Labor (A2016)

Last Updated:
Oct. 15, 2013

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LABOR STANDARDS and SOCIAL LEGISLATION Reviewer || Prof. P. R. P. Salvador-Daway
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Constitutional Mandate
Art. II. Sec. 10, Art. XIII, Secs. 1-3
I. Labor: Concept
-
Labor is a physical toil, though it does not necessarily include the

application of skill, thus there is skilled and unskilled labor
Rendition of services and production of good
Through mental / physical effort
Skill = The familiar knowledge of any art or science, united with
readiness and dexterity in execution or performance or in the
application of the art or science to practical purposes
(ART. 13(A))
Labor includes all members of the labor force, employed and

unemployed, as well as professionals
Workers = Refers to self-employed people and those working in
the service and under the control of another, regardless of rank,
title, or nature of work
Employee = A salaried person working for another who controls
or supervises the means, manner and method of doing the work
Who are part of the Labor force?

ILO:
Persons 15 yrs. old and above
PH:
Persons 18 yrs. old and above, 15-17 yrs. old are covered
by special laws
II. Labor Law

-
Pieces of legislation which govern the relationship between capital

and labor
It includes (1) Labor standards, (2) institutional mechanisms and (3)
welfare legislations
Neither communism, nor despotism, nor atomism not anarchy but

the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated
Means the promotion of the welfare of all the people, the adoption
by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of
salus populi est suprema lex.
Must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of
the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the
state of promoting the health, comfort, and quiet of all persons,
and of bringing about the greatest good to the greatest number.
7 Cardinal Rights
1.
Self-Organization
2.
Collective Bargaining + Negotiations
3.
Peaceful and Lawful Collective Action (Right to Strike)
4. Security of Tenure
5.
Humane conditions of work
6.
Living Wage
7.
Participation in relevant Policy & Decision Making Processes
Rights granted in other provisions in the Constitution
1.
Right to form unions, associations, societies for purposes not
contrary to law.
2.
Right to self-organization shall not be denied to government
employees.
3.
Regular farmworkers shall have the right to own directly or
collectively the lands they till.
4. The State shall by law and for common good, undertake in
cooperation with the private sector a continuing program of urban
land reform and housing.
5.
The State shall protect working women by providing safe and
healthful working conditions taking into account their maternal
functions.
6.
Labor is entitled to seats allotted to party-list representatives
7.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform.
8. Congress shall create an agency to promote the viability and
growth of cooperatives.
9. The Government shall increase salary scales of the other officials
and employees of the National Government.
10. Career civil service employees shall be entitled to appropriate
separation pay and to retirement and other benefits under existing
laws.
To promote Social Justice in all phases of national development

Congress to 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 inequalities, and
remove cultural inequities by equitably diffusing wealth and
political power for the common good
State shall regulate the acquisition, ownership, use, and disposition
of property and its increments.
State to create economic opportunities based on freedom of
initiative and self-reliance.
State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and
equality of employment opportunities for all.
State shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations.
The power of the government to enact laws within the

constitutional limits, to promote order, safety, health, morals and
general welfare of society
The power inherent in government to protect itself and all its
constituents, and for this purpose, to hold the government
immune, as far as necessary from any limitations imposed in the
past
Right of every person to pursue a business, occupation, or
profession is subject to the paramount right of the government as a
part of its police power to impose such restrictions and regulations
as the protection of the public may require.
The exercise of the police power must not violate the safeguards of
constitutional rights only insofar as is necessary to accomplish
purposes justified by the public evil to be removed or the public
good achieved
Calalang v. Williams (1940)
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Consti., Art XIII, Sec III, Par 3
The Constitution commands the State to promote the principle of

shared responsibility between workers and employees and the
preferential use of voluntary models of settling disputes to foster
Industrial peace
The Industrial peace Act was patterned after the US laws, and thus
decisions interpreting those laws may be useful in interpreting our
labor laws
Consti., Art. II, Sec. 20; Art. XIII, Sec. 3, pars. 3 and 4
Right by the owner of the company

An employer is free to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
tools to be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers
As long as the companys exercise of the same is exercised in good
faith for the advancement of the employers interest, and not for
the purpose of defeating or circumventing the rights of the
employees under special laws or valid agreements, the courts will
uphold them.
But this right can be regulated by the state
The exercise of management prerogatives is not unlimited. A line

must be drawn between management prerogatives regarding
business operations per se and those which affect the rights of
employees. In treating the latter, management should see to it that
its employees are at least properly informed of its decisions and
modes of action.
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be
expected that every labor dispute will be automatically decided in
favor of labor. Management also has its own rights which, as such,
are entitled to respect and enforcement in the interest of simple
fair play.2
Consti., Art XIII, Sec III, Par 3 and 4
The state is mandated to regulate the relations of labor and capital,

balancing the rights of the workers to a just share in the fruits of
production and the right of the employer to a reasonable return on
its investment
III. Classification
1.
2.
3.
Labor Standards
Labor Relations
Welfare Legislation
Labor standards which sets out the

Minimum terms
Conditions
Benefits of employment that employers must provide or comply
with and to which employees are entitled as a matter of legal right.
Labor relations law which defines the

Status
Rights
Duties
Institutional mechanisms that govern the individual and collective
interactions of employers, employees or their representatives.
Social Legislation vis--vis Labor Laws
Social legislation provides particular kinds of protection or benefits
to society or segments thereof in furtherance of social justice.
Labor laws are necessarily social legislation. But to differentiate,
labor laws directly affect employment while social legislation
governs effects of employment.
Labor laws are social legislation but not all social legislation are
labor laws.
Coca-Cola v. Gacayna
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IV. Basis
-
Inherent inequalities between labor and capital

Levelling of the playing field which is the work premises / work
place
7 Principles underlying the code

Labor relations must be made both responsive and responsible to
national development
Labor laws/labor relations during national emergency must
substitute rationality for confrontation; strikes; lockouts give way
to arbitration
Labor justice can be expeditious without sacrificing due process
Manpower development and employment must be regarded as a
major dimension of labor policy
There is a global labor market available to qualified Filipinos
Labor laws must command adequate resources and acquire a
capable machinery for effective and sustained implementation
There should be popular participation in national policy-making
through what is now called tripartism
Arts. 19, 20, 21, 1700, 1701
Provides for responsibilities between employers and employees, for

each other to respect the rights of the other in the performance of
their duties and in the exercise of their rights
It also acknowledges that the labor relationship is imbued with
public interest and therefore subject to proper regulations by the
State. Hence, the parties cannot disregard labor laws and
regulations and insulate themselves from these restrictions simply
by contracting with each other.4
Consti., Art. II, Sec. 2
International law likewise proscribes discrimination. General

principles of law include principles of equity, i.e., the general
principles of fairness and justice, based on the test of what is
reasonable. The Universal Declaration of Human Rights, the
International Covenant on Economic, Social, and Cultural Rights,
the International Convention on the Elimination of All Forms of
Racial Discrimination, etc., all embody the general principles
against discrimination, the very antithesis of fairness and justice.
The Philippines, through its Constitution, has incorporated this
principle as part of its national laws.5
The basic policy is to balance and coordinate the rights and

interests of both workers and employers
The perspective is the same as the 1987 Constitution which
explicitly recognizes shared responsibility of employers and
workers and the right of enterprise to reasonable returns on
investment and to expansion and growth
Art. II, Secs. 5, 9, 10, 11, 13, 14, 18, 20;

Art. III, Secs. 1,3, 4, 8, 18 (2)
Art. XII, Secs. 1, 2, 3, 14
Labor Code, Art. 3
1. Right to Security of Tenure

The guarantee of security of tenure under the Constitution means
that an employee cannot be dismissed from the service for causes
other than those provided by law and only after due process is
accorded the employee.3
2. Right to Humane Conditions of Work
3. Right to a living wage
V. The Labor Code of the Philippines

-
The writing of the Labor Code began in 1968 under the Minister of
Labor Blas Ople
The objective was not merely to consolidate the then existing
pieces of labor legislation but also to reorient them to the needs of
economic development and justice
Information had to be gathered from different departments and
bureaus of the government, UP Law, IBP, NEDA, etc.
Ratified on April 28, 1973
It was signed into law on May 1, 1974 and took effect on Nov 1, 1974
because it is designed to be a dynamic and rowing body of laws
which will reflect continually the lessons of practical applications
and experience
Art. 3
Art. 4; Art. 1702 (NCC)
ART. 4 (LC)
All Cases
Labor Code + IRR
All doubts
Art. 1
Labor Code of the Philippines
November 1, 1974
ART. 1702 (NCC)

In cases in favor of safety and
decent living
Labor legislation & contracts
In case of doubt
Art. 2
3
4
De Guzman vs. Comelec (2000)

Innodata v. Quejada-Lopez (2006)
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International School Alliance of Educators v. Quisumbing (2000)
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Art. 217
Art. 5
Unfair labor practice cases;

Termination disputes;
If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;
Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
and
Except claims for Employees Compensation, Social Security,
PhilHealth and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding P5k
regardless of whether accompanied with a claim for reinstatement.
Art. 6, 282; Consti., Art. IX-B, Sec. 2 (1)
Art. 221
The rules of evidence prevailing in courts of law or equity shall not

be controlling
The Commission and the LAs shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure
Scales of justice are tilted towards the employee

Procedural laws may be relaxed in order to avoid injustice
Rules of procedure should be relaxed when there is substantial and

subsequent compliance.
The Court has time and again relaxed the rigid application of the
rules to offer full opportunity for parties to ventilate their causes
and defenses in order to promote rather than frustrate the ends of
justice.6
VI. Work Relationship
Person
Either natural or juridical, individual or collectively
Includes business trust and legal representatives
Santos v. Litton Mills (2011)
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Includes the Visitorial and Enforcement Powers of the Secretary of

Labor and Employment (SOL)
Penalties:
o
P1,000 P10,000 OR 3 months 3 years OR BOTH
o
Summary deportation to aliens after service of sentence
Prescription of Offenses
o
3 years
o
ULP must be filed within 1 year
o
Money claims must be filed within 3 years
Employee
Arts. 97 (a), (b), (c); 173 (f), (g), (h); 218 (e), (f)
Employer
Includes any person acting directly or indirectly in the interest of an
employer in relation to an employee
Includes the government and all its branches, subdivisions and
instrumentalities, all GOCCs and institutions, as well as non-profit
private institutions, or organizations.
The term shall not include any labor organization or any of its
officers or agents except when acting as employer.
All rights and benefits under the Labor Code shall be applied to all
kinds of workers
BUT GOCCs incorporated under a general charter shall be governed
primarily by their original charters
Art. 217 (a) (2), (3), (4), (6); 128, 129, 288, 289, 290, 291, 292, Consti., Art. III, Secs. 11 & 16
A rule or regulation that exceeds the departments rule-making

authority is void
Implementing rule has to be subordinate to the law
The rulemaking power is exceeded when the implementing rule
changes, wittingly or unwittingly, the content or meaning of the
law which the rule aims to implement
Includes any individual employed by an employer

The term shall not be limited to the employees of a particular
employer, unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in connection
with any current labor dispute or because of any unfair labor
practice if he has not obtained any other substantially equivalent
and regular employment.
Employer Employee Test7

4-fold test:
1.
Selection of employee
2.
Payment of wages
3.
Power to dismiss
4. Control on employee on means and methods
Lirio v. Genovia
5
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Control Test
For purposes of the test, Control refers to:
a. Control as to the MEANS
b. Control as to the RESULTS.
Under this test an employer-employee relationship exist where the
person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and
means to be used in reaching the end.
This is to be distinguished from the control used in Independent
Contractor (IC). In IC, control is used not to test ER-EE relationship,
but WON theres control (as to the means only) as would warrant a
relationship with an IC.
One need not actually exercise direct control, provided the ER
reserves the right to control. It also need not be done personally or
physically because it may be done through an intermediary
(supervisor or manager, etc.)
Control may be used as [a] guideline or [b] regulation.
Arts. 106, 107, 108, 109; OR: Book III, Rule VIII-A
INDEPENDENT CONTRACTOR
Has sufficient substantial capital
OR investment in machinery, tools
or equipment directly or intended
to be related to the job contracted
Carries an independent business
different from the employers
Undertakes to perform the job
under its own account and
responsibility, FREE from the
principals control
NO ER-EE Relationship except
when the contractor or
subcontractor fails to pay the
employees wages.
LIMITED liability
(Principal solidarily liable with
contractor or subcontractor only
when latter fails to comply with
requirements as to unpaid wages
and other labor standards
violations.)
Permissible
Economic Reality Test8

Measure: Economic dependence of the worker on his employer.
The economic realities prevailing within the activity or between the
parties are examined, taking into consideration the totality of
circumstances surrounding the true nature of the relationship
between the parties.
This is especially appropriate when there is no written agreement
or contract on which to base the relationship.
LABOR-ONLY CONTRACTOR
Has NO substantial capital NOR
investment in the form of
machinery, tools or equipment
Has no independent business
Performs activities directly related
to the main business of the
principal
Principal treated as direct employer
of the person recruited in all
instances (contractor is deemed
agent of the principal)
Principals liability extends to all
rights, duties and liabilities under
labor standard laws including the
right to self-organization
Prohibited
D.O. 18-A-11, Sec. 3(m), Sec. 5
PROVING
ER-EE RELATIONSHIP
ILLEGAL DISMISSAL
BURDEN
The party trying to
establish the
presence of the
relationship
Employee
QUANTUM OF
EVIDENCE
Substantial Evidence
Substantial Evidence = That amount of relevant evidence which a reasonable

mind might accept as adequate to justify a conclusion as sufficient
Refers to the relationship in a contracting or subcontracting

arrangement where there is a contract for a specific
job/work/service between the principal and the contractor, and a
contract of employment between the contractor and its workers.
1.
The contractor or subcontractor does not have substantial capital

or investment which relates to the job, work or service to be
performed
The employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related
to the main business of the principal; or
The contractor does not exercise the right to control over the
performance of the work of the contractual employee.
2.
3.
Piercing the corporate mask is only done when the corporation is

just an alter ego of a person or of another corporation.
For reasons of public policy and in the interest of justice, the
corporate veil will justifiably be impaled only when it becomes a
shield for fraud, illegality or inequity committed against third
persons.
Any application of the doctrine of piercing the corporate veil should
be done with caution. A court should be mindful of the milieu where
it is to be applied. It must be certain that the corporate fiction was
misused to such an extent that injustice, fraud, or crime was
committed against another, in disregard of rights.
The wrongdoing must be clearly and convincingly established; it
cannot be presumed.9
1.
2.
3.
4.
D.O. 18-A-11, Secs. 14, 15
Orozco v. CA (2008)
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Registered in accordance with rules

Distinct and independent business
Sufficient Capital
Service Agreement
The registration of contractors and subcontractors shall be

necessary for purposes of establishing an effective labor market
information and monitoring.
Failure to register shall give rise to the presumption that the
contractor is engaged in labor-only contracting.
Sarona v. NLRC (2012)

6
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VII. EMPLOYMENT CONTRACT

D.O. 18-A-11, Sec. 27
10
The Indirect Employer is only liable if there exists a Labor-Only

Contracting relationship between an Indirect and Direct Employer,
which is determined only by a competent authority
o
In these cases, the indirect employer is ultimately liable
to the employee
The joint and several liability of the employer or principal was
enacted to ensure compliance with the provisions of the Code,
principally those on statutory minimum wage.
o
The contractor or subcontractor is made liable by virtue
of his or her status as a direct employer, and the
principal as the indirect employer of the contractor's
employees.
o
This liability facilitates, if not guarantees, payment of
the workers' compensation, thus, giving the workers
ample protection as mandated by the 1987 Constitution.
This is not unduly burdensome to the employer.
o
Should the indirect employer be constrained to pay the
workers, it can recover whatever amount it had paid in
accordance with the terms of the service contract
between itself and the contractor.
The indirect employer's liability to the contractor's employees
extends only to the period during which they were working for the
petitioner, and the fact that they were reassigned to another
principal necessarily ends such responsibility.
In case of conflict between the text of the contract and the intent
of the parties, it is the latter that prevails, and not the wording
which is prone to mistakes, inadequacies and ambiguities. To hold
otherwise would give life, validity and precedence to mere typo
errors and defeat the very purpose of agreements.10
GROW v. Velasco (2012)
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Allowed Private Agencies and Entities

Arts. 12 (f), 16, 18, 25
I. Employment Policies, Recruitment and Placement

of Workers and Agencies
Arts. 3, 12 (a), (f); Consti., Art. II, Sec. 9; RA 8042, Secs. 2 (a), (b), in relation to (g), (c); 4, 5
To promote and maintain a state of full employment through

improved manpower training, allocation and utilization
o
BUT the State does not promote overseas employment
as a means to sustain economic growth and achieve
national development.
To strengthen the network of public employment offices and
rationalize the participation of the private sector in the
recruitment and placement of workers, locally and overseas, to
serve national development objectives
The State 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 adequate social
services, promote full employment, a rising standard of living, and
an improved quality of life for all.
The State recognizes that the ultimate protection to all migrant
workers is the possession of skills. Pursuant to this and as soon as
practicable, the government shall deploy and/or allow the
deployment only to skilled Filipino workers.
1. Parties
Worker
-
Any member of the labor force, whether employed or unemployed.
Private Employment Agency

Means any person or entity engaged in recruitment and placement
(R&P) of workers for a fee which is charged, directly or indirectly,
from the workers or employers or both.
Private Recruitment Entity
Means any person or association engaged in the R&P of workers,
locally or overseas, without charging, directly or indirectly, any fee
from the workers or employers.
2. Recruitment and Placement
Local Employment
1.
2.
3.
4.
5.
6.
7.
8.
Prohibited Business Agencies and Entities

Arts. 16, 18, 25, 26; IRR of RA 8042, Rule II, Sec. 1 (i)
Refers to any act of canvassing, enlisting, contracting, transporting,

utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally
or abroad, whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed engaged in
recruitment and placement.
Travel Agencies and Sales Agencies of Airlines

o
by companies without approval from SOL
Direct hiring
Exceptions to Direct Hiring (as allowed by SOL):

-
Those hired by international organizations

Those hired by diplomatic corps
Name hires / workers who are able to secure oversees employment
opportunities with employers without support from an agency
1.
2.
3.
4.
5.
6.
Licensing / Qualifications of Applicants

Workers Fees, Filing Fees and License Fees
Reports / Employment Information
Regulations for illegal recruitment
Enforcement Powers
POEA Standard Employment Contract
Licensing Requirements:
1.
Citizenship (Filipino)
2.
Capitalization (P 3M)
3.
Validity of License (4 years; 1 year provisional)
4. Non-Transferability
5.
Registration / License Fees
6.
Bonds (100k)
7.
Placement / Documentation Fees
Workers Fees
Art. 32; Part II, Rule V, Sec. 3
Shall not be charged until worker has obtained employment

through agencys efforts or has actually commenced employment.
Reports/Employment Information
Arts. 33, 14 (d), 34 (h); RA 8042, Sec. 6 (h)
Art. 13 (b)
Public employment offices

Private recruitment entities
Private employment agencies
Shipping or manning agents or representatives
The POEA
Construction contractors if authorized to operate by DOLE and the
Construction Industry Authority
Members of the diplomatic corps although hirings done by them
have to be processed through the POEA
Other persons or entities as may be authorized by the DOLE
secretary
SOL may direct all persons or entities within the coverage of this
Title to submit a report on the status of employment, including job
vacancies, details of job requisitions, separation from jobs, wages,
other terms and conditions and other employment data.
Failure to do so = illegal recruitment
Overseas Employment
RA 8042, Sec. 6
Means any act of canvassing, enlisting, contracting, transporting,

utilizing, hiring, procuring workers and includes referring, contact
services, promising or advertising for employment abroad, whether
for profit or not,
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Illegal Recruitment
Arts. 34, 38 (a) (b), RA 8042, Secs. 6, 7, 8, 9, 10, 11, 12
The following are acts of illegal recruitment, done by a non-license or nonholder of authority:
(a) To charge or accept directly or indirectly any amount greater than
the specified in the schedule of allowable fees prescribed by the
SOL, or to make a worker pay any amount greater than that
actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in
relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or
commit any act of misrepresentation for the purpose of securing a
license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit
his employment in order to offer him another unless the transfer is
designed to liberate a worker from oppressive terms and conditions
of employment;
(e) To influence or attempt to influence any persons or entity not to
employ any worker who has not applied for employment through
his agency;
(f) To engage in the recruitment of placement of workers in jobs
harmful to public health or morality or to dignity of the Republic of
the Philippines;
(g) To obstruct or attempt to obstruct inspection by the SOL or by his
duly authorized representative;
(h) To fail to submit reports on the status of employment, placement
vacancies, remittances of foreign exchange earnings, separations
from jobs, departures and such other matters or information as
may be required by the SOL;
(i) To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the DOLE from the time of
actual signing thereof by the parties up to and including the period
of the expiration of the same without the approval of the DOLE;
(j) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly or indirectly in
the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other
than those authorized under the Labor Code and its implementing
rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by
the DOLE; and
(m) Failure to reimburse expenses incurred by the workers in
connection with his documentation and processing for purposes of
deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when
committed by a syndicate or in large scale shall be considered as
offense involving economic sabotage.
Qualified/Syndicated Illegal Recruitment
This is carried out by a group of three (3) or more persons
conspiring or confederating with one another.
It is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
Sanctions
Venue: RTC of place of commission / residence of offended party
Money Claims: LA have original and exclusive jurisdiction
Enforcement Powers
Rule Making Power
Art. 36
SOL is authorized to issue orders and promulgate rules and

regulations to carry out the objectives and implement the
provisions of this Title.
Regulatory Power
Art. 35, 36
SOL shall have the power to restrict and regulate the recruitment
and placement activities of all agencies within the coverage of this
Title
SOL shall have the power to suspend or cancel any license or
authority to recruit employees for overseas employment for
violation of rules and regulations.
Visitorial Power
Art. 37
SOL or his duly authorized representatives may, at any time,

inspect the premises, books of accounts and records of any person
or entity
POEA Standard Employment Contract

To be integrated in every seafarers contract
Liberal Construction
Terms and Conditions shall include disability benefits
Joint and Several Liability of Recruitment/Placement Agency and
Principal/Employer
Requires that a PEA submit a verified undertaking stating that it
shall assume joint and solidary liability with employer for all claims
and liabilities which may arise in connection with the
implementation of the contract, including but not limited to
payment of wages, death and disability compensation and
repatriations
Effect of Termination of Agency Agreement between Principal and
Manning Agent
The performance bond to be filed by the recruitment/placement
agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers.
Such liabilities shall continue during the entire period or duration of
the employment contract and shall not be affected by any
substitution, amendment or modification of the contract made
locally or in a foreign country.
For immediate and sufficient payment of claims
Responsibilities of local recruitment agencies / liability for damages and
attorneys fees
RA 8042, Sec. 10
In case of termination of overseas employment without just, valid

or authorized cause as defined by law or contract, the workers shall
be entitled to the full reimbursement of his placement fee with
interest of twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.
RTC for Criminal Action arising from illegal recruitment

LA for money claims
POEA over administrative cases
_______________________________________________________________
58
Licensee Violator: 2 5 years OR P10k P50k OR BOTH

Non- Licensee Violator: 4 8 years OR P20k P100k OR BOTH
Automatic revocation of license and forfeiture of cash and surety
bonds
Suspension and/or Cancellation of authority

Illegal recruitment Penalty: 6 years, 1 day 12 years AND P200k
P500k
o
Life Imprisonment AND P500k P1M if there is
economic sabotage
o
Maximum penalty if person recruited is a minor
Prescription: 5 years, 20 years if with economic sabotage
II. Alien Employment Registration

Art. 40, Book I, Rule XIV, Sec. 1; DO 97-09, Sec. 1 as amended by DO 120-12; Rule I.1
Any alien seeking admission to the Philippines for employment

purposes
Any domestic/foreign employer who desires to engage an alien for
employment in the Philippines
All foreign nationals who intend to engage in gainful employment
Missionaries or religious workers who intend to engage in gainful
employment
Holders of special investors resident visa, special retirees resident
visa, treaty traders visa, or special non-immigrant visa, who occupy
any executive, advisory, supervisory, or technical position in any
establishment
Agencies, organizations or individuals whether public or private,
who secure the services of foreign professionals to practice their
professions in the Philippines under reciprocity and other
international agreements
Non-Indo Chinese refugees who are asylum seekers and given
refugee status by the United Nations High Commissioner on
Refugees or the Department of Justice under DOJ Department
Order No. 94, series of 1998
Resident foreign nationals seeking employment in the Philippines
Book I, Rule XIV, Secs. 5, 6
Requirements:
o
CV of applicant
o
Contract of Employment
o
Designation by employer of at least 2 understudies per
alien worker
Report of the Bureau Director as to the availability or nonavailability of any person in the Philippines who is competent, able,
and willing to do the job for which the services of the applicant are
desired
BDs assessment as to whether or not the employment of the
applicant will redound to the national interest;
Admissibility of the alien as certified by the Commission on
Immigration and Deportation
The recommendation of the Board of Investments or other
appropriate government agencies if the applicant will be employed
in preferred areas of investments or in accordance with imperatives
of economic developments
Payment of a P100.00 fee
Book I, Rule XIV, Sec. 7; DO 97-09, Sec. 11
1.
2.
3.
4.
5.
6.
7.
All members of the diplomatic services and foreign government

officials accredited by the Philippine government
Officers and staff of international organizations of which the
Philippine government is a cooperating member, and their
legitimate spouses desiring to work in the Philippines
Foreign nationals elected as members of the Governing Board who
do not occupy any other position, but have only one voting right in
the corporation; and
All foreign nationals granted exemption by special laws and all
other laws that may be promulgated by the Congress
Owners and representatives of foreign principals whose companies
are accredited by the PEA, who come to the Philippines for a limited
period and solely for the purpose of interviewing Filipino applicants
for employment abroad;
Foreign nationals who come to the Philippines to teach, present
and/or conduct research studies in universities and colleges as
visiting, exchange or adjunct professors under formal agreements
between the universities or colleges in the Philippines and foreign
universities or colleges; or between the Philippine government and
foreign government; provided that the exemption is on a reciprocal
basis; and
Permanent resident foreign nationals, probationary or temporary
resident visa holders
_______________________________________________________________
Minimum 1 year, Maximum of 5 years
DO 97-09, Sec. 13
a.
b.
c.
d.
e.
f.
Non-compliance with any of the requirements or conditions for

which the AEP was issued;
Misrepresentation of facts in the application;
Submission of falsified or tampered documents;
Meritorious objection of information against the employment of
the foreign national
The foreign national has been convicted of a criminal offense or a
fugitive from justice; or
Employer terminated the employment of the foreign national
10
58
III. Development of Human Resources
Art. 57
Art. 44 (a); RA 7796, Sec. 4 (b), (c), (e)
Manpower
Means that portion of the nations population which has actual or
potential capability to contribute directly to the production of
goods and services
Skills Development
Means the process through which learners and workers are
systematically provided with learning opportunities to acquire or
upgrade, or both, their ability, knowledge and behavior pattern
required as qualifications for a job or range of jobs in a given
occupational area
Technical Education
Refers to the education process designed at post-secondary and
lower tertiary levels, officially recognized as non-degree programs
aimed at preparing technicians, para-professionals and other
categories of middle-level workers by providing them with a broad
range of general education, theoretical, scientific and technological
studies, and related job skills training
Middle-Level Manpower
-
Refers to those
o
Who have acquired practical skills and knowledge
through formal or non-formal education and training
equivalent to at least a secondary education but
preferably a post-secondary education with a
corresponding degree or diploma; or
o
Skilled workers who have become highly competent in
their trade or craft as attested by industry.
RA 7796, Sec. 2
To provide relevant, accessible, high quality and efficient technical

education and skills development in support of the development of
high quality Filipino middle-level manpower responsive to and in
accordance with Philippine development goals and priorities.
The State shall encourage active participation of various concerned
sectors in providing technical education and skills development
opportunities.
RA 7796, Sec. 3
Promote and strengthen the quality of technical education and

skills development programs to attain international
competitiveness.
Focus technical education and skills development on meeting the
changing demands for quality middle-level manpower;
Encourage critical and creative thinking by disseminating the
scientific and technical knowledge base of middle-level manpower
development programs;
Recognize and encourage the complementary roles of public and
private institutions in technical education and skills development
and training systems; and
Inculcate desirable values through the development of moral
character with emphasis on work ethic, self-discipline, selfreliance and nationalism
_______________________________________________________________
1.
2.
3.
To help meet the demand of the economy for trained manpower;

To establish a national apprenticeship program through the
participation of employers, workers and government and nongovernment agencies; and
To establish apprenticeship standards for the protection of
apprentices.
Art. 58 (b); RA 7796, Sec. 4 (j), (k), (l), (m), (n)
Apprentice
A person undergoing training for an approved apprenticeable
occupation during an established period assured by an
apprenticeship agreement
They train in a highly skilled job or in a job found only in a highly
technical industry that is why training period exceeds three months
An apprentice is also a learner
Learner
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 exceed three (3) months.
Learners are immediately hired after the training period as
compared to an apprentice
Learnership is allowed even for non-technical jobs
QUALIFICATIONS
BUSINESS
ENTERPRISE
PERIOD
AGREEMENT
REGULATIONS
COMPENSATION
LEARNER
No qualifications
needed
Semi-Skilled business
APPRENTICE
Qualifications may be
set
Highly Technical
Industries
3 mos.
6 mos.
Learnership
Apprenticeship
Approval of TESDA
Approval of TESDA,
Endorsed by a tripartite
body
Must not be lower than 75% of minimum wage
Arts. 60, 74; RA 7796, Sec. 4 (m)
Apprenticeable Occupation
An occupation officially endorsed by a tripartite body
Approved for apprenticeship by the Authority;
Only employers in the highly technical industries may employ
apprentices
Learners may be hired when:
-
No experienced workers are available

The employment of learners is necessary to prevent curtailment of
employment opportunities
The employment does not create unfair competition in terms of
labor costs or impair or lower working standards.
11
58
Arts. 61, 72, 281, 75, 76; WO NCR-16, Sec. 6
Apprenticeship agreements, including the wage rates of

apprentices, shall conform to the rules issued by the SOL
The period of apprenticeship shall not exceed 6 months.
Apprenticeship agreements providing for wage rates below the
legal minimum wage, which in no case shall start below 75% of the
applicable minimum wage, may be entered into only in accordance
with apprenticeship programs duly approved by the SOL
The Department shall develop standard model programs of
apprenticeship.
Hiring of apprenticeship without compensation may be authorized
by SOL if the job is required by the school or training program
curriculum or as requisite for graduation or board examination
Probationary employment shall not exceed six (6) months from the
date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period.
o
May be terminated for just cause or if the employee fails
to qualify as a regular employee in accordance with
reasonable standards
o
An employee who is allowed to work after a
probationary period shall be considered a regular
employee.
RA 7277, Sec. 2
Senate shall give full support to the improvement of the total wellbeing of PWDs and their integration into the mainstream of society.
State shall adopt policies ensuring the rehabilitation, selfdevelopment and self-reliance of PWDs.
It shall develop their skills and potentials to enable them to
compete favorably for available opportunities.
They should be able to live freely and as independently as possible.
PWDs rights must never be perceived as welfare services by the
Government.
The rehabilitation of the PWDs shall be the concern of the
Government in order to foster their capability to attain a more
meaningful, productive and satisfying life.
Ensure full participation of different sectors as supported by
national and local government agencies
The State also recognizes the role of the private sector in
promoting the welfare of PWDs and shall encourage partnership in
programs that address their needs and concerns.
The State shall advocate for and encourage respect for PWDs. The
State shall exert all efforts to remove all social, cultural, economic,
environmental and attitudinal barriers that are prejudicial to PWDs.
RA 7277, Sec. 3
Arts. 65, 66, 67
Investigation of violation of apprenticeship agreement.

o
Upon complaint of any interested person or upon its
own initiative
o
Shall investigate any violation of an apprenticeship
agreement pursuant to such rules and regulations as
may be prescribed by SOL
Appeals to the SOL
o
The decision of the authorized agency of the DOLE may
be appealed by any aggrieved person to the SOL within 5
days from receipt of the decision.
o
The decision of the SOL shall be final and executory.
Exhaustion of administrative remedies
o
No person shall institute any action for the enforcement
of any apprenticeship agreement or damages for breach
of any such agreement, unless he has exhausted all
available administrative remedies.
RA 7277, Sec. 4 (a), (b), (c), (d)
Persons with Disabilities (PWDs)

-
Art. 81; RA 7277, Secs. 4 (i), 5, 6, 7
PWDs may be hired as apprentices/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.
Equal Opportunity for Employment

o
No PWDs shall be denied access to opportunities for
suitable employment.
o
A qualified PWD employee shall be subject to the same
terms and conditions of employment and the same
compensation and benefits as a qualified able-bodied
person.
o
5% of all casual, emergency and contractual positions in
government agencies, offices or corporations engaged in
social development shall be reserved for PWDs.
Sheltered Employment
o
The provision of productive work for PWDs through
workshop providing special facilities, income producing
projects or homework schemes with a view to give them
the opportunity to earn a living thus enabling them to
acquire a working capacity required in open industry.
o
If suitable employment for PWDs cannot be found
through open employment, the State shall endeavor to
provide it by means of sheltered employment.
o
In the placement of PWDs in sheltered employment, it
shall accord due regard to the individual qualities,
vocational goals and inclinations to ensure a good
working atmosphere and efficient production.
Apprenticeship
o
PWDs shall be eligible as apprentices or learners;
o
Provided, That their handicap is not much as to
effectively impede the performance of job operations in
the particular occupation for which they are hired;
o
Provided, further, that after the lapse of the period of
apprenticeship if found satisfactory in the job
performance, they shall be eligible for employment.
Are those suffering from restriction of different abilities, as a result

of a mental, physical or sensory impairment, to perform an activity
in the manner or within the range considered normal for a human
being
Impairment
Is any loss, diminution or aberration of psychological, physiological,
or anatomical structure of function
Disability
-
Shall mean:
(1) A physical or mental impairment that substantially limits one
or more psychological, physiological or anatomical function
of an individual or activities of such individual;
(2) A record of such an impairment; or
(3) Being regarded as having such an impairment
Handicap
Refers to a disadvantage for a given individual resulting from an
impairment or a disability, that limits or prevents the functions or
activity, that is considered normal given the age and sex of the
individual
_______________________________________________________________
This Act shall cover all PWDs and, to the extend herein provided,
departments, offices and agencies of the National Government or
non-government organization involved in the attainment of the
objectives of this Act.
12
58
RA 7277, Secs. 32, 33
The following constitute acts of discrimination:

(a) Limiting, segregating or classifying a PWD job applicant in
such a manner that adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other
selection criteria that screen out or tend to screen out a PWD
unless such standards, tests or other selection criteria are
shown to be job related for the position on question and are
consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration
that:
1.
Have the effect of discrimination on the basis of
disability; or
2.
Perpetuate the discrimination of others who are
subject to common administrative control;
(d) Providing less compensation to a qualified PWD employee,
by reason of his disability, than the amount to which a nonPWD performing the same work is entitled;
(e) Favoring a non-PWD over a qualified PWD employee with
respect to promotion, training opportunities, study and
scholarship grants, solely on account of the latters disability;
(f) Re-assigning or transferring a PWD employee to a job or
position he cannot perform by reason of his disability;
(g) Dismissing or terminating the services of a PWD employee by
reason of his disability unless the employer can prove that he
impairs the satisfactory performance of the work involve to
the prejudice of the business entities; Provided, however, that
the employer first sought provide reasonable
accommodations for PWDs;
(h) Failing to select or administer in the effective manner
employment tests which accurately reflect the skills, aptitude
or other factor of the PWD applicant or employee that such
test purports to measure, rather than the impaired sensory,
manual or speaking skills of such applicant or employee, if
any; and
(i) Excluding PWDs from membership in labor unions or similar
organization.
Upon an offer of employment, a PWD applicant may be subjected to

medical examination, on the following occasions:
(a) All entering employees are subjected to such an examination
regardless of disability;
(b) Information obtained during the medical condition or history
of the applicant is collected and maintained on separate
forms and in separate medical files and is treated as a
confidential medical record, Provided, however, That:
1.
Supervisors and managers may be informed regarding necessary
restrictions on the work or duties of the employees and necessary
accommodations;
2.
First aid and safety personnel may be informed, when appropriate,
if the disability might require emergency treatment;
3.
Government officials investigating compliance with this Act shall
be provided relevant information on request; and
4. The results of such examination are used only accordance with this
Act.
RA 7277, Secs. 44, 45, 46
Enforcement by the Secretary of Justice.

(a) Denial of Right
1.
The Sec. of Justice shall investigate alleged violations of this
Act
2.
Shall also undertake periodic reviews of compliance of
covered entities under this Act.
(b) Potential Violations - The Sec. of Justice may commence a legal
action in any appropriate court if he has reasonable cause to
believe that:
1.
Any person or group of persons is engaged in a pattern of
practice of discrimination under this Act; or
2.
Any person or group of persons has been discriminated
against under this Act and such discrimination raises and
issue of general public importance
Authority of Court
The court may grant any equitable relief that such court
considers to be appropriate, including, to the extent required
by this Act:
(a) Granting temporary, preliminary or permanent relief;
(b) Providing an auxiliary aid or service, modification of
policy, practice or procedure, or alternative method; and
(c) Making facilities readily accessible to and usable by
individuals with disabilities.
Penal Clause
1.
1st violation, P50k P100k OR 6 mos. - 2 years OR BOTH
2.
Subsequent violation, P100k P200k OR 2 years - 6
years OR BOTH
Any person who abuses the privileges granted herein:
o
6 months OR P5k P50k OR both
IV. Conditions of Employment
The Eight-Hour Labor Law was designed not only to safeguard the
health and welfare of the laborer or employee, but in a way to
minimize unemployment by forcing employers, in cases where
more than 8-hour operation is necessary, to utilize different shifts
of laborers or employees working only for eight hours each.11
Art. 82, 276; Book III, Rule I, Secs. 1, 2
11
Shall apply to employees in all establishments and undertakings

whether for profit or not,
Exceptions to the General Rule

1.
Government Employees
2.
Managerial Employees
3.
Officers of Management Staff
4. Field Personnel
5.
Family members
6.
Domestic Workers
7.
Persons in the personal service of another
8. Workers paid by results
Exception to the Exception
Employees of GOCCs under the Corp Code
Manila Terminal v. CIR (1952)
_______________________________________________________________
13
58
"Managerial employees"
Those whose primary duty consists of the management of the
establishment in which they are employed
One who is vested with the powers or prerogatives to lay down and
execute management policies
Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment.
1.
2.
3.
An employee is a Manager if meet all of the following conditions

are met:
Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof.
They customarily and regularly direct the work of two or more
employees therein.
They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendations as to hiring and firing and
as to the promotion or any other change of status of other
employees, are given particular weight.
Member of the managerial staff

An employee is an Officer or Member of a Managerial Staff if he
performs the following duties and responsibilities:
1.
The primary duty consists of the performance of work
directly related to management policies of their employer;
2.
Customarily and regularly exercise discretion and
independent judgment; and
3.
(i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of
the establishment in which he is employed or subdivision
thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training,
experience, or knowledge; or (iii) execute, under general
supervision, special assignments and tasks; and
4. Who do not devote more than 20 percent of their hours
worked in a work week to activities which are not directly and
closely related to the performance of the work described in
paragraphs (1), (2) and (3) above.
Field Personnel
-
(a)
(b)
12
13
Domestic Workers
Refers to any person engaged in domestic work within an
employment relationship
Domestic Work = service in the employers home which is usually
necessary or desirable for the maintenance and enjoyment thereof
and includes ministering to the personal comfort and convenience
of the members of the employers household, including services of
family drivers
Exception/Exclusions:
Any person who performs domestic work only occasionally or
sporadically and not on an occupational basis.
The term shall not include children who are under foster family
arrangement, and are provided access to education and given an
allowance incidental to education
Assignment to non-household work.
o
No DW shall be assigned to work in a commercial,
industrial or agricultural enterprise at a wage or salary
rate lower than that provided for agricultural or nonagricultural workers as prescribed herein.
Persons in the Personal Service of Another
Domestic servants and persons in the personal service of another if
they perform such services in the employer's home which are
usually necessary or desirable for the maintenance and enjoyment
thereof, or minister to the personal comfort, convenience, or safety
of the employer as well as the members of his employer's
household.
Piece-rate Workers
Workers who are paid by results, including those who are paid on
piece-work, "takay," "pakiao" or task basis, and other non-time
work if their output rates are in accordance with the standards
prescribed under Section 8, Rule VII, Book Three of these
regulations, or where such rates have been fixed by the SOL in
accordance with the aforesaid Section.
Those who are paid a standard amount for every piece or unit of
work produced that is more or less regularly replicated, without
regard to the time spent in producing the same13
Workers under piece-rate employment have no fixed salaries and
their compensation is computed on the basis of accomplished
tasks14
Refers to non-agricultural employees who regularly perform their

duties away from the principal place of business or branch office of
the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty
Test:
Regularly performs work outside the work premises
Actual hours of work in the field cannot be determined with
reasonable certainty
o
WON employees time and performance are constantly
supervised by the employer 12
Far East Agricultural Supply, Inc. v. Lebatique (2007)

Labor Congress v. NLRC (1998)
_______________________________________________________________
14
Best Wear v. De Lemos (2012)
14
58
Art. 83
The normal hours of work of any employee shall not exceed 8 hours
a day.
o
This does not mean that an employer cannot employ a
worker for less than 8 hours
Health personnel in cities and municipalities with a population of at
least 1M or in hospitals and clinics with a bed capacity of at least
100 shall hold regular office hours for 8 hours a day, for 5 days a
week, exclusive of time for meals, except where the exigencies of
the service require that such personnel work for 6 days or 48 hours,
in which case, they shall be entitled to an additional compensation
of at least 30% of their regular wage for work on the sixth day.
"Health personnel" = Includes resident physicians, nurses,
nutritionists, dieticians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel
On Duty
Art. 84 (a); Book III, Rule I, Secs. 3 (a), 4 (a)
All time during which an employee is required to be on duty or to be

at a prescribed workplace
o
Regardless of whether or not such hours are spent in
productive labor or involve physical or mental exertion.
Preliminary and post-liminary activities are deemed performed
during working hours, where such activities are controlled or
required by the employer and are pursued necessarily and primarily
for the employers benefit
Meal Period
Regular Meal Period (1 hr.)
Art. 85
Shorter Meal Period (Less than an hour but not less than 20 min)
Book III, Rule I, Sec 7, par 1
Notes:
-
Art. 84 (b); Book III, Rule I, Secs. 3 (b)
All time during which an employee is suffered or permitted to work.

Whether sleeping time is part of working time will depend upon the
express or implied agreement of the parties
o
In the absence of which, it will depend upon the nature
of the service and its relation to the working time
o
Conditions are less desirable than his home
Rest Period
Short duration or coffee break (compensable)
Art. 84, 2nd par; Book III, Rule I, Sec. 7, 2nd par.
Rest periods of short duration during working hours shall be

counted as hours worked.
Rest periods or coffee breaks running from 5 - 20 minutes shall be
considered as compensable working time.
More than 20 min (not compensable)
Every employer shall give his employees not less than 1 hour timeoff for regular meals, except in the following cases when a meal
period of not less than 20 minutes may be given and is
compensable hours worked of the employee
Exceptions to 1hr Meal period (Compensable)

1.
Non-Manual work
2.
16 hrs. of work / operations
3.
Emergencies, work on machineries to avoid serious loss
4. Perishable goods
At Work
-
It shall be the duty of every employer to give his employees not

less than 60 minutes time-off for their regular meals.
When work is continuous for several shifts, the meal time breaks
should be counted as working time for purposes of overtime
compensation
To shorten meal time to less than 20 minutes is not allowed. If it is
then it becomes only a rest period and is considered working time
The employees themselves may request that their meal period be
shortened so that they can leave work earlier than the previously
established schedule
o
The shortened meal here is not compensable
o
Conditions to be followed
The employees voluntarily agree to a

shortened meal period and are willing to
waive the overtime pay
There will be no diminution whatsoever in the

salary and other fringe benefits
The work of the employees does not involve

strenuous physical exertion and they are
provided with adequate coffee breaks in the
morning and afternoon
The value of the benefits derived by the

employees from the proposed work
arrangement is equal to or commensurate
with the compensation due them
The overtime pay of the employees will

become due and demandable if ever they are
permitted or made to work beyond 4:30 PM
The effectivity of the proposed working time

arrangement shall be of temporary duration
as determined by the SOL
Employers may change lunch break from paid to unpaid
Book III, Rule I, Sec. 4 (b)
An employee need not leave the premises of the work place in

order that his rest period shall not be counted, it being enough that
he stops working, may rest completely and may leave his work
place, to go elsewhere, whether within or outside the premises of
his work place.
Characteristics of More than 20 min break

1.
Stops working
2.
May leave workplace (either within/outside work premises)
3.
May rest completely
_______________________________________________________________
Book III, Rule I, Sec 5(a)
Whether waiting time spent in idleness is so spent predominantly

for the employers benefit or for the employees
Whether waiting is considered an integral part of his work or if the
employee is required or engaged by an employer to wait
15
58
Working while On Call (compensable)

Book III, Rule I, Sec 5(b)
An employee who is required to remain on call in the employer's

premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose
Not working while On Call (not compensable)

Book III, Rule I, Sec 5(b)
An employee who is not required to leave word at his home or with

company officials where he may be reached
Notes:
Although the laborers can rest completely and may not be actually
at work, if they are required to be in their place of work before or
after the regular working hours and within the call of his
employers, the time they stay in the place of work should not be
discounted from their working hours
Book III, Rule I, Sec 4(d)
Inactivity is by reason of interruptions in his work beyond his

control shall be considered working time either if:
o
Imminence of the resumption of work requires the
employee's presence at the place of work
o
If the interval is too brief to be utilized effectively and
gainfully in the employee's own interest.
Semestral breaks are in the nature of work interruptions beyond
the employees' control. They cannot be considered as "absences"
for which deductions may be made from monthly allowances.
o
Thus, the "No work, no pay" principle does NOT apply.
o
Such hours are considered as hours worked15
Book III, Rule I, Sec. 4(c)
If the work was with the knowledge of his employer or immediate

supervisor, any of the following are compensable:
1.
If the work performed was necessary
2.
It benefited the employer
3.
The employee could not abandon his work at the end of
his normal working hours because he had no
replacement
Book III, Rule I, Sec. 6
G.R.: Lectures, meetings and trainings are compensable

E: (not compensable):
-
It shall not be compensable if the following conditions are met:

(a) Attendance is outside of the employee's regular working
hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during
such attendance.
G.R.: May not constitute working time

Travel from home to work normal incident of employment
regardless if he works at different jobsites
E: (compensable):
o
When an employee receives an emergency call outside of his
regular working hours and is required to travel to his regular
place of business or some other work site
o
Whether the employee is bound to travel in a conveyance
furnished by the employer or is free to choose his conveyance,
whether or not during the travel he is subject to the
employers supervision and control, and whether or not the
travel takes place under vexing and dangerous conditions
o
Travel that is all in the days work travel as part of his
principal activity
Univ. of Pangasinan Faculty Union v Univ. of Pangasinan (1984)
_______________________________________________________________
Arts. 87, 88, 89, 90; Book III, Rule I, Sec. 8
Regular base pay = Excludes the money received by an employee

in different concepts
The right to overtime pay cannot be waived
OT pay in arrears retroacts to the date when services were actually
rendered
Overtime in Ordinary Day

25% of regular hourly pay
Rationale: He is made to work longer than what is commensurate
with his agreed compensation for the statutorily fixed or
voluntarily agreed hours of labor he is supposed to do
Emergency/Compulsory overtime work:
a. When the country is at war or when any other national or local
emergency has been declared by the National Assembly or the
Chief Executive;
b. When it is necessary to prevent loss of life or property or in case
of imminent danger to public safety due to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other disaster or calamity;
c.
When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or
damage to the employer or some other cause of similar nature;
d. When the work is necessary to prevent loss or damage to
perishable goods; and
e.
Where the completion or continuation of the work started before
the 8th hour is necessary to prevent serious obstruction or
prejudice to the business or operations of the employer.
f.
When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
Undertime work/pay
Shall not be offset by overtime work on any other day
Permission given to the EE to go on leave on some other day of the
week shall not exempt the ER from paying the required additional
compensation.
Additional Compensation
If working on a special holiday/rest day:
o
First 8 hrs. is +30% of regular pay
OT on special holiday/rest day:
o
30% of the hourly rate of the 1st 8 hours
If working on a regular holiday:
o
First 8 hrs. is 200% of regular pay
OT on regular holiday:
o
+30% of the 1st 8 hours
If working on a regular holiday falling on rest day:
o
First 8 hrs. is 200% of regular pay + 30% (260%)
Art. 86; Book III, Rule II, Secs. 1, 2, 3, 4, 5, 6; RA 10151
Coverage
Applies to all employees
Exclusions:
Government + GOCCs
Retail and service establishments regularly employing not more
than 5 workers
DW and persons in the personal service
Managerial employees
Field personnel and performance based employees
"Retail Establishment" = One principally engaged in the sale of goods to endusers for personal or household use;
"Service Establishment" = One principally engaged in the sale of service to
individuals for their own or household use and is generally recognized as such;
Additional Compensation
Working time for Night differential time
o
10pm 6am
Night differential Pay:
o
+10% on hourly rate falling under the Night Differential
Time
15
16
58
SUMMARY OF RULES ON ADDITIONAL COMPENSATION

BASIC PAY ON:
SPECIAL HOLIDAY, REST DAY
SPECIAL HOLIDAY FALLING ON A
REST DAY
REGULAR HOLIDAY
REGULAR HOLIDAY FALLING ON A
REST DAY
DOUBLE REGULAR HOLIDAY
ADDITIONAL PAY
+30% of basic daily rate
OVERTIME PAY
REGULAR OT
SPECIAL HOLIDAY, REST DAY,
REGULAR HOLIDAY OT
ADDITIONAL PAY
+25% of basic hourly rate
+30% of special hourly rate
See rules above.

Where the nature of the work of the employee is such that he has
no regular work days and no regular rest days can be scheduled,
he shall be paid an additional compensation of at least 30% of his
regular wage for work performed on Sundays and holidays.
Special holiday + Rest day:

o
+50% of basic pay
OT:
o
+30% of special rate

NIGHT DIFFERENTIAL PAY

NIGHT PREMIUM
ADDITIONAL PAY
+10% on hourly rate
(10pm 5am)
* Minimum wage is currently pegged at P466 / day (or P58.25 / hr.)
If CBA imposes higher premiums, employer to follow that
Art. 94; E.O. 203 (1987); RA 9492; E.O. 292 (2007); Book III, Rule IV; PD 1083
All employees
Retail and Service establishments regularly employing less than 10

workers;
Art. 91, 92, 93, Book III, Rule III, Secs. 1, 2, 3, 4, 5, 6, 7, 8, 9
All employers, whether for profit or not

Includes public utilities operated by private persons
Government employees (Except GOCCs)

Managerial employees
Members of the managerial staff
Field personnel
Members of the family dependent on support
DW
Persons in the personal service of another
Workers paid by result
24 consecutive hours after every 6 consecutive normal work days

Subject to CBA and rules/regulations set by SOL
G.R.:
(a)
(b)
(c)
(d)
(e)
(f)
Employer to choose
o
Employer to inform 1 week before implementation
E:
Respect based on religious grounds
o
Employee to inform employer at least 7 days before
effectivity of such rest day
E.E.:
If it will prejudice or obstruct operations and employer
cannot normally be expected to resort to other remedial measures,
the employer may so schedule the weekly rest day of his choice for
at least 2 days in a month.
When the country is at war or when any other national or local

emergency has been declared by the National Assembly or the
Chief Executive;
When it is necessary to prevent loss of life or property or in case
of imminent danger to public safety due to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other disaster or calamity;
When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or damage
to the employer or some other cause of similar nature;
When the work is necessary to prevent loss or damage to
perishable goods; and
Where the completion or continuation of the work started before
the eighth hour is necessary to prevent serious obstruction or
prejudice to the business or operations of the employer.
When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
_______________________________________________________________
a) Regular Holidays
New years Day
January 1
Maundy Thursday
Movable date
Good Friday
Movable date
Eidul Fitr Movable date
Araw ng Kagitingan Monday nearest April 9
Labor Day Monday nearest May 1
Independence Day
Monday nearest June 12
National Heroes Day Last Monday of August
Bonifacio Day
Monday nearest November 30
Christmas Day
December 25
Rizal Day Monday nearest December 30
b) Nationwide Special Holidays:
Ninoy Aquino Day
Monday nearest August 21
All Saints Day
November 1
Last Day of the Year December 31
Notes:
In the event the holiday falls on a Wednesday, the holiday will be
observed on the Monday of the week. If the holiday falls on a
Sunday, the holiday will be observed on the Monday that follows
Provided, That for movable holidays, the President shall issue a
proclamation, at least six months prior to the holiday concerned,
the specific date that shall be declared as a nonworking day
Provided, however, The Eidul Adha shall be celebrated as a regional
holiday in the Autonomous Region in Muslim Mindanao.
Book III, Rule IV, Sec. 9
Holiday pay is a one-day pay given by law to an employee even if

he does not work on a regular holiday
If the worker comes to work on a regular holiday, he earns extra
pay equivalent to his regular rate
Rationale: To prevent diminution of the monthly income of the
workers on account of work interruption declared by state. Even if
the worker is forced by law to take a rest he is not deprived of what
he should earn.
If the holiday falls on a Sunday, the following day shall be
considered a special holiday for purposes of the Labor Code, unless
said day is also a regular holiday.
o
But the Handbook on Workers Monetary Benefits, the
following day shall not be a special holiday unless
proclaimed.
17
58
Faculty in Private School

Book III, Rule IV, Sec. 8 (a)
Includes faculty members of colleges and universities

No regular holiday pay during semestral break
But there is regular holiday pay during Christmas break
For hourly paid teachers:
o
Schools are exempted from paying Holiday Pay during
regular holidays (regardless if semestral break or not)
o
Schools are required to pay the regular hourly rate for
special holidays, class cancellation or shortening, or
class extensions 16
Divisor as Factor
The divisor acts as the total number of regular days + regular
holidays
This is used to identify the hourly rate for monthly paid employees
The higher the divisor, the less hourly rate the person would have
o
When an employee changes the way the divisor is
computed, and as a result, an increase in the divisor
occurs, this becomes a diminution of their wages, which
is prohibited by the law.
Book III, Rule IV, Sec. 6 (c)
Art. 95; Book III, Rule V
Sunday
Art. 93 (a) 2nd sentence, (b); Book III, Rule III, Sec. 2
Where the day immediately preceding the holiday is a non-working

day in the establishment or the scheduled rest day of the
employee, he shall not be deemed to be on leave of absence on that
day, in which case he shall be entitled to the holiday pay if he
worked on the day immediately preceding the non-working day or
rest day.
5 days of leave with pay, as an incentive for the hard work and
dedication of employees
All employees who has rendered at least 1 year of service
Those already enjoying such privilege

Those enjoying vacation leave with pay of at least 5 days
Those employed in establishments regularly employing less than 10
employees or in establishments exempted from granting this
benefit by the SOL after considering the viability or financial
condition of such establishment.
All establishments and enterprises may operate or open for

business on Sundays and holidays provided that the employees are
given the weekly rest day and the benefits as provided in this Rule.
Muslim holidays
Arts. 169, 170, 171, 172; PD 1083; RA 9492
Official Muslim holidays:

(a) 'Amun Jadid (New Year), which falls on the 1st day of the 1st lunar
month of Muharram;
(b) Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls
on the 12th day of the 3rd lunar month of Rabi-ul-Awwal;
(c) Lailatul Isra Wal Mi'raj (Nocturnal Journey and Ascension of the
Prophet Muhammad), which falls on the 27th day of the 7th lunar
month of Rajab;
(d) 'Id-ul-Fitr (Hari Raya Pausa), which falls on the 1st day of the 10th
lunar month of Shawwal, commemorating the end of the fasting
season; and
(e) 'Id-ul-Adha (Hari Raja Haji), which falls on the 10th day of the 12th
lunar month of Dhu 1-Hijja.
"At least one-year service"

12 months service, whether continuous or broken
Starts from the date the employee started working
Including authorized 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 is less than 12
months, in which case said period shall be considered as one year.
Treatment of Benefits
SIL shall be commutable to its money equivalent if not used or
exhausted at the end of the year.
Book III, Rule IV, Sec. 6 (a), 10
16
Employees who are on leave with pay shall be entitled to the

benefit herein
Employees who are on leave w/o Pay on the day immediately
preceding a regular holiday = No pay if he did not work on the
holiday.
o
If the day preceding the holiday is a non-working day,
he is compensated on the regular holiday if he worked
on the day immediately preceding the non-working day
Where there are 2 successive regular holidays, an employee may
not be paid for both holidays if he absents himself from work on
the day immediately preceding the first holiday, unless he works on
the first holiday, in which case he is entitled to his holiday pay on
the second holiday.
Jose Rizal College v. NLRC (1987)
_______________________________________________________________
17
In the grant of vacation leave privileges to an employee, the

employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of
vacation leave is not a standard of law, but a prerogative of
management.
It is a mere concession or act of grace of the employer and not a
matter of right on the part of the employee.
Thus, it is well within the power and authority of an employer to
impose certain conditions, as it deems fit, on the grant of vacation
leaves, such as having the option to schedule the same.17
PNCC-PSTMSDWO v. PNCC Skyway Corp (2010)

18
58
(e)
RA 8187, Secs. 1, 2, 3, 4, 5, 6; Implementing Rules
The State recognizes the Filipino family as the foundation of the

nation. Accordingly, it shall strengthen its solidarity and actively
promote its total development.
Every married male

Either in private or public sector
a.
b.
He is an employee at the time of delivery

He has notified his employer of the pregnancy of his wife and her
expected date of delivery
Spouse either has given birth, suffers a miscarriage or an abortion
He is cohabiting with his spouse at the time she gives birth / suffers
a miscarriage
As soon as the married male employee learns that his spouse is
pregnant, he shall inform his employer of such pregnancy and the
expected date of delivery within a reasonable period of time. The
employee shall accomplish a Paternity Notification Form to be
provided for by the employer and submit the same to the latter,
together with a copy of his marriage contract, or where not
applicable, any proof of marriage. Provided, that this notification
requirement shall not apply in cases of miscarriage or abortion.
Any employee who has availed of the paternity benefits shall,
within a reasonable period of time, submit a copy of the birth
certificate of the newly born child, death or medical certificate in
case of miscarriage or abortion, duly signed by the attending
physician or midwife showing actual date of childbirth, miscarriage
or abortion, as the case may be.
c.
-
Before, during, or after, max 7 days per delivery
Entitled to full pay for the 7 days absence for the 1st 4 deliveries,
miscarriage or abortion
Pay should not be below minimum wage
Leave is not convertible to cash
Penalty: P25k OR 30 days 6 months.
RA 8972
Consti., Art. XV, Sec. 1
It is the policy of the State to promote the family as the foundation

of the nation, strengthen its solidarity and ensure its total
development. Towards this end, it shall develop a comprehensive
program of services for solo parents and their children to be carried
out by the different agencies of government
"Solo parent"
(a) A woman who gives birth as a result of rape and other crimes
against chastity even without a final conviction of the offender:
Provided, That the mother keeps and raises the child;
(b) Parent left solo or alone with the responsibility of parenthood due
to death of spouse;
(c) Parent left solo or alone with the responsibility of parenthood
while the spouse is detained or is serving sentence for a criminal
conviction for at least one (1) year;
(d) Parent left solo or alone with the responsibility of parenthood due
to physical and/or mental incapacity of spouse as certified by a
public medical practitioner;
_______________________________________________________________
(f)
(g)
(h)
(i)
(j)
Parent left solo or alone with the responsibility of parenthood due

to legal separation or de facto separation from spouse for at least
one (1) year, as long as he/she is entrusted with the custody of the
children;
to declaration of nullity or annulment of marriage as decreed by a
court or by a church as long as he/she is entrusted with the custody
of the children;
to abandonment of spouse for at least one (1) year;
Unmarried mother/father who has preferred to keep and rear
her/his child/children instead of having others care for them or
give them up to a welfare institution;
Any other person who solely provides parental care and support
to a child or children;
Any family member who assumes the responsibility of head of
family as a result of the death, abandonment, disappearance or
prolonged absence of the parents or solo parent.
A change in the status or circumstance of the parent claiming
benefits under this Act shall terminate his/her eligibility for these
benefits.
Employee has rendered service of at least 1 year

Employee has notified employer of the availment of the leave
within a reasonable time
Employee has presented a Solo Parent Identification Card to the
employer
A resident of the area where the assistance is sought, as certified

by the barangay captain; Provided, that if the solo parent is a
transferee from another barangay, he/she is required to secure a
clearance from his/her previous barangay, indicating whether or
not he/she has availed of any benefits for solo parents, and the
nature of such benefits.
Flexible work schedule

The flexi-schedule shall not affect individual and company
productivity
Any employer may request exemption from the above
requirements from the DOLE on certain meritorious grounds.
In the case of employees in the government service, flexible
working hours will be subject to the discretion of the head of the
agency.
o
Weekly working hours shall not be reduced in the event
the agency adopts the flexible working hours schedule
format (flexi-time).
Discrimination
No employer shall discriminate against any solo parent employee
with respect to terms and conditions of employment on account of
his/her status.
Leave
-
7 working days every year

Granted to any solo parent employee who has rendered service of
at least 1 year.
The seven-day parental leave shall be non-cumulative.
RA 9262, Sec. 43; IRR, Rule VI, Sec. 42
Against a woman who is his wife, former wife, or against a woman

with whom the person has or had a sexual or dating relationship, or
with whom he has a common child, or against her child whether
legitimate or illegitimate, within or without the family abode, which
result in or is likely to result in physical, sexual, psychological
harm or suffering, or economic abuse including threats of such
acts, battery, assault, coercion, harassment or arbitrary deprivation
of liberty.
19
58
Paid leave up to 10 days

At any time during the application of any protection order,
investigation, prosecution and/or trial of the criminal case.
This period is extendible when the necessity arises as specified in
the protection order.
The availment of the ten day-leave shall be at the option of the
woman employee, which shall cover the days that she has to attend
to medical and legal concerns.
Non-cumulative and non-convertible
Requirements
The Punong Barangay/kagawad or prosecutor or the Clerk of Court,
as the case may be, shall issue a certification at no cost to the
woman that such an action is pending, and this is all that is required
for the employer to comply with the 10-day paid leave.
For government employees, in addition to the aforementioned
certification, the employee concerned must file an application for
leave citing as basis R.A. 9262.
All employees regardless of position, designation, or employment

status, and irrespective of method of payment of wages EXCEPT to
managerial employees
"Managerial employee" = One who is vested with powers or
prerogatives to lay down and execute management policies and/or
to hire, transfer, suspend, lay-off, recall, discharge, assign, or
discipline employees or to effectively recommend such managerial
actions.
85% employees, 15% management

85% distributed equally
15% shall be for the disposition by management to answer for
losses and breakages and distribution to managerial employees at
the discretion of the management in the latter case
Not less than once every 2 weeks or 2x a month at intervals not

exceeding 16 days
The share of covered employees shall be considered integrated in

their wages.
The basis of the amount to be integrated shall be the average
monthly share of each employee for the past 12 months
immediately preceding the abolition of withdrawal of such charges.
RA 9710
A woman employee having rendered continuous aggregate

employment service of at least 6 months for the last 12 months
Special Leave Benefit of 2 months with full pay based on her gross
monthly compensation following surgery caused by gynaecological
disorders.
Art. 96; Book III, Rule VI, Secs. 1, 2, 3, 4, 5
Art. 100
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 Government.
Nothing in this Book shall be construed to eliminate or in any way

diminish supplements, or other employee benefits being enjoyed at
the time of promulgation of this Code.
V. Minimum Wages and Wage Fixing Machinery

Form: Agreement for compensation of services
Art. 97(f)
Right to a living wage
"Wage"
-
Consti. Art. XIII, Sec. 3
Must be fair and just

Some margin or leeway must be provided, over and above the
minimum, to take care of contingencies, such as increase of prices
of commodities and increase in wants, and to provide means for a
desirable improvement in his mode of living
No work, No pay / A fair days wage for a far day labor\
Equal pay for work of equal value

Art. 135 (a), 248 (e)
Unlawful for women to receive lesser salary or wage for work of

equal value
ULP: To discriminate in regard to wages, hours of work, and other
terms and conditions of employment
Means the remuneration or earnings, however designated, capable

of being expressed in terms of money,
Whether fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same,
Payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or
for services rendered or to be rendered
Includes the fair and reasonable value, as determined by the SOL,
of board, lodging, or other facilities customarily furnished by the
employer to the employee.
"Fair and reasonable value"

Shall not include any profit to the employer, or to any person
affiliated with the employer.
Exemption from income tax of Minimum Wage Earners
RA 9504, Sec. 2
_______________________________________________________________
Minimum wage earners shall be exempt from the payment of

income tax on their taxable income: Provided, further, That the
holiday pay, overtime pay, night shift differential pay and hazard
pay received by such minimum wage earners shall likewise be
exempt from income tax.
20
58
Rates of Tax on Taxable Income of Individuals

"Not over P10,000
........
5%
"Over P10,000 but not over P30,000
........
P500+10% of the excess
over P10,000
........
P2,500+15% of the excess
over P30,000
........
P8,500+20% of the excess
over P70,000
........
P22,500+25% of the
excess over P140,000
........
P50,000+30% of the
"Over P5000,000
........
P125,000+32% of the
Facilities and Supplements/Allowances

Book III, Rule VIII A, Secs. 4, 5, 6, 7
"Facilities"
Include articles or services for the benefit of the employee or his
family
Does not include tools of the trade or articles or service primarily
for the benefit of the employer
Value of Facilities = cost of operation and maintenance, +
adequate depreciation + reasonable allowance (not more than 5
% interest)
If the fair rental value is lower than the computed value, fair rental
value will be used
"Supplements"
Extra remuneration or special privileges or benefits given to or
received by the laborers over and above their ordinary earnings or
wages.
FACILITIES
Forms part of the wages
For the employee
Deductible from Wage
Necessary for the laborer and his
familys existence and subsistence
Arts. 97 (b), (c), (e), 98
Employers = No one is exempted

Employees = All employed by employers, except to farm
tenants/lessees, DW engaged in needle work or in any cottage
industry
What are the requirements for deducting value of facilities from

employees wages?
1.
Proof must be shown that such facilities are customarily furnished
by the trade
2.
The provision of deductible facilities must be voluntarily accepted
in writing by the employee.
3.
Facilities must be charged at fair and reasonable value.19
Coverage/Exclusions
Art. 98; Wage Order No. NCR-18, Sec. 2, 7; RA 9504
Applicable to all minimum wage earners in the private sector in the

Region
Regardless of position, designation or status of employment and
irrespective of the method by which they are paid.
BUT does not cover:
o
DW, Personal services, workers of duly registered
BMBEs, homeworkers engaged in needlework, farm
tenancy or leaseholds
Learners, Apprentices, PWDs: Shall have at least 75% of minimum
wage
Public Employees = Covered by the Salary Standardization Law
Does Salary include allowances?

No. Existing laws exclude allowances from the basic salary or wage
in the computation of the amount of retirement and other benefits
payable to an employee.20
Cash Wages / Commission
Art. 97(f); Book III, Rule VII-A, Sec. 4
"Wage"
Paid to any employee shall mean the remuneration or earnings,
however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece.
Commissions
Are intimately related to or directly proportional to the extent or
energy of an employee's endeavors21
Exemptions
Sec. 7
Distressed Establishments;
Retail/Service Establishments regularly employing not more than
10 workers;
Establishments whose Total Assets including those arising from
loans but exclusive of the land on which the particular business
entity's office, plant and equipment are situated, are not more than
P3 M
Establishments Adversely Affected by Natural Calamities.
Micro and small indigenous exporters as certified by the Export
Development Council, subject to the criteria and requirements to
be provided for in its Implementing Rules.
Determination of compliance with minimum wage

Nature of work for a salesman and the reason for such type of
remuneration for services rendered demonstrate clearly that
commissions are part of salesmans wage/salary
When commissions equal to or even exceed the minimum wage, the
employer need not pay, in addition, the basic minimum pay
prescribed by law. It follows then that commissions are included in
determining compliance with minimum wage requirements.18
Iran v. NLRC (1998)

SLL v. NLRC (2011)
20
Cebu Institute of Technology vs. Ople
Gratuity and Salary/Wages, Difference22

SALARY GRATUITY
Given as a form of compensation Freely given, or without
recompense
Linked to actual services performed Not intended for actual services
or to be performed
Mandatory Not mandatory
-
18
21
19
22
_______________________________________________________________
SUPPLEMENTS
Over and above the actual wage
For the employer
Non-Deductible from Wage
Given through the employers
liberality or own benefit
What other non-wage payments can therefore be made aside from

Gratuity?
o
Emergency Allowance: But receipt of ECOLA is
dependent on whether or not you are also entitled to
basic if you get no basic pay for that day, you also get no
ECOLA.
o
Representation/Transportation Allowance: This
contemplates payment for expenses.
o
Per diem: This is actually allowance for each day that an
officer or employee is out of the home. It answers for
board, lodging, transportation and other related
expenses.
Phil. Duplicators Inc v NLRC (1995)

Plastic Town Center vs. NLRC (1989)
21
58
Effect on Benefits
Art. 100
So that the rule against diminution of supplements or benefits may

apply it must be shown that:
o
The grant of the benefit is founded on a policy or has
ripened into a practice over a long period
o
The practice is consistent and deliberate
o
The practice is not due to error in the construction or
application of a doubtful or difficult question of law
o
The diminution or discontinuance is done unilaterally by
the employer
Exceptions:
o
Not established practice
o
Mistake in the application of law
o
Negotiated benefits contained in a CBA as these are
bilateral
The giving of salary increase across-theboard to comply with a CBA provision cannot
be said to have ripened into a company
practice
o
Reimbursement benefits
There can be an elimination of an existing

benefit in exchange for an equal or better
one
o
Reclassification of position; promotion
However, this must be done in good faith. The

personnel movement should not be intended
to circumvent the law to deprive employees
of the benefits they used to receive
o
Contingent or conditional benefits such as a bonus
RA 6727, Sec. 2;
Policies of State:
-
To rationalize the fixing of minimum wages and to promote

productivity-improvement and gain-sharing measures to ensure a
decent standard of living for the workers and their families
To guarantee the rights of labor to its just share in the fruits of
production; to enhance employment generation in the countryside
through industry dispersal
To allow business and industry reasonable returns on investment,
expansion and growth.
Regional Tripartite Wages and Productivity Board

RA 6727, Sec. 3; Art. 122, 126
RA 6727, Sec. 3; Art. 124
Currently, we have 1 Commission and 17 Regional Boards
RA 6727, Sec. 3; Art. 120, 121 and 126
23
Attached to DOLE for policy and program coordination

Powers and functions:
o
Consultative and advisory body to the President and
Congress
o
Policy and guideline formulation for wages
o
Minimum wage and productivity measures creation
o
Review of regional wages
o
Undertake studies, researches and surveys necessary for
the attainment of its functions and objectives
o
Review plans and programs of the Regional Tripartite
Wages and Productivity Boards
o
Technical and administrative supervision over the
Regional Tripartite Wages and Productivity Boards
o
To call, from time to time, a national tripartite
conference of representatives of government, workers
and employers for the consideration of measures to
promote wage rationalization and productivity
o
Other powers and functions necessary to implement
objectives and goals
SOL as ex-officio chair, Director General of NEDA as ex-officio
vice-chair, 2 members each from workers and employers sector
(appointed by President), 5 year terms
The demand for living wages;

Wage adjustment vis--vis the consumer price index;
The cost of living and changes or increases therein;
The needs of workers and their families;
The need to induce industries to invest in the countryside;
Improvements in standards of living;
The prevailing wage levels;
Fair return of the capital invested and capacity to pay of
employers;
Effects on employment generation and family income; and
The equitable distribution of income and wealth along the
imperatives of economic and social development.
RA 6727, Sec. 3; Art. 123, 124
National Wages and Productivity Commission (NWPC)
Powers and Functions

o
Develop plans, programs and projects relative to wages,
incomes and productivity improvement
o
Determine and fix minimum wage rates applicable in
their region
o
To undertake studies, researches and surveys necessary
for the attainment of their functions, objectives and
programs
o
To coordinate with the other Regional Boards
o
To receive, process and act on applications for
exemption from prescribed wage rates
o
To exercise such other powers and functions as may be
necessary
Regional Director of DOLE as chair, Regional Director of NEDA and
DTI as vice chairs and 2 members each from workers and employers
sector (appointed by President), 5 year terms
No 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 Boards.
Within 30 days of the conclusion of the last hearing, Board shall

decide and issue a WO
Will last for 12 months and no petition for wage increase shall be
entertained within this 12 months
WO shall take effect 15 days after its publication in at least 1
newspaper of general circulation
Board shall prepare the IRR not later than 10 days of WO's issuance.
This shall be approved by the Sec. of Labor and Employment
Appeals for review of WO
o
Non-conformity with prescribed guidelines and/or
procedure
o
Questions of law
o
Grave abuse of discretion
Methods of Fixing
Floor Wage Method
-
The fixing of a determinate amount that would be added to the

prevailing statutory minimum wage
Salary Ceiling Method

Wage adjustment is applied to employees receiving a certain
denominated salary ceiling
Validity
-
The issue of the validity of the wage order subsists even after its
implementation23
Metrobank v. NWPC (2007)
_______________________________________________________________
22
58
Wage Distortion
RA 6727, Sec. 3; Art. 124
Wage Distortion = A situation where an increase in the wage rates

will eliminate or severely diminish the differences between and
among wage groups in an establishment
Four elements of wage distortion:24

1.
An existing hierarchy of positions with corresponding
salary rates
2.
A significant change in the salary rate of a lower pay
class without a concomitant increase in the salary rate
of a higher one
3.
The elimination of the distinction between the two
levels
4. The existence of the distortion in the same region of the
country.
For Organized Establishments, steps for fixing wage distortion:

1.
Bargaining/Negotiations
2.
Grievance Machineries
3.
Voluntary Arbitration
For Unorganized Establishments, steps for fixing wage distortion:

1.
Endeavor to negotiate
2.
National Conciliation and Mediation Board
3.
NLRC
Art. 125; RA 6727, Sec. 2, 2nd par.
WO cannot limit the freedom to bargain
Art. 127
WO must provide wage rates higher than the statutory minimum

wage prescribed by Congress
RA 8188, Sec. 12
Art. 104; Book III, Rule VII, Sec. 4; Labor Advisory on Payment of Salaries thru ATM
G.R.: Shall be made at or near the place of undertaking

E: Following circumstances:
Payment cannot be made because of deterioration of peace
and order conditions, or by reason of actual or impending
emergencies (fire, flood, epidemic)
Employer provides free transportation to the employees back
and forth
Under any other analogous circumstances; Provided, That the
time spent by the employees in collecting their wages shall be
considered as compensable hours worked
NO PAYMENT in any bar, night or day club, drinking establishment,
massage clinic, dance hall, or other similar places or in places
where games are played with stakes of money or things
representing money except in the case of persons employed in
said places.
Conditions for payment thru ATM:
ATM system of payment is with the written consent of the
employees
The employees are given reasonable time to withdraw their wages
from the banking facility (compensable hours, if during working
hours)
System shall allow workers to receive their wages within the
period/frequency provided by law
There is a bank/ATM facility within 1km radius from place of work
Upon request of the concerned employee/s, the employer shall
issue a record of payment of wages, benefits and deductions for a
particular period
There shall be no additional expenses and no diminution of benefits
and privileges
The employer shall assume responsibility in case the wage
protection provisions of law and regulations are not complied with
under the arrangement.
P25k P100k OR 2 years 4 years OR BOTH

Art. 105; Book III, Rule VII, Secs. 5, 6
Art. 102; Art. 1705 (NCC); Book III, Rule VII, Secs. 1, 2
G.R.: Legal Tender only

E: Check/Money Order if customary OR necessary because of special
circumstances, as specified by SOL or the CBA
Not allowed: Promissory notes, vouchers, coupons, tokens, tickets,
chits, or any object other than legal tender, even when expressly
requested by the employee
Conditions for payment through check
o
Bank/Facility for encashment within 1km radius from
workplace
o
Employer did not receive any pecuniary benefit because
of said arrangement
o
The employees are given reasonable time during
banking hours to withdraw their wages (compensable
hours, if during working hours)
o
The payment by check is with the written consent of the
employees concerned, in the absence of a CBA
Art. 103; Book III, Rule VII, Sec. 3
24
At least once every 2 weeks/2x per month

o
Intervals must not be more than 16 days
Force majeure = valid excuse for delayed payment
o
But must pay immediately after cessation of such
For tasks which cannot be completed in 2 weeks:
o
Payments should be made with intervals not more than
16 days, in proportion to work completed
o
Final settlement is made upon completion of the work.
G.R.: Directly to the employee

E: Following circumstances:
Authorized member of the family
A third person authorized by law (e.g. insurance companies
for premiums)
Force majeure, then to authorized person
Worker has died, then to heirs, the latter executing an
affidavit regarding their relationship
Art. 112; Book III, Rule VIII, Sec. 9
No limitation/interference with the freedom of any employee to

dispose of his wages.
Employer shall not in any manner force, compel, or oblige his
employees to purchase merchandise, commodities or other
property from any other person, or otherwise make use of any
store or services of such employer or any other person.
Art. 113; Book III, Rule VIII, Sec. 10
G.R.: Employer cannot make any deduction from the wages of his
employee
E: Insurance premiums; Union Dues; Authorized by law / by SOL
In case of Bankruptcy: Unpaid wages before declaration of
such shall have first preference over creditors
Prubankers v. Prudential Bank (1999)
_______________________________________________________________
23
58
Arts. 114, 115; Book III, Rule VIII, Sec. 11
G.R.: No deposits where deductions shall be made for the

reimbursement of loss of or damage to tools, materials, or
equipment supplied by the employer
E: Employer engaged in such trades, occupations or business with the
practice of making deductions is a recognized one, or is necessary
or desirable as determined by the SOL in appropriate rules and
regulations.
-
No deduction from the deposits of an employee for the actual

amount of the loss or damage shall be made unless:
o
The employee has been heard
o
His responsibility has been clearly shown.
o
Amount of the deduction is fair and reasonable and shall
not exceed the actual loss of damage
o
Must not exceed 20% of weekly pay
Attorney's fees in any judicial or administrative proceedings for the

recovery of wages shall not exceed 10% of the amount awarded.
Art. 128 (d)
Art. 110; Book III, Rule VIII, Sec. 7; Arts. 1707, 2241(6), 2242(3), 2244(2), 2245, 2246, 2248, 2250
(NCC)
G.R.: First preference over creditors

o
Declaration is important before preference to exist
Every employer or indirect employer shall be jointly and severally
liable with his contractor or sub-contractor for the unpaid wages
of the employees of the latter.
o
Such employer or indirect employer may require the
contractor or sub-contractor to furnish a bond equal to
the cost of labor under contract on condition that the
bond will answer for the wages due the employees
should the contractor or subcontractor, as the case may
be, fail to pay the same.
-
The laborer's wages shall be a lien on the goods manufactured or

the work done.
Art. 113, 116; Art. 1706 (CC)
G.R.: Prohibition from withholding of wages and kickbacks

E: Special circumstances:
Deduction is for insurance premiums
For Union dues
Authorized by law / by SOL
Due and Demandable debt to employer
Arts. 2241, 2242 (NCC)
Art. 2241 [Specific movables of the employer]

6.
Claims for laborers' wages, on the goods manufactured or the
work done
Art. 2242 [Specific immovable property and real rights of the

employer]
3.
Claims of laborers, masons, mechanics and other workmen, as
well as of architects, engineers and contractors, engaged in
the construction, reconstruction or repair of buildings, canals
or other works, upon said buildings, canals or other works
(preferred liens over immovable or real rights)
Art. 117
No deduction from the wages for the benefit of the employer,

representative or intermediary as consideration of a promise of
employment or retention in employment.
Art. 118
Prohibited to refuse to pay or reduce the wages and benefits,

discharge or in any manner discriminate against any employee who
has filed any complaint or instituted any proceeding under this Title
or has testified or is about to testify in such proceedings.
Art. 2244 (NCC)
Art. 2244 [Other properties (real/personal)]

2.
Credits for services rendered the insolvent by employees,
laborers, or household helpers for one year preceding the
commencement of the proceedings in insolvency shall be
preferred
Art. 119; Book III, Rule X, Sec. 13
It shall be unlawful for any person to make any false statement,

report, or record filed or kept pursuant to the provisions of this
Code
It shall be unlawful for any employer or any person to make any
false statement, report or record on matters required to be kept or
maintained pursuant to the provisions of this Rule.
Art. 2245
Notes:
Book III, Rule X, Secs. 11, 12
Premises = The main or branch office of the establishment, if any,

depending upon where the employees are regularly assigned.
All employment records of the employees shall be kept and
maintained by the employer in or about the premises of the work
place.
All employment records required to be kept and maintained by
employers shall be preserved for at least 3 years from the date of
the last entry in the records.
G.R.:
The laborer's wages shall not be subject to execution or
attachment
E:
Debts incurred for food, shelter, clothing and medical
attendance.
_______________________________________________________________
The excess, if any, after the payment of the credits which enjoy
preference with respect to specific property, real or personal, shall
be added to the free property which the debtor may have, for the
payment of the other credits.
For special preferred credits, preferences listed will be given in pari
passu, pro rata (in equal footing, proportionately)
Arts. 128, 129, 223, 111; Book III, Rule X, Secs. 1, 2, 3, 4, 5
Art. 1708 (NCC)
Art. 2245
o
Credits of any other kind or class, or by any other right
or title not comprised in the four preceding articles,
shall enjoy no preference
An order issued by the duly authorized representative of the SOL

under this Article may be appealed to the latter. In case said order
involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by
a reputable bonding company duly accredited by the SOL in the
amount equivalent to the monetary award in the order appealed
from.
24
58
Arts. 128 (a), (b), (c), (d), (e), (f)
Visitorial Powers
The SOL or his duly authorized representatives, including labor
regulation officers, shall have access to employers records and
premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question
any employee and investigate any fact, condition or matter which
may be necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order or rules
and regulations issued pursuant thereto.
Enforcement Powers
In cases where the relationship of employer-employee still exists,
the SOL or his duly authorized representatives shall have the power
to issue compliance orders to give effect to the labor standards
provisions of this Code and other labor legislation based on the
findings of labor employment and enforcement officers or
industrial safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives shall issue
writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer
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.
The SOL may likewise order stoppage of work or suspension of
operations of any unit or department of an establishment when
non-compliance with the law or implementing rules and
regulations poses grave and imminent danger to the health and
safety of workers in the workplace.
o
Within 24 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 employer,
he shall pay the employees concerned their salaries or
wages during the period of such stoppage of work or
suspension of operation.
Power to Review
The SOL may, by appropriate regulations, require employers to
keep and maintain such employment records as may be necessary
in aid of his visitorial and enforcement powers under this Code.
25
Jurisdictions
Regional Director of DOLE / duly authorized hearing officers
(Summary proceeding)
To hear and decide on Recovery of wages and other monetary
claims and benefits, including legal interest, owing to an employee
or person employed as a DW, arising from employer-employee
relations
Provided, That such complaint does not include a claim for
reinstatement
Provided further, that the aggregate money claims of each
employee or DW does not exceed P5k.
Power to enforce compliance with labor standards law
Appeals: NLRC
-
Exception Clause Elements (To divest RD of jurisdiction, give to Labor

Arbiters)25
1.
Employer contests the findings of the labor regulations officer and
raises issues thereon
2.
In order to resolve such issues, there is a need to examine
evidentiary matters
3.
Such matter are not verifiable in the normal course of inspection
Labor Arbiters
Original and Exclusive jurisdiction
To hear and decide:
o
Unfair labor practice cases
o
Termination disputes
o
If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment
o
Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations
o
Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of
strikes and lockouts; and
o
Except claims for Employees Compensation, Social
Security, PhilHealth and maternity benefits, all other
claims arising from employer-employee relations,
including those of DWs, involving an amount exceeding
P5k regardless of whether accompanied with a claim for
reinstatement
Appeals: NLRC
Meteoro v. Creative Creatures (2009)
_______________________________________________________________
25
58
VI. Thirteenth Month Pay

-
PD 851 (13th Month Pay Law) was signed into law in 1975 by
President Ferdinand Marcos
o
Originally, it was only for employees not receiving more
than P1k basic salary
PD 1364 was signed on 1978, to stop accepting applications for
exemption under PD 851
Memorandum Order 28 was issued by President Cory Aquino in
1986, removing the P1k basic salary ceiling
Revised Guidelines on the Implementation of the 13th Month Pay Law (1987), Secs. 1, 2, 3, 4, 5,
6, 7, 8; P.D. 851, Secs. 1, 2
All rank and file employees, who have worked at least 1 month
DWs are included (RA 10361, Art. IV, Sec. 25)
PD 851 Whereas Clauses
For the protection of the level of real wages from the ravage of
worldwide inflation
Absence of an increase in the legal minimum wage since 1970
Christmas Season is an opportune time for society to show its
concern for the plight of the working masses
1/12 of the total basic salary earned in a year

o
Shall not include the following in the basic salary26
COLA granted pursuant to Presidential

Decree 525 and LOI No. 174.
Profit sharing agreements
All allowances and monetary benefits which

are not considered or integrated as part of
the regular basic salary of the employee at
the time of the promulgation of the Decree
on December 16, 1975.
Cash and stock dividends, cost of living

allowances and all other allowances
regularly enjoyed by the employee, as well as
non-monetary benefits27
th
13 month pay must be paid not later than Dec. 24
o
Frequency of payment may be subject to agreement
The Government and GOCCs, except those corporations operating

essentially as private subsidiaries
Employers already paying their employees a 13th month pay or
more in a calendar year or its equivalent at the time of issuance
Employers of those who are paid on purely commission, boundary,
or task basis, and those who are paid a fixed amount for
performing specific work, irrespective of the time consumed in the
performance thereof
Except where the workers are paid on piece-rate basis
VII. Bonus
Differences between Commission and Bonus28
COMMISSION
PRODUCTIVITY BONUS
Paid upon the specific results Generally tied to the productivity, or
achieved employee capacity for revenue production, of
a corporation
A percentage of the sales closed by Closely resembles profit-sharing
the employee and operates as an
integral part the basic pay
Intimately related to or directly No clear direct or necessary relation
proportional to the extent or to the amount of work actually
energy of an employee's endeavors done by each individual employee
Demandable once earned Not a demandable and enforceable
obligation
Mandatory once earned; Management prerogative
considered as wages
Conditioned on contract on Conditioned on the profit or amount
commission; automatic increment of productivity achieved and
to each unit of work rendered by management decision
salesmen
Included in basic salary for 13th Not included in basic salary for 13th
month pay computation month pay computation
Letran Calamba v. NLRC (2008)

Framanlis Farms v. MOLE (1989)
28
Phil. Duplicators v. NLRC (1995)
29
Supra
Bonus
-
26
30
27
31
_______________________________________________________________
An amount granted and paid to an employee for his industry

loyalty which contributed to the success of the employer's business
and made possible the realization of profits.
It is an act of generosity of the employer for which the employee
ought to be thankful and grateful.
It is also granted by an enlightened employer to spur the employee
to greater efforts for the success of the business and realization of
bigger profits. 29
PART OF WAGE: If it is an additional compensation agreed to be
given by the employer without condition
NOT PART OF WAGE: If it is paid only after realization of profits or
for a certain amount of productivity30
If it is made part of the wages and salary

If it was included in the CBA without condition or qualification on
how it is to be earned
If it forms part of the company practice, in support of the NonDiminution of wages principle
Phil. Duplicators v. NLRC (1995)

Eastern Telecommunications v. Eastern Telecoms Employees Union (2012)
26
58
VIII. Working Conditions for Special Group of Workers

Women Night Workers
Art. 158
Consti., Art. II, Sec. 14; Art. XIII, Sec. 14
The State recognizes the role of women in nation-building, and

shall ensure the fundamental equality before the law of women
and men.
The State shall protect working women by providing safe and
healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance
their welfare and enable them to realize their full potential in the
service of the nation.
(a)
(b)
Book III, Rule XII, Sec. 1
G.R.: This Rule shall apply to all employers, whether operating for profit
or not, including educational, religious and charitable institutions
E: Government and to GOCCs and to employers of DW and persons in
their personal service insofar as such workers are concerned.
During the periods referred to in this article

i. A woman worker shall not be dismissed or given notice of
dismissal, except for just or authorised causes provided for in
this Code that are not connected with pregnancy, childbirth
and childcare responsibilities.
ii. A woman worker shall not lose the benefits regarding her
status, seniority, and access to promotion which may attach
to her regular night work position.
Pregnant women and nursing mothers may he allowed to work at

night only if a competent physician, other than the company
physician, shall certify their fitness to render night work, and
specify, in the ease of pregnant employees, the period of the
pregnancy that they can safely work.
The measures referred to in this article may include transfer to day
work where this is possible, the provision of social security benefits
or an extension of maternity leave.
The provisions of this article shall not have the effect of reducing
the protection and benefits connected with maternity leave under
existing laws.
RA 9710, Secs. 2 (1) and 12
Recognizing that the economic, political, and sociocultural realities

affect women's current condition, the State affirms the role of
women in nation building and ensures the substantive equality of
women and men.
It shall promote empowerment of women and pursue equal
opportunities for women and men and ensure equal access to
resources and to development results and outcome.
Further, the State realizes that equality of men and women entails
the abolition of the unequal structures and practices that
perpetuate discrimination and inequality.
State shall endeavor to develop plans, policies, programs,
measures, and mechanisms to address discrimination and
inequality in the economic, political, social, and cultural life of
women and men.
The State shall take steps to review and, when necessary, amend
and/or repeal existing laws that are discriminatory to women
within 3 years from the effectivity of this Act. (2012)
Measures shall be taken to ensure that an alternative to night work

is available to women workers who would otherwise be called upon
to perform such work
Before and after childbirth, for a period of at least 16 weeks, which
shall be divided between the time before and after childbirth;
For additional periods, in respect of which a medical certificate is
produced stating that said additional periods are necessary for the
health of the mother or child
(1) During pregnancy;
(2) During a specified time beyond the period, after childbirth is
fixed pursuant to subparagraph (a) above, the length of which
shall be determined by the DOLE after consulting the labor
organizations and employers.
Discrimination
Art. 133; RA 9710, Sec. 2(2), Sec. 12

RA 10151; Arts. 154, 158
RA 10151 repealed Arts. 130 131 of the LC

It created a new Chapter V in Book III, Title III (Employment of Night
Workers)
Employment of Night Workers

Art. 154.
Coverage
Applies to all persons, who shall be employed or permitted or
suffered to work at night, except those employed in agriculture,
stock raising, fishing, maritime transport and inland navigation
Period must be not less than 7 consecutive hours, including the
interval from midnight to five oclock in the morning
Night worker = Any employed person whose work requires
performance of a substantial number of hours of night work which
exceeds a specified limit.
o
This limit shall be fixed by the SOL after consulting the
workers representatives/labor organizations and
employers.
_______________________________________________________________
a.
b.
Prohibition on discrimination with sole basis on sex

The following are acts of discrimination
Payment of a lesser compensation, including wage, salary or other
form of remuneration and fringe benefits, to a female employees
as against a male employee, for work of equal value; and
Favoring a male employee over a female employee with respect to
promotion, training opportunities, study and scholarship grants
solely on account of their sexes.
The State condemns discrimination against women in all its forms
and pursues by all appropriate means and without delay the policy
of eliminating discrimination against women in keeping with the
CEDAW and other international instruments consistent with
Philippine law.
Stipulation against marriage

Art. 134
Prohibited to require as a condition of employment or continuation

of employment that:
o
A woman employee shall not get married
o
To stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned
or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.
27
58
Discharge to prevent enjoyment of benefits

Art. 137(1)
Prohibited to deny any woman employee 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.
Discharge on account of pregnancy

Art. 135(2), (3); RA 9710, Sec. 13(c)
It is prohibited for any employer

o
To discharge such woman on account of her pregnancy,
or while on leave or in confinement due to her
pregnancy
o
To discharge or refuse the admission of such woman
upon returning to her work for fear that she may again
be pregnant.
Discharge on account of testimony

Book III, Rule XII, Sec. 13(d)
Prohibited to discharge any woman or child or any other employee

for having filed a complaint or having testified or being about to
testify under the Code
Expulsion of women faculty/student due to pregnancy outside of marriage

RA 9710, Sec. 13(c)
Expulsion and non-readmission of women faculty due to

pregnancy outside of marriage shall be outlawed.
Arts. 130, 132; Book III, Rule XII, Sec. 11
a.
b.
c.
d.
The SOL shall establish standards that will ensure the safety and
health of women employees. In appropriate cases, he shall, by
regulations, require any employer to
Provide seats proper for women and permit them to use such seats
when they are free from work and during working hours, provided
they can perform their duties in this position without detriment to
efficiency;
To establish separate toilet rooms and lavatories for men and
women and provide at least a dressing room for women;
To establish a nursery in a workplace for the benefit of the women
employees therein; and
To determine appropriate minimum age and other standards for
retirement or termination in special occupations such as those of
flight attendants and the like.
i. Establishments which are required by law to maintain a clinic
or infirmary shall provide free family planning services to their
employees which shall include, but not be limited to, the
application or use of contraceptive pills and intrauterine
devices.
ii. In coordination with other agencies of the government engaged
in the promotion of family planning, the DOLE shall develop
and prescribe incentive bonus schemes to encourage family
planning among female workers in any establishment or
enterprise.
Employers who habitually employ more than 200 workers in any
locality shall provide free family-planning services to their
employees and their spouses which shall include but not limited to,
the application or use of contraceptives.
Art. 136
Any woman who is permitted or suffered to work, with or without

compensation, in any night club, cocktail lounge, massage clinic,
bar or similar establishments under the effective control or
supervision of the employer for a substantial period of time as
determined by the SOL, shall be considered as an employee of such
establishment for purposes of labor and social legislation.
_______________________________________________________________
SSS Law, Sec 14-A; RA 828
Coverage
A female member who has paid at least 3 monthly contributions in
the 12-month period immediately preceding the semester of her
childbirth or miscarriage.
Benefit
-
Daily maternity benefit equivalent to one 100% of her average daily

salary credit for 60 days or 78 days in case of Caesarian delivery
Conditions:
Notify ER of her pregnancy and the probable date of her childbirth,
which will notify SSS
Full payment of ER within 30 days from the filing of the maternity
leave application
Payment of daily maternity benefits shall be a bar to the recovery
of sickness benefits
Can only avail for the first 4 deliveries or miscarriages
SSS to reimburse the employer 100% of maternity benefits
advanced
But if required contributions not remitted her employer to the SSS,
or without the latter having been previously notified by the ER of
the time of the pregnancy, the ER shall pay to the SSS damages
equivalent to the benefits
Sickness Benefit.
A member who has paid at least 3 monthly contributions in the 12month period immediately preceding the semester of sickness or
injury and is confined therefor for more than 3 days in a hospital or
elsewhere with the approval of the SSS, shall, for each day of
compensable confinement or a fraction thereof, be paid by his
employer, or the SSS, if such person is unemployed or selfemployed, a daily sickness benefit equivalent to 90% of his average
daily salary credit, subject to the following conditions:
o
Daily sickness benefit be paid must not be longer than
120 days in 1 calendar year
o
Any unused portion of the 120 days of sickness benefit is
not carried forward and added to the total number of
compensable days allowable in the subsequent year
o
The daily sickness benefit shall not be paid for more
than 240 days on account of the same confinement
o
The employee member shall notify his employer of the
fact of his sickness or injury within 5 calendar days after
the start of his confinement
RA 7877, Secs. 3, 4
Definition
Work, education or training-related sexual harassment is
committed by an employer, employee, manager, supervisor, agent
of the employer, teacher, instructor, professor, coach, trainor, or
any other person who, having authority, influence or moral
ascendancy over another in a work or training or education
environment, demands, requests or otherwise requires any sexual
favor from the other, regardless of whether the demand, request or
requirement for submission is accepted by the object of said act.
Any person who directs or induces another to commit any act of
sexual harassment as herein defined, or who cooperates in the
commission thereof by another without which it would not have
been committed, shall also be held liable under this Act.
28
58
When committed in a work-related/employment environment

In a work-related or employment environment, sexual harassment is
committed when
(1) The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation,
terms of conditions, promotions, or privileges; or the refusal to
grant the sexual favor results in limiting, segregating or classifying
the employee which in any way would discriminate, deprive or
diminish employment opportunities or otherwise adversely affect
said employee;
(2) The above acts would impair the employee's rights or privileges
under existing labor laws; or
(3) The above acts would result in an intimidating, hostile, or offensive
environment for the employee.
Duty of the employer
To prevent or deter the commission of acts of sexual harassment
To provide the procedures for the resolution, settlement or
prosecution of acts of sexual harassment.
To promulgate appropriate rules and regulations in consultation
with and jointly approved by the employees or students or trainees,
through their duly designated representatives, prescribing the
procedure for the investigation of sexual harassment cases and the
administrative sanctions therefor.
o
Administrative sanctions shall not be a bar to
prosecution in the proper courts for unlawful acts of
sexual harassment.
o
The said rules and regulations issued pursuant to this
subsection (a) shall include, among others, guidelines on
proper decorum in the workplace and educational or
training institutions.
To create a committee on decorum and investigation of cases on
sexual harassment.
To disseminate or post a copy of this Act for the information of all
concerned.
Childhood is entitled to special care and assistance

Children, should be afforded the necessary protection and
assistance so that it can fully assume its responsibilities within the
community
Recognizing that the child, for the full and harmonious
development of his or her personality, should grow up in a family
environment, in an atmosphere of happiness, love and
understanding
Considering that the child should be fully prepared to live an
individual life in society, and brought up in the spirit of the ideals
proclaimed in the Charter of the United Nations, and in particular in
the spirit of peace, dignity, tolerance, freedom, equality and
solidarity
Consti., Art. II, Secs. 13, 18; Art. XV, Sec. 3 (2)
The State recognizes the vital 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
The State shall defend: The right of children to assistance, including
proper care and nutrition, and special protection from all forms of
neglect, abuse, cruelty, exploitation and other conditions
prejudicial to their development
_______________________________________________________________
RA 9231, Sec. 2(3)
Child
-
Refers to any person under 18 years of age.
Child Labor
-
Refers to any work or economic activity performed by a child that

subjects him/her to any form of exploitation or is harmful to
his/her health and safety or physical, mental or psychosocial
development.
Working Child
Refers to any child engaged as follows:
i. When the child is below 18 years of age, in work or economic
activity that is not child labor as defined in the immediately
preceding sub-paragraph, and
ii. When the child below 15 years of age,
In work where he/she is directly under the
responsibility of his/her parents or legal guardian
and where only members of the childs family are
employed; or
In public entertainment or information.
Art. 137; RA 7610, Sec.12 (as amended); DO 65-04, Sec. 6
Minimum Employable Age

G.R. 15 years old
Employment of Children
Children below 15 years of age shall not be employed except
When a child works directly under the sole responsibility of his/her
parents or legal guardian & where only members of his/her family
are employed
o
Provided, however, That his/her employment neither
endangers his/her life, safety, health, & morals, nor
impairs his/her normal development
o
Provided, further, That the parent or legal guardian shall
provide the said child with the prescribed primary
and/or secondary education; or
Where a childs employment or participation in public
entertainment or information through cinema, theater, radio,
television or other forms of media is essential.
o
Provided, That the Employment contract is concluded by
the childs parents or legal guardian, with the express
agreement of the child concerned, if possible, and the
approval of the DOLE
o
Provided, further, That the following requirements in all
instances are strictly complied with
The employer shall ensure the protection,

health, safety, morals and normal
development of the child
The employer shall institute measures to

prevent the childs exploitation or
discrimination taking into account the
system and level of remuneration, and the
duration and arrangement of working time;
and
The employer shall formulate and

implement, subject to the approval and
supervision of competent authorities, a
continuing program for training and skills
acquisitions of the child.
In the above-exceptional cases where any such child may be
employed, the employer shall first secure, before engaging such
child, a work permit from the DOLE which shall ensure observance
of the above requirements.
o
For purposes of this Article, the term "child" shall apply
to all persons under 18 years of age.
29
58
RA 9231, Sec. 3 on Sec. 12-A; DO 6504 Sec. 3(k)
"Hours of work"
(1) All time during which a child is required to be at a
prescribed workplace
(2) All time during which a child is suffered or permitted to
work. Rest periods of short duration during working
hours shall be counted as hours worked.
Childs age: < 15
o
Max of 20 hrs./week
o
Max of 4 hrs./day
o
No work from 8PM 6AM
Childs age: 15-17
o
Max of 40 hrs./week
o
Max of 8 hrs./day
o
No work from 10PM 6AM
Prohibition on the Employment of Children in Certain Advertisements

No child below 18 years of age shall be employed as a model in any
advertisement directly or indirectly promoting alcoholic beverages,
intoxicating drinks, tobacco and its by-products, gambling or any
form of violence or pornography.
Art. 140
RA 9231 Sec. 9 on Sec. 16-a
RA 9231, Sec. 3 on Sec. 12-d, Sec. 5 on Sec. 14
The phrase "worst forms of child labor" shall refer to any of the
following
o
All forms of slavery, as defined under the "Antitrafficking in Persons Act of 2003", or practices similar
to slavery such as sale and trafficking of children, debt
bondage and serfdom and forced or compulsory labor,
including recruitment of children for use in armed
conflict; or
o
The use, procuring, offering or exposing of a child for
prostitution, for the production of pornography or for
pornographic performances; or
o
The use, procuring or offering of a child for illegal or
illicit activities, including the production and trafficking
of dangerous drugs and volatile substances prohibited
under existing laws; or
o
Work which, by its nature or the circumstances in which
it is carried out, is hazardous or likely to be harmful to
the health, safety or morals of children, such that it
Debases, degrades or demeans the intrinsic

worth and dignity of a child as a human being
or
Exposes the child to physical, emotional or

sexual abuse, or is found to be highly
stressful psychologically or may prejudice
morals; or
Is performed underground, underwater or at

dangerous heights; or
Involves the use of dangerous machinery,

equipment and tools such as power-driven or
explosive power-actuated tools; or
Exposes the child to physical danger such as,

but not limited to the dangerous feats of
balancing, physical strength or contortion, or
which requires the manual transport of
heavy loads; or
Is performed in an unhealthy environment

exposing the child to hazardous working
conditions, elements, substances, co-agents
or processes involving ionizing, radiation, fire,
flammable substances, noxious components
and the like, or to extreme temperatures,
noise levels, or vibrations; or
Is performed under particularly difficult

conditions or
Exposes the child to biological agents such as

bacteria, fungi, viruses, protozoans,
nematodes & other parasites; or
Involves the manufacture or handling of

explosives and other pyrotechnic products.
The family court shall have original jurisdiction over all cases
involving offenses punishable under this Act Provided. That in cities
or provinces where there are no family courts yet, the regional trial
courts and the municipal trial courts shall have concurrent
jurisdiction depending on the penalties prescribed for the offense
charged.
The preliminary investigation of cases filed under this Act shall be
terminated within a period of 30 days from the date of filing.
If the preliminary investigation establishes a prima facie case, then
the corresponding information shall be filed in court within 48
hours from the termination of the investigation.
Trial of cases under this Act shall be terminated by the court not
later than 90 days from the date of filing of information. Decision
on said cases shall be rendered within a period of 15 days from the
date of submission of the case.
RA 10361, Art. I, Sec. 2
The State adheres to internationally accepted working conditions

for workers in general, and establishes labor standards for
domestic workers in particular, towards decent employment and
income, enhanced coverage of social protection, respect for human
rights and strengthened social dialogue;
The State recognizes the need to protect the rights of domestic
workers against abuse, harassment, violence, economic
exploitation and performance of work that is hazardous to their
physical and mental health; and
The State, in protecting domestic workers and recognizing their
special needs to ensure safe and healthful working conditions,
promotes gender-sensitive measures in the formulation and
implementation of policies and programs affecting the local
domestic work.
Domestic Work
RA 10361, Art. I, Sec. 4 (c)
Work performed in or for a household or households.
Domestic Worker/Kasambahay
RA 10361, Art. I, Sec. 4 (d)
Any person engaged in domestic work within an employment

relationship such as, but not limited to, the following: general
househelp, nursemaid or yaya, cook, gardener, or laundry person,
but shall exclude any person who performs domestic work only
occasionally or sporadically and not on an occupational basis.
The term shall not include children who are under foster family
arrangement, and are provided access to education and given an
allowance incidental to education, i.e. baon, transportation,
school projects and school activities.
Household
RA 10361, Art. I, Sec. 4 (f)
_______________________________________________________________
No employer shall discriminate against any person in respect to

terms and conditions of employment on account of his age.
The immediate members of the family or the occupants of the

house that are directly provided services by the domestic worker
30
58
Weekly Rest Period

RA 10361, Art. I, Sec. 3, IRR, Rule I, Sec. 2
Applies to all domestic workers employed and working within the

country, whether live-in or live-out.
All parties under the following service contract or work
arrangements are not covered:
o
Service providers;
o
Family drivers;
o
Children under foster family arrangement; and
o
Any other person who performs work occasionally or
sporadically and not on an occupational basis
RA 10361, Art. IV, Sec. 21; IRR, Rule IV, Sec. 12
24 consecutive hours per week

Employer to set, but must take into consideration religious beliefs
The following arrangements may be set:
o
Offsetting a day of absence with a particular rest day
o
Waiving a particular rest day in return for an equivalent
daily rate of pay
o
Accumulating rest days not exceeding five (5) days
o
Other similar arrangements.
Compensation
Minimum Wage
Standard of Treatment
RA 10361, Art. II, Sec. 5; IRR, Rule IV, Sec. 17
Fairness and Respect

Prohibition to any kind of abuse nor inflict any form of physical
violence, harassment, verbal and psychological abuse or any act
tending to degrade the dignity
Board, Lodging and Medical Attendance

3 adequate meals a day

Humane and safe sleeping arrangements
Appropriate rest and assistance during illness, including first-aid
medicine
Guarantee of Privacy
Time and Form of Payment / Person to Pay

RA 10361, Art. IV, Sec. 25; IRR, Rule IV, Sec. 4, 6
Privacy to all forms of communication and personal effects
Pay Slip
-
Access to outside communication
Granted access to outside communication during free time

Emergency Cases: Even during work time
Costs to be charged to the Kasambahay, unless waived
Right to Education and Training
To afford opportunity to finish basic education

Allow access to alternative learning systems
As far as practicable, higher education and technical and vocational
training
Employer is to adjust work schedule to accommodate such
Access to education may include financial assistance
Employment Contract
RA 10361, Art. II, Sec. 11; IRR, Rule II, Sec. 5
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
3 copies, in writing, in a language understood by the DW

The following must be included:
Duties and responsibilities of the domestic worker;
Period of employment;
Compensation;
Authorized deductions;
Hours of work and proportionate additional payment;
Rest days and allowable leaves;
Board, lodging and medical attention;
Agreements on deployment expenses, if any;
Loan agreement;
Termination of employment; and
Any other lawful condition agreed upon by both parties.
Employment Age
RA 10361, Art. III, Sec. 16; IRR, Rule VI, Sec. 1
15 years and above
Health and Safety

Safeguarding of health and safety of DW
Daily Rest Period

Aggregate period of 8 hrs./day
Employer must give a copy of the DOLE-Form BK-3 containing:

o
Amount paid in cash every pay day
o
Deductions made
Employer must keep copies of the pay slips for a period of 3 years
13th Month Pay

RA 10361, Art. IV, Sec. 25, par. 2; IRR, Rule IV, Sec. 13
DW is entitled to a 13th month pay

DW must have worked for a t least 1 month
Must be paid on or before December 24
Leave Benefits
A DW who has worked for at least 1 year is entitled to 5 days service

incentive leave with pay
Non-convertible and non-cumulative
Social and Other Benefits
A DW who has worked for at least 1 month is entitled to SSS, PAGIBIG, PhilHealth benefits
o
These shall be shouldered by the employer
If DW is receiving P5k or more per month:
o
DW to pay in proportion
Termination of Service
Fixed Duration
RA 10361, Art. V, Sec. 32, par. 1; IRR, Rule VII, Sec. 1, par. 1
Mutually agreement
Not Fixed
RA 10361, Art. V, Sec. 32, par. 2; IRR, Rule VII, Sec. 1, par. 2
Give notice 5 days before termination
Grounds for Termination

Initiated by the DW
RA 10361, Art. V, Sec. 33; IRR, Rule VII, Sec. 2
(a)
(b)
(c)
(d)
(e)
(f)
_______________________________________________________________
Directly to DW
At least once a month
Only through legal tender
P2.5k per month (NCR)

P2k per month (Cities and Municipalities)
P1.5k per month (Other municipalities)
Verbal or emotional abuse of the domestic worker by the employer

or any member of the household;
Inhuman treatment including physical abuse of the domestic
worker by the employer or any member of the household;
Commission of a crime or offense against the domestic worker by
the employer or any member of the household;
Violation by the employer of the terms and conditions of the
employment contract and other standards set forth under this law;
Any disease prejudicial to the health of the domestic worker, the
employer, or member/s of the household; and
Other causes analogous to the foregoing.
31
58
Initiated by the Employer

(a)
(b)
(c)
(d)
(e)
(f)
(g)
Misconduct or wilful disobedience by the domestic worker of the

lawful order of the employer in connection with the formers work;
Gross or habitual neglect or inefficiency by the domestic worker in
the performance of duties;
Fraud or wilful breach of the trust reposed by the employer on the
domestic worker;
Commission of a crime or offense by the domestic worker against
the person of the employer or any immediate member of the
employers family;
Violation by the domestic worker of the terms and conditions of
the employment contract and other standards set forth under this
law;
Any disease prejudicial to the health of the domestic worker, the
employer, or member/s of the household; and
Other causes analogous to the foregoing.
If Mutually Agreed
RA 10361, Art. V, Sec. 32, par. 3; IRR, Rule VII, Sec. 1
None needed
Employment Certification
Employer to issue such certification 5 days after request
Abused/Exploited DW
RA 10361, Art. IV, Sec. 31; IRR, Rule X
Immediately rescued by a municipal or city social welfare officer in

coordination with barangay officials
Any of the following parties may report:
o
Offended Kasambahay
o
Parents/Guardians of the Kasambahay
o
Ascendants, Descendants and relatives within the 4th
civil degree of consanguinity/affinity
o
Social workers
o
Barangay officials
o
Lawyer, counsellor, therapist, healthcare provider of the
Kasambahay
o
At least 2 concerned neighbors who have personal
knowledge
Mechanism for settlement of disputes

Jurisdiction of DOLE Regional Office
RA 10361, Art. VII, Sec. 37, par. 1; IRR, Rule XI, Sec. 1
Labor-related disputes
Jurisdiction of Regular Couirts
RA 10361, Art. VII, Sec. 37, par. 2; IRR, Rule XI, Sec. 3
Ordinary crimes or offenses

Penalties
RA 10361, Art. IX, Sec. 40; IRR, Rule XII
RA 10361, Art. IV, Sec. 23; IRR, Rule V, Sec. 6
May mutually agree to perform task outside the household for

another household
Additional payment for this work
Original employer to be liable for any liability incurred by DW
1st offense: P10k

2nd offense:
P20k
3rd offense:
P30k
4th and succeeding offenses:
P40k
RA 10361, Art. VIII, Sec. 39; IRR, Rule XIII, Sec. 2
January 18
Charging of recruitment and finders fees

RA 10361, Art. III, Sec. 13; IRR, Rule II, Sec. 2
Cannot charge to DW
Deposits from which deductions shall be made
RA 10361, Art. II, Sec. 10; IRR, Rule V, Sec. 2
RA 10361, Art. III, Sec. 14; IRR, Rule V, Sec. 3
Prohibited to ask for deposits for loss or damage to tools,

materials, furniture and equipment in the household
Debt Bondage
RA 10361, Art. III, Sec. 15; IRR, Rule V, Sec. 4
Assignment to non-household work
All communication and information pertaining to the employer or

members of the household shall be treated as privileged and
confidential, and shall not be publicly disclosed by the domestic
worker during and after employment.
Such privileged information shall be inadmissible in evidence
except when the suit involves the employer or any member of the
household in a crime against persons, property, personal liberty
and security, and chastity.
RA 10361, Art. IV, Sec. 22; IRR, Rule VII, Sec. 5
Prohibition on assigning DW, whether full-time or part-time, to

any commercial, industrial or agricultural enterprise
When assigned in such, must pay respective minimum wage
RA 10361, Art. III, Sec. 17; IRR, Rule IX, Sec. 1
Charging by the original employer for temporary domestic service
Employer to register the DW at the Registry of Domestic Workers in

the barangay
RA 10361, Art. IV, Sec. 23, 4th sentence
Deductions other than those mandated by law

RA 10361, Art. IV, Sec. 25, 2nd sentence
Payment in forms other than cash

RA 10361, Art. IV, Sec. 25, 3rd sentence
Arts. 153, 154, 155; Book III, Rule XIV, Sec. 1
Interference in the disposal of wages

Forcing, compelling, or obliging the Kasambahay to purchase

merchandise, commodities or other properties from the employer
or from any other person
Making use of any store or services of such employer or any other
person.
Withholding of Wages
Allowed forfeiture of wages:

o
If DW leaves without any justifiable reasons, any unpaid
salary not exceeding 15 days shall be forfeited
_______________________________________________________________
The employment of industrial homeworkers and field personnel

shall be regulated by the government through the appropriate
regulations issued by the SOLE to ensure the general welfare and
protection of homeworkers and field personnel and the industries
employing them.
The regulations or orders to be issued pursuant to this Chapter
shall be designed to assure the minimum terms and conditions of
employment applicable to the industrial homeworkers or field
personnel involved.
This Rule shall apply to any person who performs industrial
homework for an employer, contractor or sub-contractor.
32
58
D.O. No. 5, Sec. 2
"Industrial Homework"
A system of production under which work for an employer or
contractor is carried out by a homeworker at his/her home.
Materials may or may not be furnished by the employer or
contractor.
o
It differs from regular factory production principally in
that, it is a decentralized form of production where
there is ordinarily very little supervision or regulation of
methods of work.
"Industrial Homeworker"
-
A worker who is engaged in industrial homework.
o
o
Employer
D.O. No. 5, Sec. 5
"Home"
-
Any room, house, apartment or other premises used regularly, in

whole or in part, as a dwelling place, except those situated within
the premises or compound of an employer, contractor or
subcontractor and the work performed therein is under the active
or personal supervision by or for the latter.
"Employer"
Any natural or artificial person who, for his own account or benefit,
or on behalf of any person residing outside the Philippines, directly
or indirectly, or through any employee, agent, contractor,
subcontractor; or any other person who:
o
Delivers or causes to be delivered any goods. articles or
materials to be processed or fabricated in or about a
home and thereafter to be returned or to be disposed of
or distributed in accordance with his direction; or
o
Sells any goods, articles or materials for the purpose of
having such goods or articles processed in or about a
home and then repurchases them himself or through
another after such processing.
"Contractor" or "Subcontractor
Any person who, for the account or benefit of an employer, delivers
or causes to be delivered to a homeworker goods or articles to be
processed in or about his home and thereafter to be returned,
disposed of or distributed in accordance with the direction of the
employer.
D.O. No. 5, Sec. 7
"Cooperative:
An association registered under the Cooperative Code of the
Philippines.
D.O. No. 5, Sec. 3
Homeworkers shall have the right to form, join or assist

organization of their own choosing, in accordance with law.
The Department shall, as soon as possible, conduct consultation

meetings with government agencies requiring registration of
employers and determine if the data being supplied by the
registration forms of such agencies are the same as or similar to
those needed by the Department in the implementation of this
regulations.
If the registration forms of other agencies do not provide the data
needed by DOLE, it shall inquire into the possibility of adopting a
common registration form with other agencies that will provide the
data needed by all the agencies concerned.
Standard Output/Minimum Rates
"Processing"
Manufacturing, fabricating, finishing, repairing, altering, packing,
wrapping or handling in any way connected with the production or
preparation of an article or material.
of the organizational meetings and the list of workers

who participated in such meetings;
The names of all its members comprising at least 20% of
all the workers in the bargaining unit where it seeks to
operate, if applicable;
If the applicant has been in existence for one or more
years, copies of its annual financial reports; and
Four copies of the constitution and by-laws of the
applicant organization, the minutes of its adoption or
ratification and the list of members who participated in
it
Motu proprio or upon petition of any interested party, the SOL/his

authorized representative shall establish the standard output rate
or standard minimum rate in appropriate orders for the particular
work or processing to be performed by the homeworkers.
The standard output rates or piece rates shall be determined
through any of the following procedures
o
Time and motion studies;
o
An individual/collective agreement between the
employer and its workers as approved by the SOL/his
authorized representative;
o
Consultation with representatives of employers and
workers organization in a tripartite conference called by
the SOL.
The time and motion studies shall be undertaken by the Regional
Office having jurisdiction over the location of the premise/s used
regularly by the homeworker/s.
o
However, where the job operation or activity is being
likewise performed by regular factory workers at the
factory or premises of the employer, the time and
motion studies shall be conducted by the Regional
Office having jurisdiction over the location of the main
undertaking or business of the employer.
o
Piece rates established through time and motion studies
conducted at the factory or main undertaking of the
employer shall be applicable to the homeworkers
performing the same job activity.
o
The standard piece rate shall be issued by the Regional
Office within 1 month after a request has been made at
said office.
Wage Deductions
D.O. No. 5, Sec. 6
Homeworkers Organization
D.O. No. 5, Sec. 4
Any applicant home worker organization or association shall

acquire legal personality, and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements
o
P55.00 registration fee;
o
The names of its officers, their addresses, the principal
address of the homeworkers organization, the minutes
_______________________________________________________________
Immediately upon receipt of the finished goods or, articles, the

employer shall pay the homeworker or the contractor or
subcontractor, as the case may be, for the work performed less
corresponding homeworkers' share of SSS, PhilHealth and PAGIBIG premium contributions which shall be remitted by the
contractor/subcontractor or employer with the employers share.
However, where payment is made to a contractor or subcontractor,
the homeworker shall likewise be paid immediately after the goods
or articles have been collected from the workers.
33
58
Deductions for Materials

D.O. No. 5, Sec. 8
Prohibition against any deduction from the homeworker's earnings

for the value of materials which have been lost, destroyed, soiled or
otherwise damaged unless the following conditions are met
o
The homeworker concerned is clearly shown to be
responsible for the loss or damage;
o
The homeworker is given reasonable opportunity to
show cause why deductions should not be made;
o
The amount of such deduction is fair and reasonable and
shall not exceed the actual loss or damage; and
o
The deduction is made at such rate that the amount
deducted does not exceed 20% of the homeworker's
earnings in a week.
the contractor or subcontractor to the workers of the latter, to the

extent that such work is performed under such contract, in the
same manner as if the employees or homeworkers were directly
engaged by the employer.
The employer, contractor or subcontractor shall assist the
homeworkers in the maintenance of basic safe and healthful
working conditions at the homeworkers' place of work.
D.O. No. 5, Sec. 13
No homework shall be performed on the following:

o
Explosives, fireworks and articles of like character;
o
Drugs and poisons;
o
Other articles, the processing of which requires
exposure to toxic substances.
Improperly executed work

D.O. No. 5, Sec. 9
The employer may require the homeworker to redo once the work
which has been improperly executed without having to pay the
stipulated rate again.
Returned goods
D.O. No. 5, Sec. 9 (b)
An employer, contractor, or subcontractor need not pay the

homeworker for any work which has been done on goods and
articles which have been returned for reasons attributable to the
fault of the homeworker.
D.O. No. 5, Sec. 11
Whenever an employer shall contract with another for the

performance of the employer's work, it shall be the duty of such
employer to provide in such contract that the employees or
homeworkers of the contractor and the latter's subcontractor shall
be paid in accordance with the provisions of this Rule.
In the event that such contractor or subcontractor fails to pay the
wages or earnings of his employees or homeworkers as specified in
this Rule, such employer shall be jointly and severally liable with
D.O. No. 5, Sec. 10
The Regional Director shall have the power to order and administer
compliance with the provisions of the law and regulations affecting
the terms and conditions of employment of home workers and
shall have the jurisdiction in cases involving violation of this Rule.
Non-compliance with the order issued by the Regional Director can
be the subject of prosecution in accordance with the penal
provisions of the LC.
Jurisdiction
Regional Director
-
Complaints for violations of labor standards and the terms and

conditions of employment involving money claims of homeworkers
in an amount of not more than P5,000 per homeworker.
He shall have the power to order and administer, after due notice
and hearing, compliance with the provisions of this Rule.
Regional Arbitration Branch of NLRC

Money claims due a homeworker exceed P5,000
IX. Medical, Dental and Occupational Safety

Book IV, Rule I, Sec. 1
This Rule shall apply to all employers, whether operating for profit
or not, including the Government and any of its political
subdivisions and GOCCs, which employs in any workplace one or
more workers.
Art. 163
Art. 162
Every employer shall keep in his establishment such first-aid

medicines and equipment as the nature and conditions of work may
require, in accordance with such regulations as the DOLE shall
prescribe.
The employer shall take steps for the training of a sufficient
number of employees in first-aid treatment.
_______________________________________________________________
It shall be the duty of every employer to furnish his employees in

any locality with free medical & dental attendance and facilities
consisting of:
o
50 200 employees
Services of a full-time registered nurse
A graduate first-aider, where no registered

nurse is available, if workplace is not
hazardous
o
201 300 employees
Services of a full-time registered nurse
A part-time physician
A part-time dentist
An emergency clinic
o
301 employees and above
Services of a full-time physician
Full-time dentist
Full-time registered nurse
A dental clinic and an infirmary or emergency

hospital with one bed capacity for every 100
employees
In cases of hazardous workplaces:
o
Part-time physician/dentist must stay in the premises
of the establishment for at least 2 hours
o
Full-time physician/dentist must stay in the premises of
the establishment for at least 8 hours
34
58
Where the undertaking is non-hazardous in nature:

o
The physician and dentist may be engaged on retainer
basis, subject to such regulations as the SOLE may
prescribe to insure immediate availability of medical
and dental treatment and attendance in case of
emergency.
Art. 164
The requirement 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 employers establishment and he makes
arrangement for the reservation therein of the necessary beds and
dental facilities for the use of his employees.
Art. 167
It shall be the duty of any employer to provide all the necessary

assistance to ensure the adequate and immediate medical and
dental attendance and treatment to an injured or sick employee in
case of emergency.
Book IV, Rule II, Secs. 5(a)(d)
Every employer shall take steps to train a sufficient number of his

supervisors or technical personnel in occupational safety and
health.
An employer may observe the following guidelines in the training of
his personnel
o
In every non-hazardous establishment or workplace
having from 50 - 400 workers each shift, at least 1 of
the supervisors or technical personnel shall be trained in
occupational health and safety and shall be assigned as
part-time safety man. Such safety man shall be the
secretary of the safety committee.
o
In every hazardous establishment or workplace having
over 200 workers each shift, at least 2 of its supervisors
or technical personnel shall be trained and one of them
shall be appointed full-time safety man and secretary
of the safety committee therein.
_______________________________________________________________
Book IV, Rule II, Sec. 5 (e)
The employment of a full-time safety man not be required where

the employer enters into a written contract with a qualified
consulting organization which shall develop and carry out his
safety and health activities
o
Provided, that the consultant shall conduct plant visits
at least 4 hours a week and is subject to call anytime to
conduct accident investigations and is available during
scheduled inspections or surveys by the SOL or his
authorized representatives.
Arts. 168, 169, 170. 171
Enforcement
The SOL shall, by appropriate orders, set and enforce mandatory
occupational safety and health standards to eliminate or reduce
occupational safety and health hazards in all workplaces and
institute new, and update existing, programs to ensure safe and
healthful working conditions in all places of employment.
The SOL 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, equipment and other safety devices and the
approval of plans for such materials, equipment and devices.
o
The fee so collected shall be deposited in the national
treasury to the credit of the occupational safety and
health fund and shall be expended exclusively for the
administration and enforcement of safety and other
labor laws administered by the DOLE.
DOLE Responsibilities:
To conduct continuing studies and research to develop innovative
methods, techniques and approaches for dealing with occupational
safety and health problems
To discover latent diseases by establishing causal connections
between diseases and work in environmental conditions
To develop medical criteria which will assure insofar as practicable
that no employee will suffer impairment or diminution in health,
functional capacity, or life expectancy as a result of his work and
working conditions.
Shall develop and implement training programs to increase the
number and competence of personnel in the field of occupational
safety and industrial health.
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
o
However, chartered cities may be allowed to conduct
industrial safety inspections of establishments within
their respective jurisdictions where they have adequate
facilities and competent personnel for the purpose as
determined by the DOLE and subject to national
standards established by the latter.
35
58
SUMMARY OF COVERAGE AND EXCEPTIONS TO BENEFITS

SUMMARY
HOURS OF WORK
8 hours of work
OT PAY
See table of summaries for

additional compensation
1 day rest after 6
consecutive days of work
10PM 6am
10% Night Differential Pay
WEEKLY REST
PERIODS
NIGHT WORK
COVERAGE
1. Applies to all employees, whether for profit or
not
2. Employees of GOCCs under Corp Code
EXCEPTIONS
1.
2.
3.
4.
5.
6.
7.
8.
Field Personnel
Family dependants
Domestic Workers
Personal Assistants
Workers paid by results/Piece-rate workers
Same
Same
Same, WON for profit/not plus:

Public utilities operated by private persons
Same
Same
1.
2.
3.
4.
5.
6.
7.
8.
Field Personnel
a. Paid by results
b. Paid on commission basis
Domestic Workers
Personal Assistants
Family dependants
Workers paid by results/Piece-rate workers
Additions:
9. Establishment with 5 or less employees
10. Those in agriculture, stock raising, fishing, maritime
transport and inland navigation, during a period of not
less than 7 consecutive hours
HOLIDAYS
Same
Same plus:
Establishment with 9 or less employees
Same plus:
Those with vacation leave with pay of at least 5 days
Establishment with 9 or less employees
Depends on employer
SERVICE
INCENTIVE LEAVE
5 days of leave with pay

(only for private persons)
Same, who has rendered at least 1 year of service
VACATION / SICK
LEAVE
PATERNITY LEAVE
Depends on employer
Depends on employer
7 days leave with pay, for 1st

4 deliveries
60 days natural born
78 days caesarean section
Married Male employees, cohabiting with their

legitimate spouse, either in public/private sector
A female member who has paid at least 3 monthly
contributions in the 12-month period immediately
preceding the semester of her childbirth or
miscarriage
Qualified Solo Parent, with 1 year of service
None
A woman who suffers physical, sexual, psychological

and economic abuse
None
Woman having rendered aggregate employment of at

least 6 months for the last 12 months
Must be following a surgery caused by gynaecological
disorders
All employees in the private sector
None
MATERNAL LEAVE
PARENTAL LEAVE
VICTIMS LEAVE
SPECIAL LEAVE
BENEFITS FOR
WOMEN
MINIMUM WAGE
Flexi Work Sched, 7 days of

leave with pay
10 days leave with pay
during the pendency of the
case + medical attendance
2 months leave with pay
As set by the NLRC
13TH MONTH PAY
1/12 of annual pay
SERVICE CHARGE
85% - 15% Sharing
RETIREMENT PAY
22.5 days worth of salary for

every year of service
1. All rank and file employees, who have worked at

least 1 month
2. DWs
3. Piece Rate workers
4. Private subsidiaries of the Government
Collectors of service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail
lounge, massage clinics, bars, casinos and gambling
houses, and similar enterprises
Any employee of the private sector who has served at
least 5 years, upon reaching retirement age
_______________________________________________________________
None
1. DW + Family drivers
2. Personal services of another
3. Workers of duly registered BMBEs
4. Homeworkers engaged in needlework
5. Farm tenancy or leaseholds
The following must apply for exemptions
6. Establishments with 10 or less employees
7. Distressed establishments
8. Establishments with less than P3M in assets
9. Establishments affected by natural calamities
10. Micro and small indigenous exporters
1. Government and GOCCs
2. Employers already paying 13th month pay
3. Employers of those who are paid on purely commission,
boundary, or task basis and those who are paid a fixed
amount
Establishments with 10 or less employees
36
58
I. General Provisions
Art. 284
Shall apply to all establishments/undertakings, for profit or not

Including educational, medical, charitable and religious institutions
and organizations
For regular employment: The government and its political
subdivisions including GOCCs
Note (from Prof. Daway):

Regardless of classification, employees are entitled to security of
tenure
o
Its just that this right is limited by the type of
employment
The language of the law evidently manifests the intent to

safeguard the tenurial interest of the worker who may be denied
the rights and benefits due a regular employee by virtue of lopsided
agreements with the economically powerful employer who can
maneuver to keep an employee on a casual status for as long as
convenient.32
According to Prof. Daway, the employers designation or

determination of the employment type on the contract is
immaterial. What would govern is the nature of the employment
according to the labor code.
Where the employment of project employees is extended long after

the supposed project has been finished, the employees are
removed from the scope of project employees and considered
regular employees.34
The fact that the employment has been a contract-to-contract

basis cannot alter the character of employment, because
contracts cannot override the mandate of law. Hence, by operation
of law, an employee, who has been repeatedly re-hired on a
contractual basis has become a regular employee.35
Art. 286, 287
1.
2.
3.
4.
5.
6.
Regular employment
Project employment
Seasonal employment
Casual employment
Fixed-Term employment
Probationary employment
II. Regular Employees

Art. 286 (1st, 2nd par.), 287 (last sentence), 75(d); Book VI, Rule I, Secs. 5 (a), b, 6
Employee has been engaged to perform activities which are usually

necessary/desirable in the usual business/trade of the employer
Art. 286 merely distinguishes between two kinds of employees, i.e.,

regular employees and casual employees, for purposes of
determining the right of an employee to certain benefits, to join or
form a union, or to security of tenure. It doesnt apply where the
existence of an employment relationship is in dispute.33
III. Project Employees

Art. 286 (1st par)
Test: WON the employee was assigned to carry out a specific

project or undertaking, the duration and scope of which were
specified at the time the employees were engaged in that project.36
There are two kinds of projects which a business/industry may

undertake37:
o
A job or undertaking that is within the regular or usual
business of the employer company, but which is distinct
and separate, and identifiable as such, from the other
undertakings of the company
o
A particular job or undertaking that is not within the
regular business of the corporation. Such a job or
undertaking must also be identifiably separate and
distinct from the ordinary or regular business
operations of the employer.
Romares v NLRC (1998)

Atok Big Wedge v. Gison (2011)
34 Tomas Lao v. NLRC (1998)
_______________________________________________________________
DO No. 19 of 1993
Indicators of Project Employment

(a) The duration of the specific/identified undertaking for which the
worker is engaged is reasonably determinable.
(b) Such duration, as well as the specific work/service to be
performed, is defined in an employment agreement and is made
clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection
with the particular project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is
free to offer his services to any other employer.
(e) The termination of his employment in the particular
project/undertaking is reported to the Department of Labor and
Employment (DOLE) Regional Office having jurisdiction over the
workplace within 30 days following the date of his separation from
work, using the prescribed form on employees'
terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to
pay completion bonus to the project employee as practiced by
most construction companies.
32
35
33
36
37
Beta Electric v NLRC (1990)

Hanjin v Ibaez (2008)
Villa v. NLRC (1998)
37
58
Conditions of Employment
Project employees who achieve a regular status shall enjoy security
of tenure.
Project employees entitled to separation pay:
o
Those whose aggregate period of continuous
employment in a construction company is at least 1 year
shall be considered as regular employees
This rule only applies if there is no day

certain agreed upon the parties for the
termination of the relationship
Day certain May be a specific date or a

day that will necessarily come, but may not
be known exactly when
o
Those who are terminated without just/authorized
cause and there is no showing that his services are
unsatisfactory
Entitled to reinstatement + backwages
If reinstatement is not possible, then he is

entitled to his salaries for the unexpired
portion of the agreement
Project employees not entitled to separation pay:
o
Those terminated because of completion of the project
o
Those terminated because they have no more work to
do or their services are no longer needed
Pro-rata bonus, if any
o
industry practice = month for every 12 months of
service
Notes:
-
IV. Casual Employees
Art. 286 (2nd par), Book VI, Rule I, Secs. 5 (b)
A casual employee allowed to work for more than 1 year ipso facto
considered as a regular employee
This proviso was not designed to stifle small-scale businesses nor
to oppress agricultural land owners to further the interests of
laborers, whether agricultural or industrial. What it seeks to
eliminate are abuses of employers against their employees and not,
as petitioners would have us believe, to prevent small-scale
businesses from engaging in legitimate methods to realize profit.
Hence, the proviso is applicable only to the employees who are
deemed "casuals" but not to the "project" employees nor the
regular employees treated in paragraph one of Art. 280. 42
38
42
39
43
_______________________________________________________________
Even though Policy Instruction No. 20/D.O. No. 19 regarding work

pools specifically applies to construction businesses, there seems
to be no impediment to applying the underlying principles to
industries other than the construction industry. Neither may it be
argued that a substantial distinction exists between the projects
undertaken in the construction industry and the motion picture
industry. On the contrary, the raison d' etre of both industries
concern projects with a foreseeable suspension of work.41
V. Fixed Term Employment
Employment to perform a job, work or service which is merely

incidental to the business of the employer.
Such job, work, or service is for a definite period made known to the
employee at the time of engagement.
What determines regularity or casualness is not the employment
contract, written or otherwise, but the nature of the job.
Hanjin v Ibaez (2008)

Tomas Lao v. NLRC (1998)
40 Maraguinot v NLRC (1998)
41
supra
If an employee is only employed for a particular phase, he is

considered to have completed a project upon completion of such
phase
The length of service or the re-hiring of construction workers on a
project-to-project basis does not confer upon them regular
employment status, since their re-hiring is only a natural
consequence of the fact that experienced construction workers are
preferred38
A work pool may exist although the workers in the pool do not
receive salaries and are free to seek other employment during
temporary breaks in the business, provided that the worker shall be
available when called to report for a project. Although primarily
applicable to regular seasonal workers, this set-up can likewise be
applied to project workers insofar as the effect of temporary
cessation of work is concerned.
o
This is beneficial to both the employer and employee for
it prevents the unjust situation of coddling labor at the
expense of capital and at the same time enables the
workers to attain the status of regular employees.39
o
In order for a project employees or work pool employees
to be considered as regular employees, the following
conditions must concur40:
1.
There is a continuous rehiring of project
employees even after cessation of a project
2.
The tasks performed by the project
employee are vital, necessary and
indispensable to the usual business/trade of
the employer.
44
Jurisprudence had laid two conditions for the validity of a fixedcontract agreement between the employer and employee43:
o
The fixed 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 employee and absent any other
circumstances vitiating his consent; OR
o
It satisfactorily appears that the ER and the EE dealt
with each other on more or less equal terms with no
moral dominance exercised by either party.
Logically, the decisive determinant in term employment should not
be the activities that the employee is called upon to perform, but
the day certain agreed upon by the parties for the commencement
and termination of their employment relationship
Seamen are considered contract workers, employed for a fixed
period only, as per accepted maritime industry practice. Seafarers
cannot stay for a long and indefinite period of time at sea, because
it has been shown that limited access to shore affects them
adversely. The diversity in nationality, culture, and language among
the crew also necessitates that the period of employment be
limited.44
Mercado v NLRC (1991)

Lynvil v Ariola (2012)
De la Cruz v Maersk (2008)
38
58
VI. Seasonal Employees

-
There is seasonal employment when:

o
The nature of the work to be performed is seasonal in
nature and
o
The employment is for the duration of the said season
"The nature of their relationship . . . is such that during off season
they are temporarily laid off but during summer season they are
re-employed, or when their services may be needed. They are not
strictly speaking separated from the service but are merely
considered as on leave of absence without pay until they are reemployed."45
o
Also, these workers are considered "in regular
employment" in cases involving the determination of an
employer-employee relationship and security of tenure.
In all cases involving employees engaged on probationary basis, the

employer shall make known to its employees the standards under
which they will qualify as regular employees at the time of their
engagement.
o
Where no standards are made known to an employee at
the time, he shall be deemed a regular employee,
UNLESS the job is self-descriptive, like maid, cook,
driver, or messenger.
A probationary period of not more than 3 years in the case of the

school teaching personnel and not more than 6 months for nonteaching personnel shall be required for employment in all private
schools.
o
A school personnel who has successfully undergone the
probationary period herein specified and who is fully
qualified under the existing rules and standards of the
school shall be considered permanent.46
As a general rule, all private schools shall employ full-time school
personnel.
An applicant shall be eligible for a full-time employment in a
private school whenever he:
o
Has the minimum qualifications prescribed in this
Manual
o
Has no other remunerative employment requiring
regular working hours elsewhere, and
o
Whose services to the extent of at least 8 hours during
each working day are available during the entire time
the school operates.47
VII. Probationary Employees

Art. 287. 61 (2nd sentence), 75 (d); Book VI, Rule I, Sec. 6
There is probationary employment when the employee upon his

engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment
based on reasonable standards made known to him at the time of
engagement
G.R.: The probationary period must not exceed 6 months

E: If there is an apprenticeship or learnership agreement stipulating a
longer period
1.
2.
3.
45
46
When they are allowed to work longer than their probationary

period
When a learner has worked for 2 mos. and was subsequently
terminated without fault
When the contract is devoid of any reasonable standards for
qualifying as a regular employment (automatic regular at the time
of engagement)
When an employee is allowed to work after a probationary period,

he is deemed to be a regular employee.
In Cebu Stevedoring v Regional Director (1988), the ex-probationary
employees were considered to be absorbed regular employees
when they were re-hired into their old positions. The court
considered their experience and training in their defunct company
in justifying their qualification to be regular employees.
The parties are free to renew the contract or not; or for the
employer to extend to such employee a regular or permanent
employment.
If the employee is not given a permanent or regular employment
contract on account of his unsatisfactory work performance, it
cannot be said that he was illegally dismissed. In such case, the
contract merely expired.
Phil. Tobacco v NLRC (1998)

Sec. 63, Manual of Regulations for Private Schools (2010)
_______________________________________________________________
47
Sec. 66, Manual of Regulations for Private Schools (2010)
39
58
SUMMARY OF EMPLOYMENT CLASSIFICATIONS

NATURE OF
WORK
WHEN
CONSIDERED
REGULAR
NATURE OF
WORK
WHEN
CONSIDERED
REGULAR
REGULAR EMPLOYMENT
Engaged in activities which are usually
necessary/desirable in the usual
business/trade of the employer
PROJECT EMPLOYMENT
1. Employee was assigned to carry out a
specific project or undertaking
2. The duration and scope were specified at
the time of engagement
SEASONAL EMPLOYMENT
1. The nature of the work to be performed is
seasonal in nature
2. The employment is for the duration of the
said season
N/A
Those whose aggregate period of continuous

employment in a construction company is at
least 1 year
These workers are considered "in regular

employment" in cases involving the
determination of an ER-EE relationship and
security of tenure.
CASUAL EMPLOYMENT
1. Employment to perform a job, work
or service which is merely incidental
to the business of the employer.
2. Such job, work, or service is for a
definite period made known to the
employee at the time of
engagement.
FIXED-TERM EMPLOYMENT
- The fixed period of employment was
knowingly and voluntarily agreed upon by
the parties without any force, duress, or
improper pressure; OR
- It satisfactorily appears that the ER and the
EE dealt with each other on more or less
equal terms with no moral dominance
exercised by either party.
PROBATIONARY EMPLOYMENT
1. Employee is made to undergo a trial period
during which the employer determines his fitness
to qualify for regular employment
2. This is based on reasonable standards made
known to him at the time of engagement
A casual employee allowed to work for

more than 1 year ipso facto considered
as a regular employee
None. Perhaps if absorbed
1. When allowed to work longer than their probi

period
2. When a learner has worked for 2 mos. and was
subsequently terminated without fault
3. When the contract is devoid of any reasonable
standards for qualifying as a regular
employment (automatic regular at the time of
engagement)
_______________________________________________________________
40
58
Any decision taken by the employer shall be without prejudice to

the right of the worker to contest the validity or legality of his
dismissal by filing a complaint with the regional branch of the NLRC
While it is true that compassion and human consideration should

guide the disposition of cases involving termination of employment
since it affects one's source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do not include
compelling an employer to retain the services of an employee who
has been shown to be a gross liability to the employer. The law in
protecting the rights of the employees authorizes neither
oppression nor self-destruction of the employer. It should be made
clear that when the law tilts the scale of justice in favor of labor, it
is but a recognition of the inherent economic inequality between
labor and management. The intent is to balance the scale of justice;
to put the two parties on relatively equal positions. There may be
cases where the circumstances warrant favoring labor over the
interests of management but never should the scale be so tilted if
the result is an injustice to the employer. Justitia nemini neganda
est (Justice is to be denied to none).51
I. General Concepts
Art. 284; Book VI, Rule 1, Sec. 1
The provisions of this Title shall apply to all establishments or

undertakings, whether for profit or not.
Art. 285, 283 (b)
In cases of regular employment, the employer shall not terminate

the services of an employee except for a just or authorized cause
Termination of employment is not anymore a mere cessation or
severance of contractual relationship but an economic
phenomenon affecting members of the family.
o
For most families the main source of their livelihood,
employment has now levelled off with property rights
which no one may be deprived of without due process of
law.48
Art. 285
As long as no arbitrary or malicious action on the part of an

employer is shown, the wisdom of a business judgment to
implement a cost saving device is beyond the courts
determination.49
The free will of management to conduct its own business affairs to
achieve its purpose cannot be denied.50
G.R.: Just/Authorized Cause + Due Process

Substantive: The just and authorized causes are laid out in the Labor
Code
Procedural:
In dismissing an employee, the employer has the burden
of proving that the dismissed worker has been served
the proper notices:
For Dismissals through Just Causes:
First Notice:
o
To inform the employee of the particular acts or
omissions for which the employer seeks his dismissal
o
To give to said employee reasonable opportunity within
which to explain his side
o
To inform him that an investigation will be conducted on
the charges specified in such notice which, if proven, will
result in the employees dismissal
Second Notice:
o
To inform the employee of his employer's decision to
terminate him because grounds have been established to
justify such termination.
For Dismissals through Authorized Causes:
Notice to the employee and to the DOLE RD 30 days before the
effectivity of the termination
-
Alhambra v NLRC (1994)

Pantoja v SCA Hygiene (2010)
NAMADA-NFL v Davao Sugar Central (2006)
51 Mansion Printing v Bitara (2012)
52 Macasero v. Southern Industrial Gases Philippines (2009)
53 Bustamante v NLRC (1996)
_______________________________________________________________
It is incumbent upon the employee to prove first that there was an

employer-employee relationship and that this was severed without
any just/authorized cause55
The burden of proving that the termination was for a valid or

authorized cause shall rest on the employer
The employer must rely on the strength of its own evidence, and
not the weakness of that adduced by the employee, pursuant to
the principle that the scales of justice should be tilted in the
workers favor, should there be doubt in the evidence presented by
both parties.
The quantum of proof that the employer must meet is substantial
evidence, which is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other
equally reasonable minds might conceivably opine otherwise.56
The employer shall afford the employee ample opportunity to be

heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules
and regulations promulgated pursuant to guidelines set by the
DOLE.
An employee who is unjustly dismissed from work shall be entitled

to two reliefs: backwages and reinstatement. 52
o
The two reliefs provided are separate and distinct.
o
Reinstatement is without loss of seniority rights + back
wages
o
Separation pay is granted where reinstatement is no
longer advisable because of strained relations between
the employee and the employer.
Full Backwages represent compensation that should have been
earned but were not collected because of the unjust dismissal.
o
This is inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the time
his compensation was withheld from him up to the time
of his actual reinstatement.53
o
The basis for computing backwages is the actual period
when the employee was unlawfully prevented from
working while that for separation pay is usually the
length of the employees service.54
Corresponding penalties, when prescribed, must be commensurate

with the act, conduct or omission imputed to the employee and
must be imposed in connection with the disciplinary authority of
the employer.57
Special circumstances should be properly taken into account in the
imposition of the appropriate penalty.58
Golden Ace Builders v Talde (2010)

Bitoy Javier v Fly Ace Corp (2012)
Functional Inc v. Granfil (2011)
57 Negros Slashers v Teng (2012)
58 Moreno v San Sebastian College-Recoletos (2008)
48
54
49
55
50
56
41
58
II. Termination of Employment by Employee

1.
2.
3.
4.
Resignation
Performance of Military/Civic Duty
Bona fide suspension of operations by employer
Forced Resignation
Resignation is the voluntary act of an employee who finds herself

in a situation where she believes that personal reasons cannot be
sacrificed in favor of the exigency of the service and that she has
no other choice but to disassociate herself from employment.59
It is a formal pronouncement or relinquishment of an office, with
the intention of relinquishing the office accompanied by the act
of relinquishment.
o
As the intent to relinquish must concur with the overt
act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in
determining whether he or she, in fact, intended to sever
his or her employment.60
Notes:
-
291 (a); Consti., Art. III, Sec. 18(2)
Art. 292, Book VI, Rule I, Sec. 12
An employee who voluntarily resigns from employment is not

entitled to separation pay, except when it is stipulated in the
employment contract or collective bargaining agreement (CBA), or
it is sanctioned by established employer practice or policy.61
Expressions of gratitude cannot possibly come from an employee
who is just forced to resign as they belie allegations of coercion.62
The resignation letter must be in a clear, concise and categorical
language. Its content must be an unequivocal intent to resign.
Art. 291 (b); Book VI, Rule I, Sec. 11
Need to give a written notification at least 1 month in advance

o
Absence of such notice = ER may hold EE liable for
damages
Rationale: Constitutional right against involuntary servitude
No need to give notice to employer if there is:

1.
Serious insult by the employer or his representative on the
honor and person of the employee;
2.
Inhuman and unbearable treatment accorded to the
employee by the employer or his representative;
3.
Commission of a crime or offense by the employer or his
representative against the person of the employee or any of
the immediate members of his family;
4. Other causes analogous to any of the foregoing.
These are not grounds for termination of employment, but rather

for the suspension of such
o
Except: If the suspension of operations was more than 6
months (may be a ground for illegal dismissal, if proven
that this was used to circumvent the rights of the
employee)
Employer is to reinstate employee if the latter indicates his desire
to resume work within 1 month from his relief from service or
resumption of operations
Payment of wages and grant of benefits shall be subject to special
laws, CBA and voluntary employer practice/policy
Forced resignation is considered as an illegal dismissal, as it is done

with the intention to circumvent labor laws by making the
resignation to look like a voluntary act of the employee, thus
exonerating the employer from liability
Mere allegations of threat or force do not constitute evidence to
support a finding of forced resignation.
In order for intimidation to vitiate consent, the following requisites
must concur: 63
1.
The intimidation caused the consent to be given;
2.
The threatened act be unjust or unlawful;
3.
The threat be real or serious, there being evident
disproportion between the evil and the resistance which all
men can offer, leading to the choice of doing the act which is
forced on the person to do as the lesser evil;
4. It produces a well-grounded fear from the fact that the
person from whom it comes has the necessary means or
ability to inflict the threatened injury to his person or
property.
III. Termination of Employment by Employer

Art. 288, 285, 283 (b)
Consti., Art. XIII, Secs. 3 (3rd and 4th pars.)
As a measure of self-protection against acts inimical to its

interest, a company has the right to dismiss its erring employees.
An employer cannot be compelled to continue employing an
employee guilty of acts inimical to the employers interest,
justifying loss of confidence in him.64
-
The employers power to dismiss must be tempered with the

employees right to security of tenure. Employers must be
reminded to exercise the power to dismiss with great caution, for
the State will not hesitate to come to the succor of workers
wrongly dismissed by capricious employers.65
Employment cannot be terminated by an employer without any
just or authorized cause. The Constitution guarantees security of
tenure for workers and because of this, an employee may only be
Globe Teleco v Crisologo (2007)

Auza v MOL Phil (2012)
J Marketing Corp v Taran (2009)
62 Globe Teleco v Crisologo (2007)
63 Mandapat v Add Force (2010)
_______________________________________________________________
terminated for just or authorized causes that must comply with the
due process requirements mandated by law.66
The Court acknowledges and recognizes the right of an employer
to transfer employees in the interest of the service. This exercise is
a management prerogative which is a lawful right of an employer.67
o
Hence, employers are barred from arbitrarily removing
their workers whenever and however they want. The law
sets the valid grounds for termination as well as the
proper procedure to take when terminating the services
of an employee.
The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion, bearing in mind the
basic elements of justice and fair play. Having the right should not
be confused with the manner in which that right is exercised. Thus,
it cannot be used as a subterfuge by the employer to rid himself
of an undesirable worker.
o
In particular, the employer must be able to show that
the transfer is not unreasonable, inconvenient or
prejudicial to the employee; nor does it involve a
demotion in rank or a diminution of his salaries,
privileges and other benefits.
o
It is also the burden of the employer to show that the
employee was duly notified of the transfer. 68
Yabut v Meco (2012)

Bascon v. Court of Appeals
Alert v. Saidali (2011)
67
supra
68 Blue Dairy Corp v. NLRC, as cited in Alert v. Saidali
59
64
60
65
61
66
42
58
2. Gross and Habitual Neglect of Duties

Art. 288 (b)
Art. 288
An employee may be validly terminated on any of the following just

causes:
1.
Serious Misconduct or Insubordination
2.
Gross and habitual neglect of duties
3.
Loss of trust and confidence
4. Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representatives; and
5.
Other causes analogous to the foregoing
1. Serious Misconduct or Wilful Disobedience

Art. 288 (a)
Serious Misconduct
It is improper or wrong conduct
It is the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, wilful in character and
implies wrongful intent and not mere error in judgment
For serious misconduct to justify dismissal, the following requisites
must be present:
1.
It must be serious;
o
To be serious it should be of such grave and aggravated
character and not merely trivial or unimportant
2.
It must relate to the performance of the employee's duties;
3.
It must show that the employee has become unfit to continue
working for the employer.
A series of irregularities may constitute serious misconduct, which
could be a just cause for dismissal
Use of accusatory language / gross discourtesy
Accusatory and inflammatory language used by an employee to the
employer or superior can be a ground for dismissal or
termination.69
Wilful Disobedience
It is the employers prerogative to prescribe reasonable rules and
regulations necessary or proper for the conduct of its business, to
provide certain disciplinary measures to implement said rules and
to assure that the same be complied with
The disobedience to be considered wilful must be resorted to
without regard to its consequences
Elements (Gross negligence): 73

1.
Want of even slight care
2.
Acting/omitting to act in a situation where theres duty to act
3.
Wilful and intentional [as opposed to inadvertent]
4. Conscious indifference to consequences affecting other people
Elements (Habitual Neglect):74
1.
Failure to perform duties
2.
For a period of time
3.
Failure done repeatedly
Respondeat Superior
-
3. Loss of Trust and Confidence

Art. 288 (c)
Fraud must be committed against the employer or representative

and in connection with the employees work
The betrayal of this trust is the essence of the offense for which an
employee is penalized.76
Requisites of a valid dismissal under Loss of Trust and Confidence77

1.
The employee concerned must be one holding a position of trust
and confidence.
2.
There must be an act that would justify the loss of trust and
confidence
3.
Such act must be based on a wilful breach of trust and founded on
clearly established facts
4. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary
Guidelines for the Application of the Doctrine78
The employee involved holds a position of trust and confidence
Loss of confidence should not be simulated
It should not be used as a subterfuge for causes which are
improper, illegal or unjustified
It may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary
It must be genuine, not a mere afterthought to justify earlier action
taken in bad faith
Notes:
Management has the right to transfer or reassign an employee
o
Disobedience of valid transfer order may justify
dismissal; disobedience of an invalid transfer order does
not.
o
Unless it is vitiated by improper motive and is merely a
disguised attempt to remove or punish the employee
sought to be transferred.
Jumuad v Hi-Flyer Food (2011)

Caingat v NLRC (2005)
Prudential Guarantee Labor Union v NLRC (2012)
78 Villanueva v NLRC (2012)
69
75
70
76
71
77
_______________________________________________________________
Acts by a subordinate may be attributed to the manager75
Gross v. Simple Negligence

See elements above
Requisites of Wilful Disobedience:

1.
The employees assailed conduct must have been wilful or
intentional
2.
The wilfulness being characterized by a wrongful and perverse
attitude
3.
The order violated must have been reasonable, lawful, made known
to the employee
4. Must pertain to the duties which he had been engaged to discharge
Nissan v. Agenlo (2011)

National Book Store v CA (2002)
PNB v Padao (2011)
72
Supra.
73 Meralco v Beltran (2012)
74
Supra.
In order to constitute a just cause for the employees dismissal, the

neglect of duties must not only be gross but also habitual. Thus,
the single or isolated act of negligence does not constitute a just
cause for the dismissal of the employee.70
Gross negligence has been defined as the "want or absence of or
failure to exercise slight care or due diligence, or the entire absence
of care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them."71
o
Ex. Tardiness and absenteeism
Habitual neglect implies repeated failure to perform ones duties
for a period of time, depending on the circumstances.72
Fraud and wilful neglect imply bad faith of employee in failing to
perform his job, to the detriment of the employer and its business.
43
58
Position of Trust and Confidence

Employee concerned holds a position where greater trust is placed
by management and from whom greater fidelity to duty is
correspondingly expected.
Loss of confidence should ideally apply only to cases involving
employees occupying positions of trust and confidence or to those
situations where the employee is routinely charged with the care
and custody of the employer's money or property.
o
To the first class belong managerial employees, i.e.,
those vested with the powers or prerogatives to lay
down management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial
actions;
o
To the second class belong cashiers, auditors, property
custodians, etc., or those who, in the normal and routine
exercise of their functions, regularly handle significant
amounts of money or property.79
Management Employees: Reason for the Rule
The mere existence of a basis for the loss of trust and confidence
justifies the dismissal of the managerial employee because when an
employee accepts a promotion to a managerial position or to an
office requiring full trust and confidence, such employee gives up
some of the rigid guaranties available to ordinary workers.
o
However, the right of the management to dismiss must
be balanced against the managerial employees right to
security of tenure which is not one of the guaranties he
gives up.
o
Although the standards for their dismissal are less
stringent, the loss of trust and confidence must be
substantial and founded on clearly established facts
sufficient to warrant the managerial employees
separation from the company. Substantial evidence is of
critical importance and the burden rests on the
employer to prove it.80
5. Analogous Causes
Art. 288 (e)
1.
2.
3.
4.
5.
6.
7.
8.
Elements of Abandonment:87
o
The failure to report for work or absence without valid
or justifiable reason
o
A clear intention to sever the employer-employee
relationship, manifested by some over acts.
Wilful Breach:
o
It is done intentionally, knowingly and purposely,
without justifiable excuse.
o
It must rest on substantial grounds and not on the
employers arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally remain at the
mercy of the employer.
Ordinary Breach:
o
An act done carelessly, thoughtlessly, heedlessly or
inadvertently.
Breach of Company Rules

Employees cannot take company rules for granted. Indeed, an
employer may discharge an employee for refusal to obey a
reasonable company rule. As a rule, although this Court leans over
backwards to help workers and employees continue with their
employment, acts of dishonesty in the handling of company
property are a different matter.81
4. Commission of a Crime
Art. 288 (d)
Crime/Offense committed must be against the person of his

employer or any immediate member of his family or his duly
authorized representatives
Esguerra v. Valle Verde (2012)

Manese v. Jollibee Foods Corp. (2013)
Paulino v NLRC and PLDT (2012)
82 Lim v. NLRC (1996)
83
Supra.
84 Cathedral School of Technology v NLRC (1992)
_______________________________________________________________
Abandonment
Courtesy Resignation
Change of Ownership
Habitual Absenteeism / Tardiness
Past Offenses
Habitual Infractions
Immorality
Conviction/Commission of a crime
Abandonment
For abandonment to exist it is essential that the employee must
have failed to report for work or must have been absent without
justifiable reason and that there has been a clear intention to sever
the ER-EE relationship manifested by overt acts.86
Distinction between Ordinary and Wilful breach

-
One is analogous to another if it is susceptible of comparison with

the latter either in general or in some specific detail; or has a close
relationship with the latter.82
"Gross inefficiency" is closely related to "gross neglect," for both
involve specific acts of omission on the part of the employee
resulting in damage to the employer or to his business.83
An employees unreasonable behavior and unpleasant
deportment in dealing with people she closely works with in the
course of her employment, is analogous to the other just causes
enumerated under the Labor Code.84
A cause analogous to serious misconduct is a voluntary and/or
wilful act or omission attesting to an employees moral
depravity. Theft committed by an employee against a person other
than his employer, if proven by substantial evidence, is a cause
analogous to serious misconduct.85
Notes:
-
The second element is the more determinative factor

Mere absence is not sufficient.
It is the employer who has the burden of proof to show a deliberate
and unjustified refusal of the employee to resume his employment
without any intention of returning
The immediate filing of a complaint for illegal dismissal against the
employer with a prayer for reinstatement shows that the employee
was not abandoning his work
Courtesy Resignation
Resignation per se means voluntary relinquishment of a position or
office. Adding the word "courtesy" does not change the essence of
resignation.88
Change of Ownership
In the exercise of such management prerogative, the employer
may merge or consolidate its business with another, or sell or
dispose all or substantially all of its assets and properties which
may bring about the dismissal or termination of its employees in
the process.
The transferee is not liable for past unfair labor practices of the
previous owner, except, when the liability therefor is assumed by
the new employer under the contract of sale, or when liability
Cosmos Bottling v Fermin (2012)

E.G. & I. Construction v. Sato (2011)
Dimagan v Dacworks United (2011)
88 Batongbacal v. Associated Bank (1988)
79
85
80
86
81
87
44
58
arises because of the new owner's participation in thwarting or

defeating the rights of the employees.
Where such transfer of ownership is in good faith, the transferee
is under no legal duty to absorb the transferors employees as
there is no law compelling such absorption.
The most that the transferee may do, for reasons of public policy
and social justice, is to give preference to the qualified separated
employees in the filling of vacancies in the facilities of the
purchaser.89
Habitual Absenteeism / Tardiness

Habitual tardiness is a form of neglect of duty.
Lack of initiative, diligence, and discipline to come to work on time
everyday exhibit the employees deportment towards work.
Habitual and excessive tardiness is inimical to the general
productivity and business of the employer. This is especially true
when the tardiness and/or absenteeism occurred frequently and
repeatedly within an extensive period of time.90
An employer has a right to transfer or assign its employees from

one office or area of operation to another in pursuit of its
legitimate business interest, provided there is no demotion in rank
or diminution of salary, benefits and other privileges; and the
transfer is not motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without sufficient
cause.98
Also, an employers decision to transfer an employee, if made in
good faith, is a valid exercise of a management prerogative,
although it may result in personal inconvenience or hardship to
the employee.99
In cases of a transfer of an employee, the rule is settled that the
employer is charged with the burden of proving that its conduct
and action are for valid and legitimate grounds such as genuine
business necessity and that the transfer is not unreasonable,
inconvenient or prejudicial to the employee. If the employer
cannot overcome this burden of proof, the employees transfer
shall be tantamount to unlawful constructive dismissal.100
Immorality
To constitute immorality, the circumstances of each particular case
must be holistically considered and evaluated in light of the
prevailing norms of conduct and applicable laws.93
Habitual Infractions
A series of irregularities when put together may constitute serious
misconduct, which under Art 282 of the Labor Code is a just cause
for dismissal.92
"Off-detailing" is not equivalent to dismissal, so long as such status

does not continue beyond a reasonable time and that it is only
when such a "floating status" lasts for more than 6 months that the
employee may be considered to have been constructively
dismissed.97
Past Offenses
Such previous offense may be used as valid justification for
dismissal from work only if the infractions are related to the
subsequent offense upon which the basis of termination is
decreed.91
Conviction/Commission of a Crime
The charge of drug abuse inside the companys premises and during
working hours against petitioner constitutes serious misconduct,
which is one of the just causes for termination.
Misconduct is improper or wrong conduct. It is the transgression of
some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent
and not merely an error in judgment.94
Book V, Rule XXIII, Secs. 8, 9 (Old Provisions, deleted by DO 40-03)
Constructive dismissal is quitting because continued employment is

rendered impossible, unreasonable or unlikely, or because of a
demotion in rank or a diminution of pay.
It exists when there is a clear act of discrimination, insensibility or
disdain by an employer which becomes unbearable for the
employee to continue his employment.95
-
Test: Whether a reasonable person in the employee's position would

have felt compelled to give up his position under the circumstances.96
It is an act amounting to dismissal but is made to appear as if it
were not. Constructive dismissal is therefore a dismissal in disguise.
The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the
coercive acts of the employer.
Manlimos v. NLRC (1995)

RBM Press v. Galit (2008)
91 Century Canning v. Ramil (2010)
92 Gustilo v Wyeth Phil (2004)
93 Santos v. NLRC (1998)
94 Eduardo Bughaw, Jr. v Treasure Island (2008)
95 Barroga v. Data Center (2011)
96 Tuason v Bank of Commerce (2012)
_______________________________________________________________
The indispensable element for there to be a promotion is that

there must be an advancement from one position to another or
an upward vertical movement of the employees rank or position.
Any increase in salary should only be considered incidental but
never determinative of whether or not a promotion is bestowed
upon an employee.
An employee cannot be promoted, even if merely as a result of a
transfer, without his consent. A transfer that results in promotion
or demotion, advancement or reduction or a transfer that aims to
lure the employee away from his permanent position cannot be
done without the employees consent.101
Preventive suspension is a disciplinary measure for the protection

of the companys property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. The
employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his
co-workers.
o
However, when it is determined that there is no
sufficient basis to justify an employees preventive
suspension, the latter is entitled to the payment of
salaries during the time of preventive suspension.102
Preventive suspension is justified where the EEs continued
employment poses a serious and imminent threat to the life or
property of the employer or of the EEs co-workers. Without this
kind of threat, preventive suspension is not proper.103
Nippon v. Leynes (2011)

Mojar v Agro Commercial (2012)
Ruiz v Wendel Osaka (2012)
100 Morales v. Harbour (2012)
101 PT&T v CA (2003)
102 Gatbonton v NLRC (2006)
103 Artificio v NLRC (2010)
89
97
90
98
99
45
58
Due Process Requirements:

To serve a written notice on the workers and to DOLE 1 month
before the intended date of termination
Art. 289; Book VI, Rule I, Sec. 9
The law acknowledges the right of every business entity to reduce

its work force if such measure is made necessary or compelled by
economic factors that would otherwise endanger its stability or
existence.104
1.
2.
3.
4.
5.
Installation of labor-saving devices

Retrenchment to prevent losses
Redundancy
Closure of business
Temporary Closure / Bona fide suspension of operations
Installation of Labor-Saving Devices

The installation of labor-saving devices contemplates the
installation of machinery to effect economy and efficiency in its
method of production.
o
But where the introduction of these methods is resorted
to not merely to effect greater efficiency in the
operations of the business but principally because of
serious business reverses and to avert further losses,
the device could then verily be considered one of
retrenchment. 105
-

Separation Pay
1 month pay OR 1 month pay per year of service (whichever is
higher)
A fraction of at least 6 months is considered as a year.
Retrenchment to Prevent Losses
Retrenchment is the termination of employment initiated by the
employer through no fault of and without prejudice to the
employees.
Is used interchangeably with the term "lay-off"
It is resorted to during periods of business recession, industrial
depression, seasonal fluctuations, or during lulls occasioned by lack
of orders, shortage of materials, conversion of the plant to a new
production program, or automation.106
Separation Pay
1 month pay OR month pay per year of service (whichever is
higher)
Notes on the elements:108
The law speaks of serious business losses or financial reverses.
Sliding incomes or decreasing gross revenues are not necessarily
losses, much less serious business losses, within the meaning of the
law.
Financial statements must be prepared and signed by
independent auditors; otherwise, they may be assailed as selfserving.
In selecting employees to be dismissed, fair and reasonable
criteria must be used, such as but not limited to: (a) less preferred
status (e.g., temporary employee), (b) efficiency and (c) seniority.
The employer must also exhaust all other means to avoid further
losses without retrenching its employees. Retrenchment is a means
of last resort; it is justified only when all other less drastic means
have been tried and found insufficient.
Redundancy
Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise.
A position is redundant where it is superfluous, and superfluity of a
position or positions may be the outcome of a number of factors,
such as overhiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.109
An employer is not precluded from adopting a new policy
conducive to a more economical and effective management even
if it is not experiencing economic reverses. Neither does the law
require that the employer should suffer financial losses before he
can terminate the services of the employee on the ground of
redundancy.110
It is however not enough for a company to merely declare that
positions have become redundant. It must produce adequate
proof of such redundancy to justify the dismissal of the affected
employees.111
Elements of a valid Redundancy:112
1.
Written notice served on employees and DOLE at least one month
prior to date of termination;
2.
Payment of separation pay equivalent to at least 1 month pay for
every year of service;
3.
Good faith in abolishing the redundant positions;
4. Fair and reasonable criteria in ascertaining what positions are to be
declared redundant and abolished.
Elements of a valid Retrenchment:107

1.
The retrenchment is reasonably necessary and likely to
prevent business losses which,
a.
if already incurred, are not merely de minimis, but
substantial, serious and real; or
b. only if expected, are reasonably imminent as
perceived objectively and in good faith by the
employer;
2.
The employer serves written notice both to the employee/s
concerned and the DOLE at least 1 month before the intended
date of retrenchment;
3.
The employer pays the retrenched employee separation pay
in an amount prescribed by the Code;
4. The employer exercises its prerogative to retrench in good
faith;
5.
The employer uses fair and reasonable criteria in
ascertaining who would be retrenched or retained.
Edge Apparel v. NLRC

Supra.
Lambert v Binamira (2010)
107 FASAP v PAL (2008)
108
Supra.

Separation Pay
-
Smart v Astorga (2008)

Supra.
Andrada v. NLRC
112 Morales v Metrobank (2012)
104
109
105
110
106
111
_______________________________________________________________
1 month pay OR 1 month pay per year of service (whichever is

higher)
46
58
Redundancy v. Retrenchment
REDUNDANCY
Reduction of employees due to an
excess of such, which is reasonably
demanded by the actual
requirements of the enterprise.
1 month pay / 1 month pay per year
of service
Temporary Closure / Bona Fide suspension of operations

RETRENCHMENT
Reduction of employees usually
due to poor financial returns, aimed
to cut down costs for operation
particularly on salaries and wages.
1 month pay / month pay per
year of service
Closure of Business
A closure or cessation of business is the complete or partial
cessation of the operations and/or shut-down of the
establishment of the employer. It is carried out to either stave off
the financial ruin or promote the business interest of the employer.
Unlike retrenchment, closure or cessation of business, as an
authorized cause of termination of employment, need not depend
for validity on evidence of actual or imminent reversal of the
employer's fortune.113
Requisites of a valid closure of business:114
1.
That the closure/cessation of business is bona fide, i.e., its purpose
is to advance the interest of the employer and not to defeat or
circumvent the rights of employees under the law or a valid
agreement;
2.
That written notice was served on the employees and the DOLE at
least 1 month before the intended date of closure or cessation of
business; and
3.
In case of closure/cessation of business not due to financial losses,
that the employees affected have been given separation pay
equivalent to month pay for every year of service or one month
pay, whichever is higher.
Art. 295
Art. 290
An employer may terminate the services of an employee who has

been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as
well as to the health of his co-employees
1.
The disease is of such nature of at such a stage that it cannot be

cured within a period of 6 months even with proper medical
treatment.
There is a certification by competent public health authority
2.
Separation Pay
higher)
Notes:
-

Separation Pay
higher)
Rules on Award of Separation Pay:115
RESULTS OF DISMISSAL
BAD FAITH CLOSURE OF
Illegal termination
BUSINESS
FINANCIAL LOSSES + GOOD
Valid dismissal and no separation benefits
FAITH CLOSURE
NOT DUE TO FINANCIAL
Valid dismissal + separation pay
LOSSES + GOOD FAITH
CLOSURE
It is done to either stave off the
financial ruin or promote the
business interest of the employer.
Need not depend on any evidence
of actual/imminent reversal of
employers fortune
RETRENCHMENT
Reduction of employees usually
due to poor financial returns, aimed
to cut down costs for operation
particularly on salaries and wages.
Must prove substantial,
real/reasonably imminent financial
losses justifying such termination
EGCI v. ELU (2008)

Supra.
115
Supra.
116 JPL Marketing v. CA (2005)
_______________________________________________________________
Must not exceed 6 months

When that "floating status" of an employee lasts for more than six
months, he may be considered to have been illegally dismissed
from the service. Thus, he is entitled to the corresponding benefits
for his separation, and this would apply to suspension either of the
entire business or of a specific component thereof.116
If the disease or ailment can be cured within the period, the

employee shall not terminate the employee but shall ask the
employee to take a leave of absence. The employer shall reinstate
such employee to his former position immediately upon the
restoration of his normal health.
A closed-shop agreement is an agreement whereby an employer

binds himself to hire only members of the contracting union who
must continue to remain members in good standing to keep their
jobs.
It is "the most prized achievement of unionism." It adds
membership and compulsory dues. By holding out to loyal
members a promise of employment in the closed-shop, it welds
group solidarity. It is a very effective form of union security
agreement.
A closed-shop is a valid form of union security, and such a provision
in a collective bargaining agreement is not a restriction of the right
of freedom of association guaranteed by the Constitution.
In terminating the employment of an employee by enforcing the Union

Security Clause, the employer needs only to determine and prove that:
1.
The union security clause is applicable;
2.
The union is requesting for the enforcement of the union security
provision in the CBA; and
3.
There is sufficient evidence to support the union's decision to expel
the employee from the union or company.
113
117
114
118
Crayons v Pula (2007)

Inquilllo v. FPSI (2009)
47
58
Book VI, Rule 1, Sec. 2
Art. 271 (a)
No labor organization or employer shall declare a strike or lockout

without either:
o
First having bargained collectively; or
o
First having filed the notice required; or
o
First obtaining and reporting the necessary strike or
lockout vote to the DOLE.
Any worker whose employment has been terminated as a
consequence of any unlawful lockout shall be entitled to
reinstatement with full backwages.
Any union officer who knowingly participates in an illegal strike
and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have
lost his employment status
o
Provided, that mere participation of a worker in a lawful
strike shall not constitute sufficient ground for
termination of his employment, even if a replacement
had been hired by the employer during such lawful
strike.
SLMCEA-AFW v NLRC (2007)

_______________________________________________________________
If the termination is brought about by the completion of a contract

or phase thereof, or by failure of an employee to meet the
standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served
the employee within a reasonable time from the effective date of
termination.
While the right of workers to security of tenure is guaranteed by
the Constitution, its exercise may be reasonably regulated
pursuant to the police power of the State to safeguard health,
morals, peace, education, order, safety, and the general welfare of
the people.119
119
48
58
SUMMARY OF JUST CAUSES FOR DISMISSAL
CONCEPT
RESIGNATION
SERIOUS MISCONDUCT /
WILFUL DISOBEDIENCE
GROSS AND HABITUAL

NEGLECT
LOSS OF TRUST OF
CONFIDENCE
COMMISSION OF CRIME
Voluntary act of
employee of
relinquishing the
office
Serious Misconduct:
1. Must be serious
2. Must relate to the
performance of an EEs
duties
3. Must show that the EE
has become unfit to
continue work
Gross Negligence
1. Want of even slight care
2. Acting/omitting to act in
a situation where there's
duty to act
3. Wilful and intentional
4. Conscious indifference to
consequences affecting
other people
Crime or offense against:

1. Person of the employer
2. Any immediate member
of his family
3. His duly authorized
representative
Habitual Neglect
1. Failure to perform duties
2. For a period of time
3. Failure done repeatedly
Elements:
1. The EE must be one
holding a position of
trust and confidence.
2. An act that would justify
the loss of trust and
confidence
3. Such act must be based
on a wilful breach of
trust and founded on
clearly established facts
4. The basis for the
dismissal must be clearly
and convincingly
established
None
None
None
Wilful Disobedience
1. Conduct was
wilful/intentional
2. Characterized by a
wrongful and perverse
attitude
3. Order violated was
known, reasonable and
lawful
4. Order must pertain to
the duties of the EE
SEPARATION
PAY
None, unless
stipulated in CBA
or is company
practice
None
SUMMARY OF JUST AND AUTHORIZED CAUSES FOR DISMISSAL

INSTALLATION
OF LABOR
SAVING DEVICES
REDUNDANCY
RETRENCHMENT
CLOSURE OF BUSINESS
DISEASE
CONCEPT
Contemplates
the installation
of machinery to
effect economy
and efficiency in
its method of
production.
Elements:
1. Written notice to EE and
DOLE 1 month before
date of termination
2. Payment of separation
pay
3. Good faith in abolishing
redundant positions
4. Fair and reasonable
criteria
Elements:
1. Purpose is to advance the
interest of the employer
and not to defeat or
circumvent the rights of
employees
DOLE 1 month before
date of termination
pay in case of closure not
due to financial losses
Elements:
1. The disease is of such
nature of at such a stage
that it cannot be cured
within a period of 6
months even with proper
medical treatment.
2. There is a certification by
competent public health
authority
SEPARATION
PAY
1 month OR
1 month per year
of service
1 month OR
1 month per year of service
Elements:
1. Reasonably necessary
and likely to prevent
business losses
DOLE 1 month before
date of termination
pay
4. Retrenchment in Good
Faith
5. Use of fair and
reasonable criteria
1 month OR
month per year of service
1 month OR
1 month OR
* Note that those causes that only award month pay have a financial issue related to the termination
_______________________________________________________________
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58
IV. Procedural Requirements

Art. 283 (b); Book VI, Rule I, Secs. 1, 2, 3
The Constitution, statutes and jurisprudence uniformly mandate

that no worker shall be dismissed except for a just or valid cause
provided by law, and only after due process is properly observed.120
In dismissing an employee from service, the employer has the
burden of proving its observance of the two-notice requirement
and its accordance to the employee of a real opportunity to be
heard.121
PROCEDURAL
REQUIREMENTS
LIABILITY
ENTITLEMENT
Twin Notice Requirement:

1.
First Notice:
o
To inform the employee of the particular acts or
omissions for which the employer seeks his dismissal
o
To give to said employee reasonable opportunity within
which to explain his side
o
To inform him that an investigation will be conducted on
the charges specified in such notice which, if proven, will
result in the employees dismissal
2.
Second Notice:
o
To inform the employee of his employer's decision to
terminate him because grounds have been established to
justify such termination.
JUST CAUSES
AUTHORIZED CAUSES
Written notice of grounds of termination, give EE opportunity to

explain
Grant hearing to EE, w/ counsel if latter so desires + opportunity to
respond to charges, to present evidence, and to rebut evidence
presented against her
Written notice of termination indicating all the circumstances that
show the grounds justifying termination have been established
Acts or omissions attributable to EE
If termination is illegal: reinstatement and full backwages
If reinstatement is impossible: separation pay
Written notice to EE and DOLE 30 days prior to effectivity of

termination
Authorized grounds for termination under LC, not attributable to EE

Separation pay
If termination is illegal, REINSTATEMENT and FULL BACKWAGES
If reinstatement impossible, separation pay
History of the 4th Situation Doctrine (Compliance with substantive due process but not with procedural due process)
PERIOD
STATUS OF DISMISSAL
PRIOR TO 1989
Illegal Dismissal or Termination if EE is not given notice
WENPHIL CORP
Valid dismissal
V. NLRC (1989)
ER pays fine if there is termination for just cause, but non-compliance with procedural requisites
EE not entitled to reinstatement and backwages (to grant such would encourage worse behavior and constitute mockery of the rules of
dismissal)
Imposed a fine of 1k
SERRANO, JAN.
Ineffectual Dismissal
2000
Procedural non-compliance is not a denial of due process that will nullify the termination, but the dismissal is ineffectual and the ER must
pay full backwages from the time of termination til judicial declaration that dismissal was for just or authorized cause
AGABON, NOV.
2004
Rationale: the mere fine imposed by Wenphil failed as deterrent against ERs who did not comply with procedural requisites; thus
the penalty upgrade to full payment of backwages to confront the practice by ERs to dismiss now and pay later
Problem: it does not implement the true meaning of Art.279 on Security of Tenure, that is, termination is illegal only if there is no
just or authorized cause; payment of backwages and other benefits including reinstatement is justified only if the EE is illegally
dismissed (i.e. no just or valid cause)
The Serrano ruling can cause unfairness and injustice

Valid Dismissal
Procedural infirmity cannot be cured, but dismissal is not invalidated
ERs liability for non-compliance with procedural requirements of due process is in the form of nominal damages
The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer
Failure to qualify in accordance with the standards prescribed by

the employer does not require notice and hearing. Due process of
law for this second ground consists of making the reasonable
standards expected of the employee during his probationary period
known to him at the time of his probationary employment.122
Baron v NLRC (2010)

JARL v Atencio (2012)
122 PDI v Magtibay, Jr.
_______________________________________________________________
120
Art. 283 (b), 1st sentence
123
Administrative and quasi-judicial bodies are not bound by the

technical rules of procedure in the adjudication cases. However, the
right to counsel, a very basic requirement of substantive due
process, has to be observed.123
Salaw v NLRC (1991)
121
50
58
Cardinal Primary Rights which must be respected even in proceedings of

administrative character:124
(1) The first of these rights is the right to a hearing, which includes the
right of the party interested or affected to present his own case and
submit evidence in support thereof.
(2) The tribunal must consider the evidence presented, the right to
adduce evidence, without the corresponding duty on the part of the
board to consider it, is vain.
(3) Having something to support its decision
(4) Evidence must be "substantial."
(5) The decision must be rendered on the evidence presented the
hearing, or at least contained in the record and disclosed to parties
affected.
(6) Act on its or his own independent consideration of the law and facts
of controversy, and not simply accept the views of a subordinate
arriving at a decision
(7) Act on its or his own independent consideration of the law and
facts of controversy, and not simply accept the views of a
subordinate arriving at a decision
Notes:
-
A written notice of termination served on the employee, indicating

that upon due consideration of all the circumstances, grounds have
been established to justify his termination.
In case of termination, the foregoing notices shall be served on the
employees last known address.
In dismissing an employee, the employer has the burden of proving
that the dismissed worker has been served two notices
Consti., Art. VIII, Sec. 14
A verbal appraisal of the charges against an employee does not

comply with the first notice requirement.125
The first written notice to be served on the employees should

contain a directive that the employees are given the opportunity to
submit their written explanation within a reasonable period.
o
Reasonable opportunity under the Omnibus Rules
means every kind of assistance that management must
accord to the employees to enable them to prepare
adequately for their defense.
o
This should be construed as a period of at least 5
calendar days from receipt of the notice to give the
employees an opportunity to study the accusation
against them, consult a union official or lawyer, gather
data and evidence, and decide on the defenses they will
raise against the complaint.
Should the parties fail to agree upon an amicable settlement, either
in whole or in part, during the conferences, the Labor Arbiter shall
issue an order stating therein the matters taken up and agreed
upon during the conferences and directing the parties to
simultaneously file their respective verified position papers.127
Immediately after the submission by the parties of their position
papers/memorandum, the Labor Arbiter shall motu proprio
determine whether there is a need for a formal trial or hearing. At
this stage, he may, at his discretion and for the purpose of making
such determination, ask clarificatory questions to further elicit
facts or information, including but not limited to the subpoena of
relevant documentary evidence, if any from any party or witness.128
The employer shall furnish the worker a written notice containing a

statement of the causes for termination and shall afford the latter
ample opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in accordance with
company rules and regulations promulgated pursuant to guidelines
set by the Department of Labor and Employment.
o
"Ample opportunity to be heard" means any meaningful
opportunity (verbal or written) given to the employee to
answer the charges against him and submit evidence in
support of his defense, whether in a hearing, conference
or some other fair, just and reasonable way.
o
A formal hearing or conference becomes mandatory
only when requested by the employee in writing or
substantial evidentiary disputes exist or a company rule
or practice requires it, or when similar circumstances
justify it.
o
A hearing means that a party should be given a chance
to adduce his evidence to support his side of the case
and that the evidence should be taken into account in
the adjudication of the controversy.
o
"To be heard" does not mean verbal argumentation
alone inasmuch as one may be heard just as effectively
through written explanations, submissions or pleadings.
o
The existence of an actual, formal "trial-type" hearing,
although preferred, is not absolutely necessary to
satisfy the employees right to be heard. 126
Employer may provide an employee with ample opportunity to be
heard and defend himself in ways other than a formal hearing.
Due process is not violated where a person is given the opportunity
to be heard but chooses not to give his side of the case
Ang Tibay v CIR (1940)

King of Kings v Mamac (2007)
Perez v PT&T (2008)
127
Sec. 3, Rule V of the New Rules of Procedure of the NLRC
128
Sec. 4, Rule V of the New Rules of Procedure of the NLRC
129 ABD Overseas v NLRC (1998)
_______________________________________________________________
Due process requires that the parties to a litigation be informed of

how it was decided, with an explanation of the factual and legal
reasons that led to the courts conclusion.
The losing party is entitled to know why he lost, so he may appeal
to a higher court if he believes proper. A decision that does not
clearly and distinctly state its factual and legal bases leaves the
parties in the dark and is especially prejudicial to the losing party.129
In illegal dismissal cases, the onus of proving that the employee

was not dismissed or, if dismissed, that the dismissal was not
illegal, rests on the employer, failure to discharge which would
mean that the dismissal is not justified and, therefore, illegal.130
Before respondent company could be burdened with proving the
legality of dismissal, there has to be details of acts attributed to
respondents constituting illegal dismissal if only to give petitioner
the opportunity to adduce evidence to defend himself from or
disprove occurrence of such act or inaction131
Substantial evidence is necessary for an employer to effectuate

any dismissal. Uncorroborated assertions and accusations by the
employer do not suffice, otherwise the constitutional guaranty of
security of tenure of the employee would be jeopardized.132
o
Substantial evidence is more than a mere scintilla. It
means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even
if other minds, equally reasonable, might conceivably
opine otherwise.133
Respondents must not, however, only rely on the seeming
weakness of petitioners evidence, but must stand on the merits of
their own defense
Macasero v Southern Industrial Gases (2009)

Phil. Rural Reconstruction Movement v Pulgar (2010)
Kulas Ideas v Alcoseba (2010)
133 Abosta Shipmanagement Corp. v. NLRC (2011)
124
130
125
131
126
132
51
58
Neither a criminal prosecution nor a conviction beyond reasonable

doubt for the crime is a requisite for the validity of the dismissal.
It is not necessary that the employer should await the employees
final conviction in the criminal case involving such fraud or breach
of trust before it can terminate the employees services. In fact,
even the dropping of the charges or an acquittal of the employee
therefrom does not preclude the dismissal of an employee for acts
inimical to the interests of the employer.
Unlike a criminal case, which necessitates a moral certainty of guilt
due to the loss of the personal liberty of the accused being the
issue, a case concerning an employee suspected of wrongdoing
leads only to his termination as a consequence. The quantum of
proof required for convicting an accused is thus higher proof of
guilt beyond reasonable doubt than the quantum prescribed for
dismissing an employee substantial evidence.
Technical requirements should be relaxed in the interest of

substantial justice140
The longer that an employee stays in the service of a company, the

greater the expectation that he will comply with the norms of
conduct and the code of discipline in the company; prolonged
employment militates against the defense of good faith.141
Art. 229
Art. 1146 (CC); Art. 296, 297 (LC)
ACTIONS UPON AN INJURY TO THE

RIGHTS OF THE PLAINTIFF
OFFENSES PENALIZED UNDER THE LC
MONEY CLAIMS
UNFAIR LABOR PRACTICES
PRESCRIPTIVE PERIOD
4 years
3 years
-
1 year
Based on Article 1155 of the Civil Code, the 3-year prescriptive period for
money claims in labor cases can be interrupted by the following:135
A claim filed with the proper judicial or quasi-judicial forum
An extrajudicial demand on the employer
The employer's acknowledgment of its debt or obligation.
Concept
-
Has to be a voluntary act as there is no showing that the employee

was coerced into executing the instrument.
While the law looks with disfavor upon releases and quitclaims by
employees who are inveigled or pressured into signing them by
unscrupulous employers seeking to evade their legal
responsibilities, a legitimate waiver representing a voluntary
settlement of a laborer's claims should be respected by the courts
as the law between the parties. 136
o
Absent any evidence that any of the vices of consent is
present and considering the petitioners position and
education, the quitclaim executed by the petitioner
constitutes a valid and binding agreement. 137
Requisites for perfection of appeal:143

1.
Payment of appeal fees
2.
Filing of memorandum of appeal
3.
Payment of required cash/surety bond
Art. 229
Appeals to the NLRC involving a monetary award are only perfected

upon posting of a cash/surety bond in the amount equivalent to
the monetary award in the judgement appealed from.
o
The bond is also a jurisdictional requirement that must
be complied with in order for NLRC to acquire
jurisdiction. Non-compliance renders the decision of LA
final and executory.144
The amount of the bond may be reduced only on meritorious
grounds and upon posting of a partial bond in a reasonable amount
in relation to the monetary award.
o
The exercise of this authority is not a matter of right on
the part of the appellant, but lies within the discretion
of the NLRC upon showing of meritorious grounds145
Meritorious grounds:146
1.
Substantial compliance with the rules
2.
Surrounding facts and circumstances constituting meritorious
grounds to reduce the bond
3.
When a liberal interpretation of the requirement of an appeal bond
would serve the desired objective of resolving controversies on the
merits
4. The appellants exhibited willingness or good faith by posting a
partial bond during the reglementary period
Instances when a reduction of the bond is not warranted:
No meritorious ground
Appellant failed to comply with requirement of posting even a
partial bond
Circumstances show the ERs unwillingness to ensure satisfaction
of EEs valid claims.
-
Requisites of a valid quitclaim138

1.
The EE executes a deed of quitclaim voluntarily
2.
There is no fraud or deceit on the part of any of the parties
3.
The consideration of the quitclaim is credible and reasonable
4. The contract is not contrary to law, public order, public policy,
morals or good customs or prejudicial to a third person with a right
recognized by law.
When quitclaims may be annulled
"Dire necessity" may be an acceptable ground to annul quitclaims if
the consideration is unconscionably low and the employee was
tricked into accepting it, but is not an acceptable ground for
annulling the release when it is not shown that the employee has
been forced to execute it.139
Concepcion v Minex Import Corp. (2012)

PLDT v Reus (2008)
136 Talam v NLRC (2010)
137 Aujero v Phil. Communications Satellite Corp. (2012)
138 Universal Robina Sugar Milling v Caballeda (2008)
139
Supra.
140 Jobel Enterprises v NLRC
_______________________________________________________________
Appeals from LA: 10 calendar days after receipt of such decision

Grounds for Appeal:
o
If there is prima facie evidence of abuse of discretion on
the part of the LA;
o
If the decision, order or award was secured through
fraud or coercion, including graft and corruption;
o
If made purely on questions of law; and
o
If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to
the appellant.
The proper remedy to question the decisions or orders of the
Secretary of Labor is via Petition for Certiorari under Rule 65, not
via an appeal to the Office of the President.
o
Only those of national interest may be appealed to the
Office of the President142
Cruz v Coca-Cola Bottlers

Barairo v MST Marine (2011)
143 Ramirez v CA
144 Mindanao Times v Confesor (2010)
145 University Plans v Solano (2011)
146 Nivol v. Footjoy Industrial Corp
134
141
135
142
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58
V. Reliefs/Remedies in Illegal Dismissal
Economic Business Conditions

Economic business conditions are valid grounds to not reinstate an
employee who was with management during its downhill economy.
It is inevitable that these be reflected in the desire for efficient and
productive management. Instead of reinstatement to the previous
position, illegally dismissed employee must be reinstated to a
substantially equivalent position without loss of seniority rights.150
Art. 285, 229
1.
2.
3.
4.
5.
Reinstatement / Separation Pay

Backwages
Damages
Attorneys Fees
Other Indemnity
Employees Unsuitability
While the employee is innocent, her continued presence as a
teacher in the school may well be met with antipathy and
antagonism by some sectors in the school community.151
G.R.: Remedy for illegal dismissal is reinstatement of employee to his former

position w/o loss of seniority rights and payment of backwages
E:
Doctrine of Strained Relations
In lieu of reinstatement, separation pay + full backwages should be
given
Separation pay and full backwages are cumulative not alternative
remedies.
Employees Retirement/Overage
-
Art. 285
Antipathy and Antagonism Doctrine of Strained Relations

Payment of separation pay is an acceptable alternative to
reinstatement when the latter option is no longer desirable or
viable.
It liberates the employee from what could be a highly oppressive
work environment and it releases the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it
could no longer trust.153
Definition
Reinstatement means restoration to a state or condition from
which one had been removed or separated.
It presupposes that the previous position from which one had been
removed still exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the one previously
occupied by the employee.
Reinstatement does not mean promotion.147
The decision of the LA reinstating a dismissed employee shall be
immediately executory, even pending appeal.
Job with a totally different nature

An assignment to a different job, as well as transfer of work
assignment without any justification therefor, cannot be deemed
as faithful compliance with a reinstatement order.154
Types of Reinstatement
1.
Actual reinstatement
2.
Payroll reinstatement
Intent of the law in making a reinstatement order immediately executory:
To restore the status quo in the workplace in the meantime that
the issues raised and the proofs presented by the contending
parties have not yet been finally resolved.
It is a legal provision which is fair to both labor and management
because while execution of the order cannot be stayed by the
posting of a bond by the employer, the workers also cannot
demand their physical reinstatement if the employer opts to
reinstate them only in the payroll.148
Exceptions
1.
Closure of Business
2.
Economic Business Conditions
3.
Employees Unsuitability
4. Employees Retirement/Overage
5.
Antipathy and Antagonism Doctrine of Strained Relations
6.
Job with a totally different nature
Closure of Business
Absent any showing that its business was deliberately stopped to
avoid reinstating the complaining employees, the amount of back
wages shall be computed from the time of their illegal termination
up to the time of the cessation of the business operations.
Computing backwages beyond the date of cessation of business,
would not only be unjust but confiscatory as well as violative of the
Constitution depriving the [respondent] of his property rights.149
Asian Terminals v. Villanueva (2006)

Composite Enterprises v. Caparoso (2007)
Retuya v. Dumarpa (2003)
150
Union of Supervisors v. Secretary of Labor (1984)
151 Divine Word High School v NLRC (1986)
152 Espejo v NLRC (1996)
153 Martos v New San Jose Builders (2012)
_______________________________________________________________
An illegally dismissed employee cannot be reinstated if he reaches

60 by the time his second complaint is filed with the Labor Arbiter.
He is only entitled to back wages computed from when he was
illegally dismissed until the time he turned 60.152
Offer to reinstate
At any rate, sincere or not, the offer of reinstatement could not
correct the earlier illegal dismissal of the employer.155
Payroll Reinstatement/Wages pending Appeal
A form of constructive reinstatement where the employer does not
physical work again but is still receiving his regular salary and
benefits.
Even if the employee is able and raring to return to work, the
option of payroll reinstatement belongs to the employer an
exercise of its management prerogative.
In case of strained relations or non-availability of positions, the
employer is given the option to reinstate the employee merely in
the payroll, precisely in order to avoid the intolerable presence in
the workplace of the unwanted employee.156
No Refund Doctrine
If the employee has been reinstated during the appeal period and
such reinstatement order is reversed with finality, the employee is
not required to reimburse whatever salary he received for he is
entitled to such, more so if he actually rendered services during the
period.157
Reinstatement as Interim Relief, when applicable
Article 223 concerns itself with an interim relief, granted to a
dismissed or separated employee while the case for illegal
dismissal is pending appeal. It does not apply where there is no
finding of illegal dismissal.158
DUP Sound Phils. V CA and Pial (2011)

Ranara v NLRC (1992)
Radio Phil Network v YAP (2012)
157 Roquero v PAL
158 Lansangan v Amkor (2009)
147
154
148
155
149
156
53
58
Art. 285
Purpose
-
It is to restore an EEs income that was supposed to be earned but

was lost because of his unjust dismissal.
Computation:
Moment compensation was withheld -> Time of reinstatement
Includes the following:
o
Basic Wage/Salary
o
Allowances
o
13th month pay
o
Other benefits
Does not include the following:
o
Salary increases after termination
o
Benefits not yet awarded before termination
Legal Interest shall be awarded on top of the backwages after final
judgement.159
Effect of Failure to Order
The failure of the LA and the NLRC to award backwages to an
employee who is legally entitled thereto having been illegally
dismissed, amounts to a "plain error" that the Court may rectify,
although the employee did not bring any appeal regarding the
matter, in the interest of substantial justice.160
Fringe Benefits
Fringe benefits are included in the phrase full backwages, inclusive
of allowances, and to his other benefits or their monetary
equivalent.
Art. 111; Art. 2208 (7) (CC)
Concept
-
Awarded to validly dismissed employees as a measure of social

justice and equity.163
Also awarded to unjustly dismissed employees if reinstatement is
not feasible.
Separation pay may be awarded only in cases when the termination of

employment is due to:
Installation of labor-saving devices
Redundancy
Retrenchment
Closing or cessation of business operations, (e) d
Disease of an employee and his continued employment is
prejudicial to himself or his co-employees
When an employee is illegally dismissed but reinstatement is no
longer feasible.
A valid dismissed for just causes other than serious misconduct,
wilful disobedience, gross and habitual neglect of duty, fraud or
wilful breach of trust, commission of a crime against the employer
or his family, or those reflecting on his moral character.164
Separation Pay for Resigned Employees165
G.R.: An employee who voluntarily resigns from employment is not
entitled to separation pay
E:
When it is stipulated in the employment contract or CBA
It is sanctioned by established employer practice or policy.
CONCEPT
Attorneys Fees
10% of amount of wages recovered
It is unlawful to demand more than 10% attorneys fees
Damages
Moral Damages:
o
Recoverable only where the dismissal of the employee
was attended by bad faith or fraud, or constituted an
act oppressive to labor, or was done in a manner
contrary to morals, good customs or public policy.161
Nominal Damages:
o
30,000 In case of valid dismissals attended with a
violation of the EEs Procedural Due Process Rights
o
This form of damages would serve to deter employers
from future violations of the statutory due process
rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right
granted to the latter under the Labor Code and its
Implementing Rules.162
Exemplary Damages:
o
Exemplary damages may avail if the dismissal was
effected in a wanton, oppressive or malevolent manner.
Eastern Shipping v CA
Aurora Land v NLRC (1997)
M+W Zander v Enriqez (2009)
162 Agabon v NLRC (2004)
163 BPI v NLRC (2010)
_______________________________________________________________
BACKWAGES
To restore withheld
income because of unjust
dismissal
WHEN
AWARDED
Upon finding of LA of
unjust dismissal
COMPUTATION
From time compensation

was withheld up to time of
reinstatement
EFFECT OF
RECEIPT
Not returnable
SEPARATION PAY
Awarded to validly
dismissed employees as a
measure of social justice
and equity.
Also awarded to unjustly
dismissed employees if
reinstatement is not
feasible.
Upon termination of
employee
When reinstatement is no
longer feasible
Will depend upon the CBA,
agreement between the
ER and EE or the cause of
the termination
Time it can be claimed
that the ER-EE
relationship has formally
ceased.
Not a bar from contesting
the legality of dismissal.
Must be based on employees basic wage + transportation + ECOLA

Commissions earned shall also be included in the computation
o
Must be based on the average commissions earned
during their last year of employment.166
Employees who received their separation pay are not barred from
contesting the legality of their dismissal. The acceptance of those
benefits would not amount to estoppel.167
Toyota Motor Phils. Corp. Workers Association v. NLRC

J Marketing Corp v Taran (2009)
Songco v NLRC (1990)
167 San Miguel Corp v Javate (1992)
159
164
160
165
161
166
54
58
Generally allowed as a measure of social justice and equity

May also be awarded in case of exception circumstances, such as
recurring illness preventing the employee from working168
Employee is validly dismissed for the following causes:

o
Serious misconduct
o
Wilful disobedience
o
Gross and habitual neglect of duty
o
Fraud or wilful breach of trust
o
Commission of a crime against the employer or his
family, or those reflecting on his moral character
Paduata v Meralco (2012)

_______________________________________________________________
168
G.R.: Corporate Officers are not personally liable for their official acts,
because a corporation, by legal fiction, has a personality
separate and distinct from its officers, stockholders, and
members.
E:
Unless they have exceeded their authority or where
terminations of employment are done with malice or in bad faith
o
In this case, they should be held solidarily liable with the
corporation169
169
AMA Computer College v Ignacio (2009)

55
58
VII. Voluntary Retirement

I. Coverage
Art. 293, par. 1; Book VI, Rule II, Sec. 1; Labor Advisory on Retirement Pay Law
Applies to all employees in the private sector, regardless of their

position, designation or status an d irrespective of the method by
which their wages are paid
1.
2.
Voluntary Retirement
Compulsory Retirement
Retirement by virtue of EEs intention to severe the ER-EE

relationship upon reaching retirement age
In the absence of any agreement, an employee may retire upon
reaching the age of 60 years
If the intent to retire is not clearly established or if the retirement
is involuntary, it is to be treated as a discharge.174
Sec. 2
Employees of the National Government and its political

subdivisions
GOCCs if they are under the Civil Service Law
Employees of retail, service and agricultural establishments
employing not more than 10 employees
II. Definition
-
Retirement is the result of a bilateral act of the parties, a voluntary

agreement between the employer and the employee whereby the
latter, after reaching a certain age agrees to sever his or her
employment with the former.170
Took effect on Jan. 7, 1993
VIII. Forfeiture of Benefits

-
III. Retroactive Application of RA 7641

Requisites in order for RA 7641 may be given a retroactive effect171
1.
Claimant was still in the employ of the employer at the time the
statute took effect; and
2.
Claimant had complied with the requirements for eligibility for
such retirement benefits under the statute.
IV. Components of Month Pay/Salary

Rules Implementing the New Retirement Law, Rule II, Sec. 5.2, Guidelines 5.2
15 days of salary
5 days service incentive leave
1/12th of 13th month pay
Other benefits
Total
Notes:
-
The Courts may order the payment of retirement benefits not

because there is legal basis for such but on the basis of equity
o
It serves as a measure of what should be paid as
equitable solution177
X. Retirement Pay Differential

If the benefits in a CBA or Company-provided retirement scheme
are less than those provided in the law, the employer shall pay the
difference.
XI. Management Prerogative

172
Salary shall not include the following:

o
ECOLA
o
Profit-Sharing payments
o
Other monetary benefits which are not considered as
part of or integrated into the regular salary of the
employees
V. When RA 7641 is applicable
G.R.: The companys retirement scheme shall apply

E: Art. 293 shall apply in the following cases:
o
There is no CBA or other applicable employment
contract providing retirement benefits
o
There is a CBA but such provides retirement benefits
below requirement set by law
Rules Implementing the New Retirement Law, Rule II, Sec. 6
Requisites in order for the Retirement Plan to be Tax-Exempt

1.
The benefit plan must be approved by the Bureau of Internal
Revenue;
2.
The retiring official or employee must have been in the service of
the same employer for at least 10 years and is not less than 50
years of age at the time of retirement; and
3.
The retiring official or employee shall not have previously availed
of the privilege under the retirement benefit plan of the same or
another employer.
Note:
-
170
Jaculbe v Silliman University (2007)

Universal Robina Sugar Milling v Caballeda (2008)
Reyes v NLRC (2007)
173 Banco Filipino v Lazaro (2012)
174 Ariola v Philex Mining (2005)
_______________________________________________________________
175
171
176
172
177
Compulsory and Contributory in character (Art. 293)

CBA / Agreed retirement schemes
Voluntarily provided retirement schemes
a.
Announced company policy
b. Implied in its failure to contest the employees claim for
retirement benefits
Retirement of an employee may be done upon initiative and option

of the management. And where there are cases of voluntary
retirement, the same is effective only upon the approval of
management.178
XII. Exemption from Tax
VI. Three Kinds of Retirement Plans173

1.
2.
3.
Under the Labor Code, only unjustly dismissed employees are

entitled to retirement benefits and other privileges including
reinstatement and backwages. 175
o
Employees who are validly dismissed from service by
reason of timely discovered offenses are deprived of
retirement benefits.176
IX. Equitable Solution
15 days
5 days
2.5 days
________
22.5 days
In the absence of any agreement, an employee shall be retired

upon reaching the age of 65 years
An agreement to pay the taxes on the retirement benefits as an

incentive to prospective retirees and for them to avail of the
optional retirement scheme is not contrary to law or to public
morals.179
Sy v. Metrobank (2006)
Equitable PCI Bank v Caguioa (2005)
PLDT v Reus (2008)
178 PAL v ALPAP (2002)
179 Intercontinental Broadcasting Corp. v Amorilla (2006)
56
58
XIII. Gratuity vis--vis Retirement Pay

-
Gratuity pay is separate and distinct from retirement benefits. It is

paid purely out of generosity.180
BASIS
PURPOSE
RETIREMENT PAY
Loyalty of EE
Help EE enjoy his remaining years
Release EE from burden of worrying
for his financial support
GRATUITY PAY
Generosity of
Grantor/ER
Reward for
satisfactory service
Sta. Catalina College v NLRC (2003)

_______________________________________________________________
180
57
58
Jamie Chans Reviewer (A 2015)

A2016 Digests
_______________________________________________________________
58
58

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Oct. 15, 2013

Art. II. Sec. 10, Art. XIII, Secs. 1-3

Labor is a physical toil, though it does not necessarily include the

Labor includes all members of the labor force, employed and

Who are part of the Labor force?

II. Labor Law

Pieces of legislation which govern the relationship between capital

Neither communism, nor despotism, nor atomism not anarchy but

To promote Social Justice in all phases of national development

The power of the government to enact laws within the

Calalang v. Williams (1940)

Consti., Art XIII, Sec III, Par 3

The Constitution commands the State to promote the principle of

Right by the owner of the company

The exercise of management prerogatives is not unlimited. A line

Consti., Art XIII, Sec III, Par 3 and 4

The state is mandated to regulate the relations of labor and capital,

Labor standards which sets out the

Labor relations law which defines the

Inherent inequalities between labor and capital

7 Principles underlying the code

Arts. 19, 20, 21, 1700, 1701

Provides for responsibilities between employers and employees, for

Consti., Art. II, Sec. 2

International law likewise proscribes discrimination. General

The basic policy is to balance and coordinate the rights and

Art. II, Secs. 5, 9, 10, 11, 13, 14, 18, 20;

1. Right to Security of Tenure

V. The Labor Code of the Philippines

Art. 4; Art. 1702 (NCC)

Labor Code of the Philippines

ART. 1702 (NCC)

De Guzman vs. Comelec (2000)

International School Alliance of Educators v. Quisumbing (2000)

Unfair labor practice cases;

Art. 6, 282; Consti., Art. IX-B, Sec. 2 (1)

The rules of evidence prevailing in courts of law or equity shall not

Scales of justice are tilted towards the employee

Rules of procedure should be relaxed when there is substantial and

VI. Work Relationship

Santos v. Litton Mills (2011)

Includes the Visitorial and Enforcement Powers of the Secretary of

A rule or regulation that exceeds the departments rule-making

Includes any individual employed by an employer

Employer Employee Test7

Economic Reality Test8

D.O. 18-A-11, Sec. 3(m), Sec. 5

Substantial Evidence = That amount of relevant evidence which a reasonable

Refers to the relationship in a contracting or subcontracting

The contractor or subcontractor does not have substantial capital

Piercing the corporate mask is only done when the corporation is

D.O. 18-A-11, Secs. 14, 15

Registered in accordance with rules

The registration of contractors and subcontractors shall be

Sarona v. NLRC (2012)

VII. EMPLOYMENT CONTRACT

The Indirect Employer is only liable if there exists a Labor-Only

GROW v. Velasco (2012)

Allowed Private Agencies and Entities

I. Employment Policies, Recruitment and Placement

To promote and maintain a state of full employment through

Any member of the labor force, whether employed or unemployed.

Private Employment Agency