity 2 @rt. = : J months after its promulgation.
%. " )66licability
1. )rt. :: @ll rights and benefits granted under this Code shall,
e$cept as many otherwise be provided, apply alike to all workers,
whether agricultural, or non&agricultural.
2. )rt. @:: he terms and conditions of employment of all
government of all government !!#s, including !!#s of NECC#s
shall be governed by the Civil (ervice /aw.
3. )rt. I-A&, Sec. 517, !onst. :he Civil (ervice embraces all
branches of Novernment, including NECC#s with original
charters.
<estAG$!!
4. he rule now is that only the NECC#s with original charters come
under the Civil (ervice /aw. (Ca!rera vs. )&C)
11
%.% I(6le(enting Rules
4. )rt. *: Implementing rules and regulations of the )E/! and
other government agencies of the Code shall become effective
; 1* days after announcement of their adoption in newspapers of
general circulation.
Li(itation BRule Ma/ing 1ower
4. 2 his power is limited to the promulgation of rules and regulations
to effectuate policies of the Code. (uch rules and regulations must
conform to the terms and standard prescribed in the statute. hey
cannot supplant its plain and e$plicit command. (*lcantara)
2 @ rule or regulation promulgated by an administrative body, such as
the )E/!, to implement a law, in e$cess of its rule&making authority is
void. (*."cena)
=. ,$amples of void (RR-s:
2 I"" providing the 4I&day period specified in @rt. ==6 refers to working
days as stated in the article.
2 @n I"" providing that !!#s paid by the month shall be presumed to be
paid for all days in the month, whether worked or not. %n effect, will
except "")s paid by the month from the enjoyment of the holiday pay
benefit. (2ns"lar 0an( // Union vs. 2nciong)
2 I"" of "@ J74; e$cluding security guards from those allowed to join
unions. (%/*&C, vs. S,&/)
2 I"" including commission in the computation of 46
th
month pay.
*nduly expanded the concept of +basic salary,. (0oie3-a(eda vs. $e &a
Serna)
%.* 1olicy Declaration
2 )rt. ": he (tate shall 5)1'R)7
4. @fford protection to labor
=. Promote full employment
6. !nsure e3ual work opportunities regardless of se$, race or creed
H. "egulate the relations between workers and !"#s.
;. @ssure the rights of workers to self&organi8ation, collective
bargaining, security of tenure, and just humane conditions of
work.
%.: Law Inter6retation
4. )rt. % : @ll doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.
=. )rt. 1@4, =!! : In case of doubt, all labor legislation and labor
contracts shall be construed in favor of the safety and decent
living of the laborer.
12
(n Favor Labor)Rationale
2 his kind of interpretation gives meaning and substance to the
liberal and compassionate spirit of the law. he policy is to e$tend
the decree#s applicability to a greater number of !!#s to enable
them to avail of the benefits under the law, in consonance with the
(tate#s avowed policy to give ma$imum aid and protection to labor.
(*!ella vs. )&C)
Liberal #onstruction
2 @re the provisions violative of the e3ual protection clauseD 0o. he
!" and the laborer do not stand on e3ual footing> to ensure
e3uality, the latter must, be afforded protection. Insofar as labor
contracts are concerned, the same are usually drafted and prepared
by the !". @ll doubts in their provisions should therefore be resolved
against it. (*lcantara)
oubt
2 Chen these are = or more possible e$planations regarding an issue
affecting worker#s rights, that which favors the worker must be chosen.
(Clemente vs. 'S2S)
&o doubt
2 he provision in case of doubt does not apply where the pertinent
provisions of the /abor Code leave no room for doubt either in their
interpretation or application. (0onifacio vs. 'S2S)
Sweeping (nterpretation
2 he (upreme Court cannot also adopt a sweeping interpretation of
the law, lest it engages itself in judicial legislation. (0ravo vs. //C)
Factual #onsideration and Rationality
2 he care and solitude in the protection and vindication of the right of
workingmen cannot justify disregard of relevant facts or schewal of
rationality in the construction of the te$t of applicable rules in order to
arrive at disposition in favor of an !!. (P*& vs. )&C)
,!uity and .oral #onsideration
; Considerations of e3uity and social justice cannot prevail against the
e$pressed provisions of labor laws. (%anning vs. )&C)
/alancing #onflicting #laims
2 he basic policy of the law is to balance or to coordinate the rights
and interests of both workers and !"#s. It should not be deduced that
the basic policy is to favor labor to prejudice capital. (*."cena)
13
H.7 !nforcement and (anctions
1. )rt. 1@ 5a7 57, 5"7, 5%7, 5:7: -urisdiction of Labor rbiters and
the Commission
4. he /abor @rbiters shall have e$clusive and original jurisdiction,
e$cept as otherwise provided, the following cases involving all
workers: ?unfair labor practiceB
=. ermination disputes ?3ualified by @rt. =J4 which grant voluntary
arbitrators original and e$clusive jurisdiction over all unresolved
grievances arising from C-@s and company personnel policiesB>
3. Cases involving terms and conditions of employment, if
accompanied with a claim for reinstatement ?including claims of
E1C#s arising out of an !"&!! relationship, including claims for
actual, moral and e$emplary damages, as provided in $ec. ./,
0igrant 1orkers ctB>
H. Claims for actual, moral, e$emplary and other damages arising
from the !"&!! relations>
;. !$cept claims for !!#s Compensation, (ocial (ecurity, +edicare
and maternity benefits, all other claims, arising from the !"&!!
relations> including
- those of persons in domestic or household service,
involving an amount e?ceeding 106*,444, regardless of
whether of whether accompanied with a claim for
reinstatement.
J. )isputes arising from @rt. =JH including legality of strikes and
lockouts
. )rt. 1, : 2isitorial and "nforcement 3ower of the $ecretary of
Labor or his duly authori4ed representative.
4. @ccesss to !"#s records and premises at anytime of the day or
night whenever work is being undertaken therein and copy
thereform>
=. Luestion any !!> and
6. Investigate any fact, condition or matter which may be necessary
to determine violations of this Code of any labor law, wage order
or rules and regulations issued pursuant thereto.
2 In cases where the relationship of !"&!! still e$ists, the power to
issue Compliance Erders to give effect to the labor standard provisions
of this Code and other social legislation.
Crits of e$ecution to the appropriate authority shall be
issued for the enforcement of the said orders, e$cept in
cases:
a. where the !" contests the findings of the labor
employment and enforcement officer> and
b. raises issues supported by documentary profits
which were not considered in the course of
inspection.
2 Erder (toppage of work or suspension of operations of any unit or
department of an establishment when non&compliance poses grave
and imminent danger to the health and safety of workers in the
workplace.
14
Cithin =H hours, a hearing shall be conducted to determine
whether an order for the stoppage of work and suspension
of operations shall be lifted or not.
In case the violation is attributable to the fault of the !",
he shall pay !!#s their !!#s their salaries or wages during
said period.
2 It shall be unlawful for any person to Ebstruct, impede, delay or
otherwise render ineffective the order of the (ecretary of /abor.
2 0o inferior court shall issue a temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders in accordance with this @rticle.
2 @ny government !! found guilty of violation, after appropriate
administrative investigation, be subject to (ummary dismissal from the
service.
2 he (ecretary of /abor may re3uire !"#s to keep and maintain
!mployment records as may be necessary. ?@( CE0!(B
". )rt. 13. Recovery of wages0 simple money and other
benefits%
2 he "egional )irector of the )E/! or any of the duly authori8ed
hearing officers of the )epartment is empowered, through summary
proceedings and after due notice, to hear and decide any matter
involving the recovery of wages and other monetary claims and
benefits, including legal interest owing to a person employed in
domestic or household service: Provided
such complain does not include claim for reinstatement
aggregate money claims of each househelper does not
e$ceed P;,III.II
2 he complaint shall be resolved within 6I days from the date of the
filing of the same.
%. )rt. ,, + Penalties and 1urisdiction )
a. !$cept, as otherwise provided in the Code, or unless the
acts complained of hinges in a 3uestion or interpretation
or implementation of ambiguous provisions of an e$isting
C-@, any violation of this Code declared to be unlawful or
penal in nature shall be punished with:
a fine not less than P4,III.II nor more than P4I,III.II.
or imprisonment of not less than 6 months nor more than 6
years.
Er both such fine and imprisonment at the discretion of the
court.
In addition to such penalty any alien found guilty shall be
summarily deported upon completion of service of service.
b. @ny criminal offense punished under this Code shall be
under the concurrent jurisdiction of the +C and the "C.
*. )rt. ,3 + he penalty ?of the offenses listed in the /abor CodeB
shall be imposed upon the guilty officer of officers of a corporation,
trust, firm, partnership, association pr entity which committed said
offenses.
:. )rt. 34. Prescription of 2ffensses )
2 Effenses penali8ed under this Code and the I""#s 6 years.
15
2 <nfair labor practice 4 year from accrual of such unfair labor
practice.
@. )rt. 31 + Prescription of .oney #laims) @ll money claims
arising from !"&!! relations accruing during the effectivity of this Code
6 years from the time the cause of action is accrued.
,. )rt. 3 + +oney claims specified in rt. 56.shall be filed before
the appropriate entity independently of the criminal action that may be
instituted in the proper courts.
Pending the final determination of the merit of money claims
filed with the appropriate entity, no civil action shall be filed with any
court.
his provision shall not apply to !!#s compensation cases
which shall be processed and determined strictly in
accordance with the pertinent provisions of this Code.
Section *. .or/ Relations0i6
*. 1 .or/ Relations0i6
'R and ''
4. )rt. 3@ 5a7 and 5b7 : 9Person: means individual, partnership,
association, corporation, business trust, legal representative, or
any organi8ed group of persons.
?bB 9!": includes any person acting directly or indirectly in the
interest of the !" in relation to an !! and shall include the
Novernment and all its branches, subdivisions and
instrumentalities, all NECC#s and institutions, as well as non&
profit private institutions, or organi8ations.
2. )rt. 1:@ 5f7 and 5g7 : ?fB 9!": means any person, natural or
juridical, employing the services of the !!.
?gB 9!!: means any person compulsory covered by the N(I( .
. ., including members of the @1P, and any person employed
as casual, emergency, temporary, substitute or contractual, or
any person compulsory covered by the (((. . .
3. )rt. 1 5e7 and 5f7 : 9!": includes any person acting in the
interest of the !" directly or indirectly. he term shall not include
any labor organi8ation or any of its officers e$cept when acting
as an !".
?fB 9!!: includes any person in the employ of an !". he term
shall not be limited to the !!#s of a particular !", unless this
Code e$plicitly states. It shall include any individual whose work
has ceased as a result or in connection with any current labor
dispute or because of unfair labor practice if he has not obtained
any other substantially e3uivalent or regular employment.
!L)SSICI!)<I$=
4. casual
=. regular
6. emergency
H. temporary
16
;. substitute
J. contractual
4. Is the purchaser of the assets of an !" corporation considered a
successor !" of the latter#s !!D 0o. /abor contracts are not
enforceable against a transferee of an enterprise, labor contracts
being in personam, thus binding only between parties.
,R),, Relationship 3 (ndependent #ontractor and Labor
#ontractor
1. )rt. 14: + #ontractor or subcontractor B
a. Chenever an !" enters into a contract with another
person for the performance of the former#s work, the !!#s
of the contractor and of the latter#s subcontractor, if any
shall be paid in accordance with the provisions of this
Code.
In the event that the contractor or the subcontractor fails to pay
the wages of his !! in accordance with this Code, the !" shall be
jointly and severally be liable with his contractor or subcontractor to
such !!#s to the e$tent of the work performed under the contract, in
the same manner and e$tent that he is liable to !!#s directly employed
by him.
b% There is 4labor)only5 contracting where6
1. the person supplying in workers to an !" does not have [!,I]
substantial capital
'substantial, investment in the form of tools, e3uipment,
machineries, work premises, among others
=. and the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such !".
In such cases, the person or intermediary shall be considered
merely as an agent of the !" who shall be responsible to the
workers in the same manner and e$tent as if the latter were directly
employed by him.
2. Sec. 3, Rule DIII, &oo/ III, IRREs : ?aB @ny person who
undertakes to supply workers to an !" shall be deemed to be
engaged in labor&only contracting where such person :
; Does not 0a2e
substantial capital
'substantial, investment in the form of tools, e3uipment,
machineries, work premises and other materials> and
2 he workers recruited and placed by such person are performing
activities which are directly related to the principal business or
operations of the !" in which the workers are habitually employed.
/abor&only contracting as defined herein is hereby prohibited and the
person acting as contractor shall be considered merely as an agent or
intermediary of the !" who shall be responsible to the workers in the
same manner and e$tent as if the latter were directly employed by
him.
17
?cB 1or cases not falling under this @rticle, the (ecretary of /abor shall
determine through whether or not the contracting out is permissible in
the light of the circumstances of each case and after considering the
operating needs of the !" and the rights of the workers involved.
3. )rt. 14@ : %ndirect "7 he provisions of the immediately
preceding @rticle shall likewise apply in any person, partnership,
association or corporation which, not being an !", contracts with
an independent contractor for the performance of any work, job
or project.
4. )rt. 143 : !very !" or indirect !" shall be held responsible with
his contractor or subcontractor for any violation of the provisions
of this Code. 1or purposes of determining the e$tent of their civil
liability under this Chapter, they shall be considered direct !"#s.
5. Sec. ,, Rule DIII, &oo/ III, IRREs + -ob Contracting 8 here is
job contracting permissible under the Code if the following
conditions are met:
4. he contractor carries on an independent business and
undertakes the contract work '@ " + & 1,
a. on his own account
b. under his own responsibility
c. according to his own manner and method
d. free from the control and direction of his !" or principal in
all matters connected with the performance of the work
e$cept as to the results thereof> and
=. he contractor has
a. substantial capital or
b. 'substantial, investment in the form of tools, machineries,
work premises, and other materials which are necessary in
the conduct of his business.
2Chere the !"&!! relationship has become ascertained, the !"
becomes bound by statutory re3uirements pertaining, though not
limited, to terms and conditions of employment, labor relations and
post employment. (Phone3Po"lenc vs. )&C) 0onetheless, when a
contractor fails to pay the wages of his !!#s, the !" who contracted out
the job to the contractor becomes jointly and severally liable with his
contractor to the !!#s of the latter 9to the e$tent of the work
performed under the contract: as if such !" were the !" of the
contractor#s !!#s. he law itself, establishes an !"&!! relationship
between the !" and the job contractor#s !!#s for a limited purpose i.e.
in order to ensure that the latter get paid the wages due them. @
similar situation obtains where there is a 9labor&only: contracting. his
time, however, for a comprehensive purpose: 9!" for purposes of this
Code, to prevent any violation or circumvention of any provision of this
Code.: he law in effect holds both the !" and the 9labor only:
contractor responsible to the latter#s !!#s for more effective
safeguarding of the !!#s rights under the /abor Code. (P0C vs. )&C)
). D'<'RMI=)<I$=
2 In determining whether the relationship is that of !" and !! or one of
independent contractor, each case must be determined on its own
18
facts and all the features of the relationship must be considered.
(1illal"ga vs. )&C)
22 the e$istence of an !"&!! relationship is a 3uestion of law and
cannot be made the subject of agreement
2 the nature of ones business is not determined by self&serving
appellations one attaches thereto but by the tests provided by statute
and prevailing case law
&. C)!<$RS
4. The e$istence of ,R),, relationship is determined by the
following elements namely6
a. the (election and engagement of the !!#s
b. the payment of Cages
c. the power of )ismissal> and
d. the power to control the !!#s conduct
?C!)(B although the latter is the most important element. (osario
0rothers vs. ,ple) 0o particular form of evidence is re3uired to prove the
e$istence of an !"&!! relationship. @ny competent and relevant
evidence to prove the relationship may be admitted (,p"lencia vs. )&C)
=. Is there an !"&!! relationshipD
2 Corkers under a pakiao agreement arranged by N whom P"C
considered as an independent contractor. !" gives orders to N, on
where to store the copra, when to bring out, how much to load and
where, and what class of copra to handle. he e3uipment used is
owned by P"C. Mes. 37C has direct control over the handling of the
copra. The control test is satisfactorily met.
2 Piece workers subject to specifications. Mes. The fact that the making
of the basket is subject to Dy)s specifications indicates the existence of
control. ($# 4oh 0eng vs. 2&%U)
2 ailors, pressers, stitchers and similar workers employed by CE) on a
piece&work basis. he !!#s are governed by the company#s regulations
i.e. %&hour workday, recording of attendance etcO 1urthermore, a
master cutter distributes job orders e3ually, supervises the work and
sees to it that they were finished as soon as possible. Mes. The worker)s
conduct in the performance of their work was controlled by the
company (osario vs. ,ple)
2 Cargadores and pahinantes recruited by (+C through a labor
contractor who are governed by the regulations of the (+C whose work
consisted of loading, unloading, pilling or palleting empty bottles and
wooden shells from company trucks and warehouses. Mes. The
evidence firmly establishes the control exercised by the $0C. (0&U% vs.
5amora)
2 (hoe shiners who had their own customers but shared proceeds with
company. 0o. The company does not exercise any degree of control or
supervision over his work. The shoe shiner is a partner in trade. (0esa
vs. -ra6ano)
19
2 .endees of cigarettes who are governed by the regulations of the
vendor company i.e. definite sales territory, re3uirement to submit
daily, weekly and monthly reports, etc. Mes. 2endor company had
control over the vendee. (SSS vs. C*)
2I. (, a prominent social figure, had an agreement with C( to act as
9branch manager> he agreement provided that she would be entitled
to a part of the commission on sale of tickets> and that she would share
in the e$penses of maintaining the office. (he was also a signatory to a
lease agreement covering the branch#s premises, holding herself
solidarily liable for the prompt payment of rentals. 0o. %. $ was not
subject to the control by T1$. The services rendered by %.$ must have
been done by her pursuant to a contract of agency. (Sevilla vs. C*)
2 @ plant manager hired by a marble company which was about to
close in a few month#s time due to business losses. he company had
no control over the former, either as to hours of work or method of
accomplishing the work. he former was entitled to a percentage of the
net profits of the company for that period. 0o. 0anager was merely a
party to a joint venture. (C%C vs. )&C)
2 1ishermen&crew of a trawl fishing vessel subject to control and
supervision of the owner of the vessel i.e. conduct of fishing
operations> time to report to fishing port, etcO Mes. ("ga vs. )&C)
2 ailors, seamstresses and other workers of a haberdashery who were
paid on a piece&rate basis. hey were directed by the proprietor of the
establishment as specified by the customers. hey were re3uired to
finish jobs orders in one day before due date. Mes. They did not
exercise independence in their own methods, but on the contrary were
subject to the control of the establishment from the beginning of their
task to their completion. They also had to rely on the tools and
e!uipment supplied by the haberdashery. (%a(ati Ha!erdasher# vs. )&C)
2 he power of control refers merely to the e$istence of the power and
not the actual e$ercise thereof.
2 Caddles who are not under the control and supervision of the golf
club as to working hours, manner of carrying out their services, etc.
0o. he club did not have the measure of control over the incidents of
the caddy#s work and compensation that the !" would possess. (%anila
vs. 2*C)
2 College teachers. Mes. The Court takes judicial notice that a
university controls the work of the members of its faculty9 that it
prescribes the courses or subjects that they teach and the time and
place for teaching. (+eati vs. 0a"tista)
2 Peepney drivers working under the boundary system. Mes. The driver
does not have any interest in the business because he did not invest
anything in the ac!uisition of jeeps and did not participate in the
management thereof. (Citi.en7s &eag"e of +ree Wor(ers vs. *!!as)
!. !$=<R$L <'S<
20
222 here is an !"&!! relationship where the !" controls or has
reserved the right to control the !! not only as the result of the work
but also as to the means by which said work is to be accomplished
(Paradise vs. )g). he test merely calls for the e$istence of the right to
control the manner of doing the work not the actual e$ercise of the
right. ("ga vs. )&C) he line should be drawn between rules that
merely serve as guidelines towards the achievement of the mutually
desired results without dictating the means or methods employed in
attaining it, and those that control or fi$ the methodology and bind or
restrict the party hired to the use of such means. he first , which aim
only to promote the result, create no !"&!! relationship unlike the
second, which addresses both the result and the means to achieve it.
(2ns"lar &ife vs. )&C) he control test calls merely for the e$istence of
the right to control and manner of doing work, not the actual e$ercise
of the right. ($# 4eh 0eng)
D. '!$=$MI! <'S<
1. he absence of !"&!! relationship may be determined through
economic tests like the inclusion of the !! in the payrolls, having
irregular compensation and having a personal stake in the
business. (Sevilla vs. )&C)
'. )GR''M'=<
2 he e$istence of an !"&!! relationship is a 3uestion of law and being
such, it cannot be made the subject of an agreement. (-a!as vs. C%C)
;.= Inde6endent !ontractor and Labor !ontractor $nly
1. )rt. 14: : Contractor or subcontractor
a. Chenever an !" enters into a contract with another person
for the performance of the former#s work, the !!#s of the
contractor and of the latter#s subcontractor, if any shall be
paid in accordance with the provisions of this Code.
In the event that the contractor or the subcontractor fails to pay
the wages of his !! in accordance with this Code, the !" shall be
jointly and severally liable with his contractor or subcontractor to such
!!#s to the e$tent of the work performed under the contract, in the
same manner and e$tent that he is liable to !!#s directly employed by
him.
b. here 9labor&only: 'considered as agent, contracting
where:
2 the person supplying workers to an !" does not have
substantial capital
'substantial, investment in the form of tools, e3uipment,
machineries, work premises, among others
Cith respect to the first re3uirement, the law does not re3uire both
substantial capital and investment in the form of tools, e3uipment,
machineries, etc. his is clear from the use of the conjunction 9or:.
()eri vs. )&C)
21
=. and the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such !".
Cith respect to the second re3uirement, the service provided by
janitors, firemen, mechanics, hired helpers and similar workers are
considered directly related to the operations of a company since this is
necessary to the proper maintenance of the premises and machineries
as well as the protection of the company premises against fires. ('"arin
vs. )&C)
In such cases, the person intermediary shall be considered merely
as an agent of the !" who shall be responsible to the workers in the
same manner and e$tent as if the latter were directly employed by
him.
;;; Cactors to Deter(ine e?istence of Inde6endent !ontractor
Relations0i6+
4. whether the contractor is carrying on an independent business>
=. whether the work is part of the !"#s general business>
6. the nature and e$tent of the work>
H. the skill re3uired>
;. the terms and duration of the relationship>
J. the right to assign the performance of the work to another>
7. the control and supervision of the work and the !"#s powers with
respect to the hiring, firing and payment of salaries>
8. the duty to supply premises, tools and appliances. (%afinco vs.
,ple)
;; '?a(6les of Inde6endent !ontractor+
2 !o((ission agent : IPC Company entered into agreement with
registered representatives who worked on a commission basis. Chile
the agents were subject to a set of rules and regulations governing the
performance bond> the termination for certain causes, however, the
agents were not re3uired to report to work> to devote their time
e$clusively for the company> to account for their time nor submit a
record of their activities> and that they were paid on a commission
based on a certain percentage of sales. The fact that for a certain
specified causes &failure to meet annual !uota' the relationship may
be terminated does not mean such control exists, for the causes of
termination have no relation to the means and methods of work. (2PC
vs. SSS)
2 Dealers0i6 : @ contract whereby one engages to purchase and sell
soft drinks on trucks supplied by the manufacturer but providing that
the other party ?peddlerB shall have the right to employ his own
workers, shall post a bond to protect the manufacturer against losses
shall be responsible for damages caused to third person, shall obtain
the necessary licenses and permits and bear the e$penses incurred in
the sale of the soft drinks. (%afinco vs. )&C)
@nother dealership agreement wherein the dealer: handles the
products in accordance with e$isting laws and regulations> sends his
orders to the factory plant> is supplied by the factory with a delivery
truck and all e$penses for repairs are borne by the factory> receives no
22
commission but given a discount for all sales> is responsible alone for
any violation of the law, sells the product at the price agreed upon
between the parties> and posts a surety bond of not less than
P4I,III.II. (&a S"erte vs. $irector of &a!or elations)
2 Security )gency : (hipping company entered into an agreement
with a security agency wherein the security agency was responsible for
the hiring and assignment of the guards, the guards were not known to
the shipping company for it dealt directly with the agency, and a
payment of a lump sum to the agency who in turn paid the
compensation of the individual watchmen. *nder the circumstances,
the guards cannot be considered "")s of the shipping company. %t is
the security agency that recruits, hires and assigns the work of the
watchmen. %t is the wages to which the watchman is entitled. The
powers to dismiss lies with the agency. Lastly, since the company has
to deal with the agency, and not with the individual watchmen, on
matters, pertaining to the contracted task, it stands to reason that the
company does not exercise any power or control over the watchmen)s
conduct. (*P& vs. Clave)
2 Ste2edoring Ser2ices : (FIP(I)! entered into a 9Contract for
(ervices: with /a <nion providing among others that the latter would
furnish all labor needed for stevedoring work in piers controlled by the
former. he net balance of the stevedoring charges will be divided
e3ually among the parties. The records do not show any participation
on the part of $:%3$%D" with respect to the selection and engagement
of the individual stevedores. The terms and conditions of their services
are matters determined not by $:%3$%D" but by La *nion. %t is also
sufficiently established that La *nion exercised supervision and control
over its labor force. 1hile $:%3$%D" occasionally issued instructions to
the stevedores, such instructions, in legal contemplation are mere
re!uests since the privity of contract lies between the workers and La
*nion. (SH2PS2$/ vs. )&C)
; !ollection )gency + (inger entered into a 9collection agency
agreement: with collectors providing among others that the collector is
to be considered at all times to be an independent contactor> he was
re3uired to comply with certain rules and regulations ?i.e. use of
authori8ed receipts, monthly collection 3uota, cash bond, and
submission of report of all collections at least once a weekB> and his
services can be terminated in case of failure to satisfy these
regulations. Fowever, the agent was not re3uired to observe office
hours or to report to (inger e$cept for remitting his collections. Fe did
not have to devote his time e$clusively for (inger and the manner and
method of collection were left solely to the discretion of the agent, and
he shouldered his transaction services. ?
2 MessengerialFJanitorial Ser2ices + Panitors were hired by C(I and
assigned to /a <nion Carbide. hey drew their salaries from C(I. C(I
e$ercised control over them through a (CI !! who gave orders and
instructions. +oreover, C(I had the power to assign its janitors to
various clients and pull them out. C(I was a registered service
contractor and did business with a number of known companies in the
country. It maintains its own office and had its own office e3uipment. It
furnishes its janitors the cleaning e3uipment. (hone3Po"lene vs. )&C)
23
-CC, capitali8ed at P4 million fully subscribed and paid for
provided janitorial and other services to various firms. It hired @ and -
and assigned them to work for 1!-C. he two reported for work
wearing the prescribed uniform of the -CC> their leave of absences
were filed directly with -CC> and their salaries drawn only from -CC.
1!-C however issued a job description which detailed the functions of
two. pplying the control test, #CC is the "7 of the two. ;urthermore, it
had substantial capital. The guidelines in the job description were laid
down merely to ensure the desired result was achieved. %t did not,
however, tell how the work should be performed. ()eri vs. )&C)
2 Re6air and Maintenance Ser2ice + 1 doing business, was hired
by (hell to conduct a hydro&pressure test. Fe was paid a lump sum for
the work he and his men accomplished. Fe utili8ed his own tools and
e3uipment. Fe accepted business from other companies. Fe was not
controlled by (hell with regard to the manner in which he conducted
the test. (Pilipinas Shell vs. C*)
22 Instances of LaborA$nly !ontracting
2 )gency 0iring : P-C and C!(I entered into an agreement under
which the latter undertook to supply the former with 44 messengers.
he agreement provided that the messengers would remain !!#s of
C!(I> P-C remitted to C!(I amount e3uivalent to the wages of the
messengers> C!(I in turn paid them and their names are not included
in the P-C#s payroll> the bank, in cases of dismissal would re3uest C!(I,
and C!(I would in fact withdraw such messenger, and the messengers
performed their functions within the bank#s premises. C"$% cannot be
considered a job contractor because its undertaking is not the
performance of a specific job9 it merely undertook to provide the bank
with a certain number of persons able to carry out the work of
messengers. (P0C vs. )&C)
<nder the Cork Contract between @ and a motorshop, @
undertook to supply labor and supervision in the performance of
automotive body painting work. @ and his men were paid lump sum,
the company supplied the tools, e3uipment, machineries and materials
and moreover, the jobs were done in the premises of the motor shop.
side from the fact that the company exercised control and direction
over the work done by and his men, the line of work<automobile
painting 8 was directly related to, if not an integral part of the regular
business of the motor shop. (0road8a# %otors vs. )&C)
/( provided helpers, janitors, mechanics to 0P, a corporation
engaged in garment manufacturing. he agreement between the two
provided that /( shall provide 0P with workers, 0P shall pay /( a fee
based on rates fi$ed by the agreement, there is no !"&!! relationship
between the two and /( shall have e$clusive direction in the selection,
engagement and discharge of its personnel and the latter shall be
within is full control. L$ is a +labor<only, contractor since it is merely an
agent to procure workers for the real "7. ('"arin)
2 Security Guard #iring + Fyatt and .(( entered into a contract of
services wherein .(( agreed to protect the properties and premises of
Fyatt by providing security guards. he security guards filled up Fyatt
24
employment application forms and submitted the forms to the (ecurity
)epartment of the hotel. heir wages were paid directly by Fyatt and
their assignments, promotions, supervisions and dismissal were
approved by the Chief (ecurity Efficer of Fyatt. (1all"m Sec"rit# vs. )&C)
(ection J. !mployment Policies, "ecruitment and Placement of
Corkers, and @gencies
J. 4 '(6loy(ent 1olicies
4. )rt. 1 : (tatement of Ebjectives (t is the policy of the State:
a. o promote and maintain a state of 1ull employment through
improved manpower training, allocation and utili8ation>
b. o protect every citi8en desiring to work locally or overseas by
securing for him the best possible terms and conditions of
employment>
c. o facilitate a free choice of @vailable employment by persons
seeking work in conformity with national interest>
d. o facilitate and regulate the +ovement of workers in conformity
with national interest>
e. o regulate the employment of @liens, including the establishment of
a registration andGor work permit system>
f. o strengthen the network of public employment offices and
rationali8e the participation of the private sector in the "ecruitment
and placement of workers, locally and overseas, to serve national
development objectives>
g. o issue careful selection of 1ilipino workers for overseas
employment in order to protect the good name of the Philippines
abroad. ?@1P +@"CB
J.= '(6loy(ent )gencies
3rivate $ector<gencies and "ntities
@. 1)R<I'S
@.4. Corker
2 )rt. 1" 5a7 4Wor*er5 any member of the labor force, whether
employed or unemployed
@.= @gency
2 )rt. 1" 5c7 : 9Private fee)charging employment agency: any
person or entity engaged in the recruitment or placement of workers
for a fee which is charged directly or indirectly, from the workers or
!"#s or both.
@.6 !ntity
25
2 )rt. 1" 5e7 : 9Private recruitment entity: any person or
association engaged in the recruitment and placement of workers,
locally or overseas, without charging, directly or indirectly, any fee
from the workers or the !"#s or both.
-. )LL$.'D '=<I<I'S
-.4 +llowed Private +gencies and ,ntities
2 )rt. 1: : !$cept as provided in Chapter II of this itle, no person or
entity, other than the public employment offices, shall engage in the
recruitment and placement of workers.
Sec. 1, Rule III, &oo/ I, IRREs 0o person or entity shall engage in
the recruitment and placement of workers either for local or overseas
employment e$cept the following: [allowed agencies]
4. public employment agencies
=. PE!@
6. private recruitment entities
H. private employment agencies
;. shipping or manning agents or representatives> and
J. such other persons or entities as may be authori8ed by the
(ecretary.
2)rt. * : . . . the private employment sector shall participate in the
recruitment and placement of workers, locally and overseas, under
such guidelines, rules and regulations as may be issued by the
(ecretary of /abor.
-.= 1ro0ibited &usiness )gencies and 'ntities
4. )rt. 1, : Ban on Direct Hiring 0o !" may hire a 1ilipino worker for
overseas employment e$cept through the -oards and entities
authori8ed by the (ecretary of /abor.
a. )irect hiring by members of the diplomatic corps>
b. International organi8ations and such other !"#s as may be>
c. allowed by the (ecretary of /abor is e$empted from this provision.
=. )rt. : : ravel agencies and sales agencies of airline companies
are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment, whether for profit or
not.
C. G$D'R=M'=< <'!#=IGH'S $C R'GHL)<I$= B 1RID)<'
R'!RHI<M'=< )=D 1L)!'M'=< &HSI='SS
C.4 Licensing, !itiIens0i6, !a6italiIation, Duration,
<ransferability and Cees
1. )rt. @ : Citi8enship "e3uirement:
a. Enly 1ilipino citi8ens or
b. Enly corporations, partnerships or entities at least 7;Q of
the authori8ed and voting capital stock of which is owned
and controlled by 1ilipino citi8ens shall be permitted to
participate in the recruitment and placement of workers,
locally or overseas.
26
2. )rt. , : Capitali8ation (ubstantial capitali8ation as determined
by the (ecretary of /abor. ?P4 +B
Sec. 1, Rule D, &oo/ I, IRREs : =ualification of pplicants for
3rivate employment agencies 8 @ll applicants for licenses to operate
private employment agencies either for local or overseas
recruitment and placement shall possess the following
3ualifications. . .
3. )rt. 3 : >on<tranferability of License or uthority
2 0o license or authority shall be used directly or indirectly by any
other person other than the one in whose favor it was issued> or
2 at any place other than that stated in the license of authority
2 nor such license or authority be transferred, conveyed or assigned
to any other person or entity.
2 @ny transfer of business address, appointment or designation of
any agent or representative including the establishment of
additional offices everywhere shall be subject to the prior approval
of the )E/!.
4. )rt. 1* 5a7 : ?aB he -ureau of !mployment (ervices shall be
primarily responsible for developing and monitoring a
comprehensive employment program. It shall have the power
and duty:
=B o establish and maintain a registration andGor licensing
system to regulate private sector participation in the recruitment
and placement of workers, locally or overseas, and to secure the
best possible terms and conditions of employment for 1ilipino
contract workers and compliance therewith under such rules and
regulations as may be issued by the +inister of /abor.
5. )istinguish authority from licenseD 4+uthority5 means a
document issued by the (ecretary of /abor and !mployment
authori8ing a person or association to engage in recruitment and
placement activities as a private recruitment entity> while a
4license5 is the document issued to a person or entity to
operate a private employment agency. ?@rt. 46B
J. Chat is the duration of a license recruitD @ license is valid for a
period of = years from the date of issuance unless sooner
cancelled, revoked or suspended for violation of the /abor Code
or its I""#s.
2 non&tranferrable
C.= &onds
4. @rt. 64 : @ll applicants for license or authority shall post such
cash and surety bonds as determined by the (ecretary of /abor
to guarantee compliance with prescribed recruitment
procedures, rules and regulations, and terms and conditions of
employment as appropriate.
=. he purpose of bonds is to insure that if the rights of these
overseas workers are violated by their !"#s recourse would still
be available to them against the local companies that recruited
them for the foreign principal. ?(tronghold vs. C@B
27
C.6 .or/ers Cees
2 )rt. " : @ny person applying with a private fee<charging
employment agency for employment assistance shall not be
charged any fee until
4. he has obtained employment through its efforts> or
=. he has actually commenced employment. (uch fee shall be
always covered with the appropriate receipt clearly showing the
amount paid. he (ecretary of /abor shall promulgate the
schedule of allowable fees.
C.H Re6orts Sub(ission
2 )rt. "" : Chenever the public interest re3uires, the (ecretary of
/abor may direct all persons or entities within the coverage of this itle
to submit a report on the status of employment, including job
vacancies, details of job re3uisitions, separation from job, wages, other
terms and conditions, and other employment data.
1ercentage of salary re(ittance
4. seaman %IQ
=. construction worker 7IQ
6. professional workers with free board and lodging 7IQ
H. professional without board and lodging ;IQ
;. domestic helpers ;IQ
J. other workers ;IQ
C.; 1ro0ibited 1ractices [IC C)I<S !#$.]
4. )rt. "% : Prohibited Practices It shall be unlawful for any
individual, entity license or holder of authority:
4. o charge or accept> directly or indirectly, any amount greater
than that specified in the schedule of allowable fees, or make a
worker pay any amount greater than that actually received by
him as a loan or advance>
=. o furnish or publish any false notice or information or document
in relation to recruitment or employment> 'includes the act of
furnishing fake employment documents to a worker. ?@8ucenaB
6. o give any false notice, testimony, information or document or
commit any @ct of misrepresentation for the purpose of securing
a license of authority under this Code>
H. o induce or attempt to induce a worker already employed to 3uit
his employment in order to offer him to another unless the
transfer is so designed to liberate the worker from oppressive
terms and conditions of employment>
;. o influence or attempt to influence any person or entity not to
employ any worker who has not applied for employment through
his agency>
J. o engage in the recruitment or placement of workers in jobs
Farmful to public health or morality or to the dignity of the
"epublic of the Philippines>
7. o obstruct or attempt to obstruct inspection by the secretary of
/abor or by his duly authori8ed representatives>
28
%. o 1ail to file reports on the status of employment, placement
vacancies, remittance of foreign e$change earnings, separation
from jobs, departures and such other matters of information as
may be re3uired by the (ecretary of /abor>
5. o substitute or alter employment contracts approved and
verified by the )E/! from the time of actual signing thereof by
the parties up to and including the period of e$piration of the
same without the approval of the (ecretary of /abor <nless it is
to improve the terms and conditions of employment. ?.ir&Pen vs.
0/"CB>
4I.o become an officer or member of any corporation engaged in
ravel agency or to be engaged directly or indirectly in the
management of a travel agency>
44.o Cithhold or deny travel documents from applicant workers
before departure for monetary or financial consideration other
than those authori8ed under this Code and its implementing
rules and regulations.
=. @, 1ilipina, was recruited by a local private employment agency
for a tutoring job abroad. <pon arrival in the place of employment,
she was made to work as a housemaid. Chat advice will you give
herD I will advice the 1ilipina to commence a criminal action against
the employment agency for violation of rt. ?@ of the /abor Code.
(he was recruited under false pretense. (*lcantara)
6. (C, a travel agency, advertised for young women to work as
domestic helpers in Fongkong. 1ive women who left for Fongkong
were later brought to prostitution houses. Fave the officers of (C
committed any unlawful actsD Mes. .iolation of @rt. =J and @rt. 6H
?dB and ?fB of the /abor Code. (*lcantara)
C.J Illegal Recruit(ent
1. )rt. 1" 5b7 : 9"ecruitment and Placement: & @ct of [!'!A
<H#1I]
a. Canvassing
b. !nlisting
c. Contracting
d. ransporting
e. <tili8ing
f. Firing or
g. Procuring workers and
h. Includes referrals, contracts services, promising or
advertising for employment, locally or abroad, whether for
profit or not.
Provided
hat any person or entity which, in any manner, offers or promises for
a fee employment to = or more persons shall be deemed engaged in
recruitment or placement. 'he number of persons dealt with is not, an
essential ingredient of the act of recruitment or placement. he
provision merely lays down a rule of evidence that where a fee is
collected in consideration of a promise or offer of employment to = or
more prospective workers, the individual or entity dealing with them
shall be deemed to be engaged in the act of recruitment or placement.
(Pp vs. Panis)
29
22 Illegal ter(ination
- full reimbursement fees R 4=Q
- salaries for une$pired portion or 6 mos. 1or every year of
une$pired term whichever is lower
;; Liability of 6ri2ate e(6loy(ent agency B e(6loy(ent
contract
- joint and solidary with employer
- all claims and liabilities that may arise in connection with
the implementation of the contracts
=. @ny recruitment activities, including the prohibited practices,
enumerated under @rt. 6H of this Code, to be undertaken by non&
licensees or non&holders of authority shall be deemed illegal and
punishable under @rt. 65 of this Code.
2 (llegal recruitment when committed by a6
syndicate
or in large scale
shall be considered an offense involving economic sabotage and shall
be penali8ed in accordance with @rt. 65 hereof.
- non&bailable
- life imprisonment
22 Illegal recruit(ent by a syndicate Carried out by a group of 6
or more persons conspiring andGor confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme
defined under the first paragraph hereof.
22 Illegal recruit(ent in large scale Committed against 6 or more
persons individually or as a group.
'Chen the /abor Code speaks of illegal recruitment, 9committed
against 6 or more persons:, it must be understood as referring to the
number of complainants therein, otherwise, prosecutions for single
crimes of illegal recruitment can be cumulated to make out a case of
large scale illegal recruitment. In other words, a conviction for large<
scale illegal recruitment must be based on a finding in each case if
illegal recruitment of ? or more persons whether individually or as a
group. (Pp vs. e#es)
". Sec. ,, Migrant .or/ers )ct : @ criminal action arising from
illegal recruitment as defined herein shall be filed with the "C of the
province or city where the offense was committed or where the
offended party actually resides at the time of the commission of the
offense: provided, hat the court where the criminal action is first filed
shall ac3uire jurisdiction to the e$clusion of other courts.
H. <0e cri(e of illegal recruit(ent 0as ele(ents+
a. hat the offender is a non&license or non&holder of
authority to lawfully engage in the recruitment and
placement of workers> and
b. hat the offender undertakes any of the recruitment
activities defined under rt. .? &b' of the /abor Code or
any of the prohibited practices enumerated under rt. ?@
of the same Code.
30
;. N convinced 1 and (, that they could be employed for 1rance for a
fee. N was also able to persuade @ that he could give @ a working visa.
0othing happened to 1, ( and @. N did not have any license to recruit
or authority to recruitD @ may be charged and convicted of a large&
scale illegal recruitment since he did not have the license or authority
to recruit, and yet recruit at least 6 persons. (Pp vs. -"rda) 1urthermore,
he can also be convicted and charged of estafa since the latter is a
malum in se while the former is a malum prohibium &%d.'
J. 0@E, a national union of teachers was able to find jobs abroad for
its member by directly contacting other teachers organi8ations in
foreign countries, without charging additional fees. Is this legalD 0o.
Enly persons or entities with appropriate license or authority can
engage in recruitment and placement of workers. Contact services are
activities that fall within the scope of recruitment and placement of
workers. (*lcantara)
7. @ paper manufacturing company in Cainta would like to know if it
needs to obtain a license authority before it can recruit workers for its
plant. 0o license or authority is necessary. he company is not
engaged in the business of recruitment and placement of workers, it is
not recruiting workers to be employed by others. It does not represent
a principal. It is recruiting its own workers. (*lcantara)
C.7 Rule Ma/ing
2 he (ecretary of /abor and !mployment has the power and authority
not only to restrict and regulate the recruitment and placement
activities of all agencies but also promulgate rules and regulations to
carry out the objectives and implement the provisions governing said
activities. (/astern *ss"rance vs. Secretar# of &a!or)
C. % 'nforce(ent
1. )rt. ": : he (ecretary of /abor shall have the power to restrict
and regulate the recruitment and placement activities of all
agencies within the coverage of this itle and is hereby
authori8ed to issue orders and promulgate rules and regulations
to carry out the objectives and implement the provisions of this
itle.
Sec. , Rule DI, &oo/ I, IRREs : Pending investigation of the
complaint or report, the (ecretary may suspend the license of the
private employment agency concerned. . .
2. )rt. "@ : he (ecretary or his duly authori8ed representatives
may, at any time, inspect the premises, books of account and
records of any person or entity covered by this itle, re3uire it to
submit records regularly on prescribed forms, and act on
violations of any provisions of any provisions of this itle.
Public Sector +gencies
@. 'M1L$JM'=< $CCI!'S )=D <#' 1$')
31
1. )rt. 1% 5a7 : he (ecretary of /abor shall have the power and
authority: ?aB o organi8e and establish new employment
agencies in addition to the e$isting employment offices under
the )E/! as the need arises.
2. Sec. ", '$ %@ : P2,+ functions
a. "egulate private sector participation in the recruitment
and overseas placement of workers by setting up a
licensing and registration system>
b. 1ormulate and implement in coordination with appropriate
entities concerned, a system for promoting and monitoring
the overseas employment of 1ilipino workers taking into
consideration their welfare and the domestic manpower
re3uirements>
c. Protect the rights of 1ilipino workers to fair and e3uitable
recruitment and employment practices and ensure their
welfare>
d. !$ercise original and e$clusive jurisdiction to hear and
decide all pre&employment cases which are administrative
in character involving or arising out of violation of
recruitment laws, rules and regulations, or violation of the
conditions for issuance of license or authority to recruit
workers. he PE!@ has no jurisdiction to hear and decide a
claim for enforcement of a foreign judgment. (uch a claim
must be brought before the regular courts. ?Pacific @sia vs.
0/"CB
-. )efinition of erms
Sec. 1 587, 5w7, 5I7, 5ff7, and 5>>7, Rule II, &oo/ I, Rules and
regulations on $2erseas '(6loy(ent
1. 4#ontract Wor*er5 & @ny person working or who has worked
overseas under a valid employment contract.
2. 4.anning agency5 @ny person or entity recruiting seamen for
vessels plying international waters and fore related maritime
activities.
3. 4&ame 7ire5 Corker who is able to secure employment
overseas on his own without the assistance or participation of an
agency.
4. 42verseas employment5 !mployment of a worker outside
the Philippines, including employment on hoard vessels plying
international waters covered by a valid employment contract.
5. 4Placement fee5 @mount charged by a private employment
agency from a worker for its services in securing employment.
6. 4Service fee5 @mount charged by a license from its foreign !"
as payment for actual services rendered in relation to the
recruitment and employment of workers for said principal.
J. 6 Sanctions
32
1. )rt. "* : $uspension andAor Cancellation of License or uthority
he (ecretary of /abor shall have the power to suspend or
cancel any license or authority to recruit !!#s for overseas
employment for violations of rules and regulations by the )E/!,
the PE!@, or for violation of the provisions of this, and other
applicable laws . .
2. )rt. "3 : 3enalties 8 .iolations of any provisions of this ile or
I""#s by license or holder of authority :
a. imprisonment of not less than = years nor more than ;
years
b. or a fine of not less than P4I,III.II nor more than
P;I,III.II
c. or both such imprisonment and fine, at the discretion of
the court.
6. .iolation of any of the provisions thereof or its implementing
rules and regulations by a non&license or non&holder of authority
a. imprisonment of not less than H years nor more than %
years
b. or a fine of not less than P=I,III.II nor more than
P4II,III.II
c. or both such imprisonment and fine, at the discretion of
the court.
H. If the offender is a corporation, partnership, association or entity,
the penalty shall be imposed upon the officer or officers of the
corporation, partnership, association or entity responsible for
violation> and if such officer is an alien, he shall in addition to the
penalties herein prescribed, be deported without further
proceedings:
2 Illegal recruit(ent+
a. imprisonment of not less than J years and 4 day but not
more than 4= years and
b. a fine of not less than P=II,III.II nor more than
P;II,III.II.

2 Illegal recruit(ent constituting 'cono(ic Sabotage+
c. life imprisonment> and
d. a fine of not less than P;II,III.II nor more than
P4,III,III.II.
2 <0e (a?i(u( 6enalty s0all be i(6osed if+
a . the person illegally recruited is less than 4% years of age>
or
b. committed by a non&license or non&holder of authority.
2 he (ecretary of /abor or his duly authori8ed representative may
order the closure of illegal recruitment establishments.
5. @rt. 6% ?cB of the /abor Code granting the (ecretary of /abor the
power to issue search or arrest warrants is declared
unconstitutional and null and void. (Sala.ar vs. *chacoso)
33
- money claims arising from !"&!! relationship prescribes in
6 years
- strict rules of evidence are not applicable in claims for
compensation and disability benefits
;. In case of breach of the employment contract by a foreign&based !",
may the private employment agency or recruitment entity be held
liableD Chat is the nature of the liability of the recruitment and
placement agency and its principalD Mes. he agency or entity
undertakes under oath to assume full and complete responsibility for
all claims and liabilities which may arise in connection with the use of
the license or authority. he agency is jointly severally liable with the
principal or foreign&based !" for any of the violations of recruitment
agreement contract of employment. (*m!ra9"e vs. )&C: Pp vs. Catan)
Section @. )lien '(6loy(ent
7. 4 <ec0ni>ue of RegulationA'(6loy(ent 1er(it
1. )rt. %4 : "mployment 3ermit of >on<resident liens 8 @ny alien
seeking admission to the Philippines for employment purposes
and any domestic or foreign !" who desires to engage an alien
for employment in the Philippines shall obtain an employment
permit from the )E/! . . .
1or an enterprise registered in preferred areas of investments, said
employment permit must be issued upon recommendation of the
government agency charged with the supervision of the registered
enterprise.
Sec. @, Rule -ID, &oo/ I, IRREs : he employment permit shall be
valid for a minimum period of 4 year.
2. )rt. %1 : 3rohibition gainst Transfer of "mployment ?aB @fter
the issuance of an employment permit, the alien shall not
transfer to another job or change his !" without prior approval of
the (ecretary of /abor.
)rt. ,, : @ny alien found guilty shall be summarily deported upon
completion of service of sentence.
6. +ay an !" in the Philippines employ a worker who is not a
1ilipino citi8enD Mes, e$cept to nationali8ed activities such as:
a. public utility to develop, e$ploit and utili8e natural
resources JIQ 1ilipino>
b. +ass media 4IIQ owned by 1ilipino citi8ens
c. @dvertising 7IQ 1ilipino owned
d. "etail -usiness 4IIQ 1ilipino owned
e. 1inancing business JIQ 1ilipino owned
4. @re there e$ceptions to the prohibition against employment of
aliens in entities engaged in nationali8ed activitiesD Mes, when ?aB
the (ecretary of Pustice specifically authori8es the employment of
technical personnel> or ?bB where aliens are elected members of
-oard of )irectors in proportion to their allowable participation in
34
the capital> or ?cB when allowed under certain special laws.
(*lcantara)
#overage
2 @ resident alien need not obtain an employment permit in order to be
employed in the Philippines. (*lmodiel vs. )&C)
,mployment Permit 3 #onditions for 8rant
1. )rt. %4 : he employment permit may be issued to a non&
resident alien or to the applicant !" after a determination of: [.
) !]
a. competent
b. able and
c. willing
at the time of the application to perform the services for which the
alien is desired. 'he )E/! is the agency vested with jurisdiction to
determine the 3uestion of availability of the local workers. ('eneral
%illing vs. -orres)
2. Sec. *, Rule -ID, &oo/ I, IRREs : "e!uirements for
"mployment 3ermit pplicants 8 he applicant for an
employment permit shall be accompanied by the following:
a. Curriculum vitae signed by the applicant indicating the
educational background, his work e$perience and other
data showing that he possesses technical skills in his trade
or profession.
b. Contract of employment between the !" and the principal,
which shall embody the following, among others:
hat the non&resident alien shall comply with all applicable
laws and rules and regulations>
hat the non&resident alien worker and !" shall bind
themselves to train at least = 1ilipino understudies> and
@ designation by the !" of at least = understudies which
must be the most ranking regular !!#s in the section or
department for which the e$patriates are being hired to
ensure actual transfer of technology.
Section ,. De2elo6(ent of #u(an Resources
%.4 $b8ecti2es A Definitions
1. )rt. %" : It is the objectives of this [C ' D]
a. itle to )evelop human resources
b. !stablish training institutions, and
c. 1ormulate such plans and programs as will ensure efficient
allocation, development and utili8ation of the nation#s
manpower and thereby promote employment and
accelerate economic and social growth.
2. Chat is human resources developmentD Process by which the
actual and potential labor force is made systematically to ac3uire
greater knowledge, skills and capabilities for the nation#s
35
sustained economic and social growth. &$ec. ., 7ule %, #ook %%,
%77)s'
3. )efine manpowerD Is the portion of the population which has
actual or potential capability to contribute to the production of
goods and services. &$ec. . &c', 7ule %, #ook %%, %77)s'
4. Is human resources development intended solely to train
workersD 0o. +anpower development also means training for
self&employment. his is known as 9entrepreneurship: &rt. @@
&b'.
;. Chat is dual systemGtrainingD It refers to a delivery system of
3uality technical and vocational education which re3uires
training to be carried out alternatively in = venues:
a. in school and
b. in the production plant.
In school, training provides the trainee the theoretical foundation, basic
training, develops his skill and proficiency in actual working conditions
as it continues personal discipline and work value. &$ec. @ &p', 7
BB6C'
%.= 1rogra( Incenti2e
2 )rt. * : )eduction from ta$able income of S of the value of labor
training but not to e$ceed 4IQ direct labor wage: Provided, hat in the
case of apprenticeship programs, the program is recogni8ed by )E/!.
%.6 <raining and '(6loy(ent of S6ecial .or/ers B )66rentices,
Learners and #andica66ed .or/ers
Policy 2b9ectives
2 Chat is the policy of the (tate on apprenticeshipD
4. o help meet the demand of the economy for trained manpower>
=. o establish a national apprenticeship program through
participation of !"#s workers, and government and non&
government agencies> and
3. o establish apprenticeship standards for the protection of
apprentices. &rt. DB'
Definition
1. )rt. *, : K+pprenticeship5 8 Practical training on the job
supplemented by related theoretical instruction.
2. )rt. @" : KLearners5 8 Persons hired as trainees in semi&skilled
and other industrial occupations which are non&apprenticeable
and which may be learned through practical training on the job in
a relatively short period of time which shall not e$ceed 6 months.
3. )rt. @, : K7andicapped wor*ers5 8 hose whose earning
capacity is impaired by age or physical or mental deficiency or
injury
Who #an ,mploy and When

36
@. )11R'=<I!'S must be approved by !()@
1. )rt. :4 : Enly !"#s in highly technical industries and only in
apprenticeable occupations may employ apprentices.
Sec. 1, Rule ID, &oo/ II, IRREs : 9:ighly Technical %ndustries:
rade, business, enterprise, industry or other activity which is
engaged in the application of advanced technology.
)rt. *, : 9pprenticeship Eccupation: "e3uires more than 6
months of practical training supplemented by related theoretical
instruction.
- 4 month probation
- prior approval by !()@ of the proposed apprenticeship
program is a condition sine 3ua non before an
apprenticeship can be validly entered into
- employer is not obliged to employ the apprentice after the
completion of his training
2. )rt. @4 : @pprenticeship programs shall be primarily voluntary
e$cept:
a. Chen national security or particular re3uirements of
economic development so demand, the President may
re3uire compulsory training where the shortage of trained
manpower is deemed critical by the (ecretary of /abor.
b. Chere services of foreign technicians are utili8ed by
private companies in apprenticeable trades.
-. L')R='RS
& /earnership programs must be approved by !()@
2 )rt. @% : /earners may be employed when:
4. no e$perienced worker is available
=. the employment of learners is necessary to prevent curtailment
of employment opportunities
6. and the employment does not create unfair competition in terms
of labor costs or impair or lower working standards.
C. #)=DI!)11'D .$RL'RS
2 )rt. @3 : Fandicapped workers may be employed when their
employment
4. is necessary to prevent curtailment of employment
opportunities> and
=. when it not create unfair competition in labor costs or lower
working standards.
Conditions of "mployment
- not e$ceed % hours
- allowed overtime
2 )rt. :1 :
4. Period of apprenticeship shall not e$ceed J months.
=. Cages shall not start below 7;Q of the minimum wage.
37
3. @pprenticeship program must be duly approved by !()@ or
apprentices becomes regular !!. his must be evidenced by an
apprenticeship agreement. ()itto /nterprises vs. )&C)
Ratio of t0eoretical 2s. on t0e 8ob training M 144+ 444
& may work overtime duly credited as his training time
2 )rt. @ : he (ecretary of /abor may authori8e the:
1. hiring of apprentices without compensation whose training on
the job is re3uired by the school or training program curriculum
as a re3uisite for graduation or board e$amination. here is no
!"&!! relationship between students on one hand, and schools,
where there is written agreement between them under which
the former agree to work for the latter in e$change for the
privilege to study free of charge. &$ec. .@, 7ule F, #ook %%%, %77)s'
2. @ clerk in the College of /aw of a <niversity worked without pay
but was allowed to take up no more than 6 units per semester
free of charge. he clerk resigned and demanded payment of
unpaid wages. Is the clerk entitled to unpaid wagesD Mes. (ec. 4H,
"ule A, -ook III, I""#s : only applies in instances where the
students are given real opportunity, including such facilities as
may be reasonably necessary to finish their chosen courses
under such arrangement. In this problem, the clerk was not given
any real opportunity to finish law as he was allowed to take up no
more than 6 units per semester. here is therefore an !"&!!
relationship between the clerk and the university. (*lcantara)
". Gualifications of an )66rentice+
a. @t least 4; years of age: provided, those below 4%
years of age shall not work in ha8ardous
occupations>
b. -e physically fit for the occupation.
c. Possess vocational aptitude and capacity.
d. Possess the ability to comprehend, and follow oral
and written instructions. &$ec. .., 7ule 2%, #ook %%%,
%77)s'
4. @ ;&star hotel would like to have an apprentice program
dishwashersD 0o. his is not an apprenticeable program
occupation because proficiency can be attained within a very
short period. -esides, the hotel industry is not highly technical.
(*lcantara)
;. @fter working for 4 month may an apprentice be dismissed
without causeD 0o. @fter the probationary period of 4 month, the
apprenticeship agreement may be terminated only for cause.
:% #auses for termination of apprenticeship agreement by
apprentice6
a. "epeated violation by !" of agreement
b. Cruel or inhuman treatment
c. Personal problems which prevents a satisfactory
performance ?bad healthB
d. (ubstandard working conditions
38
'M1L$J'R
a. habitual absentism
b. willful disobedience e.g. rules
c. insubordination lawful order
d. poor physical conditions apprentice
e. theft or malicious destruction
f. poor efficiency of performance
g. engaging in violence
h. gross misconduct
i. bad health or continuing illness. &$ec. 5D, 7ule 2%, #ook %%,
%77)s'
2 employer must make a commitment to employ the business
-. L')R='RS
& learnership must be approved by !()@
4. )rt. @* :
4. )uration of the learnership period shall be 6 months>
=. Cages and salary rates begin at not less than 7;Q minimum
wage> and
6. @ commitment to employ learners if they so desire, as regular
!!#s upon completion of the learnership.
@ll learners who have been allowed or suffered work during
the first =
nd
months to be deemed !!#s training is
terminated by the !" before the end of the stipulated
period though no fault of the learner.
=. )rt. @: : /earners employed in piece or incentive&rate jobs during
training shall be paid in full for the work done.
6. P entered into a learnership agreement with employer @. -efore the
end of = months, @ terminated the agreement. Chen P re3uested for a
chance to let him finish the 6 months period. @t the end of 6 months, @
refused to hire P. Is the stand of @ sustainableD 0o. @ has a
commitment under the learnership agreement to employ P as a regular
worker upon the completion of the learnership.
C. #)=DI!)11'D .$RL'RS ') 1 M I,
1. )rt. ,4 :
"ates to be paid to handicapped workers shall not be less
than 7;Q of the applicable minimum wage.
!mployment agreement must state the duration of the
employment period and the work to be performed.
2. )rt. ,1 : Fandicapped workers may be hired as apprentices or
learners if their handicap is not such as to effectively impede the
performance of job operations in the particular occupations for
which they are hired.
,nforcement
1. )rt. :: : ppeal to the $ecretary of Labor < he decision of the
authori8ed agency of the )E/! may be appealed to the
(ecretary of /abor within ; days from receipt of the decision. he
decision of the (ecretary of /abor shall be final and e$ecutory.
39
2. )rt. :@ : "xhaustion of dministative 7emedies 8 0o person
shall institute any action for the enforcement of any
apprenticeship agreement or damages for breach of any such
agreement, unless he has e$hausted all available administrative
remedies.
Section 3. !onditions of '(6loy(ent B #ours of .or/
5. 4 #ours Regulation
7ationale and "nforcement
2 he %&hour labor law was designed not only to safeguard the health
and welfare of the laborer but in a way to minimi8e unemployment by
forcing !"#s, in cases, where more than an %&hour operations is
necessary, to utili8e different shifts of laborers working only for % hours
each. (%anila -erminal vs. C2)
5.= !o2erage
I. )rt. , : he provisions of this itle shall apply to !!#s in all
establishments and undertakings whether for profit or not but to
[GMSA CMD1]
1. Novernment !!#s 'whether employed by the 0ational
Novernment or any of its political subdivisions, including those
employed in NECC#s with original charters. &$ec. 5, 7ule %, #ook
%%%, %77)sG
=. +anagerial !!#s 'refer to those who meet all of the following
conditions, namely:
a. heir primary duty consists of the management of the
establishment in which they are employed or of a
department or sub&division thereof>
b. Customarily or regularly direct the work of = or more !!#s
c. Fas the authority to hire or fire other !!#s of lower rank> or
their suggestions and recommendations as to the hiring
and firing and as to the promotion or any change of status
of other !!#s are given, particular weight. ?d.B,
+ere designation to a position with a high&sounding title,
does not make an !! a managerial !! where the e$ercise
of the independent judgment is not present. (Sierra vs.
)&C)
6. Ether officers or members of the managerial staff if they perform
the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the !">
b. Customarily and regularly, e$ercise discretion and
independent judgment>
c. "egularly directly assist a proprietor or managerial !! or
e$ecute under general supervision work along speciali8ed
or technical lines re3uiring special training, e$perience or
knowledge> or e$ecute under general supervision special
assignment and tasks> and
40
d. )o not devote more than =IQ of their hours worked to
activities which are not directly and closely related to the
performance of the work described in the preceding
paragraphs. ?Id.B
4. 1ield personnel '0on&agricultural !!#s who regularly perform their
duties away from the principal place of business or branch office
of the !" and whose actual hours of work in the field cannot be
determined with reasonable certainty. &rt. H5'
5. +embers of the family of the !" who are dependent on him for
support domestic helpers and persons in the personal service of
another. 3erform such serviceI
a. In the !"#s home which are usually necessary or desirable
for the maintenance or enjoyment thereof>
b. Er minister to the personal comfort, convenience or safety
of the !" as well as the members of his !"#s household.
&sec. 5, 7ule %, #ook %%%, %77)s'
Fowever, house personnel hired by a ranking company
official, but paid for the company itself, to maintain a staff
house provided for the official, are not the latter#s domestic
helpers but regular !!#s of the company. (Cadi. vs. Philippine
Sinter)
he function of a managerial employee re3uires the use of
discretion and independent judgment ?nature of his
functionsB
J. @nd workers who are paid by results. 'Including those who are
paid on piece&work, 9takay:, 9pakiao:, or task basis if their
output rates are in accordance with the standards prescribed.,
II. Nive the reason for the e$ceptionsD
1. Jovernment "")s erms and conditions of employment are
governed by the Civil (ervice /aw
2. 0anagerial "")s !mployed by reason of their special training,
e$pertise or knowledge and for positions re3uiring the e$ercise of
discretion and independent judgment. .alue of work cannot be
measured in terms of hours.
3. >on<agricultural field personnel hese regularly perform their
duties away from the principal or branch office or place of
business of the !"> they are on their own in the field and the
number of hours of actual work they render cannot be
reasonably ascertained.
4. 0embers of the family dependent upon him for support
@mounts given by way of support may far e$ceed the benefits to
which the !!#s are entitled under the laws on overtime.
5. Domestic helpers and persons in the personal service of another
hey minister to the personal needs and comfort their !" and
his family and terms and conditions of employment are governed
in other parts of the /abor Code.
41
6. 1orkers paid by results Compensation computed on the basis
of work accomplished and not on time spent in accomplishing
the work. (*lcantara)
III. )etermine whether e$empted !! or notD
1. 1oremen, inspectors and supervisors given the power to
recommend hiring and firing of !!#s but where ultimate power to
hire or fire rested with personnel managerD 0o. 1here such
recommendatory powers are subject to evaluation and review,
the same are not effective and not an exercise of independent
judgment as re!uired by law. ( +ran(lin 0a(er Compan# vs. -ra6ano)
2. (upervisory !!#s are given the following duties and functions
assist the department superintendent in various aspects of
management such as in the planning of systems and procedures,
recommends disciplinary action against erring subordinates or
promotion of deserving personnel, train and guide subordinates>
communicate and coordinate with other supervisors> recommend
measures to improve work method> and other related tasks as
may be assigned by his immediate superior. Mes. They discharge
duties and responsibilities which !ualify them as members of the
managerial staff. (*lcantara)
3. Cutter in tailoring shop was assigned chore of distributing work
to shop#s tailors when the shop#s manager were absent. Fe saw
to it that work conformed with pattern he had prepared and if
not, had them redone, repaired or sewn. 0o. :e did not
participate in policy<making. %t is true that in the absence of the
manager and assistant manager, he distributes and assigns work
to "")s but such duty though involving discretion is occasional
and not regular and customary. (1ill"ga vs. )&C)
5.6 =or(al #ours
2 )rt. ," : he normal of hours of work of any !! shall not e$ceed %
hours a day.
22 Fealth personnel in cities and municipalities with a population of at
least 4,III,III or in hospitals and clinics with a bed capacity of at
least 4II shall hold regular office hours for % hours a day, for ; days a
week, e$clusive of time of meals, e$cept where the e$igencies of the
service re3uire that such personnel work for J days or H% hours in
which case they shall be entitled to an additional compensation at
least 6IQ of their regular wage for work on the J
th
day. '9:ealth
personnel: Includes resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory technicians,
paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnelO,
2 he HI&hour work week would not be applicable if there is a training
agreement between the resident physician and the hospital and the
training program is duly accredited or approved by appropriate
government agency. (*."cena)
5.H #ours .or/ed
42
4. )rt. ,% : Fours worked shall include:
@. all time during which an !! is re3uired
to be on duty
to be at a prescribed workplace and
-. all time during which an !! is suffered or permitted to
work.
"est periods of short duration during working hours shall be counted as
hours worked.
=. Sec. %, Rule III, &oo/ III, IRREs :
Principles in etermining 7ours Wor*ed
4. @ll hours are hours worked which the !! is re3uired to give to his
!" regardless of whether or not such hours are spent in
productive labor or involve physical or mental e$ertion>
=. @n !! need not leave the premises of the workplace in order that
his rest period shall not be counted, it being enough that
a. he stops working,
b. may rest completely and
c. may leave his workplace, to go elsewhere, whether within
or outside the premises of the workplace>
6. If the work performed was necessary or it benefited the !" or the
!! could not abandon his work at the end of the normal working
hours because he had no replacement, all the time spent for
such work shall be considered as hours worked, if the work was
with the knowledge of his !" or immediate supervisor>
H. he time during which an !! is inactive by reasons of
interruptions in his work beyond his control shall be considered
working time either if the imminence of the resumption of the
work re3uires the !!#s presence at the place of work or if the
interval is too brief to be utili8ed effectively and gainfully in the
!!#s own interest.
6. Pose works as a janitor. Fe continues sweeping the floors after ;:II
p.mO he manager is aware of this, but he does not stop Pose from
doing work after ;:II p.m. Is this hours of workD Mes. @lthough Pose
was not instructed e$pressly to render work, he was impliedly allowed
to do so by failure of the !" to warn him against rendering such work.
-esides the work rendered by Pose benefited the !".
Waiting Time
1. Sec. *, Rule I, &oo/ III, IRREs : Caiting time spent by an !!
shall be considered as working time if waiting is an
a. integral part of his work, or
b. the !! is re3uired to engage by an !" to wait
he controlling factor is whether waiting time spent in idleness is
so spent predominantly for the !"#s benefit or for the !!#s.
?@8ucenaB
2. (, a company driver has the following work schedule: %:6I a.m. &
fetches N.+.> 5:II a.m. 4=:II noon does nothing on call for
43
N.+. at the company premises > 4= noon 4:II p.m. lunch>
4:II p.m. ;:II p.m. drives the N.+. to conferences> ;:II p.m.
goes home. he company refuses to pay him for the 5:II a.m. to
4=:II noon period. Is this validD 0o. ( is not free to make use of
the period effectively and gainfully for his own purposes. Fe
must remain in the premises as at any time he may be called to
drive for the N.+. (*lcantara)
3. 6I minutes prior to the start of the scheduled working hours, the
workers of an enterprise assembled at a designated area to
answer roll call. @s their houses are situated right where the
farms are located, the workers can go back in their houses after
roll call to do some chores. Is the assembly time working timeD
0o. he works are not subject to the absolute control of the
company during the period. he workers were not deprived of
the time to attend to other personal pursuits. (*ria vs. )&C)
(dle Time
4. @ laborer need not leave the premises of the factory, shop or
boat in order that his period of rest shall not be counted, it being
enough that he 9cease to work:, may rest completely and leave
or may leave at his will the spot where he actually stays while
working, or go somewhere else, whether within or without the
factory, shop or boat. (&".on Stevedoring vs. &".on %arine $ept. Union)
2. @, an accountant in the manufacturing firm, has idle time in her
work schedule, 9waiting for company papers to work on. (he
dovotes this time working on papers of other firms for which she
receives remuneration. Is the firm obligated to pay her for this
timeD Mes. @lthough she is working on the papers of other
companies, she has no absolute control over her time. Fer !"
may at any time re3uire her to do some work. (he cannot
furthermore leave the place of work during her work schedule.
(*lcantara)
6. , a machine operator was forced to stop operating his machine
for 4 hour during a brownout. Is this working timeD Mes. he
interruption was not due to the fault of . -esides 4 hour is too
brief to be utili8ed effectively and gainfully for his own interest.
.eal Time
1. Sec. @, Rule I, &oo/ III, IRREs : !very !" shall give his !!#s not
less than 4 hour time&off for regular meals, e$cept in the
following cases where a meal period of not less than =I minutes
may be given by the !" provided
2?hat such shorter meal period is credited as compensable hours
worked hours worked of the !! -ut if it is the !! who re3uested for the
shorter meal time, then such shortened meal period is not
compensable. (*."cena);
[= $ 1 ']
Chere work is 0on&manual in nature or does not involve
strenuous physical e$ertion>
44
Chere the establishment regularly Eperates less than 4J
hours a day>
In cases of actual or impending !mergency or there is
urgent work to be performed on machineries and
e3uipment to avoid serious loss which the !" would
otherwise suffer> and
Chere the work is necessary to Prevent serious loss of
perishable goods.
2 "est periods or coffee breaks running from ; to =I minutes shall be
considered as compensable working time.
2. Chere during the so&called meal period, the laborers are re3uired
to stand by for emergency work, or where said meal hour is not
one of complete rest, such period is considered overtime. (Pan *m
vs. Pan *m //7s *ssociation)
Wor*ing While Sleeping
2 (leeping time may be considered working time if it is subject to
serious interruption or takes place under conditions substantially less
desirable than would be likely to e$ist at the !! home i.e. firemen
permitted to sleep a portion of the time they are so on duty at the fire
station. (*."cena)
2n #all
4. Sec. *, Rule I, &oo/ III, IRREs : @n !! while he is re3uired to
remain on call in the !"#s premises or so close thereto that he
cannot use the time effectively and gainfully for his own purpose
shall be considered as working hours while on call. @n !! who is
not re3uired to leave word at his own or with company officials
where he may be reached is not working while on call.
2. If an !! is kept within reach through a cellular phone. Is it on
callD 0o. (*."cena)
Travel Time
222Principles which determine whether or not time spent in travel is working time:
Travel from 7ome to Wor* 0ormal travel from home to
work is no work time but an emergency call outside of
regular working hours re3uiring him to go to his regular
place of business is working time.
Travel that is all in the day-s wor* ime spent by an
!! in traveling from one job site to another, during the
workday, must be counted as hours worked.
Travel away from home ravel away from home is
clearly worktime when it cuts across the !!#s workday,
e$cept during meal period or when !! is permitted to sleep
in ade3uate facilities furnished by the !". he time is not
45
only hours worked on regular workdays but also during
corresponding working hours on non&working days. Eutside
of these regular working hours, travel away from home is
not considered working time. "+zucena'
Lectures0 .eetings0 Training Programs
2 Sec. :, Rule I, &oo/ III, IRREs : @ttendance at lectures, meetings,
training programs and other similar activities shall not be counted as
working time if all of the following conditions are met:
4. @ttendance is outside of the !"#s regular working hours>
=. @ttendance is in fact voluntary> and
6. he !! does not perform any productive work during such
attendance.
Semestral /rea*
2 "egular full&time teachers are entitled to salary and CE/@ during
semestral break. (U.Pang. +ac"lt# Union vs. U. Pang.)
5.; $2erti(e .or/ and $ffsetting 1ro0ibition
4. )rt. ,@ : Evertime 1ork 8
regular work day plus =;Q basic hourly rate
(pecial days, holiday or rest day plus 6IQ of the regular
hourly rate on said days.
=. )rt. ,3 : "mergency Evertime 1ork < @ny !! may be re3uired
by the !" to perform overtime work in any of the following cases:
[.'DAH1S]
a. Chen the country is at war
b. Chen any other national or local emergency has been
declared
c. Chen it is necessary to prevent loss of life or property or in
case of imminent danger to the public safety due to an
actual or impending emergency in the locality caused by
serious accidents, fire, flood, typhoon, earth3uake,
epidemic or other )isaster or calamity.
d. Chen there is <rgent work to be performed on machines
and installations in order to avoid serious loss or damage
to the !" or some other cause of similar nature.
e. Chen the work is necessary to prevent loss or damage to
Perishable goods.
f. Chere the completion or continuation of the work started
before the %
th
hour is necessary to prevent (erious
obstruction or prejudice to the business operations of the
!".
he !!#s refusal to obey the order of the !! constitutes
insubordination for which he may be subjected to disciplinary
action. (*lcantara)
". )rt. ,, : <ndertime work in any particular day shall not be offset
by overtime work on another day -< not on someday.
46
Permission given to the !! to go on leave on some other
day of the week shall not e$empt the !" from paying the
additional compensation re3uired.
H. )rt. 34 : 1or purposes of computing overtime and other
additional remuneration as re3uired by this Chapter the 9regular
wage: of an !! shall include the cash wage only, without
deduction on account of facilities provided by the !".
;. M, corporation, as a company policy, re3uired its !!#s to render
only J hours of work daily but pays them the minimum wage
corresponding to % hours work. /ater, the full %&hours was
re3uired without any increase in wages. @re the !!#s entitled to
overtime payD Mes. hough voluntary practice or policy, the
company has fi$ed the normal workday at J hours. It now
constitute part of the terms and conditions of employment and
cannot be unilaterally withdrawn by the !". (*lcantara)
J. )istinguish overtime pay from premium pay : $2erti(e 6ay is
additional compensation for work done beyond the normal work
hours on ordinary working days. 1re(iu( 6ay is additional
compensation for work rendered by the !! on days normally he
should not be working. -ut additional compensation for work
rendered in e$cess of % hours during these days is also
considered overtime pay.
7. @ was late for work on a particular day. o offset for the time he
was late, @ worked on additional period e3uivalent to the period
he was late for work. he period was offset against @# undertime.
Is this validD Mes. he prohibition to offset overtime against
undertime applies to undertime incurred and overtime rendered
on different days.
Provisions for overtime covers both profit and non&profit
establishment or undertaking
1or purposes of computing overtime
"!N</@" C@N! includes the cash wage only> without
deduction of facilities provided.
%. +ay the right to overtime pay be waivedD @s a general rule, the
right cannot be waived. (Cr". vs. <es Sing) Fowever, when the
waiver is e$change for certain benefits and privileges, which may
be more than what will accrue to them in overtime pay, the
waiver may be permitted. (%/*&C, Wor(ers Union vs. %/*&C,)
Rationale 3 2vertime Pay
2 he reasons for overtime pay is that the worker is made to work
longer than what is commensurate with the agreed compensation for
the statutorily fi$ed or voluntary agreed hours of labor he is supposed
to do. Chen he thus spends additional time to his work, the effect upon
him is multi&faceted> he puts in more effort, physical or mental> he is
delayed in going home to his family to enjoy the comforts thereof> he
might have no time for rela$ation, amusement or sports> he might miss
important pre&arranged arrangements. (P)0 vs. P/%*)
#ompressed Wee* 3 2oluntary basis
47
2 Chile as a general rule, the right to overtime pay cannot be waived
under e$isting laws, the !!#s and !" can agree to a compressed
workweek of ; days of 5 hours each with no payment of overtime if
this will redound to the benefit of the workers i.e. if the original
workweek is reduced from +onday (aturday to +onday 1riday.
(*.".ena) Fowever, @lcantara answered in a 45%H problem differently
when he answered that overtime pay should be paid. In that problem,
the workers were re3uired to render 5.; hours of work for ; days.
?Chat is the answer, I really do not know, ask the reviewerB
!onditions for K#ompressed Wor* Wee*N
4. voluntary agreed upon
=. not to e$ceed H% hoursG week
6. no diminution on take home pay or fringe benefits
H. waivers must be made
;. all hours e$ceeding H% hoursGweek considered overtime
J. must submit report to )E/!
Retail 'stablis0(ent
- sale of goods for personal or household use
e$. grocery
Ser2ice 'stablis0(ent
- sale of services to individuals for their own or household
use
e$. ... repair shop
&o Formula /asic #ontract
2 Chen the contract of employment re3uires work for more than %
hours at specific wages per day, without providing for a fi$ed hourly
rate or that the daily wages include overtime pay, said wages cannot
be considered as including overtime compensation. (%anila -erminal vs.
C2)
/uilt)(n #ompensation
2 he employment contract may provide for a 9built<in: overtime pay.
-ecause of this, non&payment of overtime pay by the !" is valid.
(/ngineering e9"ipment vs. %inister of &a!or)
5.J =ig0t .or/
4. )rt. ,: : !very !! shall be paid night shift differential of not less
than 4IQ of his regular wage for each hour of work performed
between 4I:II p.m. and J:II a.m.
=. Sec. 1, Rule II, &oo/ III, IRREs + his rule shall apply to all !!#s
e$cept:
[G R S D M C]
a. hose of the government and any of its political
subdivisions, including NECC#s.
b. "etail and service establishments regularly employing not
more than ; workers.
48
c. )omestic helpers and persons in the personal service of
another.
d. +anagerial !!#s.
e. 1ield personnel and other !!#s whose time and
performance is unsupervised by the !".
f. Includes task and contract basis
6. A works at a gasoline station which has only ; !!#s. Is he entitled
to night shift differentialD 0o. Fe works in a retail establishment
employing not more than ; workers. (*lcantara)
H. Chat if A works at Ting#s +inimarts, a retail store chain with 4I
outlets of = !!#s each outlet. Is he entitled to night shift
differentialD Mes. he total number of !!#s of the !" e$ceeds ;. It
is at least =I. ?IdB
Rationale 3 Prohibition
2 1irst, there are remotely injurious effects of permanent nightwork
manifested in the later years of worker#s life. Ef the more immediate
importance is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations
of normal family relations. 1rom an economic point of view, it is to be
discouraged because of its adverse effect upon efficiency and output.
@ moral argument in the case of workers is that they go to and from
the factory in the darkness. (Shell vs. )&U)
!$ercise of a profession is neither a retail nor service
Section 14 + .ee/ly Rest 1eriods
2 )rt. , : he provisions of this itle shall apply to !!#s in all
establishments and undertakings whether for profit or not, but not to
;8 . S F ( 3 F R<
4. 8overnment ,,-s 'whether employed by the 0ational
Novernment or any of its political subdivisions, including those
employed in NECC#s with original charters. ?(ec. =, "ule I, -ook
III, I""#s,
=. .anagerial ,,-s 'refer to those who meet all of the following
conditions, namely:
a. heir primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof>
b. Customarily and regularly direct the work of = or more
!!#s>
c. Fas the authority to hire or fire other !!#s of lower rank> or
their suggestions and recommendations as to the
promotion or any other change of status of other !!#s are
given particular weight. ?IdB
U +ere designation to a position with a high&sounding title, does not
make an !! where the e$ercise of independent judgment is not
present. (Sierra vs. )&C)
49
6. 2ther officers or members of the managerial staff 'if they
perform the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the !">
b. Customarily and regularly e$ercise discretion and
independent judgment>
c. "egularly directly assist a proprietor or managerial !! or
e$ecute under general supervision work along speciali8ed
or technical lines re3uiring special training, e$perience or
knowledge, or e$ecute under general supervision special
assignment and tasks> and
d. )o not devote more than =IQ of their hours worked to
activities which are not directly and closely related to the
performance of the work described in the preceding
paragraphs. ?IdB
H. Field personnel '0on&agricultural !!#s who regularly perform
their duties away from the principal place of business or branch
office of the !" whose actual hours of work in the field cannot be
determined with reasonable certainty &rt. H5'G
=% .embers of the family of the ,R who are dependent on
him for support
J. omestic helpers and persons in the personal service of
another. 'Perform such services:
a. In the !"#s home which are usually necessary or desirable
for the maintenance or enjoyment thereof>
b. Er minister to the personal comfort, convenience, or safety
of the !" as well as the members of his !"#s household
&$ec. 5, 7ule %, #ook %%%, %77)s'
Fowever, house personnel hired by a ranking company
official, but paid for by the company itself, to maintain a
staff house provided for the official, are not the latter#s
domestic helpers but regular !!#s of the company. (Cadi. vs.
Philippine Sinter)
7. @nd wor*ers who are paid by results. 'Including those who
are paid on piece&work, 9takay:, 9pakiao:, or task basis if their
output rates are in accordance with the standards prescribed.,
Sec. 1, Rule III, &oo/ III, IRREs : his rule shall apply to all !"#s
whether operating for profit pr not, including public utilities
operated by private persons.
4I.= Sc0eduling of Rest DayO .0en !o(6ulsory .or/ )llowedO
and !o(6ensation
4. )rt. 31 : It shall be for the duty of every !", whether operating
for profit or not, to provide !! a rest period of not less than =H
consecutive hours after every J consecutive normal working
days.
2 he !" shall determine and schedule the weekly rest day of his
!!#s
50
Fowever, the !" shall respect the preference of !!#s as to
their weekly rest day when such preference is based on
religion grounds.
Sec. %, Rule III, &oo/ III, IRREs : Chere however the choice of the
!!#s as to their rest day based on religious grounds will inevitably
result in serious prejudice or obstruction to the operation of the
undertaking, the !" may so schedule the weekday rest day of their
choice at least = days in a month.
=. )rt. 3 + KWhen ,R may re!uire Wor* on rest day5 3 [D H
) A 1 = )]
a. In case of actual or impending emergency caused by
serious accident, fire, flood, typhoon, earth3uake,
epidemic, or other )isaster or calamity to prevent loss of
life, or imminent danger to public safety.
b. In case of <rgent work, to avoid serious loss which the !"
would otherwise suffer>
c. In the event of @bnormal pressure of work due to special
circumstances, where the !" cannot ordinarily be e$pected
to resort to other measures>
d. o prevent or damage to Perishable goods>
e. Chere the 0ature of work re3uires continuous operations
and stoppage of the work may result in irreparable injury
or loss to the !"> and
f. @nalogous ?avail of favorable weatherB or similar
circumstances 'P@0@)<,
". #ow (uc0 is a wor/er entitled if 0e wor/s on a rest day9
Sc0eduled rest day B additional compensation of at least
6IQ of his regular wage.
Sc0eduled rest day w0ic0 is a nonAwor/ing 0oliday
entitled to additional compensation of at least ;IQ of his
regular wage.
Sc0eduled rest day w0ic0 is a regular 0oliday
entitled to additional compensation of at least 6IQ of his
regular holiday rate of =IIQ based on his regular wage
rate. &$ec. @, 7ule %%%, #ook %, %77)s'
H. . works on board the +G. (tarfish. (ometimes, the boat remains
at sea for = weeks, while at other times, especially during bad
weather, the vessel returns to port only after a few days. Chile
the vessel is in port, . stays home with his family. Can . claim
the additional compensation for work on rest dayD .#s work is
such that no regular workdays and no rest days can be
scheduled. In such cases, the law provides that if he performs
work on (undays and holidays, he shall be paid an additional
compensation of at least 6I Q of his regular wage. '@rt. 65 ?bB,
Rationale 3 Rest day
2 Erdinarily, (undays and legal holidays are dedicated to reading and
instruction so as to fill the mind with culture or some sort of
51
advancement. En these days, the laborer spends longer hours in the
company of his family. he deprivation of that opportunity to satisfy
mental, moral and spiritual needs should not be ignored, and should be
properly compensated. (%/*&C, vs. P"!lic Utilities //7s *ssociation)
Section 11 + !onditions of '(6loy(ent #olidays
44.4 !o2erage
1. ; )rt. 3% : !very worker shall be paid his regular daily wage during
holidays, e$cept: [RSI$, G, D#, M, C1]
a. in retail and service establishments regularly employing less than 4I
workers>
Sec. 1, Rule ID, &oo/ III, IRREs :
b. hose of the government and any of its political subdivisions,
including NECC#s.
c. )omestic helpers and persons in the personal service of another.
d. +anagerial !!#s.
e. 1ield personnel and other !!#s whose time and performance is
supervised by the !".
2 If re3uired to work on regular holidays,
regular rate ?
Regular #olidays
4. 0ew Mears day
=. +aundy hursday
6. Nood 1riday
H. -ataan )ay
;. /abor day
J. Independence day
7. 0ational heroes day
%. -onifacio day
5. A&mas day
4I."i8al day
=ationwide S6ecial #olidays
4. 0ov. 4
=. )ec. 64
. +onthly paid !!#s are not e$cluded from the benefits of holiday pay.
(%antrade vs. 0ac"ngan)
". A is a manicurist in the )#(tyle -arbershop which has =I barbers
and manicurists. Is she entitled to holiday payD Mes. A is an !! who is
paid by results ad she works in a service establishment employing
more than 4I persons. &$ec. H, 7ule %2, #ook %%%, %77)s'
4=.= #oliday 1ay
4. )rt. 3% : he !" may re3uire an !! to work on a holiday but
such !! shall be paid a compensation e3uivalent to twice his
regular rate.
52
=. o receive holiday pay, the !! should not have been absent
without pay on the working day preceding the regular holiday.
(*."cena)
6. @ legal holiday falling on a (unday creates no legal obligation for
the !" to pay e$tra to the !! who does not work on that day,
aside from the usual holiday pay, to its monthly&paid !!#s.
(Wellington vs. -ra6ano)
H. A was told by !" to work during a legal holiday which fell on a
(unday. Fow much is he entitled toD A will get =IIQ of his daily
rate plus premium pay pf 6IQ of the holiday pay V regular daily
rate 2 =6IQ.
;. If A works overtime during that day, how much will he earnD
Foliday pay rateG% plus overtime pay of 6IQ of the holiday
hourly rate V holiday pay rateG% 2 46IQ.
J. " was absent without pay on )ecember =H. Is he entitled to
holiday pay for Christmas dayD 0o. @n !! may not be paid on
holiday pay if he was absent on the day preceding holiday, or in
the case of +aundy hursday and Nood 1riday, if he was absent
on the day preceding the first holiday. It would be different if the
day preceding the legal holiday was the !!#s rest day. hen he is
entitled to holiday pay. (*lcantara)
En leave with pay
7. Can monthly pay under employment contract already include
pay for any unworked regular holiday within the monthD Mes. his
is management prerogative provided that the monthly pay
comply with the least minimum rates prescribed under minimum
wage laws.
Chat an employer has voluntarily given cannot be
unilaterally withdrawn
If the employees are already paid for all non&working days,
the divisor should be ?CD and not 5D.
Dacation and sic/ lea2e must be claimed otherwise waived
- cannot be converted into cash unless allowed by employer
Caculty 1ri2ate Sc0ool
2 "egular holidays specified by law are known to both school and
faculty members as 9no class days:. hus, hourly paid faculty
members are not entitled to their pay for unworked regular holidays.
En the other hand, hourly paid faculty members are however entitled
to their regular hourly rate on days declared as special holidays or
when classes are called off or shortened since the faculty member,
although forced to take a rest, does not earn what he should earn on
that day. (=C vs. )&C)
ivisor as Factor
53
2 he daily rate is a constant figure for the purpose of computing
overtime and night differential pay and commutation of sick and
vacation leave credits, and this should also be the same basis for
computing unpaid holidays. (Union of +ilipro vs. 1ivar)
Section 1. !onditions of '(6loy(ent B Ser2ice Incenti2e
Lea2e
Dacation and Sic/ lea2e
- employer must still bind himself in C-@ or grant it
unilaterally
- not granted by law
4=.4 !o2erage
#overage
; )rt. 3* : The provision on service incentive leave shall not apply
to:
[',S, I$, ', G, D, M, C]
4. hose who are already enjoying the benefit.
=. hose enjoying vacation leave with pay of at least ; days.
6. hose employed in establishments regularly employing less than
4I workers
H. !$empt establishments.
Sec. 1, Rule D, &oo/ III, IRREs +
;. hose of the government and any of its political subdivisions
including NECC#s.
J. )omestic helpers and persons in the personal services of
another.
7. +anagerial !!#s.
%. 1ield personnel and other !!#s whose performance is
unsupervised by the !" including those who are engaged on task
or contract basis, purely commission basis, or those who are paid
in a fi$ed amount of performing work irrespective of the time
consumed in the performance thereof.
2 eachers of private schools on contract basis are entitled to service
incentive leave. (Ce!" 2nstit"te of -echnolog# vs. ,ple)
4=.= 'ntitle(ent
- can be converted to cash
; )rt. 3* : ; days incentive leave with pay for at least 4 year of
service.
'he term Wat least 4 year of service# shall mean service within 4=
months, whether continuous or broken, reckoned from the date the !!
started working, including authori8ed absences and paid regular
holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contract are less
than 4= months, in which case said period shall be considered as 4
year. &$ec. ?, 7ule 2, #ook %%%, %77)s'
D)!)<I$= )=D SI!L L')D'
employer must still bind himself in C-@ or grant it unilaterally
54
not granted by law
Section 1". Mini(u( .ages and .age Ci?ing Mac0inery
46.4 Mini(u( .ages
4. )rt. 33 : he minimum wages for agricultural and non&
agricultural !!#s and workers in each and every region of the
country shall be those prescribed by the "egional ripartite
Cages and Productivity -oards.
=. !$plain the rule 4a fair day-s wage for a fair day-s labor5D
<nless specifically re3uired by law, contract or established
policy, the !" is not bound to pay wages to a worker who has not
actually rendered any service.
6. Nive > aspects of 4agriculture5 ? he primary aspect covers
cultivation and tillage of the soil, growing and harvesting of any
agricultural and horticultural commodities and raising of
livestock and poultry. he secondary aspect covers any practices
performed by a farmer on a farm as an incident to or in
conjunction with the farming operations.
H. 1armers employed by - cultivate the soil and plant and harvest
tobacco and they also cut big trees grown on the land which they
used for fencing and repair of the owner#s house. hey claim for
minimum wages for non&agricultural workers. Is the claim validD
0o. hey are still agricultural workers. hey perform activities which
fall under the primary aspect of agriculture and the cutting of trees
to be used for fencing is incidental to the farming operations and
falls under the secondary aspect of agriculture.
#overage
; )rt. 3, : his itle shall not apply
to farm tenancy or leasehold
domestic services and
persons working in their respective homes in needle or in
any cottage industry duly registered in accordance with
law.
Section ", Rule DII, &oo/ III, IRREs +
; Corkers in duly registered cooperatives when so recommended by
the bureau of Cooperative )evelopment and upon approval of the
(ecretary of /abor . . .
.inimum Wage
4. )rt. 3@ 517 : 9Cage: paid to
2 he remuneration or earnings, however designated, ?/!N@/ !0)!"B
capable of being e$pressed in terms of money, whether
fi$ed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same,
55
which is payable by an !" to an !! under a written or
unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered
2 and includes the fair and reasonable value, as determined by the
(ecretary of /abor, of board, lodging or other facilities customarily
furnished by the !" to !!. '9;air and reasonable value: shall not
include any profit to the !" or to any person affiliated with the !".
=. )rt. :1 : )66rentices : Cage rates shall in no case fall below 7;
Q of the applicable minimum wage.
6. )rt. @* : Learners : Cage rates shall begin at not less than 7;Q
of the applicable minimum wage.
H. )rt. ,4 + #andica66ed .or/ers + Cage rates shall not be less
than 7;Q of the applicable minimum wage.
;. )rt. 1% : @ll recogni8ed learnership and apprentice agreements
shall be considered automatically modified insofar as their wage
clauses are concerned to reflect the prescribed wage rates 'set
by the "egional tripartite and Cages Productivity -oard,.
). C)!ILI<I'S )=D SH11L'M'=<S
2 he law guarantees the laborer a fair and just wage. he 9minimum
wage: can by no means imply only the actual minimum. (ome margin
or leeway must be provided, over and above the minimum, to take
care of contingencies, such as increase in wants, and to provide means
for a desirable improvement in his mode of living. (*to(30ig Wedge vs.
*to(30ig3Wedge %"t"al 0enefit *ssociation)
&. SH11L'M'=<)L C)!ILI<J
4. )istinguish between supplements and facilitiesD
Su66le(ents !$tra remuneration or special privileges or
benefits given to or received by the worker over and above his
ordinary earnings or wages.
- granted for the convenience of the !"
Cacilities Items of e$pense necessary for the laborer#s and his
family#s e$istence and subsistence. hey form part of the wage and
when furnished by the !" are deductible therefrom since if they are
not furnished, the laborer would spend and pay for them just the
same i.e. meals> housing for dwelling purposes> fuel including
electricity, gas, water for the non&commercial personal use of the
!!> and other articles and services given primarily for the benefit of
the worker or his family.
- for the benefit of the worker and his family
=. he criterion in determining whether an item is a supplement or
facility is not so much with the kind of benefit or item given, but
its purpose. (State %arine vs. Ce!" Seamen7s *ssociation)
6. C+C has 6 buses used to transport its workers, free of charge
from +akati to its plat in +untinlupa. he buses became
56
dilapidated and the service was discontinued by the company.
he !!#s demanded for their replacement. )ecide with reasons.
he company may be compelled to continue providing the
transportation free of charge. his is considered a supplement given
over and above the ordinary earnings or wages of the workers. Ence
given, a supplement cannot be eliminated or diminished. (*lcantara)
- <est on w0et0er or not ite(s are facilities [! C, D ),
C R]
a. @re these items automatically furnished by the
tradeD
b. )id the employee voluntarily accepted the same in
writingD
c. Is the value thereof fair and reasonableD
- (f the employer fails to prove this:
a. hen it is a supplement not a facility.
b. Ence given, a supplement cannot be eliminated or
diminished.
c. Nrant of bonus may be unilaterally be reduced by
the employer if it depends on profits ac3uired.
H. -ecause he lived ;I kilometers from its work, A re3uested his !"
if he can sleep in the company premises. he latter agreed with
the condition that he will deduct P;.II per day as board charges
from A. Is the deduction legalD
0o. /odging is not customarily finished by the !" to his !!#s. he
deduction, furthermore, is not with the written consent of A.
C. !)S# .)G' legal tender
4. Chat is basic salaryD In its common, generally accepted
meaning, it is the rate of pay for a standard work period,
e$clusive of such additional payment as bonuses and overtime.
(0oic3-a(eda vs. $ela Serna)
=. @re emergency cost of living allowances considered part of
regular wageD
Mes. his is taken into account in determining overtime and
premium pay , premium contributions, social security, maternity
pay, etc. ?!E 47%B
). 'CC'!< A I=)&ILI<J <$ 1)J
2 If a company cannot pay a living wage, it has no business operating
at the e$pense of the lives of the workers. (Phil. *pparel vs. )&C)
!. GR)<HI<J and .)G'S
2 8ratuity hat paid to the beneficiary for past services rendered
purely out of the generosity of the giver or grantor. Chile it may be
enforced once it forms part of a contractual undertaking, the grant of
57
such benefit is not mandatory so as to be considered a part of labor
standard law. (Plastic -o8n vs. )&C)
1. &'='CI!I)RJ $C <#' MI=IMHM .)G' L).
2 he minimum wage law directly benefits the lowly paid !!#s who
receive inade3uate wages on which they support themselves and their
families. It benefits all wage earners indirectly by setting a floor below
which their remuneration cannot fall. It increases the standard of
competition among !"#s since it would protect the fair&minded !" who
operates at lower costs by reason of paying his workers a wage below
subsistence. (Pp vs. 'atchalian)
N. &'='CI<S
4. )rt. 144 : 0othing in this -ook shall be construed to eliminate
or in any way diminish supplements, or other !! benefits being
enjoyed at the time of promulgation of this Code.
=. <nless agreed otherwise, statutory benefits are apart from
contractual benefits. (%e#ca"a#an College vs. $rilon) hus, !!#s are
entitled to the full amounts of both a wage increase under a C-@
and an increase in living allowances prescribed by law during the
period when both increases are concurrently effective, for want
of an agreement between the parties to treat the increase in
living allowances as applicable to the wage increases. (+ilipinas
'olf vs. )&C)
6. he work of batillos, cargadores of fish catch, were limited to
days of arrival of fishing vessels. 1rom 457J to 45%I, operators
paid them a fi$ed monthly emergency allowance which included
non&working days. Can the operators now discontinue the
practice and pay the batillos only for actual days worked,
following the principle of 9no work, no pay: D
0o. -enefits voluntarily given cannot be unilaterally withdrawn by
the !". @rt. 4II prohibits the elimination or diminution of e$isting
benefits.
H. Corkers in a plastic manufacturing company are able to clean
and inspect only =;I containers of % hours despite repeated
appeals from management. hey were paid a daily rate of
P4;I.II. hrough time and motion studies set by the )E/!, the
!" was able to ascertain that an ordinary worker can clean and
inspect H;I containers for % hours. he company then changed
its mode of payment from time basis to piecework at PI.HI per
container. Is this validD
Mes. he company has the right to change the basis of the payment
of the wages of the workers. he workers would not suffer since it is
within their capability to clean and inspect the number of containers
to enable them to at least earn the rate they were receiving at the
time the change was effected. hey cannot however be deprived of
benefits they were already enjoying at the time of such change.
(*lcantara)
58
22 Chile normally discretionary, the grant of a gratuity or bonus, by
reason of its long and regular concession, may become part of a
regular compensation.
2 E" employer agreed to give its regularly without any condition
imposed for its payment
46.= Rationale for .age RationaliIation
2 Section , .age RationaliIation )ct : It is hereby declared the
policy of the (tate to rationali8e the fi$ing of minimum wages and to
promote productivity&improvement and gain&sharing measures: [J ) D
']
4. o ensure )ecent standard of living for the workers and their
families>
=. o guarantee the rights to its Pust share in the fruits of
production>
6. o enhance !mployment generation in the countryside through
industry dispersal> and
H. o @llow business and industry reasonable returns on investment,
e$pansion and growth.
46.6 )gencies for .age Ci?ing Mac0inery
+dvisory agency 8 >ational 1ages and 3roductivity Commission
4. )rt. 14 : =ational .ages and 1roducti2ity !o((ission
attached to the )E/! the policy and program coordination.
=. Gi2e at least * (a8or 6owers and functions of t0e
=ational .ages and 1roducti2ity !o((ission :
a. o act as the national consultative and advisory body to
the President and Congress on matters relating to wages,
incomes and productivity.
b. o formulate policies and guidelines on wages, incomes
and productivity improvement at the enterprise, industry
and national levels.
c. o prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at
the regional, provincial or industry levels.
d. o review regional wage levels set by the "egional
ripartite Cages and Productivity -oards .
6. )rt. 1: : 0o preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or any
entity against any proceedings before the Commission or the
regional -oards.
Wage Fi$ing +gency
4. )rt. 1 + Regional <ri6artite .ages and 1roducti2ity
&oards In all regions, including autonomous regions.
59
=. Gi2e at least " (a8or 6owers and functions of t0e
Regional <ri6artite and 1roducti2ity &oards wit0in t0eir
territorial 8urisdiction:
a. o develop plans, programs and projects relative to wages,
incomes and productivity improvement for their respective
regions.
b. o determine and fi$ minimum wage rates applicable in
their region, provinces or industries therein and to issue
the corresponding wage orders, subject to guidelines by
the Commission.
c. o receive, process and act on applications for e$emption
from prescribed wage rates as may be provided by law or
any Cage Erder. 'Implementation of the plans shall be
through the respective offices of the )E/! but the "egional
-oards shall have technical supervision over the said )E/!
offices.,
6. )rt. 1: : 0o preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or other
entity against any proceedings before the Commission or the
regional -oards.
he !CE/@ now forms part regular wage
!mployees paid by results should receive not less than the
applicable wage rates provided for % hours workday
46.H )rea Mini(u( .ages and !riteria
2 )rt. 1% + Standards@#riteria for .inimum Wage Fi$ing 8
"egional minimum wages shall be nearly as ade3uate as is
economically feasible to maintain the minimum standards of living
necessary for the health, efficiency and general well&being of the !!#s
within the framework of the national economic and social development
program. In the determination of such regional minimum wages, the
"egional -oard shall, among other relevant factors, consider the
following:
4. he demand of living wages>
=. Cage adjustment vis<K<vis the consumer price inde$>
6. he cost of living and changes and their families>
H. he need to induce industries to invest in the countryside>
;. Improvements in the standard of living
J. he prevailing wage levels
7. 1air return of the capital invested and capacity to pay of !"#s
%. !ffects on employment generation and family income> and
5. he e3uitable distribution of income and wealth along the
imperatives of economic and social development.
hese wages shall include wages varying within industries,
provinces or localities if in the judgment of the "egional -oard
conditions make such local differentiation proper and necessary to
effectuate the purpose of this itle.
46.; .age $rder
2 )rt. 1" : Chenever conditions in the region so warrant, the
"egional -oard shall investigate and study pertinent facts and, based
on the standards and criteria herein prescribed, shall proceed to
determine whether a Cage Erder should be issued.
60
In the performance of its wage&determining functions, the
"egional -oard shall conduct public hearings, consultations, giving
notices to !!#s and !"#s groups, provincial, city and municipal officials
and other interested parties.
@ny party aggrieved by the Cage Erder issued by the "egional
-oard may appeal such order to the Commission within 4I calendar
days from the publication of such order. It shall be mandatory for the
Commission to decide such appeal within JI calendar days from the
filing thereof.
.ethods of Fi$ing
2he determination of wages has generally involved two methods, the
9floor&wage: method and the 9salary&ceiling: method. he 4
st
method
involves the fi$ing of determinate amount that would be added to the
prevailing statutory minimum wage. In the =
nd
method, the wage
adjustment is applied to !!#s receiving a certain denominated salary
ceiling. (/C,P vs. )WPC)
Wage istortion
2 @ severe contraction of the wage or salary differences is enough
4. )rt. % + Wage istortion & )istortion where an increase in the
prescribed wage rates results in the elimination or severe
contraction of intentional 3uantitative differences in wage salary
rates between and among !! 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.
=. #ow is a wage distortion correctedD @ny dispute arising
from wage distortions shall be resolved through the grievance
procedures under their C-@, and if it remains unresolved,
through arbitrary arbitration. If there is no recogni8ed labor union
or there are no collective bargaining agreements, the dispute
shall be settled through the 0ational Conciliation and +ediation
-oard, or if unresolved after 4I days of conciliation, through the
0/"C which shall decide the dispute within =I calendar days.
?@rt. =HB he law recogni8es the validity of negotiated wage
increases to correct wage distortions. he legislative intent is to
encourage the parties to seek solution to the problems of wage
distortions through voluntary negotiation or arbitration, rather
than strikes, lockouts, or other concerted activities of the !!#s or
management. "+LU)TU#P vs% &LR#' In a case where a union
went on strike over a salary distortion dispute, the Court held the
strike illegal. (2la8 at 0"(lod ng %anggaga8a vs. )&C)
46. J .ages and 1roducti2ity Measures
Wage@Salary
)ifferentiate wages from salaryD
2 9Wages: Compensation for manual labor, skilled or unskilled paid
at stated times, and measured by the day, week, month, or season. It
61
indicates considerable pay for a lower and less responsive character of
employment.
2 9Salary: )enotes a higher degree of employment, or a superior
grade of services, and implies a position of office> by contrast, the term
9wages:, while 9salary: is suggestive of a larger and more important
service. ('aa vs. C*)
Wage Payment
4. )rt. 14 + Forms of Payment : 0o !" shall pay the wages of an
!! by means of promissory notes, vouchers, coupons, tokens,
tickets, chits or any object other than legal tender, even when
e$pressly re3uested by the !!. 'he laborer#s wage shall be paid
in legal currency. ?@rt. 47I;, 0CCB,
- Payment of wages by chec* or money order shall be
allowed when 6
a. such manner of payment is customary on the date
of the effectivity of this Code, or
b. is necessary because of special circumstances as
specified in appropriate regulations to be issued by
the (ecretary of /abor or as stipulated in a C-@.
- #2&(T(2&S
a. bank 4 km
b. written consent of !!
c. !" does not receive any pecuniary benefit
d. !! given time to withdraw from the bank
considered as compensable his work
=. )rt. 14" : Time of Payment
; Generally + Ence every two weeks or twice a month at intervals
not e$ceeding 4J days. 0o !" shall make payment with less
fre3uency than once a month.
; Corce Ma8eure + Immediately after the force majeure or the
circumstances have ceased.
; <as/ cannot be co(6leted in wee/s in t0e absence of a
!&) or arbitration award+
a. he payments are made at intervals not e$ceeding 4J
days, in proportion to the amount of work completed>
b. hat final settlement is made upon completion of work>
6. )rt. 14% : 3lace of 3ayment I Payment of wages shall be made
at or near the place of undertaking, e$cept as otherwise provided
by such regulations as the (ecretary of /abor may prescribe
under conditions to ensure greater protection of wages.
4. deterioration of peace and order conditions
=. actual or impending emergencies calamity
- !" must provide or reimburse transportation back and
forth
- ime spent collecting wages considered compensable his
work
H. )rt. 14* : irect Payment of Wages 3
62
; General Rule + Cages paid directly to workers.
; '?ce6tions+
4. 1orce majeure rendering such payment impossible or under the
special circumstances, in which case the worker may be paid
through another person under written authority given by the
worker for the purpose.
=. Chere the worker has died, in case the !" may pay the wages of
the deceased worker to the heirs of the latter without the
necessity of intestate proceedings.
@. DIR'!< 1)JM'=<
Payment of wages to leader of group not violation of direct
payment since the contract to perform the services was made by the
leader of the group, for and in behalf of the latter, not for each and
everyone of them individually. (0ermiso vs. /scano)
Wage Prohibition
4. )rt. 11 : >on<%nterference in Disposal of 1ages 8
- 0o !" shall limit or otherwise interfere with the freedom of
any !! to dispose of his wages.
- Fe shall not in any manner force, compel or oblige his !!#s
to purchase merchandise, commodities or other property
from the !" or from any other person, or otherwise make
use of any store or services of such !" or any other person.
=. @ meat processing company gives a =;Q discount to !!#s for
purchase on credit of its product. Fowever, said purchases on
credit will be considered payment of his wages. @n !! purchases
4I cans of the product but objects to the application of his
purchases as part of his wages. Is the objections validD
Mes. he application of his purchases on credit as part of his wages
the products in lieu of legal tender. (*lcantara)
6. +ay an !" make any deductions from the wages of !!#sD
General Rule + 0o. Fis own behalf or in behalf of any person.
'?ce6tions+ [)llowable Deductions]
4. )eductions of (((, +edicare and Pag&ibig Premiums ?@lcantaraB
=. Cithholding ta$ ?0/"CB
6. )eductions for reimbursement of insurance premium advanced
by the !" where the worker is insured with his consent by the
former. ?@rt. 446B
H. )eductions for unions dues where the right to check&off has been
recogni8ed by the !" or individual !! himself. ?IdB
;. )eductions made with the written authori8ation of the !! for
payment to a 6
rd
person and the !" agrees to do so, provided
that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction. ?@lcantaraB
J. )eductions for reimbursement of loss or damage to tools,
materials or e3uipment supplied by the !" to the !!, in trades,
occupations or business where the practice of making such
deductions is recogni8ed. ?@rt. 44HB
7. )eductions as a disciplinary measure for habitual tardiness
?@lcantaraB
63
%. @gency fees under rt. 5@H &e' of the Code.
5. )eductions for debts due the !" from the !!, when such debts
become due and demandable. ?@rt. 47IJ, 0CCB
4I.In court awards, wages may be the subject of e$ecution or
attachment, but only for debts incurred for food, shelter, clothing
and medical attendance. ?@rt. 47I%B
44.)eductions for value of meals and others. ?@lcantaraB
6. )rt. 11% : Deposits for Loss or Damage I 0o !" shall re3uire his
worker to make deposits from which deductions shall be made for the
reimbursement for loss or damage to tools, materials or e3uipment
supplied by the !" e$cept:
a. Chen the !" is engaged in such trades, occupations or business
where the practice of making deductions or re3uiring deposits is a
recogni8ed one, or
b. is necessary or desirable as determined by the (ecretary of /abor in
appropriate rules and regulations.
H. P works as a dishwasher in a big restaurant. @t the time of his
employment, he was told that it was an industry practice that the
value of plates broken by him while in the performance of his work will
be deducted from his wages. +ay management deduct the said value
from P#s wagesD
Mes, provided the following conditions are met: [1R$AC4]
4. he practice of making deductions is a recogni8ed one or is
necessary and desirable in the business of the !".
=. P is clearly shown to be responsible
6. Fe is given reasonable opportunity to show cause why the
deduction should not be made.
H. he amount of deductions is fair and reasonable and does not
e$ceed the actual loss or damage.
;. he deduction does not e$ceed =IQ of P#s wages in a week. (Sec.
14> "le 1222> 0oo( 222> 27s)
;. )rt. 11: : 1ithholding of 1ages and kickbacks prohibited 8 It shall
be unlawful for any person, directly or indirectly,
o withhold any amount from the wages of a worker or
Induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means
whatsoever without the workers consent.
J. )rt. 11@ : Deduction to ensure employment & It shall be unlawful to
make any deduction from wages of any !! for the benefit of the !" or
his life representative or intermediary as consideration of a promise of
employment or retention in employment.
7. )rt. & 0o attorneys fees, negotiation fees or similar charges of
any kind arising from any collective bargaining negotiations or
conclusions of the C-@ shall be imposed on any individual member of
the contracting union: Provided, however that attorneys fees may be
charged against union funds in an amount agreed upon by the parties.
@ny contract, agreement or arrangement of any sort to the contrary
shall be null and void.
64
%. )rt. 1@4, : he laborer#s wages shall not be subject to e$ecution or
attachment e$cept for debts incurred for food, shelter, clothing and
medical attendance.
@. .)G' D'DH!<I$=
4. @n obligation arising from non&payment of stock subscriptions to
a corporation cannot be offset against a money claim of an !!
against an !". (*podaca vs. )&C)
=. he wife of an !! tells the manager that her husband has not
been giving her support. aking pity, the manager instructs the
cashier to deduct 4G6 of the !!#s pay and give the same to the
wife. Is this validD
0o. he !! concerned did not give his written authori8ation for the
deduction. (*lcantara)
6. X borrowed P;II.II from his !". Chen the loan became due and
demandable, X did not pay his !". +ay the !", without the
written authori8ation of X, deduct the loan from the latter#s
wagesD
Mes. Compensation can take place under rt. .B/C of the 0CC.
(*lcantara)
-. !#'!LA$CC
2 @n !" may be compelled to 9check&off: union dues from the wages of
his !! when the !" has been authori8ed to do so by the !!. his is
upon the theory that it is necessary to promote the welfare and
integrity of the union to which he belongs. (%anila -rading vs. %anila
-rading &a!or *ssociation)
C. G)R=IS#M'=<F)<<)!#M'=<
4. <nder @rt. 47I% of the 0CC, 9laborers# wages shall not be subject
to e$ecution or attachment, e$cept for debts incurred for food,
shelter, clothing and medical attendance: (Pacific C"stoms vs. 2nter3
2sland $oc(men and &a!or Union)
=. @rt 47I% which e$empts laborers# wage from attachment or
e$ecution does not apply to a responsibly placed !!, supervisory
or managerial !!, but only to the rank&and&file. ('aa vs. C*)
). D'1$SI<
4. @ marketing firm retains ;Q of the weekly salary of its collectors
as a deposit to answer for any shortage in their collections.
hese are refunded at the end of the month, if no shortages are
incurred. Is the practice legalD
It depends. If it is a recogni8ed practice of !"#s to re3uire such
deposits, then such is legal, since the sum retained is not e$cessive
and is kept by the !" only for a reasonable period. (*lcantara)
65
=. @ ta$icab company re3uires its drivers to make deposits to
defray boundaries and to cover car wash payments. Is this legalD
rt. ..@ does not permit deposits for deficiency in the remittances
of drivers) +boundary, but the re!uirement for deposit for car wash
payments is lawfull. (?3= -a@i vs. )&C)
Prohibited +cts
4. )rt. 11, : It shall be unlawful for an !" to reuse to pay or reduce
the wages and benefits, discharge or in any manner discriminate
against any !! who has filed any complaint or instituted any
proceedings under this itle or has testified or is about to testify
in such proceedings.
=. )rt. 113 : It shall be unlawful for any person to make any
material false statement, report or record filed or kept pursuant
to the provisions of this Code.
). R'!$RD L''1I=G
2 he records shall be kept and maintained in or about the premises of
workplace or in the branch where the !! is regularly assigned, the
keeping of the records in any other place is prohibited. (So"th %otorists
vs. -osoc)
4H. 7 Liability of 'R and ot0er 1arties
,R0 (ndependent #ontractor and Subcontractor and Labor)2nly
#ontracting
4. he rules on t0e liability of Job contractors, Indirect 'REs and
KLaborAonlyN contractors are the following:
4. General Rule : @n !" who enters into a contract with a
contractor to perform work for the !", does not thereby create
an !"&!! relationship between himself and the !!#s of the
contractor. hus the !!#s of the contractor remain the
contractor#s !!#s and his alone. (P0C vs. )&C)
=. =onet0eless : Chen a contractor fails to pay the wages of his
!!#s in accordance with the /abor Code, the !" who contracted
out the job to the contractor becomes 8ointly and se2erally
liable with the contractor to the !!#s of the latter 9to the e$tent
of the work performed under the contract: as if such !" were the
!" of the contractor#s !!. ?IdB
he law itself, established an !"&!! relationship between the !" and
the job contractor#s !!#s for a limited purpose i.e. in order to ensure
that the latter get paid for wages due them.
6. Indirect 'R : hese provisions shall likewise apply to any
person, partnership , association or corporation which, not being
an !", contracts with an independent contractor for the
performance of any work, task, job or project. &rt. ./B'
66
H. LaborA$nly !ontractor : he conclusion is different where
there is 9labor&only: contracting. he 9labor&only: contractor i.e.
person or intermediary, is considered 9merely as an agent of the
!".: he statute makes the !" directly responsible to the !!#s of
the 9labor&only: contractor as if such !!#s had been directly
employed by the !". he statute establishes an !"&!!
relationship between the !" and the !!#s of the 9labor&only:
contractor, this time for a comprehensive purpose, to prevent
any violation of this Code. (0road8a# %otors vs. )&C)
he legitimate job contractor provides services while the
labor&only contractor only provides manpower.
Pob contractor undertakes to perform a specific job while
labor&only contractor merely provides personnel to work for
the employer.
=. )rt. 14, : @n !" or indirect !" may re3uire the contractor or
subcontractor to furnish a bond e3ual to the cost of labor under
contract, on condition that the bond will answer for the wages due the
!!#s should the contractor or subcontractor, as the case may be fail to
pay the same.
6. C, a former !! of @-C entered into an agreement with the
company wherein C will hire person to work in the painting
department and the company will reimburse him for whatever
wages he will pay plus 4IQ of this amount. If C fails to pay the
wages, can the workers claim from the companyD
Mes. C is merely a 9labor&only: contractor and is considered merely
an agent of the !" who shall be responsible to the workers in the
same manner and e$tent as if the latter were directly employed by
him. (*lcantara)
H. A entered into a contract with " for the construction of A#s house.
(ome workers of " were not paid their wages. Is A liableD
Mes. *nder rt. ./B, the person, though not an !", who contracts
with the independent contractor for the damages employed by the
latter are indirect !"#s. (*lcantara)
;. @ entered into a verbal agreement with ( wherein @ would be
paid a commission for milled rice she sold or palay for the farmer.
@ would spend her own money for the undertaking, but to enable
her to carry out the agreement more effectively, she was
authori8ed to borrow from other persons, subject to
reimbursement from ( and either of them may terminate the
business arrangement at will, with or without cause. +ay @ be
considered an independent contractorD
Mes. @ was contracted to do a piece of work according to her own
method and without being subject to the control of the !" e$cept as
to the result of the work. (Sara vs. *garrado)
,$tent of Liability
67
4. he direct !" and the indirect !" are jointly and severally liable
to petitioners for the monetary claims. ($eferia vs. )&C) 1or
purposes of determining the e$tent of their civil liability, they
shall be considered as direct !"#s. ?@rt. 4I5B
In legitimate job contracting, no !"&!! relationship e$ist
between the principal and the job contractors employees.
Insolvency or unwillingness to pay by the contractor or
direct !" is not a prere3uisite for the joint and solidary
liability of the principal or indirect !". ($0P vs. )&C)

=. If an independent service contractor fails to pay the wages of the


janitors its supplies to AMX, is AMX liable for the unpaid wagesD
Mes. @ccording to rt. ./C, the !" shall be jointly and severally
liable to the !!#s of the contractor or subcontractor to the e$tent of
the work performed under the contract. (*lcantara)
6. Could your answer change if AMX already paid the independent
contractor the contract priceD
0o, AMX will still be liable for the unpaid wages of the janitor since
the obligation is imposed by law. ?IdB
H. P(, a government agency, entered into a service agreement
with @-C or the supply of janitors to P(. @-( failed to pay the
wages of the janitors. P( refused to pay on the ground that it is
a government agency. Is this claim validD
0o. he janitors employed by @-C are considered indirect !!#s and
not to indirect !!#s coming from the private sector. (a!ago vs. )&C)
4H. % .or/er 1referenceA&an/ru6tcy
4. )rt. 114. In the event of bankruptcy or li3uidation of an !"#s
business, his workers shall enjoy first preference as regards their
wages and other monetary claims, any provisions of law to the
contrary notwithstanding. (uch unpaid wages and monetary
claims shall be paid in full before claims of the government and
other creditors may be paid.
2 he right or preference has to be asserted in distribution
proceedings such as insolvency where all the creditors convened,
their claims ascertained and inventories and the preferences
determined.
=. @ declaration of bankruptcy or a judicial li3uidation must be
present before the worker#s preference may be enforced. he
said article cannot be viewed in isolation> it must always be read
in relation to the provisions of the Civil Code concerning the
classification, concurrence and preference of the credits. ($0P vs.
Santos) he aforesaid provisions of the Civil Code, including rt.
../ re3uires judicial proceedings in rem in adjudication of
creditor#s claims against the debtor#s assets to become
operative. (*lcantara)
68
6. <CP obtained a judgment from the 0/"C in an unfair labor case.
wo days before the judgment, the PCI-, mortgage creditors of
the company, foreclosed all mortgages in their favor. he union
sought to garnish in its favor a portion of the purchase price. Is
the bank subject to the claims of the unionD
Mes, under rt. ../ workers enjoy first preference as regards wages
owed them for services rendered during the period prior to the
bankruptcy or li3uidation. (PC20 vs. )ational %ines and *llied Union)
H. @tlas e$tile mortgaged its assets to )-P. )-P foreclosed the
asset. he !!#s filed a complaint against @tlas and )-P for the
wage differentials. he labor arbiter and the 0/"C held that the
worker#s preference under @rt. 44I does not create a lienD
0o. @rt. 44I does not create a lien in favor of the workers. (*lcantara)
)rt. 114
establishes merely a rule of preference and does not create
a lien in favor of the workers
workers claim for unpaid wages and other monetary
benefits cannot prevail over a mortgages lien
4H. 5 .age Reco2ery
4. )rt. 1@ 5a7 57, 5"7, 5%7, 5:7 + 1urisdiction of Labor +rbiters
and the #ommission he /abor @rbiters shall have e$clusive
and original jurisdiction, e$cept as otherwise provided, the
following cases involving all workers:
a. ermination )isputes ?3ualified by rt. 5C.which
grant voluntary arbitrators original and e$clusive
jurisdiction over all unresolved grievances arising
from C-@( and company personnel policiesB>
b. Cases involving terms and conditions and
employment, if accompanied with a claim for
reinstatement ?including claims of an !"&!!
relationship, including claims for actual, moral and
e$emplary damages, as provided in (ec. 4I,
+igrant Corkers @ctB
c. Claims for actual, moral, e$emplary and other
damages arising from the !"&!! relations>
d. !$cept claims for !!#s Compensation, (ocial
(ecurity, +edicare and maternity benefits, all other
claims, arising from the !"& !! relations, including
those of persons in domestic or household service,
involving an amount e$ceeding P;,III.II regardless of
whether accompanied with a claim for reinstatement.
. )rt. 1, + Disitorial and 'nforce(ent 1ower oft t0e
Secretary of Labor or 0is duly aut0oriIed re6resentati2e
@ccess to !"#s records and premises at anytime of the day
or night whenever work is being undertaken therein and
copy therefrom> 3uestion any !!> and investigate any fact,
69
condition or matter which may be necessary to determine
violations of this Code and of any labor law, wage order or
rules and regulations issued pursuant thereto.
In cases where the relationship or !"&!! still e$ists, the
power to issue Compliance Erders to give effect to the
labor standard provisions of this Code and other social
legislation.
Crit of e$ecution to the appropriate authority shall
be issued for the enforcement of the said orders,
e$cept in cases where the !" contests the findings
of the labor employment and enforcement officer
and raises issues supported by documentary proofs
which were not considered in the course of
inspection.
Erder stoppage of work or suspension of operations of any
unit of or department of an establishment when non&
compliance poses grave and imminent danger to the
health and safety of workers in the workplace.
Cithin =H hours, a hearing shall be conducted to
determine whether an order for the stoppage of
work or suspension of operations shall be lifted or
not.
In case the violation is attributable to the fault of
the !", he shall pay !!#s their salaries or wages
during the said period.
It shall be unlawful for any person to Ebstruct, impede,
delay or otherwise render ineffective the order of the
(ecretary of /abor.
2 0o inferior court shall issue a temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders in accordance with this @rticle.
@ny government !! found guilty of violation, after
appropriate administrative investigation, be subject to
(ummary dismissal from the service.
he (ecretary of labor may re3uire !"#s to keep and
maintain employment records as may be necessary. ?@(
CE0!(B
2 <nder what circumstances may the "egional )irector be divested of
his jurisdiction to issue compliance orders under @rt. 4=% ?bBD
a. !" contests the findings of the labor regulations officer and
raises issue thereon>
b. In order to resolve such issue, there is need to e$amine
evidentiary matters>
c. (uch matters are not verifiable in the normal course of
inspection. (ed 1. Cocon"t vs. &eogrado)
6. )rt. 13 + "ecovery of wages, simple money claims and other
benefits
70
he "egional )irector of the )E/! or any of the duly
authori8ed hearing officers of the )epartment is
empowered, through summary proceedings and after due
notice, to hear and decide any monetary claims and
benefits, including legal interest to a person employed in
domestic or household service> 3rovided
a. (uch complaint does not include claim for reinstatement
b. @ggregate money claims of each househelper does not
e$ceed P;,III
he complaint shall be resolved within 6I days from the
date of filing of the same.
H. )rt. 111 +
In cases of unlawful withholding of wages the culpable
party may be assessed attorney#s fees e3uivalent to 4IQ
of the amount of wages recovered.
It shall be unlawful for any person to demand or accept, in
any judicial or administrative proceedings for the recovery
of the wages, attorney#s fees, which e$ceed 4IQ of the
amount of wage recovered.
Section 1%+ Ser2ice !0arges
4H. 4 !o2erage
4. Section 1, Rule D, &oo/ III, IRREs + his rule shall apply only to
establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as
private subsidiaries of the Novernment.
=. Section , Rule DI, &oo/ III + his rule shall apply to all !!#s of
covered !"#s e$cept to managerial !!#s.
.anagerial ,, 3
a. powers of prerogatives to lay down, and e$ecute
management to lay don and e$ecute management policies
andGor
b. hire, transfer, suspend, lay&off, recall, discharge, assign, or
discipline !!#s or to effectively recommend such
managerial actions.
Collection of service charges is a management decision
and not a re3uirement of law
4H. = Ser2ice !0arges
2 )rt. 3: : o be distributed at the rate of %;Q for covered !!#s
'distributed e3ually among them, and 4;Q for management.
A a waiter at )C )iner was receiving a share in the restaurant#s service
charges. /ater, the restaurant discontinued the collection of service
charges. he take&home pay of A was reduced by the value of the
71
discontinued service charges. +ay A ask his !" to continue paying the
service chargesD

Mes. In case the service charge is abolished, the share or the covered
!!#s shall be considered integrated in their wages. 5)rt. 3:7
he employees share in the service charges is part of the
other benefits to which he is entitled, in addition to full
backwages
Section 1*+ <0irteent0 Mont0 1ay
4;.4 Law B !o2erage
#overage
4. (ection =, "evised Nuidelines on the 46
th
+onth Pay /aw : The
following ,R-s are still not covered by P A=B6
he government and any of its political subdivisions,
including NECC#s, e$cept those corporations operating
essentially as private subsidiaries of the government.
!"#s already paying their !!#s a 46
th
month pay or more in
a calendar year or its e3uivalent at the time of this
issuance.
'he term 9its e!uivalent: O shall include Christmas
bonus, mid&year bonus, cash bonuses and other payments
but shall not include cash and stock dividends, cost of
living allowances and other allowances regularly enjoyed
by the !!, as well as non&monetary benefits. Chere an !"
pays less than re3uired 4G4=
th
of the !!#s basic salary, the
!" shall pay the differences.,
!"#s of household helpers and persons in the personal
service of another in relation to such workers, and
!"#s of those who are paid on purely commission,
boundary, or task basis, and those who are paid a fi$ed
amount for performing specific work, irrespective of the
time consumed in the performance thereof, e$cept where
the workers are paid on piece&rate basis in which case the
!" shall grant the re3uired 46
th
month pay to such workers.
@ distressed !" may 3ualify for e$emption for the 46
th
month pay if there is prior authori8ation from the )E/!.
?)entech vs. 0/"CB
=. he C-@ provides for the payment of Christmas bonuses to all
regular !!#s in the bargaining unit with of at least 4 year of
continuous service. Is this e3uivalent to the 46
th
month payD
0o. he Christmas bonuses provided in the C-@ accords a reward
for loyalty to certain !!#s. his is evident from the stipulation
granting the bonus in 3uestion to workers with at least 4 year of
72
continuous service. he bonus therefore is to be in addition to the
legal re3uirement. 5H!1 2s. =LR!7
4;.= )(ount and 1ay(ent Date
4. Sec C Revised 8uidelines on the BD
th
.onth Pay Law6
)(ount : S of the total basic salary earned by an !!
within a calendar year.
he 46
th
month pay is to be paid only to rank&and file
employees regardless of the amount of their basic salary.
<i(e of 1ay(ent: 0ot later than )ecember =H.
=. )efine basic salary: 1or purposes of computing the 46
th
month pay,
basic salary:
include remuneration or earnings paid by this !" for
services rendered
but does not include allowances and monetary benefits
which are not considered or integrated as part of the
regular or basic salary, such as the cash e3uivalent or
unused vacation and sick leave credits, overtime,
premium, night&differential and holiday pay, and cost&of&
living allowances.
Fowever, these salary&related benefits should be
included as part of the basic salary in the
computation of the 46
th
month pay if the individual
or collective agreement, company practice or
policy, the same are treated as part of the basic
salary of the !!#s.
6. 1rom 454 to 4557, )1C included in the computation of this 46
th
month pay, the !!#s sick, vacation and maternity leaves, In 455%,
the company discontinued the inclusion of the aforementioned
items in the 46
th
month pay. Is this validD
he considerable length of time the 3uestioned items had been
included by the company indicates a unilateral and voluntary action
on its part, sufficient in itself to negate any claim of mistake. @
company practice favorable to the !!#s had been established, and
the payments made pursuant thereto ripened into benefits enjoyed
by them. @ny benefit and supplement being enjoyed by the !!#s
cannot be reduced, diminished, discontinued or eliminated by the
!". (*lcantara)
&asic .age
4. @re the sales commission of a salesman paid a guaranteed wage
plus commissions included in the computation of this 46
th
month
payD
It depends on what kind of commissions may properly be
considered part of the basic salary, they should be included in
computing the 46
th
month pay. If the commission are not an integral
part of the basic salary, then they should be e$cluded. (*."cena)
(ales commissions which comprised an automatic increment to the
73
monetary value assigned to each unit of work rendered by the
salesman, or that of the wages&or sales&percentage type should be
included in the 46
th
month pay computation. En the other hand,
commission in the form of productivity bonuses which closely
resembles profit&sharing payments and have no clear direct or
necessary relation to the amount of work actually done by each
individual !!, or the profit&sharing or bonus&type, should be
e$cluded from the computation of the 46
th
month pay. (Philippine
$"plicators vs. )&C)
Substitute 1ay(ent
4. -enefits in the form of food or free electricity not proper substitute
for the 46
th
month pay. (+ramanlis vs. %inister of &a!or)
1%
t0
Mont0 1ay
4. he grant of the 4H
th
month pay is a management prerogative,
gratuitous in nature and therefore it cannot be forced. (4ama#a Hotel vs.
)&C)
4;. 6 =onAinclusion
4. Sec. @, Re2ised Guidelines on t0e 1"
t0
Mont0 1ay Law: he
mandated 46
th
month pay need not be credited as part of the
regular wage of !!#s for purposes of determining overtime and
premium pays, fringe benefits as well as contributions to the
state insurance fund, (ocial (ecurity, +edicare and private
retirement plans.
Section 1: + &onus
4J. 4 Definition
4. @ bonus is an amount is an amount granted and paid to an !! for
his industry and loyalty which contributed to the success of the
!"#s business and made possible the reali8ation of profits.
(*."cena)
4J.= .0en De(andable
4. 1rom the legal point of view, a bonus is not a demandable and
enforceable obligation. -ut it is so when it is made part of the
wage or salary or compensation. In such case, the latter would
be a fi$ed amount and the former would be a contingent one
dependent upon the reali8ation of profit. (*."cena) 1urthermore,
while normally discretionary, the grant if gratuity or bonus by
reason of its long and regular concession, may become regarded
as part of the regular compensation. (&i!eration Steamship vs. C2)
Section 1@. .or/ing !onditions for S6ecial Grou6s of .or/ers B
.o(en
47.4 .o(en and t0e !onstitution
74
4. )rt. II, Sec. 1%, !onst. : he (tate recogni8es the role of
women in nation&building, and shall ensure the fundamental
e3uality before the law of women and men.
47.= !o2erage
4. Section 1, Rule -II, &oo/ III, IRREs : his rule shall apply to all
!"#s e$cept to:
a. government and NECC#s and
b. to !"#s of household helpers and persons in their personal
service insofar as such workers are concerned
47.6 1ro0ibited )cts
=IG#< .$RL )=D '-!'1<I$=
4. )rt. 1"4 : 0o woman shall be employed or permitted or suffered
to work, with or without compensation:
a. (ndustrial underta*ing 6 -etween 4I:II pm and J:II am
of the following day.
b. #ommercial underta*ing 6 -etween midnight and J:II
am of the following day.
c. +gricultural underta*ing 6 0ighttime unless she is given
a period of rest of not less than 5 consecutive hours.
=. )rt. 1"1 : !$ceptions to 0ightwork prohibition
[), C, H, 1 B M, #, M, A C)]
a. In cases of actual or impending emergencies caused by a
serious accident, fire, flood, earth3uake, epidemic or other
)isasters or calamity, to prevent loss of life or property.
b. Cases of force majeure or imminent danger to public
safety.
c. Cases of urgent work to be performed on machineries,
e3uipment or installation, to avoid serious loss which the
!" would otherwise suffer.
d. Cork is necessary to prevent serious loss of perishable
goods
e. Coman !! holds a responsible position of managerial or
technical in nature.
f. Coman !! has been engaged to provide health and
welfare service.
g. Chere the nature of the work re3uires the manual skill and
de$terity of women workers>
h. Chere the women !!#s are immediate members of the
family operating the establishment or undertaking> and
i. @nalogous cases. ?F<++P( 1@)B
6. /N, a manufacturer and e$porter of jeans, has a 6&shift work
schedule but maintains a policy of not assigning women in the 6
rd
shift from 4I:II pm to J:II am. Is this policy discriminatory to
womenD
Mes. he women sewers, by reason of their se$, are denied the
opportunity to earn additional pay. he nature of the work re3uires
the manual skill and de$terity of women workers and cannot be
75
performed with e3ual efficiency to male workers. his is one of the
e$ceptions to the night work prohibition. 5)rt. 1"17
-. DIS!RIMI=)<I$=
4. )rt. 1"*: It shall be unlawful for any !" to discriminate against
woman !! with respect to terms and conditions of employment
solely on account of her se$.
The following are acts of discrimination [1, C]
a. Payment of lesser compensation, as against a male !!, for
work of e3ual value.
b. 1avoring a male !! over a female !! with respect to the
promotion, training opportunities, study and scholarship
grants solely on account of their se$es.
Criminal liability for violations shall be penali8ed as provided in
@rt. =%% and =%5 of this Code. he institution of any criminal
action under this provision shall not bar the aggrieved !! from
filing an entirely separate and distinct action for money claims,
which may include claims for damages and other affirmative
reliefs. he actions hereby authori8ed shall proceed
independently of each other.
=. C, a H;&year old teacher was dismissed by the school after she
got married to L, her 4%&year old H
th
year high school student. Is
the dismissal lawfulD
0o, in the absence of substantial evidence to show that C took
advantage of her position to court her student. here is nothing
wrong if the two fell in love despite the disparity in their ages.
(Ch"a3A"a vs. Clave)
C. M)RRI)G'
4. )rt. 1": : Stipulation against marriage It shall be unlawful
for an !" to : [!, S, D]
a. "e3uire as a condition of employment or continuation of
employment that a woman !! shall not get married>
b. (tipulate e$pressly or tacitly that upon getting married a
woman shall be deemed resigned or separated>
c. @ctually dismiss, discharge, discriminate or otherwise
prejudice a woman !! merely by reason of her marriage.
). G'='R)L
4. )rt. 1"@ : It shall be unlawful for any !" to : [D&, D1, R)]
a. )eny any woman !! the benefits provided for in this
Chapter or to discharge any woman employed by him for
the purpose of preventing her from enjoying any of the
benefits provided under this Code>
b. )ischarge such woman on account of her pregnancy, or
while on leave or in confinement due to her pregnancy>
76
c. )ischarge or refuse the admission of such woman upon
returning to her work for fear that she may again be
pregnant.
=. In /#s contract of employment with Club !, it was stipulated that
her employment as a dancer would cease once she gets
pregnant. Chen / got pregnant, / was no longer allowed to
dance and since there were no other work available for which her
talents were suitable, her employment was terminated. Is the
action legalD
Mes. It is both awkward and dangerous for her to dance during her
pregnancy. Ef course the !" has the obligation to give her another
job, but as stated in the problem there is no other work for which
her talents are suited. It is not fair to re3uire the !" to continue
employing her. (*lcantara)
6. @ pharmaceutical company rejected the applications of ;
pregnant women as sales representatives for contraceptive pills
and family planning devices. Is this validD
Mes. he company has the prerogative to select its !!#s. Chat is
unlawful is for the !" to discriminate against or dismiss a woman by
reason of their pregnancy. (*lcantara)
47. H Cacilities
4. )rt. 1" : he (ecretary of /abor shall establish standards that
will ensure the safety and health of women !!#s. In appropriate
cases, he shall, by regulations, re3uire !" to:
a. Provide seats proper for women and permit them to use
seats when they are free from work and during working
hours, provided they can perform their duties in the
position without detriment to efficiency.
b. o establish a nursery in a workplace.
c. o determine appropriate minimum age and other
standards for retirement or termination in special
occupations such as those of flight attendants and the like.
=. )rt. 1"% : ?aB !stablishments which are re3uired by law to
maintain clinic or infirmary shall provide free family planning
services to their !!#s.
6. Is the !" re3uired by law to give maternity benefits to its female
workersD
0o. +aternity benefits are to be paid in appropriate instances by the
(((. he only obligation of the !" is to advance the benefit subject
to reimbursement by the (((. (*lcantara)
47.; S6ecial classification S6ecial .o(en .or/ers
4. A works as a hostess in a nightclub, she is paid a percentage of
the lady#s drink ordered by customers. here are nights when
77
she does not earn anything because there are no customers. Is A
an !! of the nightclubD
Mes. @ny woman who is permitted or suffered to work, with or
without compensation, in any nightclub, cocktail lounge, massage
clinic, bar, or similar establishment, under the effective control or
supervision of the !" for a substantial period of time as determined
by the (ecretary of /abor shall be considered an !! of such
establishment for purposes of labor and social legislation. 5)rt.
1",7
Section 1,. .or/ing !onditions for S6ecial grou6 of .or/ers B
Minors
4%.4 Minors and t0e !onstitution
)rt. II, Sec. 1", !onst. + he (tate recogni8ed the role of the youth in
nation&building and shall promote and protect their physical, moral
spiritual, intellectual, and social well&being. It shall inculcate in the
youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.
4%.= !o2erage
Section 1, Rule -II, &oo/ III, IRREs : his "ule shall apply to all !"#s
e$cept
[G #]
4. to the Novernment and NECC#s and
=. to !"#s of household helpers and persons in their personal
service insofar as such workers are concerned.
4%.6 '(6loyable )ge
Section 1, R) @:14 as a(ended by R) @:*, :
2 General rule+ Children below 4; years of age shall not be employed.
2 '?ce6tions+ [1, ']
4. Child works directly under the sole responsibility of his parents or
legal guardian and where only members of the !" family are
employed, providedI
a. his employment neither endangers his life, safety, health
and morals, nor impairs his normal development:
b. the parent or legal guardian shall provide the said minor
child with the prescribed primary andGor secondary
education.
=. Child is employed in entertainment or information through
cinema, theater, radio or television, providedI
c. !mployment contract is concluded by the child#s parents or
legal guardian, with the e$pressed agreement of the child
concerned, if possible, and the approval of the )E/!.
d. he !" shall ensure the protection, health, safety and
morals of the child>
e. he !" shall institute measures to prevent the child#s
e$ploitation or discrimination.
f. he !" shall formulate and implement, subject to the
approval and supervision of competent authorities, a
78
continuing program for training and skills ac3uisition of the
child.
g. he !" shall first secure, a work permit from the )E/!
which shall ensure observance of the above re3uirements.
=. )rt. 1"3 : @ny person, between 4; and 4% may be employed in
any non&ha8ardous work. In any ha8ardous work, the employable
age is 4% and up.
D% What are considered hazardous wor* places? ; # . P<
a. Chere the nature of work e$poses the worker to )angerous
environmental elements, contaminations or work
conditions.
b. (tevedoring, construction work, logging, firefighting,
mechani8ed farming and similar work.
c. +anufacture or handling of !$plosives and other
pyrotechnic products.
d. Chere the workers are e$posed to heavy or power&driven
machinery or e3uipment or tools.
H. /, 4I years old, was hired as a singer in a carnival which stages
shows wherever there is a town fiesta. (he is paid P;,III.II a
month. / is therefore always on the road, traveling to different
parts of the country. Is her employment lawfulD
0o. (uch employment will endanger her health and impair her
normal development. (he is also deprived of the opportunity to get
primary education as she is always traveling to different parts of the
country. (*lcantara)
4%.H Discri(ination
4. )rt. 1%4 : Prohibition against child discrimination 0o !"
shall discriminate against any person in respect to terms and
conditions of employment on account of his age.
=. Could a company rule providing for lower wages for workers
below 4% years who are ine$perienced violate the prohibitionD
0o. he payment of lower wages is by reason of the worker#s
ine$perience, not his age. here is no discrimination on account of
the worker#s minority. (*lcantara)
Section 13. .or/ing !onditions for S6ecial grou6 of .or/ers B
#ouse0el6ers
45.4 !o2erage
)rt. 1%1 : his chapter shall apply to all persons rendering services in
households for compensation
45.= #ouse0el6ers
4. Define do(estic or 0ouse0old ser2ice : (ervice in the !"#s
home which is usually necessary or desirable for the
maintenance and enjoyment thereof and includes ministering to
79
the personal comfort and convenience of the member#s of the
!"#s household, including services of family drivers. 5)rt. 1%17
=. C was employed by @ company to work as a maid in the
cottages of its -aguio mining site to attend to the needs of its
e$ecutives or guests who now and then visit the site. Is ( a
househelper or domestic servantD
0o. he services of a househelper is rendered e$clusively for the
personal comfort and enjoyment of the family of the !" and are
performed in the latter#s home. (ervices rendered in an e$ecutive
cottage cannot be considered domestic. ( must be considered a
regular !! of the mining company. (*pe@ %ining vs. )&C)
45.6 =onA#ouse0old .or/ )ssign(ent
lives in a compound where he operates a modest candy business.
(ometimes, when there is no work in his house, his maids help in the
packing of the candies and his family driver delivers the candies to the
outlets. Fow should the work rendered in connection with the candy
business be compensatedD
1or work rendered by the maids and the family driver, they should be
paid at the rate prescribed by law for non&agricultural workers.
(*lcantara) 0o household helper shall be assigned to work in a
commercial industrial or agricultural enterprise at a wage or salary
rates lower than that provided for agricultural or non&agricultural
workers as prescribed therein. (*rt. 14?)
45. H !onditions for '(6loy(ent
4. +, 4; years old, worked as a maid in the house of /. (he was
paid in advance for 6 years and she agreed that she will work for
/ for the said period. Is there any legal infirmity in the said
agreementD
Mes. he period contract e$ceeds the ma$imum set by the law. @rt.
4H= provides that the original contract of domestic service shall not
last for more than = years, although it may be renewed for such
periods as may be agreed upon by the parties. +#s contract will
therefore be good for only = years. (*lcantara)
=. What are the minimum wages for househelpersD
a. +etro +anila and highly urbani8ed cities : P%II.II
b. Chartered cities and 4
st
class municipalities : PJ;I.II
c. Ether municipalities : P;;I
Fousehelpers receiving P4,III.II shall be covered by the
(((.
6. +side from the rights to minimum wage0 what other
rights are en9oyed by a househelper9 [' J & A I C]
a. Epportunity for elementary education if a househelper is
less than 4% years old ?@rt. 4HJB
80
b. Pust and human treatment ?@rt. 4H7B
c. -oard, lodging and medical attendance ?@rt. 4H%B
d. Indemnity for unjust termination of services of 4; days plus
the compensation already earned.
e. 1uneral benefits if the househelper has no relatives with
sufficient means in the place where the head of the family
lives. ?@rt. 4J5J, 0CCB '1 I - ! P,
f. If househelper is unjustly dismissed,
pay wages already earned R 4; days wages ?IndemnityB
g. If househelper leaves without justifiable cause,
forfeits any unpaid salary not e$ceeding 4; days
H. + works as a live&in labandera in the house of somewhere in
Lue8on City. (he works for 44 hours a day. -ased on their
contract, she is paid P%II.II. Is she entitled to additional
compensationD
Mes. @lthough she is merely a househelper, she should not be
allowed to work more than 4I hours a day. ?@rt. 4J5;, 0CCB (ince
she worked for 44 hours daily, she should be paid an additional
compensation beyond the minimum wage of P%II.II set by the law.
(*lcantara)
;. )rt. 1*4 : If the duration of the household service is not
determined either in the stipulation or by the nature of the
service, the !" or the househelper may give notice to put an end
to the relationship of the service.
Section 4. .or/ing !onditions for S6ecial grou6 of .or/ers B
#o(ewor/ers
=I.4 'R
4. )rt. 1** : 4,R5 of homewor*ers includes any person,
natural or artificial, who for his account or benefit, or on behalf of
any person residing outside the country, directly or indirectly or
though any !!, agent, contractor, sub&contractor or any other
person:
a. )elivers or causes to be delivered, any goods, fabricated in
or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions>
or
b. (ells any goods, articles or materials to be processed or
fabricated in or about a home then rebuys them after such
processing or fabrication, either himself or through some
other person.
=I.= 'R Liability
81
4. Section ,, Rule -ID, &oo/ III, IRREs : he !" shall be jointly
and severally liable to the !!#s or homeworkers of the contractor
or sub&contractor, in the same manner as if the !!#s or
homeworkers were directly engaged by the !".
=. ( represents in the Philippines the (ears chain of department
stores in the <(. (he sells wood and leather to housewives who
makes these into wooden clogs according to the patterns and
specifications of (. Is there an !"&!! relationship between ( and
the housewivesD
Mes. he housewives are considered homeweorkers and ( is their
!". (*lcantara)
6. Chat is the liability of (earsD
(ears is jointly and severally liable if ( is not able to pay the wages
of the homeworkers. 5Sec. ,, Rule -ID, &oo/ III, IRREs7
H. erms and conditions of employment involving money claims of
homeworker shall be heard by the "egional )irector of the )E/!.
-eyond that, the case falls under the jurisdiction of the /abor
@rbiter. (*."cena)
Section 1, Medical, Dental and !onditional Safety
=4.4 Cirst )id <reat(ent and 'R )ssistance
4. )rt. 1*:. !very !" shall keep in his establishment such first&aid
medicines and e3uipment as the nature and conditions of work
may re3uire, in accordance with such regulations as the )E/!
shall prescribe.
Section 1, Rule I, &oo/ ID, IRREs 9 his rule shall apply to all !"#s
whether operating for profit or not, including the Novernment ant
NECC#s, which employ in any workplace 4 or more workers.
=. )rt. 1:1 : It shall be the duty of an !" to provide all the
necessary assistance to ensure the ade3uate and immediate
medical and dental attendance and treatment to an injured or
sick !! in cases of emergency.
6. he !" is not obliged to provide and spend for the continued or
follow&up treatment of the !! unless it has bound itself to do so
by contract or established practice or policy. (*lcantara)
=4.= '(ergency Medical and Dental Ser2ices
When and What is Re!uired
4. )escribe briefly these free emergency medical0 dental services
and facilities re!uired to be furnished by the ,RD
14 to *4 wor/ers : he services of a first&aider shall be
provided who may be one of the workers in the workplace
and who has immediate access to the first&aid medicines.
82
*1 to 44 wor/ers: (ervices of a full&time registered
nurse shall be provided. Fowever, if the work is non&
ha8ardous, the services of a full&time first&aider may be
provided if a nurse is not available.
41 to "44 wor/ers : (ervices of a full&time registered
nurse, a part&time emergency clinic shall be provided
regardless of the nature of the undertaking therein. he
physician and dentist engaged for such workers shall stay
in the premises for at least = hours a day.
Chere the establishment has more than 4 workshift
a day, the re3uired = hour stay shall be devoted to
the workshift which has the biggest number of
workers and they shall, in addition to the
re3uirements under this "ule, be subject to call at
anytime during the other workshifts to attend to
emergency cases.
"41 or (ore wor/ers : (ervices of a full&time nurse, a
full&time physician, a full&time dentist, a dental clinic, and
an infirmary or emergency hospital with one bed capacity
for every 4II workers shall be provided. he physician and
dentist shall stay in the premises of the workplace for at
least % hours a day.
Chere the workplace has more than 4 shift per day,
they shall be at the workplace during the work&shift
which has the biggest number of workers and they
shall be subject to call at anytime during the other
workshifts to attend to emergency cases.
Chere the undertaking in such workplace is non&
ha8ardous, the !" may engage the services of a part&time
physician and part&time dentist who shall have the same
responsibilities ass those of the part&time physician and the
part&time dentist in the preceding paragraph, and shall
engage the services of a full&time nurse.
In all workplaces where there are more than 4 workshift in
a day, the !" shall in addition to the re3uirements under
this rule, provide the services of a full&time first&aider for
teach workshift. 5Sec. %, Rule I, &oo/ ID, IRREs7
.0at are considered 0aIardous wor/ 6laces9 [D ! M 1]
Chere the nature of the work e$poses the worker to
)angerous environmental elements, contaminations or
work conditions.
(tevedoring, construction work, logging, firefighting,
mechani8ed farming and similar work.
+anufacture or handling of e$plosives and other
pyrotechnic products
Chere the workers are e$posed to heavy or power&driven
machinery or e3uipment or tools.
83
@n auto repair shop has % !!#s. Chat medical and dental
services or facilities must be furnished by the owner of the
latterD
(ince the establishment employs less than 4I workers, the
owner is only obliged to keep in the workplace first aid
medicines.
.0en not Re>uired
)rt. 1*, : he re3uirement for an emergency hospital or dental clinic
shall not be applicable in case there is a hospital or dental clinic which
is accessible from the !"#s establishment and he makes arrangement
for the reservation therein of the necessary beds and dental facilities
for the use of his !!#s
; km urban
=; min rural
=4.6 )d(inistration
)rt. 1:* : ?aB he )E/! shall be solely responsible for the
administration and enforcement of occupational safety and health
laws, regulations and standards in all establishments and workplaces
wherever they may be located.
Chartered cities may be allowed to conduct industrial
safety inspections of establishments within their respective
jurisdictions where they have ade3uate facilities and
competent personnel for the purpose as determined by the
)E/! and subject to national standards established by the
latter.
?bB he (ecretary of /abor may, through appropriate
regulations, collect reasonable fees for the inspection of
steam boilers, pressure vessels and pipings and electrical
installations, the test and approval for safe use of materials,
e3uipment and other safety devices and the approval of plans
for such materials, e3uipment and devices. he fee so
collected e$pended e$clusively for the administration and
enforcement of safety and other labor laws administered by
the )E/!.
Section . '' !lassification
==.4 !o2erage
Section 1, Rule I, &oo/ DI, IRREs : his "ule shall apply to all
establishments and undertakings, whether operated for profit or not,
including educational, medical, charitable and religious institutions and
organi8ations, in cases of regular employment with the e$ception of
the Novernment and its political subdivisions including NECC#s.
==.= '' !lassification
1. )rt. ,4
a. "egular !!#s
b. Project !!#s
c. Casual !!#s
84
d. (easonal !!#s
. )rt. ,1
Probationary !!
". $t0ers
Contract&fi$ed period
'R Deter(ination
4. Chat determines whether a certain employment is regular or
casual is not the will and words of the !", much less the
procedure of hiring the !! or the manner of paying his salary. It is
the nature of the activities performed in relation to the particular
business or trade considering all circumstances, and in some
cases the length of time of its performance and its continued
e$istence. ($e &eon vs. )&C)
=. ucor Industries, a company engaged in moving and storage of
foods hired packers and drivers pursuant to employment
contracts which provided that the workers were employed on
9as&needed: basis and considered 9daily&hired:. @re they
considered regular !!#sD
Mes. Packing and driving activities are usually necessary and
desirable in ucor#s usual business. hey are entitled to security of
tenure, the provisions of the written agreement to the contrary
notwithstanding. (-"cor vs. )&C)
==.6 Regular ''Es
B% Who are considered regular ,,-s?
a. hose who have been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the !", their employment not being fi$ed for a
specific project or undertaking the completion or
termination of which has been determined at the time of
the engagement, or seasonal nature and the employment
is for the duration of the season. 5)rt. ,47
b. Casual !!#s who have rendered at least 4 year of service is
continuous or broken> they are considered regular !!#s with
respect to the activities in which they are employed> their
employment shall continue while such activity e$ists. 5Id.7
c. @ probationary !! who is allowed to work after the
probationary period. 5)rt. ,17
d. /earners who have been allowed or suffered work during
the first = months if training is terminated by the !" before
the end of the stipulated period through no fault of the
learner. 5)rt. @*7
=. F applied for employment with Foliday Inn and was accepted for
9En&the&job training: as telephone operator for 6 weeks. @fter
the completion of the training she was employed on a
9probationary basis: for J months. 1our days before the said
85
period, she was dismissed by the hotel on the ground that she
failed to meet the standards of the hotel. Is the dismissal validD
0o. @t the time of her dismissal, she was already a regular !! since
the 9on&the&job training: was already her 9probationary period.: (he
was not dropped after that period. !ven granting that the probation
did not end with the training, there is no reason why that period
should not be included in the stipulated J&month period probation.
(Holida# 2nn vs. )&C)
6. / was hired as a component mechanic by a manufacturing firm
for a probationary period for J months. +anagement decided not
to hire her after the probationary period. @fter a month, the
company again hired / for another J&month probationary period.
@fter the =
nd
J&month probationary period, she was dismissed. Is
/ a regular !!D
Mes. he nature of her job re3uired her to perform activities which
are necessary and desirable in the usual business of her !". (he
was also rehired after the probationary employment e$tended to
her. his fact of rehiring negates any claim that she failed to 3ualify
as a regular !!. (uccessive hirings and firings cannot be resorted to
by the !" to avoid obligations imposed by law for the protection and
benefit of probationary !!#s. (,ctaviano vs. )&C)
H. P is employed on a probationary period for 6 months. @lthough
the !" was not satisfied with his performance, he is allowed to
work after the end of the 6&month period. Fas P become a regular
!!D
Mes. @n !! is allowed to work after a probationary period shall be
considered a regular !!. (*lcantara)
=ature of .or/
4. What is the primary standard of determining regular
employmentD he primary standard to determine a regular
employment is the reasonable connection between the particular
activity performed by the !! in relation to the usual business or
trade of the !". ($e &eon vs. )&C) he connection can be
determined by considering the nature of the work performed and
its relation to the scheme of a particular business or trade in its
entirety. @lso, if the !! has been performing the job for at least
one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Fence, the
employment is also considered regular, but only with respect to
such activity and while such activity e$ists. ?Id.B
=. -, was hired by a -uddhist emple as secretary and interpreter.
(he also attended personally to some needs of the Fead +onk. Is
- a regular !! or a domestic helperD
- is a regular !!. Fer functions were essential and important to the
operation and religious function of the temple> they could not be
categori8ed as mere domestic work.
86
6. (tevedores were employed by corporation engaged in deep&sea
fishing to unload the tuna fish catch from latter#s vessels into
refrigerated vans. heir work was intermittent depending on the
arrival of fishing vessels. here were also times when the
stevedores worked on vessels belonging to other companies. @re
the stevedores regular !!#sD
Mes. hey were engaged to perform activities usually necessary or
desirable in the usual business or trade of their !"#s. he activity of
catching fish is a continuous process> it cannot be considered as a
specific project or a seasonal activity. heir working on other vessels
does not militate against the e$istence of the !"&!! relationship
since it is but natural for the worker to seek other employment
during the periods of temporary la&off. (=& %artine. vs. )&C)
H. @n electric cooperative only e$tended permanent appointments
to linemen, secretaries, clerks and electricians after J months
from the date of their hiring. +ay the !" treat these workers as
regular !!#s only from the date they were e$tended permanent
appointmentsD
0o. heir services are usually necessary or desirable in the usual
trade or business of the cooperative. (Central )egros /lectric vs. )&C)
#iring '?tended 1eriod
4. @ company engaged in construction hired carpenters and issued
them some notices of employment that they were hired for
specific projects and their employment shall be deemed
automatically terminated at the completion of the project.
Fowever, when the project to which they were assigned were
completed, they would be immediately assigned to the ne$t
project. Considering that they have been working for a number of
years, are they regular !!#sD
Mes. hey perform activities usually necessary or desirable in the
usual business of the company. hey are considered 9non&project
!!#s: of the construction company. (+eg"rin vs. )&C)
=. 1, a skilled welder was hired by )+ Consunji for several projects
wherein he was assigned. here was also evidence that the
worker was under obligations to be always available on call by
the company and that he could not offer his services to other
!"#s. Is he a regular !!D
0o. 1 is a project !!. (+ernande. vs. )&C)
!ontract to !ontract
4. P was hired by a te$tile firm as a machine operator. P#s
employment contract stipulates that the company shall make an
annual assessment of his performance and his continued
employment shall depend on said evaluation. Is the stipulation
validD
87
0o. It determines the security of tenure enjoyed by P who is a
regular !!. Fis continued employment is made to depend upon the
whims of the !". (*lcantara)
=. + Co., is engaged in the manufacture of furniture for e$port. It
has regular customers but also receives special orders. It hires
9temporary workers: for special orders. hese are made to sign
temporary contracts. @re these workers considered regular
workersD Mes. hey are engaged in activities which are usually
necessary of desirable in the usual business or trade of the !".
(ignificantly, the special orders are not seasonal but more or less
regular, re3uiring the continuous services of the 9temporary
workers.: he temporary employment contracts have little
probative value. (%ehita!el +"rnit"re vs. )&C)
6. + was employed as a carpenter by a company engaged in the
concrete structural business. Fis work involved the making of
moulds for bridges. Fe was never assigned to work outside the
plant of the !". !very 6 months, he was made to fill up and sign
an employment contract relating to a particular phase of a work
in a specific project. Is + a regular !!D
Mes. Fe was assigned to perform tasks which are usually necessary
or desirable in the usual trade or business of the !". )espite the
signing of employment contracts, the work did not end on a project
to project basis. Fe continued to perform the same kind of work
throughout his period of employment. (%agante vs. )&C)
==.H 1ro8ect ''Es
Who are considered pro9ect ,,-s?
@ project !! is one whose employment has been fi$ed for a
specific project or undertaking, the completion or
termination of which has been determined at the time of
the engagement of the !! or where the work or service to
be performed is seasonal in nature and the employment is
for the duration of the season. 5)rt. ,47
<est of 1ro8ect ''Es
Chat is the principal test to determine whether !!#s are
9project !!#s: as distinguished from 9regular !!#s:D he
test is whether or not the project !!#s are assigned to carry
out a specific project or undertaking the duration and
scope of which are specified at the time the !!#s are
engaged for that project. (*&U3-UCP vs. )&C)
1ro8ect ''Es
4. PPI, a company providing construction supervision of the +anila
!$pressway hired " for a term of =H months. @fter the e$piration
of the period, he was hired for another term of 4I months, and
then for 45 months. @ll these were entered during various stages
prior to the completion of the construction project. Cas " a
regular !! of PPID
88
0o. Fe was hired in a specific project or undertaking as a driver. Fe
was a project !! whose employment terminated upon the e$piration
of his employment contract or upon the completion of the project.
(ada vs. )&C)
=. @ company engaged in the building and repair of vessels hired
welders to work in the repair of a specified vessel. Is the
employment of the workers considered regularD
0o. hey are project !!#s whose work is co&terminus with the
project for which they are hired. (Sandoval Ship#ards vs. &eogardo)
6. Consumer Pulse hired field interviewers on specified project basis
for a definite period of time. +any of the interviewers worked for
several projects. Nenerally, the contractual employment is not
continuous but intermittent, sporadic with long intervals of idle
periods in between projects due to lack of work or job contracts.
@re the filed interviewers considered regular !!#sD
0o. he interviewers were hired for specific projects the completion
or termination of which are determined at the start of their
employment. (%anansag vs. )&C)
H. @ construction firm hired as project !!#s several workers. Instead
of being assigned solely to the job sites, they were also made to
work as inventory clerk or warehouseman in the company#s
central shop. @re they project !!#sD
0o. heir work did not end upon the completion of a project. hey
perform their jobs even after a job had been finished. (ince they
performed tasks vital and indispensable to the efficient
administration and completion of the company#s various projects,
they are considered regular !!#s. (Capitol 2nd"strial vs. )&C)
Rationale
4. he rationale for this rule is that if a project has already been
completed, it would be unjust to re3uire the !" to maintain them
in the payroll while they are doing absolutely nothing e$cept
waiting until another program begun, if at all. In effect, these
stand&by workers would be enjoying the status of a privileged
retainers, collecting payments for work not done, to be disbursed
by the !" from profits not earned. his is not fair by any
standards and can only be lead to a coddling of labor at the
e$pense of management. ($e ,campo vs. )&C)
I(6lication
Project !!#s are not entitled to separation pay as their work was
coterminous with the completion of the project. (Sandoval Ship#ards vs.
&eogardo)
==.; !asual ''Es
4. Chat is casual employmentD @n employment is casual when the
!! is engaged to perform tasks or activities which are not usually
89
necessary or desirable in the usual business or trade of the !".
5)rt. ,47
=. Pai @lai +anila hired a mason and plumber to do renovation work
on its building. he work lasted for 44 months. @re the mason
and plumbers regular !!#sD
0o. hey were engaged for a specific project or undertaking. hey
are casual !!#s and as such do not enjoy the security of tenure
since they work for only 44 months. (Philippine =ai *lai vs. Clave)
==.J Seasonal ''Es
4. @gricultural workers were hired by the owners of a rice and sugar
land to perform particular phases of agricultural work necessary
in rice production, after which they were free to render services.
Considering that they rendered services for many years, in their
employment, though seasonal, deemed regularD
0o. hey are considered project or seasonal !!#s .their employment
legally ends upon the completion of the project or the season.
(%ercado vs. )&C)
==.7 !ontractACi?ed 1eriod
4. @ was engaged as athletic director by -rent (chool for a fi$ed
term of ; years. (he was not rehired after that term. Is she a
regular !!D
0o. @#s employment was for a fi$ed period, her employment ended.
It does not necessarily follow that where the duties of the !!#s entail
activities which are usually necessary or desirable in the usual trade
or business of the !", the parties should not be forbidden to
stipulate any period of time for these activities. here is nothing
essentially contradictory between a definite period of employment
and the nature of the !!#s duties. (0rent vs. 5amora)
>% 8ive the criteria under the fi$ed period contracts of
employment cannot be said to be in circumvention of the
wor*er-s security of tenure%
he fi$ed period of employment was knowingly and
voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon
the !! and absent any other circumstances vitiating his
consent> or
It satisfactorily appears that the !" and !! dealt with each
other on more or less e3ual terms with no moral
dominance whatever being e$ercised by the former on the
latter. (Pantranco vs. )&C)
Chen such stipulations were not designed to circumvent
the laws on security of tenure. ?-rent vs. XamoraB
6. C was engaged by a trucking company to work as a truck driver
for a period of si$ months. It appears that all drivers of the
company were hired on fi$ed contract basis. he company
merely filled in the blanks in a mimeographed form with the
90
corresponding driver#s data. @fter the J&month period, C#s
services were terminated. Cas this a valid terminationD
0o. he contract for a fi$ed period was a clever scheme to prevent
its !!#s from becoming regular !!#s. he should be considered a
regular !!. (Cielo vs. )&C)
H. 4; years after his dismissal for cause. @ was re&hired as a driver
for 4 month. )id such re&hiring result in his reac3uisition of his
former regular statusD
0o. he contract specifically provided for a fi$ed term. (Pantranco vs.
)&C)
==.% 1robationary ''Es
4. What is a probationary employmentD It is employment for a
specified period generally no e$ceeding J months for the
purpose of determining whether the !! can 3ualify for regular
employment in accordance with reasonable standards prescribed
by the !". (*lcantara)
=. Chat is the probationary period for apprentices and learnersD
)66rentices : he probationary period in the
apprenticeship may not be under probationary
employment in the company where he trained. In another
company, however, the probationary period for him would
be J months.
Learners : If the job is learnable can be learned within 6
months then the probationary period is 6 months or less.
?Policy Instructions 0o.4B
1ur6ose
Pustify the rights of the !" to fi$ a probationary period of employmentD
he !" has the right to select his !!#s that the !" may set or fi$ a
probationary period within which the latter may test and observe the
conduct of the former before hiring him permanently. ('rand %otors vs.
%inister of &a!or) @ probationary appointment is made to afford the !"
the opportunity to observe the fitness of a probationer while at work,
and to ascertain whether he will become a proper and efficient !!.
(2nternational Catholic %igration Commission vs. )&C) It is necessary for the
probationary !! to undergo a period of probation to test his
3ualifications, skills and e$perience. ('rand %otors)
DurationF'?ce6tion
+ay a company impose a longer probationary period than J monthsD
Mes. Nenerally, the probationary period of employment is limited to J
months. he e$ception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is
established by company policy or when the same is re3uired by the
nature of the work to be performed by the !! i.e. where a probationary
period was set for 4% months, especially where the !! must learn a
particular kind of work such as selling or when the job re3uires certain
3ualifications, skills, e$perience or training. (0"iser or &eogardo)
91
'?tension !ontract 'ffect ''Es
) was hired on probation by +ariwasa. <pon e$piration of the
probationary period, he was informed by the !" that his work proved
unsatisfactory. o give him a chance to improve his performance and to
3ualify for her regular employment, +ariwasa e$tended, with his
written conformity, his probationary period for another 6 months. Fis
performance did not improve, and his services was terminated. )id he
become a regular !!D
0E. -y voluntary agreeing to the e$tension of the original probationary
period, ), in effect, waived any benefit attaching to the completion of
the said period. (%ari8asa vs. &eogardo)
)bsorbed ''Es
Private respondents could not be considered probationary !!#s
because they were already well&trained in their respective positions.
(Ce!" Stevedoring vs. egional $irector)
<er(ination and Salary
@ward to the private respondent of the salary for the une$pired 6&
month portion of her J&month probationary employment who was
validly terminated during her probationary employment is unjust and
oppressive to the !". (2nternational Catholic 2mmigration Commission vs.
)&C)
Rule 1ri2ate Sc0ool <eac0er
4. 8ive the legal re!uisites for a private school teacher to
ac!uire permanent employment and security of tenureD
hese re3uisites are:
a. he teacher is a full time teacher.
b. he teacher must have rendered 6 consecutive years of
service.
c. (uch service must have been satisfactory. (Caga#an Capitol
College vs. )&C)
=. @t the time of her retirement, @ has been employed as school
teacher for == years. @fter 6 years from her retirement, she was
rehired by the school teacher under contract which was
renewable yearly. @fter = years of continuous satisfactory
performance, her contract was not renewed. Cas the non&
renewal violative of her security of tenureD
Mes. Chen she was rehired, she did not have to undergo a
probationary employment as her teaching competence had already
been tried and tested during her == years of service. she could not
be discharged solely on account of the e$piration of her =
nd
annual
contract. (he could not only be dismissed for cause and with due
process. (St. -heresita7s *cadem# vs. )&C)
6. @ teacher was hired by a private school on a yearly basis. -efore
the e$piration of the =
nd
yearly contract, the school refused to
92
renew her contract on the ground that her teaching performance
was not satisfactory. Is the refusal justifiedD
Mes. he positions were temporary in nature and her employment
was for a definite period. !ven assuming that she was on
probationary employment, the probationary period for teachers is 6
years. (0i!oso vs. 1ictoria %illing)
Section "+ <er(ination and '(6loy(ent
=6.4 Introduction+ ''Es Security of <enure
!o2erage
4. )rt. @, : he provisions of this itle shall apply to all
establishments or undertakings, whether for profit or not.
=. Confidential and managerial are also entitled to security of
tenure, fair standards of employment and the protection of labor
laws. (2nter3,rient %aritime vs. )&C) Probationary and contractual
!!#s enjoy security of tenure but only to a limited e$tent. hat is,
they remained secure in their employment during the period of
time their respective contracts remained in effect. (&a!a6o vs.
*le6andro)
6. Pakiao workers who by the nature of their work are considered
regular workers enjoy security of tenure. ($# 4eh 0eng vs. 2&%U)
Fowever, if the circumstances indicate that they are in reality
independent contractors, then they do not enjoy security of
tenure. (*lcantara)
Security of <enure
4. Chat is meant by the 9security of tenure#D of an !!D Security of
tenure of an ,, is his right against unjust and arbitrary
dismissal. Fe cannot be deprived of his work, which is property in
the constitutional sense, without a just cause and without the
benefit of hearing. (*lcantara)
=. Is there an e$press constitutional guarantee of the security of
tenure of an !!D Mes. @rt. AIII, (ec. 6, Const. (ance vs. )&C)
=ature of Rig0ts
ermination of employment is not anymore a mere cessation or
severance of contractual relationship but an economic phenomenon
affecting members of the family. his e$plains why under the board
principles of social justice the dismissal of !!#s is ade3uately protected
by the laws of the state. (*lham!ra vs. )&C) Fowever, the worker#s right
to security of tenure is not an absolute right for the law provides that
he may be dismissed for cause. he law in protecting the rights of the
laborers, authori8es neither oppression nor self&destruction of the !".
(%/*&C, vs. )&C)
Rationale Regulation
93
he right of !" to freely select or discharge his !!#s is regulated by the
(tate, because the preservation of the lives of citi8ens is a basic duty
of the (tate, more vital than the preservation of the corporate profit.
(&losa3-an vs. Silahis)
=6.= Manage(ent Rig0ts and t0e Just !ause of <er(ination
)rt. , + )n 'R (ay ter(inate an e(6loy(ent for any of t0e
following casues+
4. (erious misconduct or willful disobedience by the !" of the lawful
orders of his !" or representative in connection with his work>
=. Nross and habitual 0eglect by the !! of his duties>
6. 1raud or willful breach by the !! of the rust reposed in him by
his !" or duly authori8ed representative>
H. Commission of a crime or offense by the !! against
a. the person of his !" or
b. any immediate member of his family or
c. his duly authori8ed representative and
;. @nalogous cases.
Manage(ent Rig0ts
he following are management rights with respect to !!:s:
4. 7ight to manage people in general : !$cept as limited by special
laws, an !" is free to regulate, according to his own discretion
and judgment, all aspects of employment. (San %ig"el vs. ,ple)
=. 7ight to just share in the fruits of production : !very business
enterprise endeavors to increase its profits. In the process it may
adopt or devise means designed toward the goal. he free will of
management to conduct its own business affairs to achieve its
purpose cannot be denied. (2d.)
6. 7ight to discipline : he !" has the prerogative to instill discipline
in his !!#s and to impose reasonable penalties, including
dismissal, on erring !!#s pursuant to company rules and
regulations. (San %ig"el vs. )&C)
H. 7ight to transfer "")s : It is management prerogative to transfer
an !! from one office to another within the business
establishment, provided there is no demotion in rank or
diminution of his salary, benefits and other privileges. (<"co
Chemical vs. %inisrt# of &a!or) @n !!#s right to security of tenure
does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment
or transfer him where he will be most useful. ?PC vs. 0/"CB he
managerial prerogative, however, to transfer personnel, must be
e$ercised without grave abuse of discretion and putting to mind
the basic elements of justice and fair play. It cannot be used as a
subterfuge by the !" to rid himself of an undesirable worker. 0or
where the real reason is to penali8e an !! for his union activities
and thereby defeat his right to self&organi8ation. ?Id.B
94
;. The right to demote : It is management prerogative to tranfer,
demote, discipline and even dismiss an !! to protect its
business, provided it is not tainted with unfair labor practice
(Petrophil vs. )&C)
J. 7ight to dismiss : he right of the company to dismiss its !!#s is
a measure of self&protection. ?"eyes vs. +inister of /aborB @n !"
cannot legally be compelled to continue with the employment of
a person who admittedly was guilty of malfeasance towards his
!", and whose continuance in the service of the latter is patently
inimical to his interests. (%anila -rading vs. 5"l"eta)
Just !auses of <er(ination
+ay an !" dismiss an !! who enjoys security of tenureD Mes. (ecurity
of tenure does not guarantee perpetual employment. If there is a just
or authori8ed cause the !" may terminate the services of an !!> the
former cannot be legally compelled to have in its employ s person
whose continued employment is patently inimical to its interest.
(*lcantara)
@. JHS< !)HS' + S'RI$HS MIS!$=DH!<
4. What is serious misconductD +isconduct is improper or wrong
conductG it is the transgression of some established and
definitive rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere
error in judgment. he misconduct to be serious must be of such
a grave and aggravated character and not merely trivial or
unimportant. (uch misconduct, however serious, must,
nevertheless, be in connection with the !!#s work to constitute
just cause for its separation.
>% ,$amples of serious misconduct 6
a. !! utters obscene, insulting or offensive words against a
superior (*sian $esign vs. $ep"t# %inister of &a!or) or
challenging a superior officer to a fistfight. (&".on Stevedoring
vs. C2) Fowever, = other later cases ruled that the penalty
of termination is e$treme and e$cessive and is not
commensurate with the acts committed. (%aranao Hotel vs.
C* and %ar# =ohnston Hospital vs. )&C) he controlling factor
is the circumstances surrounding the willful misconduct.
(*lcantara)
b. (erious breach of company rules by allowing = security
guards to come inside the (ecurity Effice, drinking and
having se$ with one of the guards, although both of them
are married. (Stanford vs. )&C)
c. @s a general rule, immorality does not justify a discharge.
-ut when the !! holds a responsible position and has
under him a good number of men, the !! must set a good
e$ample for his men to follow. hus, when he got a young
concubine and drove away the members of his family from
the conjugal home, such dismissal is justified. (Sanche. vs.
*ng -i!a#)
95
d. (leeping in post, gross insubordination, dereliction of duty
and challenging superior officers to a fight committed by a
security guard. (&".on Stevedoring vs. C2)
e. (eaman#s assault with a knife of a member of the ship#s
crew. (Haverton vs. )&C)
f. Into$ication is such a misconduct as will justify separation
from employment, where such into$ication interferes with
the employment. (*."cena)
g. (e$ual harassment by a managerial !! of one of his
subordinates. (1illarama vs. )&C)
h. @uthorship of a manifesto which ridiculed the officers of a
school and demanded their removal, and which disrupted
the good order and decorum in the school, when such
charges in the manifesto are found to be not true. (St.
%ar#7s College vs. )&C)
i. Cheating a customer. (P&$- vs. )&C)
D% What are e$amples of misconduct which does not warrant
dismissal?
a. 1istcuffs between two !!#s as a result of mere private
matter between them. (*ris vs. )&C)
b. .ending, soliciting, and engaging in usurious activities.
(Pacific Prod"cts)
c. -orrowing money from a patient which the !! later paid
back. (%a(ati %edical Center vs. )&C) Fowever, when there is
use for a trust relationship as leverage for borrowing
money, the act becomes serious misconduct. (Pearl S. 0"c(
+o"ndation vs. )&C)
d. eacher falling in love with student provided the teacher
did not take advantage of her position to court her student.
(Ch"a3A"a vs. Clave)
-. JHS< !)HS' + .ILLCHL DIS$&'DI'=!'
B% What are the re!uisites in order that willful disobedience
may constitute a 9ust cause for terminating employment?
he orders, regulations, instructions of the !" or his
representative must be:
a. "easonable and lawful has reference not only
to the kind and character of directions, but also
the manner in which they are made.
b. (ufficiently known to the !!.
c. In connection with the duties which the !! has
been engaged to discharge.
he !"#s conduct must have been willful or intentional,
willfulness being characteri8ed by a wrongful and perverse
96
mental attitude rendering the !!#s act inconsistent with
proper subordination. (*."cena)
=. 0ot every case of insubordination or willful disobedience by an
!! of a lawful work&connected order of the !" or its
representatives is reasonably penali8ed with dismissal. here
must be a reasonable proportionality between the offense and
the penalty imposed therefor. ('old Cit# vs. )&C) Past infractions,
to which the !! was already meted out disciplinary measures
cannot be used as a justification for !!#s dismissal from service
of the current infraction does not suffice as a ground for just
termination. (+ilipino vs. ,ple)
6. +, an !! of ritran was told by the personnel manager to see
right away the president to apologi8e for his past misdeeds. Fe
was dismissed because he failed to see the company president.
Is the dismissal justifiedD
0o. he directive to see the company president was neither
reasonable nor one connected with his duties. (%ancho vs. )&C)
C% ,$amples of willful disobedience 6
.iolation of a rule which prohibits !!#s from using company
vehicles for private purposes without authority from
management and stubborn refusal to attend a grievance
conference to discuss the violation. (Soco vs. %ercantile Corp.)
Cillful violation of rules and regulations designed for the
safety of laborers i. e. smoking by a painter in the painting
booth. "&orthern .otors vs% &LU'
@llowing a customer to pass thru the e$it gate without
paying for the work done on his car, despite clear
instructions to the contrary, (%anila -rading vs. 5"l"eta)
@ct of gambling if it is penali8ed under company rules with
dismissal. ($imalanta vs. Secretar# of &a!or)
1ailure to comply with reportorial re3uirements in the sales
policies. ('-/ vs. Sanche.)
0, driver refused to drive !!#s to +akati head office to
collect their profit shares despite repeated orders made by
the vehicle supervisor and the officer&in&charge. ()"e. vs.
)&C) In this case, even if he was employed for 45 years,
and this was his 4
st
offense, no separation pay, on the basis
of compassion was given to the !!.
- was employed as Chief )ietician of a hospital. (he
refused to follow the instructions of the -oard of rustees
of the hospital to buy from a food supplier who was willing
to give a discount on food purchases. -ecause of this, -
was dismissed. Is the dismissal justifiedD
97
Mes. Fer acts constitute serious defiance of the lawful orders
of her superiors with respect to matters involving her duties.
hey are also sufficient basis for her superiors to lose their
trust and confidence in her. (St. &"(e7s vs. %inister of &a!or)
;. ), an !! of 0orthwest @irlines refused a promotion. )oes such
refusal constitute insubordination warranting dismissalD
0o. here is no law which compels an !! to accept a promotion. Fe
was e$ercising a right and he cannot be punished for it as !uijure
suo utitor neminem laedit. Fe who uses his own legal right injures
no one. ($osch vs. )&C)
J. N, a press&helper of a printing company drank beer outside
company premises after his tour of duty. Fe later went to the
company#s canteen to eat lunch. Fe was dismissed based on the
company policy prohibiting 9drinking in the company premises or
coming to work under the influence of alcohol.: Is the dismissal
justifiedD
0o. Fe did not drink beer in the company premises> neither did he
report for work under the influence of li3uor because it was not their
tour of duty then. (Catalan vs. 'enilo)
C. JHS< !)HS' + ='GL'!< $C DH<I'S
4. What is the rule on neglect of duties to constitute a 9ust
cause for terminationD In order to constitute a just cause for
!!#s dismissal, the neglect of duties must not only be gross but
also habitual . Nross neglect means an absence of that diligence
that an ordinarily prudent man would use in his own affairs,
unless the contract of employment re3uires a higher degree of
care. It is sufficient that the gross and habitual neglect by the !!
tends to prejudice the !"#s interest since it would be
unreasonable to re3uire the !" to wait until he is materially
injured before removing the cause of the impending evil. ($,&/
%an"al)
>% ,$amples of gross negligence 6
1ailure to properly estimate the fair market value of a
property to be used for a loan by an appraiser. (*ssociated
0an( vs. )&C)
)bandon(ent. o constitute abandonment, two elements
must concur:
a. he failure to report for work or absence
without valid or justifiable reason, and
b. @ clear intention to sever the !"&!!
relationship, with the second element as the
more determinative factor and being
manifested by overt acts. (&a!or vs. )&C)
Fabitual tardiness and absenteeism (Sa6onas vs. )&C)
0umerous unauthori8ed absences. (Cando vs. )&C)
98
6. (, working as a lobby boy of a movie theater, was pursuant to
standard management practice transferred from the day shift
where he had been for 3uite some time to the night shift. Fe
asked that the change be recalled but his re3uest was denied. @s
he disliked the new assignment, he did not report for work. he
company dismissed him due to abandonment. Is the dismissal
jusitifiedD
Mes. here was nothing unusual or discriminatory in his change of
assignment because the rotation was standard company practice.
(Castillo vs. C2)
H. )ue to unauthori8ed absences, +, employed with the company
for 4% years, was transferred from the 1ire ender (ection to the
Pan Nrinding (ection. Fe however did not report to his new
section, on the ground that the transfer was unreasonable and
amounted to demotion. he company contends that his failure to
work despite repeated notices constitutes abandonment and a
ground for his dismissal. Is this validD
he penalty of dismissal is out of proportion to the offense
committed considering the number of years of +#s employment. @ 4
year suspension would be sufficient. (%eracap vs. 2nternational Ceramics)
;. @, met a work&connected accident. Chen he was completely
recovered, he failed to report to work despite the certification of
; doctors that he could resume his normal work. Fe was
dismissed pursuant to company 'policy that an !! who incurs
without valid reason J or more absences is subject to dismissal.
Is the dismissal validD
Mes. Fe was guilty of serious neglect of his duties. (Phil. 'eothermal vs.
)&C)
). JHS< !)HS' + DIS#$='S<J, L$SS $C !$=CID'=!'
4. What *ind of fraud 9ustifies as 9ust terminationD 1raud has
been defined as any act, omission, or concealment which
involves a breach of a legal duty, trust or confidence justly
reposed and is injurious to another. o constitute a just cause for
terminating the !!#s services, the fraud must be committed
against the !", or representative and in connection with the !!#s
work. hus, fraud committed by an !! against 6
rd
persons not in
connection with his work and which does not in any way involve
his !" not a ground for the dismissal of the !!. ($,&/> %an"al)
>% ,$ample of ishonesty
1alsification of time cards. (S%C vs. )&C)
heft of company property. (+irestone vs. &ariosa) Fowever,
the penalty must be proportional to the offense committed
i.e. !! should not be dismissed for theft of used motor oil
of minimal 3uantity if the !! has no previous record.
('elmart vs. )&C): !! should not be dismissed for theft of
lead pipe to be used for personal use if the !! has no
previous record. (P*& vs. P*&/*)> president of union should
99
not be dismissed for leading an 9une$pected strike: which
lasted for = days and which resulted in a loss to the
company of only P6,III.II (Sampang vs. 2nciong): counter
clerk of P/) should not be dismissed for tampering with a
phone bill where the worth of the tampering only
amounted to P6I.II and it was the first offense in 7 years
(P--C vs. )&C). 0ote that the length of time the !! is
employed and the fact that it was the !!#s 4
st
offense is an
important factor in many of these cases wherein the
penalty of dismissal was deemed to harsh. Chere a penalty
less punitive would suffice, whatever missteps may be
committed by the worker should not be visited with the
supreme penalty of dismissal. (*lmira vs. 0+ 'oodrich)
Circulating fake tickets. (2!arrientos vs. )&C)
6. ,$plain loss of confidence as a ground for 9ust
termination : he basic premise for dismissal on the ground of
loss of confidence is that the !! concerned holds a position of
trust and confidence. (A"e.on /lectric vs. )&C) +ere e$istence of
basis for believing that the !! has breached the trust of !" is
sufficient and does not re3uire proof beyond reasonable doubt.
(48i(8a# vs. )&C) Fowever, to constitute as valid ground, it must
be substantial and not arbitrary, and must be founded on clearly
established facts sufficient to warrant the !!#s separation from
work. (&a!or vs. )&C)
H. ,$amples of loss of confidence as ground for 9ust
termination :
N+ of hotel found to have anti&1ilipino tendencies, who did
not perform his functions properly and who re3uisitioned
wines for personal use. "Ri*er vs% 2ple'
)irector who represented to the company that machinery
brought were brand&new when in fact they were second&
hand. (Pepsico vs. )&C)
-ank teller#s act allowing encashment of checks over the
counter without verification of drawer#s signature. (*llied
0an( vs. Castro)
.iolation of the company sales policy of distributing its
goods to as many customers as possible by a salesman
who made it appear that they were sold to many
customers. (+ilipro vs. )&C)
!ngaging in business other than that of !", if the activities
tend to injure or endanger the business of the !" or the !!
is unable to give time and attention to the discharge of his
duties. (*."cena)
Competing with !"#s business. (*."cena)
"epeated shortages incurred by a bill collector, although
resulting in no material damage as the amounts were
returned. (Piedad vs. &anao del )orte /lectric Cooperative)
100
;. ; !!#s of an electric cooperative were dismissed for loss of
confidence when they were caught pilfering electric current
through tampered meters in their houses. Considering that the
!!#s held no position involving trust and confidence, is loss of
confidence a ground to dismiss themD
0o. he offense they committed is not work&related. he pilferage
could have been effected even if they were not !!#s of the
cooperative. (A"e.on /lectric Cooperative vs. )&C) Compare this with
the case of ;lores vs. >L7C, where the same act constituted a
ground of serious misconduct and breach of trust.
J. P, a checker, was dismissed by (an +iguel for breach of trust due
to possible involvement in a burglary incident. he dismissal was
effected despite P#s ac3uittal in a criminal case for the said
offense. Is the dismissal lawfulD
0o. he termination of rank and file !!#s due to breach of trust
re3uires proof of actual involvement in the acts constituting the
offense. (S%C vs. )&C)
!. JHS< !)HS' + !$MMISSI$= $C ) !RIM' $R $CC'=S'
4. @nother just cause of terminating an employment is the !!#s
commission of a crime or offense against the person of his !" or
against any immediate member of the !"#s family. he
immediate members of the family referred to are limited to the
spouse, ascendants, descendants, or legitimate, natural, or
adopted brothers or sisters of the !" or of his relative by infinity
in the same degrees, and those by consanguinity within the H
th
degree. (*."cena)
=. Conviction or prosecution is not re3uired, to warrant his dismissal
by his !" and the fact that a criminal complaint against the !!
has been dropped by the city fiscal as not binding and conclusive
upon the tribunal. (Starlite vs. )&C)
1. )=)L$G$HS !)S'S
4. o be considered analogous to the just cases enumerated, the
cause must be due to the voluntary andGor willful act or omission
of the !!. ()ed"ra vs. 0eng"et Consolidated)
>% ,$amples of +nalogous #ases 6
<nreasonable behavior and unpleasant deportment in
dealing with the people she closely works with in the
course of her employment, is analogous to the other 9just
causes: enumerated under the /abor Code. (Cathedral
School vs. )&C)
N. $<#'RS
B% 2ther e$amples of 9ust termination6
Courtesy resignation (0atong!acal vs. *ssociated 0an()
101
1aculty members of a school whose appointments as
department heads are terminated. (&a Sallette vs. )&C)
=6.6 )ut0oriIed !ases of <er(ination
)rt. ," + <0e 'R (ay also ter(inate t0e e(6loy(ent of t0e ''
due to+
4. the Installation of labor saving device.
=. redundancy
6. retrenchment to prevent losses.
H. closing or cessation of operation of the establishment or
undertaking.
)rt. ,%: !! who has been found to be suffering from and )isease and
whose continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co&!!#s.
Introduction of Labor sa2ing De2ices
Redundancy
Redundancy e$ists where the services of an !! are in e$cess of what
is reasonably demanded by the actual re3uirements of the enterprise>
a position is redundant when it is superfluous, and superfluity of a
position or positions may be the outcome of a number of factors such
as:
4. the overthrowing of workers
=. decreased volume of business or
6. the dropping of a particular product line or
H. service activity previously manufactured or undertaken by the
enterprise.
"edundancy is an !"#s personnel force, however does not necessarily
or even ordinarily refer to duplication of work. hat no other person
was holding the same position which the dismissed !! held prior to the
termination of his services does not show that his position had not
become redundant. (/scareal vs. )&C)
Retrenc0(ent
What are the general standards to determine whether the
retrenchment is valid? he general standards are the following:
4. he losses e$pected should be substantial and not merely de
minimis in e$tent.
=. he substantial loss apprehended must be reasonably imminent,
as such imminence can be perceived objectively and in good
faith by the !".
6. It must be reasonably necessary and likely to prevent the
e$pected losses.
H. he !" should have taken other measures prior or parallel to the
retrenchment to forestall losses. I. e. > cut other costs other than
labor costs.
;. @lleged losses if already reali8ed, and the e$pected minimum
losses sought to be forestalled, must be proved by sufficient and
convincing evidence. (&ope. S"gar vs. ++W)
102
)istinguish redundancy from retrenchmentD Redundancy means that
the position of the !! has become superfluous, an e$cess over what is
actually needed, even if the business reduction or reverses. (*."cena)
!losure of &usiness
4. he burden of proving that the termination was for a valid or
authori8ed cause shall rest on the !". (2ndino vs. )&C)
=. Is the !" re3uired to pay separation pay for closure of business
due to the serious business lossesD
0o. he cases of (tate Investment Fouse vs. C@, +endo8a vs.
0/"C, and the +indanao erminal vs. +inister of /abor provide that
the rule in @rticle =%6 with respect to separation pay applies only to
closure not due to business reverses. (*."cena)
D% What are the re!uirements for a valid cessation of
business not due to business reverses?
(ervice of a written notice to the !!#s and to the )E/! at
least 4 month before the intended date thereof.
Cessation or withdrawal from business operations must be
bona fide in character.
Payment to the !!#s termination pay amounting to at least
S month pay, for every year of service, or 4 month pay,
whichever is higher. (*&U vs. )&C)
)il(ent or Disease
If the !! suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of his co&
!!#s, the !" shall not terminate his employment unless there is a
certification by a competent public health authority that the disease is
of such nature or at such a stage that it cannot be cured within a
period of J months even with proper medical treatment. "Sec% A0 Rule
B0 /oo* E(0 (RR-s' @ medical certificate issued by the company#s own
physician, is not a 9competent public health authority.:
=6.H 1rocedure to <er(inate '(6loy(ent
<wo Cacets of Dalid <er(ination
4. he legality of the act of dismissal which constitutes discharge
with just cause> and
=. he legality in the manner of dismissal with due process.
(Shoemart vs. )&C)
Due 1rocess + =otice
he law re3uires that the !" must furnish the worker sought to be
dismissed with two written notices before termination of employment
can be legally effected:
4. 0otice which apprises the !! of the particular acts or omissions
for which his dismissal is sought> and
=. (ubse3uent notice which informs the !! of the !"#s decision to
dismiss him. 1ailure to comply with the re3uirements taints the
dismissal with illegality. (Pepsi3Cola vs. )&C)
103
$66ortunity to be #eard
4. @n !! must be given ample opportunity prior to his dismissal to
ade3uately prepare for his defense. -y 4ample opportunity5 is
meant every kind of assistance that management must be
accord to the !! to enable him to prepare ade3uately for his
defense. <nder the rules, indeed workers may be provided with
a representative. ("ff# vs. )&C) he re3uirement of hearing
affords the !! the opportunity to answer his !"#s charges against
him and accordingly to defend himself therefrom before
dismissal is effected. (Sala8 vs. )&C)
=. 0o hearing is re3uired if the grounds for dismissal or termination
of service does not relate to blameworthy act or omission on the
part of the !! i.e. retrenchment or redundancy. (Witshire vs. )&C).
6. C was called to the Effice of the Neneral +anager and was told
that she was being charged with discourtesy and
insubordination. )uring that time, she was also called to e$plain
her side. @s she could not give an e$planation, she was
dismissed. Is the dismissal validD
0o. (he was denied procedural due process. (he was not given
ample opportunity to be heard and to defend herself.
H. 6J conductors of a bus were dismissed after investigations
conducted by the Pago and the fiscal found out that they
defrauded the company. Is the dismissal violative of due processD
0o. 1or the company to conduct its own investigation is a
duplication of the P@NE and the city fiscal#s investigation. (0&-0 vs.
)&C)
;. ) was dismissed by his !" based on the preliminary investigation
of the city fiscal which relied on an affidavit of an accused&turned
state witness. Is this violative of due processD
Mes. @s compared to the -/- case, the findings of the city fiscal
were based solely on the affidavit of the accused&turned state
witness. he substantial evidence re3uirement is not present. (China
Cit# esta"rant vs. )&C)
J. ( was dismissed by his !" due to his well documented
involvement in pilferage. Prior to dismissal, he was called to a
meeting of all delivery personnel to discuss pilferage incidents.
Fe denied involvement therein. /ater he was dismissed. Is the
dismissal violative of due processD
Mes. he meeting called by the !" does not 3ualify as the hearing
re3uired by law. (Segism"ndo vs. %ontalvo)
Rig0t to !ounsel
he right to counsel is a basic re3uirement of substantive due process.
he right to counsel cannot be waived e$cept in writing and in the
presence of counsel. (Sala8 vs. )&C)
104
&urden of 1roof
)rt. @@ : he burden of proving that the termination was for a valid
or authori8ed cause shall rest on the !".
Degree of 1roof
In administrative or 3uasi&judicial proceedings, proof beyond
reasonable doubt is not re3uired as basis for a judgment of the legality
of an !"#s dismissal of an !!, nor even preponderance of evidenced,
substantial evidence being sufficient. (%/*&C, vs. )&C)
!ondonation
Faving condoned the misconduct of the !! and pardoned the latter, he
is deemed to have lost or waived his right to insist on the !"#s acts as
a ground for dismissal. (*."cena)
Dis(issal for !ause but .it0out Due 1rocess
@ sanction, in the form of damages, must be imposed upon the !" for
failure to give a formal notice and conduct an investigation as re3uired
by law before dismissing the !! from employment. (Wenphil vs. )&C)
Rules B Managerial ''Es and Ran/ and Cile ''Es
@s a general rule, !"#s are allowed a wider latitude of discretion in
terminating the employment of managerial personnel or those who,
while not of similar rank, perform functions which by their nature
re3uire the !"#s full trust and confidence. This must be distinguished
from the case of ordinary rank<and<file "")s whose termination on the
basis of these same grounds re3uire a higher proof of involvement in
the events in 3uestion> mere uncorroborated assertions and
accusations by the !" will not suffice. (Coca3Cola vs. )&C)
$ffer to Reinstate
he fact that his !" latter made an offer to re&employ him did not cure
the vice of his earlier arbitrary dismissal. (anara vs. )&C)
1rescri6tion
@ complaint founded on illegal dismissal is not an ordinary money
claim but for reinstatement. he action may be brought within H years
from dismissal pursuant to @rt. 44HJ of the 0CC. ()e8 2m"s &"m!er vs.
)&C)
=6.; !onse>uences of <er(ination
Se6aration 1ay
@. General Rule
If there is valid cause to terminate an employment, no separation pay
need be paid. &$ec. B, 7ule %, #ook 2%, %77)s'
-. '?ce6tions
105
4. )rt. ," :
%nstallation of labor saving devices and redundancy : 4
month or 4 month pay for every year of service, whichever
is higher.
7etrenchment to prevent losses and closure or cessation of
operation or establishment or undertaking not due to
serious business losses or financial reverses : 4 month pay
or S month pay for every year of service, which ever is
higher.
. )rt. ,% +
Disease : 4 month salary or S month salary for every year
of service, whichever is higher.
6. !ven if an !! resigns, he shall be given a separation pay if there
is a company policy to that effect. (Philoil vs. %inistr# of &a!or)
H. iscerning compassion octrine: (eparation pay shall be
allowed as a measure of social justice for instances where the !!
is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character i.e. @ was found to have
demanded and received money in consideration for promise to
facilitate approval of telephone line application. ()asipit &"m!er vs.
)&C)
;. +ntipathy and +ntagonism Reinstatement is no Longer
Possible : (trained relations in order that it may justify award of
separation pay in lieu of reinstatement with backwages, should
be such, that they are so compelling and so serious in character,
that the continued employment has become inconsistent with
peace and tran3uility which is an ideal atmosphere in every
workplace. (Si!al vs. )otre $ame) his is particularly true when the
position the !! is occupying is a position involving trust and
confidence. (*lcantara)
C. !$M1H<)<I$= of S'1)R)<I$= 1)J
Includes not just the basic salary but also the regular allowances the
!! has been receiving. (Planters Prod"cts vs. )&C) Fowever, commissions
are not included in such base figure. (Soriano vs. )&C)
). 'CC'!<A R'!'I1<
!!#s who received their separation pay are not barred from contesting
the legality of their dismissal. he acceptance of those would not
amount to estoppel. (San %ig"el vs. =avate)
&ac/wages
4. -ackwages in general are granted on grounds of e3uity which a
worker has lost due to his illegal dismissal. (-orillo vs. &eogrardo) @s
a general rule, an !! is entitled to backwages only where his
dismissal is due to the unlawful act of the !" or to the latter#s
bad faith. (e#es vs. %inister of &a!or) Chile generally an order of
reinstatement carries with it an award of backwages, the court
106
may not only mitigate, but also absolve the !" from liability fro
backwages where good faith is evident. ($"ra!ilt vs. )&C)
=. )ifferentiate backwages from separation payD (eparation pay is
the amount that an !! receives at the time of his severance from
the service and is designed to provide the !! with the
9wherewithal during the period that he is looking for another
employment.: (-orillo vs. &eogardo) -ackwages represent
compensation that should be earned but not controlled because
of the unjust dismissal. (&im vs. )&C) he basis of computing the
two are different, the 4
st
being usually the length of the !!#s
service and the =
nd
the actual period when he was lawfully
prevented from working. ?Id.B
@. !$M1H<)<I$= $C &)!L.)G'S
4. )rt. @3 : @n !! who is unjustly dismissed from work shall be
entitled to full backwages, inclusive of allowances, and to his
other benefits or their monetary e3uivalents computed from the
time his compensation was withheld from him up to the time of
his actual reinstatement.
=. he effects of e$traordinary inflation are not to be applied
without an agreement between the parties and without an official
declaration thereof by competent authorities. (&antion vs. '*U+)
Reinstate(ent
4. "einstatement is a restoration to a state which one has been
removed or separated. It is the turn to the position from which he
was removed and assuming again the functions of the office
already held. "einstatement presupposes that the previous
position from which one had been removed still e$ists, or that
there is an unfilled position more or less of a similar nature as
the one previously occupied by !!# ()*-U vs. Secretar# of &a!or)
=. @n !" has = options in order for him to comply with an order of
reinstatement, which is immediately e$ecutory, even pending
appeal, firstly, he can admit the dismissed !! back worth under
the same terms and conditions prevailing prior to his dismissal or
separation or to a substantially e3uivalent position if the former
position is already filled up. (econdly, he can reinstate the !!
merely in the payroll. (%edina vs. C0S)
6. he decision of the labor arbiter reinstating a dismissed !! is
immediately e$ecutory even while the case is brought up on
appeal. 5)rt. "7 In authori8ing this, the law itself has laid
down a compassionate policy which once more vivifies and
enhances the provisions of the Constitution. (*ria vs. )&C)
H. "einstatement is not self&e$ecuting. Payroll reinstatement or
actual reinstatement needs the issuance of a writ of e$ecution.
(%aranao Hotel vs. )&C)
;. Chat if reinstatement is not prayed for in the case before the
labor arbiter. Is the labor arbiter allowed to grant reinstatementD
107
0o. he !! will not be reinstated if he did not pray for
reinstatement. (&a!or vs. )&C) -ut an earlier case, ('eneral 0aptist
Colloge vs. )&C) says that !! is entitled to reinstatement although
he failed to specifically pray for the same. he /abor case is a later
case.
J. @fter a finding that the dismissal of N, the manager of )unkin
)onuts violated procedural due process. N asked that he be
reinstated. he company refused on the ground of loss of
confidence of N. Is the refusal validD
Mes. N held a sensitive position. he case left both parties with less
than full trust and faith in each other. Fe should be paid severance
compensation in lieu of reinstatement. ('olden $on"ts vs. )&C)
=6.J <er(ination by '' and Sus6ension of $6eration
<er(ination by '' B Just !auses
)rt. ,* + n "" may put an end to the relationship without serving
any notice on the "7 for any of the following just causesI
4. (erious insults by the !" and or his representative on the honor
and person of the !!>
=. Ihuman and unbreakable reatment accorded the !! by the !" or
his representative>
6. Commission of a crime or offense or his representative against
the person of the !!
or any immediate members of his family, and
@nalogous cases.
.it0out Just !ause B Re>uisites
)rt. ,*5a7 : @n !! may terminate without just cause the !"&!!
relationship by serving a written notice on the !" at least 4 month in
advance. he !" upon whom no such notice has been served may hold
the !! liable for damages.
@. R'SIG=)<I$=
"esignation is a voluntary act of an !! who 9finds himself in a situation
where he believes that personal reasons cannot be sacrificed in favor
of the e$igency of the service, then he has no other choice but to
disassociate himself from his employment.: he !" has no control
over resignation and so, in order to ensure that no disruption of work
would be involved by reason of resignation. his practice has been
recogni8ed because 9every business enterprise endeavors to increase
its profits by adopting a device or means designed towards that goal.
"esignation once accepted and being the sole act of the !! may not be
withdrawn without the consent of the !". ( 2ntertrod %aritime vs. )&C)
-. !$=S<RH!<ID' DIS!#)RG'
4. @ constructive discharge is a 3uitting because continued
employment is rendered impossible, unreasonable or unlikely> as,
an offer involving a demotion in rank and diminution in pay.
?Philippine Papan @ctive Carbon vs. 0/"CB his is not a case of
108
voluntary resignation. It is in the nature of a contrivance to effect
to dismissal without cause. (i.al %emorial vs. )&C)
=. X was hired as a production recorder by a tobacco company.
@fter 4H years of occupying the position, she was demoted to
picker by reason of inefficiency due to alleged fre3uent mistakes
in her report. X refused to report for work and filed a complaint
for illegal dismissal. Cas the dismissal justifiedD
0o. he management based its action merely on communications
between officers of the company. (he was not notified in advance of
the company#s actions. he demotion done in bad faith constitute
constructive dismissal.
Sus6ension of $6erations
4. )rt. ,: : he bona fide suspension of the operation of a
business or undertaking for a period not e$ceeding J months, or
the fulfillment by the !! of a military or civic duty shall not
terminate employment. In all such cases, the !" shall reinstate
the !! to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than 4 month
from the resumption of operations of his !" or from his relief
from the military or civic duty.
=. It is settled that when the bona fide suspension of operations of a
business undertaking e$ceed J months, then the worker#s
employment shall be deemed terminated. (&"c(# -e@tile vs. )&C)
Section %. Retire(ent
)rt. ,@ : @ny !! may be retired upon reaching the retirement age
established in the C-@ or other applicable employment contract.
In case of retirement, the !! shall be entitled to receive such
retirement benefits as he may have earned under e$isting laws and
any C-@ agreement and other agreements: Provided, however, hat
an !!#s retirement benefits under any C-@ and other agreements shall
not be less than those provided therein.
In the absence of a retirement plan or agreement providing for
retirement benefits of !!#s in the establishment, an !! upon reaching
the age of JI years or more, but not beyond J; years which is hereby
declared the compulsory retirement age, who has served at least ;
years in the said establishment, may retire and shall be entitled to
retirement pay e3uivalent to at least S month salary for every year of
service, a fraction of at least J months being considered as 4 whole
year.
<nless the parties provide for broader inclusions, the term S
month salary shall mean 4; days plus 4G4=
th
of the 46
th
month pay and
the cash e3uivalent of not more than ; days of service incentive
leaves.
"etail, service and agricultural establishments or operations
employing not more than 4I !!#s or workers are e$empted from the
coverage of this provision.
109
.iolation of this provision is hereby declared unlawful and subject
to the penal provisions under @rt. =%% of this Code.
$bligation
4. he law does not impose any obligation upon !"#s to set up a
retirement scheme for their !!#s over and above that already
established under e$isting laws. (&lora %otors vs. $rilon)
=. !ntitlement of !!#s to retirement benefits must be specifically
granted under e$isting laws, a C-@ or employment contract or an
established !! policy. ('1% vs. )&C)
&enefit
4. "etirement benefits are intended to help the !! enjoy the
remaining years of his life, lessening the burden of worrying for
his financial support, and are a form of reward for his loyalty and
service to the !". (*9"ino vs. )&C)
=. he C-@ between a university and its faculty members provided
that in case of unusual circumstances, faculty members whose
services are terminated shall be granted retirement benefits. @re
faculty members affected by an unusual circumstance, such a
phase&out, and who are given separation pay pursuant to law
also entitled to retirement benefitsD
Mes. here is no provision in the C-@ to the effect that termination
benefits received under the law shall preclude the !! from receiving
other benefits under the agreement. (eparation arising from a
forced termination of employment and benefits given as a
contractual right due to many years of faithful service and are not
necessarily antagonistic to each other. (U/ vs. %inister of &a!or)
1)R< II
S$!I)L S'!HRI<J
*. 1 Social Security Law ?((/B "@ 44J4 ?as amended by "@ %=%=B
Section 1, SSL : he @ct shall be known as the (ocial (ecurity @ct of
4557.
*. 1olicy of t0e State
4. Section , SSL : It is a policy of the (tate to establish, develop,
promote and perfect a
promote social justice and
provide meaningful protection to members and their
beneficiaries against the ha8ardous of disability, sickness,
maternity, old age, death, and other contingencies
resulting in loss of income or financial burden.
=. he law imposes upon !"#s and !!#s the obligation to become
members of and make contributions to the (ocial (ecurity
(ystem. Is such a legal imposition valid and constitutionalD
110
+embership in the ((( is not the result of a bilateral, consensual
agreement where the rights and obligations of the parties are
defined by and the subject to their will. he law re3uires compulsory
coverage of !"#s and !!#s, designed to provide security to the
working men. +embership in the ((( is, therefore, in compliance
with a lawful e$ercise of the police power of the (tate, to which the
principle of non&impairment of the obligation of contract is not a
proper defense. (P0% vs. SSS)
*." Definitions
'R
4. Section ,, SSL : K'RN any person, natural or juridical,
domestic or foreign, who carries on in the Philippines any trade,
business industry, undertaking or activity of any kind and uses
the services of another person who is under his orders as regards
the employment.
(elf employed is both !" and !! at the same time.
=. What ,R-s are e$empted from the SSS LawD Novernment
and any of its political subdivisions, branches or
instrumentalities, including NECC#s controlled by the
government.
''
Section ,, SSL + K''N @ny person who performs services for an !"
where either mental and physical efforts are used and who receives
compensation for such services and where there is an !"&!!
relationship.
De6endent
4. Section ,, SSL : /egal spouse entitled by law to from member
to receive support.
!0ild +
legitimate
legitimated
legally adopted
illegitimate
who is unmarried, and not gainfully
employed and not reached =4 or over =4
is congenitally or while still minor
permanently incapacitated and incapable
of self&support, physically or mentally.
1arent+ Cho is receiving regular support from member.
&eneficiaries
). 1RIM)RJ
4. Sec. ,, SSL :
)ependent spouse until remarriage
)ependent legitimate, legitimated or legally adopted and
illegitimate children provided that the illegitimate
children shall be entitled to ;IQ of the share of the
legitimate, legitimated and legally adopted children.
111
=. @fter H years of marriage, the spouses (almonte broke up. he
wife left the conjugal home. hereafter, the husband . lived with
another woman. Chen . died, who is entitled to his death
benefitsD
@ny legitimate children of . and illegitimate children ?;IQ of the
share of the legitimate childrenB. he wife of . is not entitled since
she does not 3ualify anymore as beneficiary since she is not
dependent upon the husband. (Salmonte vs. Salmonte)
&. S'!$=D)RJ
Sec. ,
)ependent parents
!. $<#'RS
4. Sec. , : @bsent primary and secondary beneficiaries any other
person designated be members as secondary beneficiary.
=. (, a bachelor dies. Fis death benefits are claimed by /, his
girlfriend whom he designated as beneficiary. he claim is
contested by ., (# brother. Cho is preferredD
/, . is not among the primary and secondary beneficiaries provided
under the law. hus, /, the designated beneficiary is preferred.
(*lcantara)
6. !. a widower, designated + as his beneficiary. he unemployed
married children of ! contests the payment of death benefits to
+. Is the contention validD
0o. !ddie#s legitimate children are not considered dependents
since they are already married. (*lcantara)
*.% !o2erage
). !$M1HLS$RJ
I. ,numerate the *inds of employment under compulsory
coverage under the SSL:
4. @ll !!#s not over JI years of age on date of employment and
!"#s on 4
st
day of operation. "Sec% F and BG0 SSL'
=. (elf&employed as determined by the commission but not limited
to self&employed professionals> partners and single proprietors of
businesses, actors, actresses, directors, scriptwriters, news
correspondents who are not !!#s> professional athletes, coaches,
trainers, and jockeys and individual farmers and fisherman.
"Sec% F0 SSL'
II. ,numerate the *inds of employment which are e$cepted
from compulsory coverage under the SSL?
112
4. !mployment purely casual and not for the purpose of occupation
or business of the !". ?(ec. %, ((/B
=. (ervice performed on or in connection with alien vessel if !!
employed when such vessel is outside of the Philippines. ?Id.B
6. !!#s of the Philippine government, instrumentality or agency
thereof. ?Id.B
H. (ervice performed in the employ of a foreign government, or
international organi8ations or wholly&owned instrumentality. ?Id.B
;. (ervices performed by temporary !!#s e$cluded by (((
regulation. ?Id.B
J. )omestic helpers who are JI years of age and below with a
monthly income of not less than P4,III.II on the date of their
employment. ?(ec. 5B
7. Individual farmers and fishermen under ((( rules and
regulations. ?Id.B
III. @s sacristan in the Catholic Church, - cleaned the premises of the
church, tolled its bells, and assisted the priests in the masses and
other church services. In consideration of these services, he received
;Q of the monthly income of the church. Is - subject to compulsory
coverageD
Mes. Fe is considered an !!. he @rchbishop as corporation sole, to
whom a share of the income or collection is sent, is considered his !".
(0asc"na vs. oman Catholic *rch!ishop)
&. D$LH=<)RJ
,numerate the *inds of employment under the SSL?
4. 1ilipinos recruited by foreign !"#s for employment abroad.
"Section F0 SSL'
=. !! separated from employment "Sec% BB0 SSL'
6. (pouse who devote full time managing household and family
affairs unless specifically mandatorily covered. "Sec% F0 SSL'
!. &J )RR)=G'M'=<
When can coverage be by arrangement? @ny foreign government,
international organi8ation or wholly owned instrumentality employing
workers in the Philippines or employing 1ilipinos outside of the
Philippines may enter into an agreement with the Philippines for the
inclusion of such !!#s in the ((( e$cept those already covered by their
respective civil service retirement system. "Sec% A0 SSL'
*.* 'ffect of Se6aration fro( '(6loy(ent or Interru6tion of
&usiness of 1rofessional Inco(e
113
I. What are the effects of separation from employment of an ,,
compulsorily covered?
4. !" contribution shall cease at the end of the month of separation
an !! not re3uired to pay contributions.
=. !! credited with all contributions paid and entitled benefits
according to ((/.
6. !! may continue to pay total contribution to maintain right to full
benefit. &$ec. .., $$L'
II. What are the effects if self)employed realizes no
professional or business income?
4. Fe shall not be re3uired to pay contributions.
=. Fe may be allowed to continue to pay contributions under the
same rules as a separated !!. ?(ec. 44, ((/B
III. @fter working for ; years, P was fired without cause. Fis dismissal
effected him so much that = months after he suffered a stroke. Is he
entitled to disability benefits at the time of his strokeD
Mes. @lthough an !! is separated from service and has ceased to pay
premiums, he shall be entitled to contributions and to benefits
available under the law. @s P was a member of (((, he remained an
((( member. (*lcantara)
*.: Re6orting Re>uire(ents
4. Sec. %, SSL : !ach !" shall immediately report !!#s names,
ages, civil status, occupations, salaries and dependents.
=. Sec. %A) : !ach covered self&employed shall within 6I days
from the 4
st
day he started practice register and report to the
((( his name, age, civil status, occupation, average monthly net
income and his dependents.
*.@ Cunding
I. What are the different sources of funding for the SSS?
4. ''E s contribution : he !" shall deduct and withhold from such
!!#s monthly salary, wage, compensation or earnings, the !!#s
contribution. ?(ec. 4%B '9Compensation: an actual remuneration
as well as cash value of any remuneration paid in any medium
other than cash. ?(ec. %B,
=. 'REs contribution : !" shall pay, with respect to such covered
!!, the !"#s contribution in accordance with the schedule
indicated in (ection 4% of this @ct.
6. Go2ern(ent contributions : @ppropriation of necessary sums
to meet the estimated e$penses of the ((( for each ensuing
year.
%. !ontributions fro( t0ose 2oluntarily co2ered by t0e SSS.
II. he funds contributed to the (ystem belong to the members who
will receive benefits, as a matter of right, whenever the ha8ards
provided by the law occur. (C%S /state vs. SSS)
114
'ffects of =onAre(ittance
Sec. , SSL : 1ailure of refusal of the !" to pay or remit contributions
shall not prejudice the right of the covered !! to the benefits of
coverage.
*. , &enefits
I. What are the different types of benefits under the SSL?
4. +onthly pension. ?(ec. 4=, ((/B
+inimum pension of P4,=II.II for members with at least
4I credited years of service and P=,HII.II for those with
=I credited years of service.
=. )ependents pension ?(ec. 4=&@, ((/B
6. "etirement ?(ec. 4=&-, ((/B
paid at least 4=I monthly contributions
monthly pension for as long as he lives
H. )eath ?(ec. 46, ((/B
paid at least 6J monthly contributions
lump sum of 6J monthly pensions
;. Permanent disability ?(ec. 46&@, ((/B
J. 1uneral ?(ec. 46&-, ((/B
7. (ickness ?(ec. 4H, ((/B
payment of at least 6 monthly contributions in the 4=&
month period immediately preceding the sickness.
Confinement for more than 6 days
0otice to !" within ; calendar days of sickness
!$haustion of sick leaves with full pay.
%. +aternity ?(ec. 4H&@, ((/B
@ female member who has paid at least 6 monthly
contributions in the 4=
&month
period immediately preceding
the semester of her childbirth or miscarriage shall be paid
a daily maternity benefit e3uivalent to 4IIQ of her
average daily salary credited for JI days or 7% in case of
caesarian delivery for the 4
st
H deliveries or miscarriages.
These are all ta$)e$empt%
II. Section >0 Paternity Leave +ct of BFF=: 0otwithstanding any
law, rules and regulations on the contrary, every male !! in the private
and public sectors shall be entitled to a paternity leave of 7 days with a
full pay for the 4
st
four deliveries of the legitimate spouse with whom
he is cohabiting. he male !! applying for paternity leave shall notify
his !" of the pregnancy of his legitimate spouse and the e$pected date
of such delivery.
III. En his way home from work, " went to a movie house to watch. Fe
is stabbed by an unknown assailant while watching. he ((( denied his
115
claims on the ground that the injury is not work&connected. Is the
denial validD
0o. It is not necessary for the enjoyment of benefits that there be
casual connection between the injury and the work of the !!. Chat is
re3uired is membership in the (((.
1rescri6tion 1eriods
)rt. 11%% : 4I years from the time the right of action accrues since
this is an obligation created by law.
&enefit 1rotection
4. Sec. 1*, SSL : -enefits are not transferable. 0o power of
attorney or other documents e$ecuted as beneficiary in favor of
any agent, attorney or other person for the collection of their
behalf shall be recogni8ed e$cept which beneficiary is physically
unable to collect.
=. Sec. 1*, SSL : Chen -eneficiary is a national of a foreign
country which does not e$tend benefits to 1ilipino beneficiary
residing in the Philippines or which is not recogni8ed by the
Philippines.
General Rule : Fe is not entitled to benefit.
'?ce6tion: (ocial (ecurity Commission may authori8e
payment where the best interest of the ((( will be served.
6. Sec. 1:, SSL : @ll benefit payments made by ((( shall be
e$empt from all kinds of ta$es, fees or charges and shall not be
liable to attachment, garnishments, levy or sei8ures by or under
any legal or e3uitable process whatsoever, either before or after
receipt e$cept to pay any debt of member to (((.
H. Sec. 1@, SSL : 0o fees shall be payable to agent, attorney, other
person&in&charge of preparation, filing or pursuing any claim and
any stipulation to the contrary is void. +embers of the -ar who
appear as counsel in any case heard by the Commission shall be
entitled to attorney#s fees not e$ceeding 4IQ of the amount
collected, any stipulation of the contrary shall be null and void.
*.3 Dis6ute Settle(ent
Jurisdiction and 1eriod of Dis6ute Settle(ent
Sec. * : )isputes involving coverage, benefits, contribution, penalties
and any related matter shall be decided by the (ocial (ecurity
Commission or duly designated member, or duly authori8ed hearing
officers and should be decided within the mandatory period of =I
calendar days from submission. )ecision shall be final 4; days after
date of notification.
'?ecution of Decisions
Sec. *, : he Commission motu proprio or on motion of any interest
party may issue order of e$ecution of decision after same is final and
e$ecutory.
116
)66eal
Sec. * : @ppeal to C@ on law and facts. @ppeal to the (C on pure
3uestions of law.
Section :. .or/(enEs !o(6ensation B ''Es !o(6ensation and
State Insurance Cund 5'!SIC7
:.1 Law
1olicy $b8ecti2e
)rt. 1:: : o promote and develop a ta$ e$empt !!#s compensation
program whereby !!#s and their dependents, in the event of work&
connected disability or death, may secure ade3uate income benefit,
and medical or related benefit.
Rationale
he primary purpose of a workmen#s compensation act is to provide
compensation for disability or death resulting from occupational
injuries or diseases or accidental injury> the statute is a remedial one,
to compensate reasonably those who are injured while in the
employment of others, as part of the natural, necessary cost of
production. (*."cena)
=ature of t0e State Insurance Cund
4. he law establishes a state insurance fund built by the
contribution of !"#s based on the salaries of their !!#s. he
injured worker does not have to litigate his right to
compensation. he worker simply files a claim with the !CC. he
payment of benefits is more prompt. he cost of administration
low. (Sarmiento vs. /CC)
>% 8ive the characteristics of the ,,-s #ompensation
Program
a$ e$empt.
)esigned to ensure promptitude in cases of work&
connected disability or death in the award of benefits.
1unded by monthly contributions of all covered !"#s.
Compulsory on all !"#s and their !!#s not over JI years of
age.
-enefits are e$clusive and in place of all other liabilities of
the !" to the !!.
Fas its own adjudicative machinery with original e$clusive
jurisdiction on any matter related thereto, independent of
other tribunals e$cept the (C. (S%C vs. )&C)
Inter6retation
@s agent charged by the law to implement social justice guaranteed
and secured by the Constitution, the !CC should adopt a liberal
attitude in favor of the !! in deciding claims for compensability,
especially where there is some basis in the facts inferring a work
connection to the accident. (&a.o vs. /CC)
117
:. Definitions
'R
)rt. :: : @ny person, natural or juridical, employing the services of
an !!.
De6endent
What are the dependents under the ,#S(F?
4. /egitimate
=. /egitimated
6. @cknowledged natural child
who is unmarried, and not gainfully employed, and not
over =4 years of age, or over =4 provided he is incapable
of self&support due to physical or mental defect which is
congenital or ac3uired during minority.
H. (pouse : /egitimate and living with the !!.
;. Parents : of !! wholly dependent upon !! for regular support.
?@rt. 4JJB
&eneficiaries
.0o are t0e beneficiaries under t0e '!SIC9
B% Primary
a. (pouse dependent spouse until remarriage
b. Children dependent> provided dependent acknowledged
natural children shall be considered as primary beneficiary
when there are no other dependent children who are not
eligible and 3ualified for monthly income benefit.
>% Secondary
a. Parents dependent subject to restrictions imposed on
dependent children.
b. Children illegitimate subject to restrictions imposed on
dependent children
c. /egitimate descendants.
:." !o(6ensability
4. What is an in9uryD Farmful change in the human organism
from any accident arising out of and in the course of the
employment. 5)rt. 1:@7
=. If a soldier is killed by an accidental discharge of his companion#s
rifle while an overnight pass to a rebel infested area, is the death
of a soldier compensableD
Mes. he death arose out of and in the course of the employment
since the soldier was not on vacation leave and he had lawful
permission to go to the place and the other soldier was authori8ed
to carry a firearm. (Hinog"in vs. /CC)
6. What are the re!uisites for an in9ury to be considered as
wor*)related?
he injury must be the result of an employment accident satisfying
all of the following grounds:
118
a. he !! must have been injured at the place where his work
re3uires him to be.
b. he !! must have been performing his official functions.
c. If the injury is sustained elsewhere, the !! must have been
e$ecuting an order for the !". 5Sec. 1, Rule III, &oo/ I,
IRREs7
1ro?i(ate !ause
he right to compensation e$tends to disability due to disease
supervening upon and pro$imately and naturally resulting from a
compensable injury. Chere the primary injury is shown to have arisen
in the course of employment, unless it is the result of an independent
intervening cause attributable to claimant#s own negligence or
misconduct i.e. condition of classroom floor caused -elarmino to slip
and fall and suffer injury as a result, hence all medical conse3uences
flowing from it, the premature delivery of her baby, and her death are
compensable. (0elarmino vs. /CC)
Going to or !o(ing fro( .or/ Rule
4. Chat is the Kgoing and co(ing ruleND
In the absence of special circumstances, an !! injured while going
to or coming from his place of work is e$cluded from the benefits of
workmen#s compensation acts, except:
a. Chere the !! is proceeding to or from his work on the
premises of the !".
b. Chere the !! is about to enter or about to leave the
premises of his !" by way of the e$clusive or customary
means of ingress and egress.
c. Chere the !! is charged, while on his way to or from his
place of employment or at his home, or during his
employment with some duty or special errand connected
with his employment.
d. Chere the !" as an incident of the employment provides
the means of transportation to and from the place of
employment.
=. Chat is the ingress or egressF6ro?i(ity ruleD
!mployment includes not only the actual doing of the work, but a
reasonable margin of time and space necessary to be used in
passing to and from the place where the work is to be done. @s a
general rule, employment may be said to begin when the !!
reaches the entrance to the !"#s premises where the work is to be
done> but it is clear that in some cases the rule e$tends to include
adjacent premises used by the !! as a means of ingress and egress
with the e$press or implied consent of the !". (2loilo $oc( vs. WCC)
Incidents of '(6loy(ent
119
It is settled that injuries sustained in connection with acts which are
reasonably incidental to the employment are deemed arising out of
such employment. Nenerally, such incidents of work include:
4. @cts of personal ministration for the comfort and convenience of
the !! i.e. answering a call of nature.
=. @cts for the personal benefit of the !" i.e. special errand rule.
6. @cts done to further the goodwill of the business.
H. (light deviations from work, from curiosity or otherwise.
;. @cts in emergencies i.e. death of an !! while attempting to
rescue a co&!! (*."cena)
Li2ing, &oarding, Lodging on 1re(ises of 'R, or at .or/ing
1lace
Compensable if living on the !"#s premises or at the place of work is an
e$press or implied re3uirement of the contract of hiring and when the
injury results from a risk or danger which is reasonably incidental to
the employment. (*."cena)
.0ile <ra2elling
Compensation depends upon whether the injury results from a risk
inherent in the nature of the employment, or reasonably incidental
incidental thereto, and upon whether the !! was engaged in the
e$ercise of some functions or duties reasonably necessary or incidental
in the performance of the contract of employment, or whether he was
authori8ed or re3uired by such contract to be. (*."cena)
)ssault
If there is a causal relation between the assault and the employment,
the assault is compensable. (2loilo $oc( vs. WCC)
Sic/ness DefinedO $ccu6ation or !o(6ensable Disease
4. efine sic*nessD
@ny illness
a. definitely accepted as an occupational disease listed by
the Commission, or
b. any illness caused by employment subject to proof that the
risk of contracting the same is increased by working
conditions. ?@rt. 4J7B
If the illness are not occupational diseases, the claimant must
present proof that he contracted them in the course of his
employment. ('alanida vs. /CC)
=. What is occupational diseaseD
120
)isease due wholly to causes and conditions which are normal and
constantly present and characteristic of the particular conditions
which are normal and constantly present and characteristic of the
particular occupation. (%ene. vs. /CC)
). <#'$RJ $C <#' I=!R')S'D RISL
If an ailment is not included in the list of occupational diseases as
drawn up by the Commission, the claimant has the burden of proving
that the nature of the work increased the risk of contracting the
disease. ($a!atian vs. 'S2S) o establish compensability under the
increased risk theory, the claimant must show proof of reasonable
work&connection, not necessarily direct causal relation. he degree of
proof is merely substantial evidence as will support a decision, or clear
and convincing evidence. ()ara.o vs. /CC)
).1 S6ecific Illnesses
8ive e$amples of diseases which are not listed as occupational
diseases6
4. Peptic ulcer
=. Cancer. -ut in some cases, it is
6. -angungot
H. Incomplete abortion
;. (chistomiasis
J. "heumatoid @rthritis
7. @denocarcinoma
%. Cirrhosis of the liver
5. Prolapsed uterus.
:.% !o2erage and Liability
!o(6ulsory !o2erage
)rt. 1:, : @ll !"#s and their !!#s not over JI years of age, provided,
an !! who is over JI and paying contribution to 3ualify for retirement
or life insurance benefits shall be subject to compulsory coverage.
Coreign '(6loy(ent
)rt. 1@4 : he Commission shall ensure ade3uate coverage of 1ilipino
!!#s employed abroad. Compulsory coverage of the !" shall take effect
on the 4
st
day of operation, and that of the !! on the date of
employment.
'?clusions
4. )rt. 1@ : he (tate Insurance 1und shall be liable for
compensation to the !! or his dependents, e$cept when the
disability or death was occasioned by the:
a. !!#s into$ication,
b. Cillful intention to injure or kill himself or another,
c. 0otorious negligence, or
d. Etherwise provided under this itle.
121
>% What defenses may be interposed by the ,#S(F against a
claim for compensation made by a covered ,,?
a. he injury is not work&connected or the sickness is not
occupational.
b. he disability or death was occasioned by the !!#s
into$ication, willful intention to injure or kill himself or
another, or his notorious negligence. ?@rt. 47=B
c. 0o notice of sickness, injury or death was given by !". ?@rt.
=IJB
d. he claim was filed beyond 6 years from time of cause of
action. ?@rt. =I4B
). I=<$-I!)<I$= $R DRH=L'=='SS
It has been held that even if it could be shown that a person
drank into$icating li3uor it is incumbent upon the person invoking
drunkenness as a defense to show that said person was e$tremely
drunk. hus, into$ication which does not incapacitate the !! from
following his occupation is not sufficient to defeat the recovery of
compensation, although into$ication may be a contributory cause to
his injury. It must be shown that the into$ication was the pro$imate
cause of death or injury and the burden of proof lies on him who raises
drunkenness as a defense. ()it"ra vs. /CC)
&. S'LCAI=CLI!<'D I=JHRI'S
@ccording to @merican authorities, suicide is compensable in the
following cases:
4. Chen it results from insanity from compensable work injury or
disease.
=. Chen it occurs during a delirium resulting from compensable
disease. ()*/SS Shipping vs. )&C)
!. =$<$RI$HS ='GLIG'=!'
0otorious negligence has been defined as something more than mere
or simple negligence or contributory negligence> it signifies a
deliberate act of the !! to disregard his own personal safety.
)isobedience to rules, orders, andGor prohibition does not in itself
constitute notorious negligence, if no intention can be attributed to the
injured to end his life. ()it"ra vs. /CC)
:.* Cunding
What are the sources of funding of the ,#S(F? Contribution shall
be paid in their entirety by the !" and any contract or device for the
deductions of any portion thereof from the wages or salaries of the
!!#s shall be null and void. ?@rt. 4%6B !!#s do not have any
contribution. he government accepts general responsibility for the
solvency of the !C(I1. @ny deficiency will be covered by the
supplemental appropriations from the 0ational Novernment. ?@rt. 4%HB
122
'ffects of =onARe(ittance
)rt. 13: : 1ailure or refusal of the !" to pay or remit the contributions
shall not prejudice the right of the !! or dependent to benefits.
:.: &enefits
.0at are t0e different ty6es of benefits under t0e '!SIC9
4. Medical benefits consisting of medical services and
rehabilitation services. ?@rt. 4%;B
=. Disability
a. emporary total ?@rt. 454B
b. emporary permanent ?@rt. 45=B
c. Partial permanent ?@rt. 456B
6. Deat0 and Cuneral minimum death benefit shall be P4;,
III.II and funeral benefit shall be P%,III.II ?@rt. 45HB
+ll the benefits are ta$)e$empt.
&enefit 1rotection
)rt. 1@* : !$cept as otherwise provided under this itle, no contract
,regulation or device whatsoever shall operate to deprive the !! or his
dependents of any part of the income benefits and medical or related
services granted under this itle. !$isting medical services being
provided by the !" shall be maintained and continued to be enjoyed by
their !!#s.
1rescri6ti2e 1eriods
)rt. 41 : 6 years from the time the cause of action accrued.
'?clusi2ity of &enefits
4. )rt. 1@" : /iability of the !C(I1 shall be e$clusive and in place of
other liabilities of !" to !!, dependents or anyone otherwise
entitled to receive damages on their behalf. he payment of
compensation shall not bar the recovery of benefit provided in
other laws i.e. payment bars recovery for damages arising from
the death of the member.
=. @s a result of a cave&in, several miners were buried alive. he
heirs filed an action with the "C for damages against the
company on grounds of breach of contract. he company moved
to dismiss the suit on grounds of e$clusive liability of the !C(I1. Is
the motion meritoriousD
0o. he !! or his heirs has the right of selection or choice of action.
Fe cannot however pursue both courses of action simultaneously.
(+loresca vs. Phile@)
Liability of <0ird 1arties
)rt. 1@% : Chen disability or death is caused by circumstances
creating a legal liability against a 6
rd
party, the system shall still pay for
the benefits. Fowever, the system shall be subrogated to the rights of
123
the disabled !! or dependents in case of death in accordance with the
general law. Chere the system recovers damages in e$cess shall be
delivered to the disabled !! or other persons entitled, after deducting
the costs of the proceedings and e$penses of the system.
&enefit 1rotection
4. )rt. 13, : @s a general rule, no claim for compensation is
transferable or liable to ta$, attachment, garnishment, levy or
sei8ure by or under any process whatsoever, either before or
after receipt, e$cept if it is to pay any debt of the !! to the
system.
=. )rt. 4" : 0o agent, attorney, or other person pursuing or in&
charge of preparation of filing any claim shall demand or charge
any fee and any stipulation to the contrary shall be null and void.
he retention or deduction of any amount from any benefit for
the payment of such fee or such services is prohibited.
:.@ Dis6ute Settle(ent
)rt. 1,4 : Novernment service insurance system or the social security
system shall have original and e$clusive jurisdiction to settle any
dispute with respect to coverage, entitlement of benefits, collection of
contributions and penalties and other related matters.
)66eal
)rt. 1,1 : )ecisions or orders shall be reviewable by the (C on
3uestion of law.
Section @+ Go2ern(ent Ser2ice Insurance Syste(
=7. 4 Re2ised Go2ern(ent Ser2ice Insurance )ct of 133@
=7.= Definitions
'R
Sec. , GSIS )ct of 133@ + <0e 'R includes +
4. he national government, its political subdivisions, branches,
agencies or instrumentalities.
=. NECC#s.
6. 1inancial institutions with original charters.
H. Constitutional commissions and the judiciary.
''
Sec. , GSIS )ct of 133@ : !! shall include :
4. @ny person receiving compensation while in the service of !"
whether by election, or appointment, irrespective of the status of
appointment.
=. -arangay officials.
6. (anggunian officials.
De6endents
Who are considered dependents under the 8S(S Law?
124
4. Child
a. /egitimate.
b. /egitimated.
c. /egally adopted.
d. Illegitimate.
who is unmarried, not gainfully employed, and not
over the age of majority, or is over the age of
majority but is incapacitated and incapable of self&
support due to mental or physical defect, ac3uired
prior to age of majority.
=. (pouse legitimate and dependent for support upon member or
pensioner.
6. Parents legitimate parent dependent upon member for support.
?(ec. =, N(I( @ct of 4557B
&eneficiaries
Cho are the beneficiaries under the N(I( /awD
4. 1ri(ary :
a. /egal dependent spouse until remarriage.
b. )ependent children.
=. Secondary :
a. )ependent parents.
b. /egitimate descendants subject to restrictions of
dependent children.
=7.6 !o(6ulsory !o2erage
Sec. ", GSIS )ct of 133@ : Coverage shall be compulsory for all !!#s
receiving compensation who have not reached compulsory retirement
age, irrespective of the employment status.
=7.H 'ffect of Se6aration of '(6loy(ent
Sec. %, GSIS )ct of 133@ : @ member separated from the service
shall continue to be a member and entitled to whatever benefits he
has 3ualified, in event of any contingency compensable under this @ct.
=7.; Re6orting Re>uire(ents
Sec. :, GSIS )ct of 133@ : he !" shall report to the N(I( the names
of all !!#s, corresponding employment status, positions, salaries and
other pertinent information.
=7.J Cunding
.0at are t0e different sources of funding of t0e GSIS9
4. !" and member contributions. &$ec. D, J$%$ ct of .66B'
=. Novernment guarantees the fulfillment of the obligations of the
N(I( to members. &$ec. H, J$%$ ct of .66B'
=7.7 &enefits
What are the benefits provided by the 8S(S?
1. )ll (e(bers
a. /ifetime insurance.
b. "etirement at least JI years of age, and 4; years of
service.
125
however, !! is allowed to continue to work to
complete the 4;&year service re3uirement. (Cana vs.
CSC)
=. Disability Provided :
he has paid at least 6J monthly contributions
within the ;&year period immediately preceding his
disability, or he has paid a total of at least 4%I
monthly contributions prior to his disability> and his
disability is not compensable under any other law.
a. (urvivorship & dependent spouse shall be entitled to
survivorship benefits for life or until she remarries.
)ependent children are entitled to benefit while still
minors and unmarried.
b. (eparation
c. <nemployment.
6. Judiciary B /ife insurance only. ?(ec. 6, N(I( @ct of 4557B
HHH +ll are ta$ e$empt%
1rescri6ti2e 1eriod
Sec. ,, GSIS )ct of 133@ : @ll claims, e$cept for life and
retirement benefits shall prescribed within H years from date of
contingency.
&enefit 1rotection
Sec. "3, GSIS )ct of 133@ :
4. @ll benefits paid shall be e$empt from ta$es.
=. @ll benefits shall be e$empt from attachment, garnishment,
e$ecutions, levy or other processes, issued by courts, 3uasi&
judicial agencies or administrative bodies including CE@
disallowances and all forms of financial obligations of members,
including pecuniary accountability arising from or caused or
occasioned by e$ercise of performance or official functions or
duties, or incurred relative to or in connection with his position or
work e$cept when monetary liability, contractual or otherwise, is
in favor of the N(I(.
=7.% Dis6ute Settle(ent
Sec. "4, GSIS )ct of 133@ : Novernment (ervice Insurance (ystem
shall have original and e$clusive jurisdiction to settle any dispute
arising under act or any laws administered by the N(I(. he -oard may
designate any member of the -oard or official of the N(I( who is a
lawyer as hearing officer to receive evidence, make findings of fact and
submit recommendations.
)66eals
Sec. "1, GSIS )ct of 133@ : @ppeals of decisionsGawards of the -oard
shall be governed by "ules H6 and H; of the 4557 "ules of Civil
126
Procedure. @ppeal shall not stay orders unless stayed by orders of the
-oard, C@ or the (C.
Section ,. =ational #ealt0 Insurance )ct of 133*
=%.4 Law B =ational #ealt0 Insurance )ct of 133* B R) @,@*
=%.= 1ur6osesF$b8ecti2es
4. Section , =ational #ealt0 Insurance )ct : he (tate shall
adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods,
health and other social services available to all the people at
affordable cost.
?bB *niversality he 0ational Fealth Insurance Program shall give
the highest priority to achieving coverage of the entire population
with at least at a basic minimum package of health insurance
benefits.
=. Section ", =ational #ealt0 Insurance )ct : his @ct seeks to :
a. Provide all citi8ens of the Philippines with the mechanism
to gain financial access to health services>
b. Create the 0ational Fealth Insurance Program, hereinafter
referred to as the Program to serve as the means to help
the people pay for health care services> and
c. !stablish the Philippine Fealth Insurance Corporation, that
will administer the Program at central and local levels.
6. Section *, =ational #ealt0 Insurance )ct : here is hereby
created the 0ational Fealth Insurance Program which shall
provide health insurance coverage and ensure affordable,
acceptable, available and accessible health care services for all
the citi8ens of the Philippines, in accordance with the policies
and specific provisions of this @ct. his social insurance program
shall serve as the means for the healthy to pay for the care of
the sick and those who can afford medical care to subsidi8e
those who cannot. It shall initially consist of Programs I and II of
+edicare and be e$panded progressively to constitute one
universal health insurance program for the entire population. he
Program shall include a sustainable system of the funds
constitution, collection, management and disbursement for
financing of the availment of a basic minimum package and
other supplementary packages of health insurance benefits by a
progressively e$panding proportion of the population.
C% The Program shall be limited to6
a. paying for the utili8ation of health services by covered
beneficiaries or
b. to purchasing health services in behalf of such
beneficiaries.
(t shall be prohibited from6
c. providing health care directly
127
d. from buying and dispensing drugs and pharmaceuticals,
e. from employing physicians and other professionals for the
purpose of directly rendering care, and from
f. owning or investing in health care facilities.
=%.6 !o2erage
4. Section @, =ational #ealt0 Insurance )ct : @ll citi8ens of the
Philippines shall be covered, provided, the Program shall not be
made compulsory in certain provinces and cites until the
Corporation shall be able to ensure the members in such
localities shall have reasonable access to ade3uate and
acceptable health care services.
>% Who are the legal dependents of a member?
a. /egitimate spouse who is not a member.
b. <nmarried and unemployed legitimate, legitimated,
illegitimate, acknowledged children, legally adopted or
stepchildren
below =4 years of age or = years old and above but
suffering from congenital disability, either physical or
mental, or any disability ac3uired that renders them totally
dependent on member for support.
c. Parents who are over JI years of age whose monthly
income is below an amount to be determined by the
Corporation. &$ec. @, >ational :ealth %nsurance ct'
=%.H Cunding
.0at are t0e sources of funding of t0e =#IC9
4. +embers contributions.
=. Current balance of the Fealth Insurance 1unds of the ((( and the
N(I(
6. Ether appropriations earmarked by the national and local
governments purposely for the implementation of the Program.
H. (ubse3uent appropriations.
;. )onations and grant&in&aid.
J. @ccruals.
7. Contributions by /N<#s for indigent members.
=%.; #ealt0 !are 1ro2iders
I. What are the minimum accreditation re!uirements of health
care providers
4. Fuman resource, e3uipment and physical structure in conformity
with the standards of the relevant facility, as determined by the
)ept. of Fealth.
=. @cceptance of formal program of 3uality assurance and
utili8ation review.
6. @cceptance of the payment mechanisms specified in the
following section.
H. @doption of referral protocols and health resources sharing
arrangements.
;. "ecognition of the right of patients.
J. @cceptance of information system re3uirements and regular
transfer of information.
128
II. 8ive the categories of personal health services to be
granted under the &7(P 6
4. Inpatient hospital care i.e. room and board services of health
care professionals.
=. Eutpatient care i.e. diagnostic, laboratory and other medical
e$aminations services and personal preventive services.
6. !mergency and transfer services.
H. (uch other health services that the Corporation shall determine
to be appropriate and cost&effective.
III. 8ive the services that are e$cluded 6
4. 0on&prescription drugs and devices.
=. Eutpatient psychotherapy and counseling for mental disorders.
6. )rug and alcohol abuse or dependency treatment.
H. Cosmetic surgery.
;. Fome and rehabilitation services.
J. Eptometric (ervices.
7. 0ormal Ebstetrical delivery. ?(ec. 44, 0ational Fealth Insurance
@ctB
,.: Grie2ance and )66eal
I. Section %4, =ational #ealt0 Insurance )ct : he following acts
shall constitute valid grounds for grievance action:
4. .iolation of the rights of patients.
=. Cillful 0eglect of duties of program implementers that results in
the loss or non&enjoyment of benefits by members or their
dependents.
6. <njustifiable delay in actions or claims.
H. )elay in the processing of claims that e$tends beyond the period
agreed upon.
;. @ny other @ct or neglect that tends to undermine or defeat the
purposes of this @ct. ?.@0<)B
II. Section %1, =ational #ealt0 Insurance )ct : @ member, his
dependent, or a health care provider may file a complaint for grievance
based on any of the above grounds, in accordance with the following
procedure :
4. @ complaint for grievance must be filed with the Effice which
shall rule on the complaint within 5I calendar days from receipt
thereof.
=. @ppeals from Effice decisions must be filed with the -oard within
6I days from receipt of notice of dismissal or disallowance by the
Effice.
6. he Effice shall have no jurisdiction over any issue involving the
suspension or revocation of accreditation, the imposition of fines,
or the imposition of charges on members or their dependents in
case of revocation of their entitlement.
H. @ll decisions by the -oard as to entitlement of benefits of
members or to payments of health care providers shall be
considered final and e$ecutory.
Section 3. !)RL, R) ::*@
129
B% 8ive the provisions of the BFAI #onstitution of agrarian
reform?
he (tate shall promote comprehensive rural development
and agrarian reform. "Sec% >B0 +rt% ((0 #onst%'
he (tate shall by law, undertake an agrarian reform
program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. o
this end, the (tate shall encourage and undertake the just
distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological,
developmental and e3uity considerations, and subject to
the payment of just compensation. In determining
retention limits, the (tate shall respect the right of small
landowners. he (tate shall provide incentives of voluntary
land&sharing. "Sec% C0 +rt% J(((0 #onst%'
=. Define agrarian refor(.
@grarian reform means the redistribution of lands regardless of
crops or fruits produced to farmers and regular farmworkers who
are landless, irrespective of tenurial arrangement, to include the
totality of factors and support services designed to life the
economic status of the beneficiaries and all other arrangements
alternative to the physical redistribution of lands, such as
production or profit sharing, labor administration and distribution of
shares of stock, which will allow the beneficiaries to receive a just
share of the fruits of the lands they work. "Sec% D0 #+RL'
". Lands co2ered by t0e !)RL.
@ll alienable and disposable lands of the public domain
devoted to or suitable for agriculture. 0o reclassification of
forest or mineral lands to agriculture lands shall be
undertaken after the approval of this @ct until Congress,
taking into account ecological, developmental and e3uity
considerations, shall have determined by law, the specific
limits of the public domain.
@ll lands of the public domain in e$cess of the specific
limits as determined by Congress in the preceding
paragraphs.
@ll other lands owned by the Novernment devoted to or
suitable for agriculture> and
@ll private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can be
raised thereon. ?(ec. H, C@"/B
U5G6IGI=Y
130
131

132