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Part I

Introductory Materials
Section 1. Labor Law in General
1.1

Labor Law Defined [S, R, J]

1. Labor Legislation Consists of statutes, regulations and


jurisprudence governing the relations between capital and labor
by:
a. providing for certain terms and conditions of employment
or
b. providing a legal framework within which these terms and
conditions and the employment relationships may be
negotiated
adjusted and
administered.
2. Social Legislation Includes all laws that provide particular
kinds of protection or benefits to society or segments thereof in
furtherance of social justice. In that sense, labor laws are
necessarily social legislation.
promote public welfare
1.2

Law Classification

1. Labor Standards Law That which sets out the minimum


terms, conditions and benefits of employment that ERs must
provide or comply with and to which EEs are entitled as a matter
of legal right.
Ex. 8-hour labor law
2. Labor Relations Law That which defines [S R D & IM]
the status, rights and duties
and the institutional mechanisms
that govern the individual and collective interaction of ERs and
EEs or their representatives.
Ex. Book V of Labor Code
3. Welfare Legislation designed to take care of contingencies
which may affect workers, e.g. where there is loss of income for
research beyond the workers control. BENEFITS
* Social Security Law.
1.3

History and Origin

1.4

Basis for Enactment

1. Art. II, Sec.5, Const. : The maintenance of peace and order,


the protection of life, liberty, and property, and the promotion of

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general welfare are essential for the enjoyment by all the people
of the blessing of democracy.
2. Art. II, Sec. 18, Const. : The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
3. Art. XIII, Sec. I, Const. : The Congress shall give highest
priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social,
economic and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for
the common good.
To this end, the State shall regulate the acquisition, ownership,
use, and disposition of property and its increments.
* Labor and social legislation are enacted pursuant to the police
power of the State. This is its inherent power to enact wholesome
and reasonable laws to promote order, safety, health, morals and
general welfare of society. In its exercise the state may interfere
with personal liberty, with property and with business and
occupation. (Calalang vs. Williams).
* No longer may the due process clause and the freedom of
contract be invoked to challenge labor and social legislation. This
has long been discarded since the 1937 case of West Coast Hotel vs.
Parish (US) and the 1924 case of Pp. vs. Pomar (RP).
* Labor relation laws enable workers to obtain from their
employers more than the minimum benefits set by labor
standard laws
1.5

Law and Worker

The SC reaffirms its concern for the lowly worker who, often at the
mercy of his ER, must look up to the law for protection. Fittingly, the
law regards him with tenderness and even favor and always with
hope in his capacity to help in shaping the nations future. It is an
error to take him for granted. (Cebu Royal Plant vs. Deputy Minister of
Labor)
Section 2. Labor and the Constitution
2.1 Constitutional Provisions
1. Art. II, Sec. 9, Const. : 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.
2. Art. II, Sec. 10, Const. : The State shall promote social justice
in all phases of national development.

3. Art. II, Sec. 13, Const. : The State recognized the role of the
youth in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. . .
4. Art. II, Sec. 14, Const. : The State recognizes the role of
women in nation-building, and shall ensure their fundamental
equality before the law of women and men.
5. Art. II, Sec. 18, Const. : The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
6. Art. XIII, Sec. 1, Const. : The Congress shall give highest
priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for
the common good.
To this end, the State shall regulate the acquisition, ownership,
use, and disposition of property and its increments.
7. Art. XIII, Sec. 3 (1st par), Const. : The State shall
*afford full protection to labor, local and overseas, organized and
unorganized, and
*promote full employment and equality of employment
opportunities for all . . .
8. Art. XIII, Sec. 4, Const. : The State shall, by law, undertake an
agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to win collectively or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof . . .
9. Art. XIII, Sec. 11, Const. : The State shall adopt an integrated
and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost . . .
10.
The present Constitution has gone further than the 1973
Constitution in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. The framers of
the Constitution intended to give primacy to the rights of labor
and afford the sector full protection regardless of the
geographical location of the workers and whether they are
organized or not (Globe Mackay vs. NLRC).
2.2 Protection to Labor
1. Art. XIII, Sec. 3, Const. : The State shall afford full protection
to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to 1) self
organization, 2) collective bargaining and negotiations, and 3)

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peaceful and concerted activities including the right to strike in
accordance with law.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by
law.
The State shall promote the principle of shared responsibility
between workers and ERs and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce
mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and
ERs, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns in
investment, expansion and growth.
1935 Const. : The State shall afford protection to labor, especially
to working women and minors, and shall regulate the relation
between landowner and tenant, and between labor and capital in
industry and in agriculture. The State may provide for compulsory
arbitration.
Three aggregates of power against which the individual
employee needs protection
1. collective labor - Union
2. collective capital - management
3. collective bargaining relationship
* The law, while protecting the rights of laborers, does not authorize
the oppression or destruction of the employer
Laissez Faire
1. Laissez faire or the principle of free enterprise never found full
acceptance in this jurisdiction . . . (ACCFA vs. CUGCO)
2.3

Labor Sector

1. Art. II, Sec. 18, Const.


: The State affirms labor as a primary
social economic force. It shall protect the rights of workers and
promote their welfare.
2.4

Policy Considerations Social Justice

1. Art. II, Sec. 10, Const. : The State shall promote social justice in
all phases of national development.
2. What does social justice envision? It envisions [E, R, C]
a. equitable diffusion of wealth and political power for the
common good;
b. regulation of the acquisition, ownership,
disposition of property and its increments;

use

and

c. and creation of economic opportunities based on freedom


of initiative and self-reliance. (Art. XIII, Sec. 1 & 2, Const. ;
Alcantara)

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Definition [H, E, P, A]
1. Social justice is neither communism nor despotism, nor atornism,
nor anarchy, but the humanization of laws and the equalization
of social and economic forces so that justice in its rational and
objectively secular conception may at least be approximated. It
means the promotion of the welfare of the people, the adoption
of measures by the government to ensure economic stability of
all the competent elements of society, through the exercise of
powers underlying the existence of all governments on the timehonored principle of salus populi est suprema lex. (Calalang vs.
Williams)
2. What does social justice guarantee?
Social justice does not champion division of property of economic
status; what it guarantees are equality of opportunity, equality of
political rights, equality before the law, equality between values
given and received, and equitable sharing of the social and
material goods on the basis of efforts exerted in their production.
(Guido vs. RPA)

Those who have less in life should have more in


law
Equal pay for equal wok

Limits of Use
* The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. At
best it may mitigate the penalty but it certainly will not condone the
offense. Those who invoke social justice may do so only if their hands
are clean and their motives blameless and not simply because they
happen to be poor. (PLDT vs. NLRC)
2.5

Specific Labor Rights

* Art. XIII, Sec. 3, Const. : [In the relation between workers and ERs
the following rights shall be assured by the State:
a. Rights to self-organization
b. Right to collective bargaining
c. Right to collective negotiations
d. Right to peaceful and concerted Activities including the
right to strike
e. Right to security of Tenure
f. Right to just and humane Conditions of work
g. Right to a living Wage
h. Right to participate in policy and Decision-making
processes (WACT BOND)
* Only to those that affect the rights of employees and have
repercussions on their right to security of tenure.
Protection to Labor
1. The law must protect labor, at least to the extent of raising him
to equal footing in bargaining relations with capital and to shield
him from abuses brought about by the necessity for survival. It is

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safe to presume, therefore, that an EE or laborer who waives in
advance any benefit granted him by law does so, certainly not in
his interest or through generosity but under the forceful
intimidation of urgent need; and hence, he could not have so
acted, freely and voluntarily. (Sanchez vs. Harry Lyons)
2.6

Other Rights

1. Art. II, Sec. 10, Const.


contracts shall be passed.

: No law impairing the obligation of

*** Compassionate Justice


- disregarding rigid rules and giving due weight to all the
equities of the case
- years of service without derogatory record taken into
account
- harshness of penalty also taken into account
2. Art. III, Sec. 16, Const. : All persons shall have the right to a
speedy disposition of their cases before all judicial, quasi-judicial
or administrative bodies.
3. Art. III, Sec. 18 (2), Const. : No involuntary servitude in any
form shall exist except as a punishment for a crime whereof the
party shall have been duly convicted.
Labor as Property
* The right of a person to his labor is deemed property within the
meaning of the Constitutional guarantees. That is his means of
livelihood. He cannot be deprived of his labor or work without due
process of law. (Phil. Movieworkers Assn. Vs. Premiere Productions)
Due Process Requirements
* The twin requirements of notice and hearing constitutes essential
elements of due process in cases of EE dismissal: the requirement of
notice is intended to inform the EE of the ERs intent to dismiss and the
reason for the proposed dismissal; upon the other hand, the
requirement of hearing affords the EE an opportunity to answer his
ERs charges against him and accordingly to defend himself therefrom
before dismissal is effected. Neither of these 2 requirements can be
dispensed with without running afoul of the Constitution. (Century
Textile vs. NLRC)
Liberty of Contract and State Interference
* Legislation appropriate to safeguard to peoples vital interests may
modify or abrogate contracts already in effect. Reservation of essential
attributes of sovereign power is read into contracts as a postulate of
the legal order. All contracts made with reference to any matter that is
subject to regulation under the police power must be understood as
made in reference to the possible exercise of that power. (Abella/Had.
Danao vs. NLRC) such was the case when Art. 283 of the Labor Code
granted severance pay to workers who at the time of their employment
were not entitled under the law to receive such pay. (Id.)

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** Employees have a vested and demandable right over existing
benefits voluntarily granted to them by their employer.
MGT.
1.
2.
3.
4.

Rights [C P S T]
Right to conduct business
Right to prescribe rules
Right to select employees
Right to transfer and discharge employees

Waiver and Compromise


* Not all waivers and quitclaims are invalid as against public
policy
1. It is only when there is clear proof that the waiver was wangled
an unsuspecting person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction.
2. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding
undertaking. (Sicangco vs. NLRC)
3. Should a party fail or refuse to comply with the terms of a valid
compromise or amicable settlement, the other party could either
enforce the compromise by a writ of execution, or regard it as
rescinded and to insist upon his original demand. (Morales vs.
NLRC)
- Voluntary consideration not unconscionable
- Waiver of future benefits is not valid and binding
- The law does not consider as valid any agreement
a. to receive less compensation on what a worker is
entitled to recover
b. to prevent him from demanding benefits to which
he is entitled
* Instances when quitclaim, waiver or compromise is valid:
1. C, a national promoter salesman, with high educational
attainment, tendered his resignation after a spot audit found out
that he had a tentative shortage of Php49,005.59. It is
unbelievable that C, occupying a responsible position, and with
high education attainment, can be rattled and confused into
signing a resignation letter, on account of a mere spot audit.
(Callanta vs. NLRC)
2. Bank and EEs association, entered into a CBA providing for the
withdrawal of the pending case of the association against the
bank for non-payment of Php60.00 ECOLA. There is nothing in
the compromise which contravenes the law, morals, good
customs, public order, or public policy. (Monte de Piedad vs. MOLE)
3. During pendency of appeal before the NLRC, workers executed a
voluntary affidavit before the Labor Arbiter declaring intention to
withdraw appeal in lieu of payment of severance pay. The
affidavits executed voluntarily and knowingly in the presence of

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the Labor Arbiter has the effect and authority of res judicata.
(Olaybar vs. NLRC)
4. A number of EEs made quitclaims in exchange for the dropping
of charges of embezzlement of P25 million which the EEs
allegedly embezzled. The consideration for the waiver is
adequate. (PBC vs. Echiveri)
Instances when quitclaim, waiver or compromise invalid:
1. A worker hospitalized for several times for work-related accidents
was told by an immediate supervisor and a personnel officer to
retire and execute a quitclaim or else would be dismissed and
got nothing. The retirement and quitclaim was made under
threat of dismissal. (Alcantara)
2. A messenger with 5 years employment resigned and executed a
quitclaim after being told by his manager to resign or else
charges will be filed against him. The threat was unjust since the
messenger did not commit any unlawful act. There was
intimidation, which vitiated consent. (Guatson Tours vs. NLRC)
3. A quitclaim of future benefits made by an EE at the time of
employment (Alcantara)
4. After the CIR rendered a decision ordering the ER to pay wage
differentials, the EEs executed a quitclaim waiving their rights
under the decision. The quitclaim contravenes public policy since
after a civil action is filed in court, the cause of action may not
be subject of compromise unless the same is with leave of court.
( Pampanga Sugar Devt. Vs. Sugar Workers Assn.)
5. A quitclaim executed by an OFW repatriated to the Philippines
because of an illness requiring surgical treatment in
consideration of the return travel fund. There was no
consideration since the EE regularly contributed to the fund.
Besides, the quitclaim is negotiable and in congruous to the
declared policy of the State to afford protection to labor and to
assure the right of workers to security of tenure. (Cuales vs. NLRC)
6. ER appealed the decision of the POEA awarding $3,800.00
disability benefits to worker. During pendency of appeal, the
worker executed a quitclaim in exchange for Php18,000.00 since
at the time the worker needed money for medical treatment. The
law does not consider valid any agreement to receive less
compensation than what the workers should receive. It was clear
that the worker was forced to accept the payment out of
necessity.(PISC vs. NLRC)
7. After the finality of judgment awarding them severance pay, the
workers executed a quitclaim before labor arbiter who had no
participation in the case. Such settlements must be approved by
the labor arbiter before whom the case is being heard. (St. Gothard
Pub vs. NLRC)

Quitclaims are ineffective to bar recovery of the full


measure of the workers rights

Dire Necessity is not an acceptable ground to annul


releases unless there is showing that
a. workers were forced to execute them
b. the considerations for the quitclaims where unconscionably
low
Management Prerogatives
1. Right to select and discharge employees with valid cause
2. promulgate reasonable employment rules and regulation
3. designation of work to employees
4. transfer and promote employees
5. control company operations
6. install money-saving devices
7. re-clarify or abolish positions
8. sell or close business
Drug Testing
G. R. : cannot right to privacy
Exception:
- if job or occupation involve public safety
Ex.ample:
a. bus drivers
b. security guards
Participation in Decision-making Process
Only if it affects his [R, D, W]:
c. rights
d. duties
e. welfare
- not
management
prerogatives
regarding
operation
- must at least be informed
1.

2.

business

The law explicitly considers it a State Policy to ensure the


participation of workers in decision and policy-making
processes affecting their rights, duties and welfare. However, a
line must be drawn between management prerogatives
regarding business operations per se and those which affect the
rights of EEs. in treating the latter, management should see to
it that EEs are at least properly informed of its decisions or
modes of action. (PAL vs. NLRC) In this respect, a legislation
providing a workers representation in the Board of Directors of
corporations is not valid since the constitutional guaranty does
not include the workers right to participate in the management
of the enterprise. (Alcantara)
May the ER be compelled to share with its EEs the prerogative
of formulating a code of discipline? I a code of discipline
unilaterally formulated by the ER enforceable? Yes, the ER has
the obligation to share with its EEs its prerogative of
formulating a code of discipline since this will be affecting their
rights and benefits. A code of discipline unilaterally formulated
and promulgated by the ER would be unenforceable. (Id.)

Section 3. Labor and the Civil Code

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3. 1 Role of Law
1. Art. 1700, NCC : The relation between capital and labor are
merely contractual. They are so impressed with public interest
that labor contracts must yield to common good. Therefore, such
contracts are subject to special laws on labor unions, collective
bargaining, strikes, lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.
3.2 ER-EE Standard of Conduct
* Art. 1701 : Neither capital nor labor shall act oppressively against
the other, or impair the convenience of the public.
Fair Treatment
* The NCC states that every person must in the exercise of his rights,
and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith. (AHS Phils. vs. NLRC)

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Law Compliance
* The return-to-work order in this case not so much confers a right as it
imposes a duty and while as a right it may be waived, it must
be discharged as a duty even against a workers will. Thus, it
does not constitute a violation of the right against involuntary
servitude. (Sarmiento vs. Tuico) This is differentiated from the
instance where there is a mere breach of contractual
stipulation. While the EE may be held liable for damages by
virtue of the breach of contract, he may not be compelled to
work against his will because this will be involuntary servitude.
(Alcantara)
EE Obedience and Complaince ER Orders
* It is a recognized principle that company policies and regulations are,
unless shown to be grossly oppressive or contrary to law,
generally binding and valid on the parties and must be
complied with until finally revised or amended unilaterally or
preferable through negotiation or by a competent authority.
(SMC vs. Ubaldo) Deliberate disregard or disobedience of rules,
defiance of management authority by the EEs cannot be
countenance. Until and unless the rules or orders imposed by
the ER are declared to be illegal or improper by competent
authority, the EEs ignore or disobey them at their own peril.
(GTE Directories vs. Sanchez)
ER Obligation
* An EE must be treated as a disdained subordinate but with respect
and fairness, if not affection and gratitude due to an equal
partner. (Lagniton vs. NLRC)
Section 4. The Labor Code of the Philippines
4.1 Decree Title * Art. 1 : Labor Code of the Philippines
4.2 Effectivity * Art. 2 : 6 months after its promulgation.
4. 3 Applicability
1. Art. 6: All rights and benefits granted under this Code shall,
except as many otherwise be provided, apply alike to all workers,
whether agricultural, or non-agricultural.
2. Art. 276: The terms and conditions of employment of all
government of all government EEs, including EEs of GOCCs
shall be governed by the Civil Service Law.
3. Art. IX-B, Sec. 2(1), Const. :The Civil Service embraces all
branches of Government, including GOCCs with original
charters.
Test-GOCC

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1. The rule now is that only the GOCCs with original charters come
under the Civil Service Law. (Cabrera vs. NLRC)
4.4 Implementing Rules
1. Art. 5: Implementing rules and regulations of the DOLE and
other government agencies of the Code shall become effective
* 15 days after announcement of their adoption in newspapers of
general circulation.
Limitation Rule Making Power
1. * This power is limited to the promulgation of rules and regulations
to effectuate policies of the Code. Such rules and regulations must
conform to the terms and standard prescribed in the statute. They
cannot supplant its plain and explicit command. (Alcantara)
* A rule or regulation promulgated by an administrative body, such as
the DOLE, to implement a law, in excess of its rule-making authority is
void. (Azucena)
2. Examples of void IRRs:
* IRR providing the 10-day period specified in Art. 223 refers to working
days as stated in the article.
* An IRR providing that EEs paid by the month shall be presumed to be
paid for all days in the month, whether worked or not. In effect, will
except EEs paid by the month from the enjoyment of the holiday pay
benefit. (Insular Bank EE Union vs. Inciong)
* IRR of RA 6715 excluding security guards from those allowed to join
unions. (MERALCO vs. SOLE)
* IRR including commission in the computation of 13 th month pay.
Unduly expanded the concept of basic salary. (Boie-Takeda vs. De La
Serna)
4.5 Policy Declaration
* Art. 3: The State shall (APERA)
1.
2.
3.
4.
5.

Afford protection to labor


Promote full employment
Ensure equal work opportunities regardless of sex, race or creed
Regulate the relations between workers and ERs.
Assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just humane conditions of
work.

4.6 Law Interpretation


1. Art. 4 : All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.

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2. Art. 1702, NCC : In case of doubt, all labor legislation and labor
contracts shall be construed in favor of the safety and decent
living of the laborer.
In Favor Labor-Rationale
* This kind of interpretation gives meaning and substance to the
liberal and compassionate spirit of the law. The policy is to extend
the decrees applicability to a greater number of EEs to enable
them to avail of the benefits under the law, in consonance with the
States avowed policy to give maximum aid and protection to labor.
(Abella vs. NLRC)
Liberal Construction
* Are the provisions violative of the equal protection clause? No. The
ER and the laborer do not stand on equal footing; to ensure
equality, the latter must, be afforded protection. Insofar as labor
contracts are concerned, the same are usually drafted and prepared
by the ER. All doubts in their provisions should therefore be resolved
against it. (Alcantara)

Doubt
* When these are 2 or more possible explanations regarding an issue
affecting workers rights, that which favors the worker must be chosen.
(Clemente vs. GSIS)
No doubt
* The provision in case of doubt does not apply where the pertinent
provisions of the Labor Code leave no room for doubt either in their
interpretation or application. (Bonifacio vs. GSIS)
Sweeping Interpretation
* The Supreme Court cannot also adopt a sweeping interpretation of
the law, lest it engages itself in judicial legislation. (Bravo vs. EEC)
Factual Consideration and Rationality
* The care and solitude in the protection and vindication of the right of
workingmen cannot justify disregard of relevant facts or schewal of
rationality in the construction of the text of applicable rules in order to
arrive at disposition in favor of an EE. (PAL vs. NLRC)
Equity and Moral Consideration
* Considerations of equity and social justice cannot prevail against the
expressed provisions of labor laws. (Manning vs. NLRC)

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Balancing Conflicting Claims
* The basic policy of the law is to balance or to coordinate the rights
and interests of both workers and ERs. It should not be deduced that
the basic policy is to favor labor to prejudice capital. (Azucena)
4.7 Enforcement and Sanctions
1. Art. 217 (a) (2), (3), (4), (6): Jurisdiction of Labor Arbiters and
the Commission
1. The Labor Arbiters shall have exclusive and original jurisdiction,
except as otherwise provided, the following cases involving all
workers: (unfair labor practice)
2. Termination disputes (qualified by Art. 261 which grant voluntary
arbitrators original and exclusive jurisdiction over all unresolved
grievances arising from CBAs and company personnel policies);
3. Cases involving terms and conditions of employment, if
accompanied with a claim for reinstatement (including claims of
OFWs arising out of an ER-EE relationship, including claims for
actual, moral and exemplary damages, as provided in Sec. 10,
Migrant Workers Act);
4. Claims for actual, moral, exemplary and other damages arising
from the ER-EE relations;
5. Except claims for EEs Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from the ER-EE
relations; including
- those of persons in domestic or household service,
involving an amount exceeding Php5,000, regardless of
whether of whether accompanied with a claim for
reinstatement.
6. Disputes arising from Art. 264 including legality of strikes and
lockouts
2. Art. 128 : Visitorial and Enforcement Power of the Secretary of
Labor or his duly authorized representative.
1. Accesss to ERs records and premises at anytime of the day or
night whenever work is being undertaken therein and copy
thereform;
2. Question any EE; and
3. Investigate any fact, condition or matter which may be necessary
to determine violations of this Code of any labor law, wage order
or rules and regulations issued pursuant thereto.
* In cases where the relationship of ER-EE still exists, the power to
issue Compliance Orders to give effect to the labor standard provisions
of this Code and other social legislation.
Writs of execution to the appropriate authority shall be
issued for the enforcement of the said orders, except in
cases:
a. where the ER contests the findings of the labor
employment and enforcement officer; and
b. raises issues supported by documentary profits
which were not considered in the course of
inspection.

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* Order Stoppage of work or suspension of operations of any unit or
department of an establishment when non-compliance poses grave
and imminent danger to the health and safety of workers in the
workplace.
Within 24 hours, a hearing shall be conducted to determine
whether an order for the stoppage of work and suspension
of operations shall be lifted or not.
In case the violation is attributable to the fault of the ER,
he shall pay EEs their EEs their salaries or wages during
said period.
* It shall be unlawful for any person to Obstruct, impede, delay or
otherwise render ineffective the order of the Secretary of Labor.
* No inferior court shall issue a temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders in accordance with this Article.
* Any government EE found guilty of violation, after appropriate
administrative investigation, be subject to Summary dismissal from the
service.
* The Secretary of Labor may require ERs to keep and maintain
Employment records as may be necessary. (AS CONES)
3. Art. 129. Recovery of wages, simple money and other
benefits.
* The Regional Director of the DOLE or any of the duly authorized
hearing officers of the Department is empowered, through summary
proceedings and after due notice, to hear and decide any matter
involving the recovery of wages and other monetary claims and
benefits, including legal interest owing to a person employed in
domestic or household service: Provided
such complain does not include claim for reinstatement
aggregate money claims of each househelper does not
exceed P5,000.00
* The complaint shall be resolved within 30 days from the date of the
filing of the same.
4. Art. 288 : Penalties and Jurisdiction a. Except, as otherwise provided in the Code, or unless the
acts complained of hinges in a question or interpretation
or implementation of ambiguous provisions of an existing
CBA, any violation of this Code declared to be unlawful or
penal in nature shall be punished with:
a fine not less than P1,000.00 nor more than P10,000.00.
or imprisonment of not less than 3 months nor more than 3
years.
Or both such fine and imprisonment at the discretion of the
court.
In addition to such penalty any alien found guilty shall be
summarily deported upon completion of service of service.
b. Any criminal offense punished under this Code shall be
under the concurrent jurisdiction of the MTC and the RTC.
5. Art. 289 : The penalty (of the offenses listed in the Labor Code)
shall be imposed upon the guilty officer of officers of a corporation,
trust, firm, partnership, association pr entity which committed said
offenses.

16

6. Art. 290. Prescription of Offensses * Offenses penalized under this Code and the IRRs 3 years.
* Unfair labor practice 1 year from accrual of such unfair labor
practice.
7. Art. 291 : Prescription of Money Claims- All money claims
arising from ER-EE relations accruing during the effectivity of this Code
3 years from the time the cause of action is accrued.
8. Art. 292 : Money claims specified in Art. 291shall be filed before
the appropriate entity independently of the criminal action that may be
instituted in the proper courts.
Pending the final determination of the merit of money claims
filed with the appropriate entity, no civil action shall be filed with any
court.
This provision shall not apply to EEs compensation cases
which shall be processed and determined strictly in
accordance with the pertinent provisions of this Code.
Section 5. Work Relationship
5. 1 Work Relationship
ER and EE
1. Art. 97 (a) and (b) : Person means individual, partnership,
association, corporation, business trust, legal representative, or
any organized group of persons.
(b) ER includes any person acting directly or indirectly in the
interest of the ER in relation to an EE and shall include the
Government
and
all
its
branches,
subdivisions
and
instrumentalities, all GOCCs and institutions, as well as nonprofit private institutions, or organizations.
2. Art. 167 (f) and (g) : (f) ER means any person, natural or
juridical, employing the services of the EE.
(g) EE means any person compulsory covered by the
GSIS . . ., including members of the AFP, and any person
employed as casual, emergency, temporary, substitute or
contractual, or any person compulsory covered by the SSS. . .
3. Art. 212 (e) and (f) : ER includes any person acting in the
interest of the ER directly or indirectly. The term shall not include
any labor organization or any of its officers except when acting
as an ER.
(f) EE includes any person in the employ of an ER. The term
shall not be limited to the EEs of a particular ER, unless this
Code explicitly states. It shall include any individual whose work
has ceased as a result or in connection with any current labor
dispute or because of unfair labor practice if he has not obtained
any other substantially equivalent or regular employment.
CLASSIFICATION
1. casual

17
2.
3.
4.
5.
6.

regular
emergency
temporary
substitute
contractual

4. Is the purchaser of the assets of an ER corporation considered a


successor ER of the latters EE? No. Labor contracts are not
enforceable against a transferee of an enterprise, labor contracts
being in personam, thus binding only between parties.
ER-EE Relationship
Contractor

Independent

Contractor

and

Labor

1. Art. 106 : Contractor or subcontractor


a. Whenever an ER enters into a contract with another
person for the performance of the formers work, the EEs
of the contractor and of the latters subcontractor, if any
shall be paid in accordance with the provisions of this
Code.
In the event that the contractor or the subcontractor fails to pay
the wages of his EE in accordance with this Code, the ER shall be
jointly and severally be liable with his contractor or subcontractor to
such EEs to the extent of the work performed under the contract, in
the same manner and extent that he is liable to EEs directly employed
by him.
b. There is labor-only contracting where:
1. the person supplying in workers to an ER does not have [C,I]
substantial capital
[substantial] investment in the form of tools, equipment,
machineries, work premises, among others
2. and the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such ER.
In such cases, the person or intermediary shall be considered
merely as an agent of the ER who shall be responsible to the
workers in the same manner and extent as if the latter were directly
employed by him.
2. Sec. 9, Rule VIII, Book III, IRRs : (a) Any person who
undertakes to supply workers to an ER shall be deemed to be
engaged in labor-only contracting where such person :
* Does not have
substantial capital
[substantial] investment in the form of tools, equipment,
machineries, work premises and other materials; and
* The workers recruited and placed by such person are performing
activities which are directly related to the principal business or
operations of the ER in which the workers are habitually employed.
Labor-only contracting as defined herein is hereby prohibited and the
person acting as contractor shall be considered merely as an agent or

18
intermediary of the ER who shall be responsible to the workers in the
same manner and extent as if the latter were directly employed by
him.
(c) For cases not falling under this Article, the Secretary of Labor shall
determine through whether or not the contracting out is permissible in
the light of the circumstances of each case and after considering the
operating needs of the ER and the rights of the workers involved.
3. Art. 107 : Indirect ER The provisions of the immediately
preceding Article shall likewise apply in any person, partnership,
association or corporation which, not being an ER, contracts with
an independent contractor for the performance of any work, job
or project.
4. Art. 109 : Every ER or indirect ER shall be held responsible with
his contractor or subcontractor for any violation of the provisions
of this Code. For purposes of determining the extent of their civil
liability under this Chapter, they shall be considered direct ERs.
5. Sec. 8, Rule VIII, Book III, IRRs : Job Contracting There is
job contracting permissible under the Code if the following
conditions are met:
1. The contractor carries on an independent business and
undertakes the contract work [A R M - F]
a. on his own account
b. under his own responsibility
c. according to his own manner and method
d. free from the control and direction of his ER or principal in
all matters connected with the performance of the work
except as to the results thereof; and
2. The contractor has
a. substantial capital or
b. [substantial] investment in the form of tools, machineries,
work premises, and other materials which are necessary in
the conduct of his business.
*Where the ER-EE relationship has become ascertained, the ER
becomes bound by statutory requirements pertaining, though not
limited, to terms and conditions of employment, labor relations and
post employment. (Phone-Poulenc vs. NLRC) Nonetheless, when a
contractor fails to pay the wages of his EEs, the ER who contracted out
the job to the contractor becomes jointly and severally liable with his
contractor to the EEs of the latter to the extent of the work
performed under the contract as if such ER were the ER of the
contractors EEs. The law itself, establishes an ER-EE relationship
between the ER and the job contractors EEs for a limited purpose i.e.
in order to ensure that the latter get paid the wages due them. A
similar situation obtains where there is a labor-only contracting. This
time, however, for a comprehensive purpose: ER for purposes of this
Code, to prevent any violation or circumvention of any provision of this
Code. The law in effect holds both the ER and the labor only
contractor responsible to the latters EEs for more effective
safeguarding of the EEs rights under the Labor Code. (PBC vs. NLRC)

19
A. DETERMINATION
* In determining whether the relationship is that of ER and EE or one of
independent contractor, each case must be determined on its own
facts and all the features of the relationship must be considered.
(Villaluga vs. NLRC)
** the existence of an ER-EE relationship is a question of law and
cannot be made the subject of agreement
* the nature of ones business is not determined by self-serving
appellations one attaches thereto but by the tests provided by statute
and prevailing case law
B. FACTORS
1. The existence of ER-EE relationship is determined by the
following elements namely:
a. the Selection and engagement of the EEs
b. the payment of Wages
c. the power of Dismissal; and
d. the power to control the EEs conduct
(WEDS) although the latter is the most important element. (Rosario
Brothers vs. Ople) No particular form of evidence is required to prove the
existence of an ER-EE relationship. Any competent and relevant
evidence to prove the relationship may be admitted (Opulencia vs. NLRC)
2. Is there an ER-EE relationship?
* Workers under a pakiao agreement arranged by G whom PRC
considered as an independent contractor. ER gives orders to G, on
where to store the copra, when to bring out, how much to load and
where, and what class of copra to handle. The equipment used is
owned by PRC. Yes. PRC has direct control over the handling of the
copra. The control test is satisfactorily met.
* Piece workers subject to specifications. Yes. The fact that the making
of the basket is subject to Dys specifications indicates the existence of
control. (Dy Koh Beng vs. ILMU)
* Tailors, pressers, stitchers and similar workers employed by COD on a
piece-work basis. The EEs are governed by the companys regulations
i.e. 8-hour workday, recording of attendance etc Furthermore, a
master cutter distributes job orders equally, supervises the work and
sees to it that they were finished as soon as possible. Yes. The workers
conduct in the performance of their work was controlled by the
company (Rosario vs. Ople)
* Cargadores and pahinantes recruited by SMC through a labor
contractor who are governed by the regulations of the SMC whose work
consisted of loading, unloading, pilling or palleting empty bottles and
wooden shells from company trucks and warehouses. Yes. The
evidence firmly establishes the control exercised by the SMC. (BLUM vs.
Zamora)

20
* Shoe shiners who had their own customers but shared proceeds with
company. No. The company does not exercise any degree of control or
supervision over his work. The shoe shiner is a partner in trade. (Besa
vs. Trajano)
* Vendees of cigarettes who are governed by the regulations of the
vendor company i.e. definite sales territory, requirement to submit
daily, weekly and monthly reports, etc. Yes. Vendor company had
control over the vendee. (SSS vs. CA)
*I. S, a prominent social figure, had an agreement with TWS to act as
branch manager; The agreement provided that she would be entitled
to a part of the commission on sale of tickets; and that she would share
in the expenses of maintaining the office. She was also a signatory to a
lease agreement covering the branchs premises, holding herself
solidarily liable for the prompt payment of rentals. No. I. S was not
subject to the control by TWS. The services rendered by I.S must have
been done by her pursuant to a contract of agency. (Sevilla vs. CA)
* A plant manager hired by a marble company which was about to
close in a few months time due to business losses. The company had
no control over the former, either as to hours of work or method of
accomplishing the work. The former was entitled to a percentage of the
net profits of the company for that period. No. Manager was merely a
party to a joint venture. (CMC vs. NLRC)
* Fishermen-crew of a trawl fishing vessel subject to control and
supervision of the owner of the vessel i.e. conduct of fishing
operations; time to report to fishing port, etc Yes. (Ruga vs. NLRC)
* Tailors, seamstresses and other workers of a haberdashery who were
paid on a piece-rate basis. They were directed by the proprietor of the
establishment as specified by the customers. They were required to
finish jobs orders in one day before due date. Yes. They did not
exercise independence in their own methods, but on the contrary were
subject to the control of the establishment from the beginning of their
task to their completion. They also had to rely on the tools and
equipment supplied by the haberdashery. (Makati Haberdashery vs. NLRC)
* The power of control refers merely to the existence of the power and
not the actual exercise thereof.
* Caddles who are not under the control and supervision of the golf
club as to working hours, manner of carrying out their services, etc.
No. The club did not have the measure of control over the incidents of
the caddys work and compensation that the ER would possess. (Manila
vs. IAC)
* College teachers. Yes. The
Court takes judicial notice that a
university controls the work of the members of its faculty; that it
prescribes the courses or subjects that they teach and the time and
place for teaching. (Feati vs. Bautista)
* Jeepney drivers working under the boundary system. Yes. The driver
does not have any interest in the business because he did not invest

21
anything in the acquisition of jeeps and did not participate in the
management thereof. (Citizens League of Free Workers vs. Abbas)
C. CONTROL TEST
*** There is an ER-EE relationship where the ER controls or has
reserved the right to control the EE not only as the result of the work
but also as to the means by which said work is to be accomplished
(Paradise vs. Ng). The test merely calls for the existence of the right to
control the manner of doing the work not the actual exercise of the
right. (Ruga vs. NLRC) The line should be drawn between rules that
merely serve as guidelines towards the achievement of the mutually
desired results without dictating the means or methods employed in
attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first , which aim
only to promote the result, create no ER-EE relationship unlike the
second, which addresses both the result and the means to achieve it.
(Insular Life vs. NLRC) The control test calls merely for the existence of
the right to control and manner of doing work, not the actual exercise
of the right. (Dy Keh Beng)
D. ECONOMIC TEST
1. The absence of ER-EE relationship may be determined through
economic tests like the inclusion of the EE in the payrolls, having
irregular compensation and having a personal stake in the
business. (Sevilla vs. NLRC)
E. AGREEMENT
* The existence of an ER-EE relationship is a question of law and being
such, it cannot be made the subject of an agreement. (Tabas vs. CMC)
5.2 Independent Contractor and Labor Contractor Only
1. Art. 106 : Contractor or subcontractor
a. Whenever an ER enters into a contract with another person
for the performance of the formers work, the EEs of the
contractor and of the latters subcontractor, if any shall be
paid in accordance with the provisions of this Code.
In the event that the contractor or the subcontractor fails to pay
the wages of his EE in accordance with this Code, the ER shall be
jointly and severally liable with his contractor or subcontractor to such
EEs to the extent of the work performed under the contract, in the
same manner and extent that he is liable to EEs directly employed by
him.
b.

There labor-only [considered as agent] contracting


where:
* the person supplying workers to an ER does not have
substantial capital
[substantial] investment in the form of tools, equipment,
machineries, work premises, among others

22
With respect to the first requirement, the law does not require both
substantial capital and investment in the form of tools, equipment,
machineries, etc. This is clear from the use of the conjunction or.
(Neri vs. NLRC)
2. and the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such ER.
With respect to the second requirement, the service provided by
janitors, firemen, mechanics, hired helpers and similar workers are
considered directly related to the operations of a company since this is
necessary to the proper maintenance of the premises and machineries
as well as the protection of the company premises against fires. (Guarin
vs. NLRC)
In such cases, the person intermediary shall be considered merely
as an agent of the ER who shall be responsible to the workers in the
same manner and extent as if the latter were directly employed by
him.
*** Factors to Determine existence of Independent Contractor
Relationship:
1. whether the contractor is carrying on an independent business;
2. whether the work is part of the ERs general business;
3. the nature and extent of the work;
4. the skill required;
5. the terms and duration of the relationship;
6. the right to assign the performance of the work to another;
7. the control and supervision of the work and the ERs powers with
respect to the hiring, firing and payment of salaries;
8. the duty to supply premises, tools and appliances. (Mafinco vs.
Ople)
** Examples of Independent Contractor:
* Commission agent : IPC Company entered into agreement with
registered representatives who worked on a commission basis. While
the agents were subject to a set of rules and regulations governing the
performance bond; the termination for certain causes, however, the
agents were not required to report to work; to devote their time
exclusively for the company; to account for their time nor submit a
record of their activities; and that they were paid on a commission
based on a certain percentage of sales. The fact that for a certain
specified causes (failure to meet annual quota) the relationship may
be terminated does not mean such control exists, for the causes of
termination have no relation to the means and methods of work. (IPC
vs. SSS)
* Dealership : A contract whereby one engages to purchase and sell
soft drinks on trucks supplied by the manufacturer but providing that
the other party (peddler) shall have the right to employ his own
workers, shall post a bond to protect the manufacturer against losses
shall be responsible for damages caused to third person, shall obtain
the necessary licenses and permits and bear the expenses incurred in
the sale of the soft drinks. (Mafinco vs. NLRC)

23

Another dealership agreement wherein the dealer: handles the


products in accordance with existing laws and regulations; sends his
orders to the factory plant; is supplied by the factory with a delivery
truck and all expenses for repairs are borne by the factory; receives no
commission but given a discount for all sales; is responsible alone for
any violation of the law, sells the product at the price agreed upon
between the parties; and posts a surety bond of not less than
P10,000.00. (La Suerte vs. Director of Labor Relations)
* Security Agency : Shipping company entered into an agreement
with a security agency wherein the security agency was responsible for
the hiring and assignment of the guards, the guards were not known to
the shipping company for it dealt directly with the agency, and a
payment of a lump sum to the agency who in turn paid the
compensation of the individual watchmen. Under the circumstances,
the guards cannot be considered EEs of the shipping company. It is
the security agency that recruits, hires and assigns the work of the
watchmen. It is the wages to which the watchman is entitled. The
powers to dismiss lies with the agency. Lastly, since the company has
to deal with the agency, and not with the individual watchmen, on
matters, pertaining to the contracted task, it stands to reason that the
company does not exercise any power or control over the watchmens
conduct. (APL vs. Clave)
* Stevedoring Services : SHIPSIDE entered into a Contract for
Services with La Union providing among others that the latter would
furnish all labor needed for stevedoring work in piers controlled by the
former. The net balance of the stevedoring charges will be divided
equally among the parties. The records do not show any participation
on the part of SHIPSIDE with respect to the selection and engagement
of the individual stevedores. The terms and conditions of their services
are matters determined not by SHIPSIDE but by La Union. It is also
sufficiently established that La Union exercised supervision and control
over its labor force. While SHIPSIDE occasionally issued instructions to
the stevedores, such instructions, in legal contemplation are mere
requests since the privity of contract lies between the workers and La
Union. (SHIPSIDE vs. NLRC)
* Collection Agency : Singer entered into a collection agency
agreement with collectors providing among others that the collector is
to be considered at all times to be an independent contactor; he was
required to comply with certain rules and regulations (i.e. use of
authorized receipts, monthly collection quota, cash bond, and
submission of report of all collections at least once a week); and his
services can be terminated in case of failure to satisfy these
regulations. However, the agent was not required to observe office
hours or to report to Singer except for remitting his collections. He did
not have to devote his time exclusively for Singer and the manner and
method of collection were left solely to the discretion of the agent, and
he shouldered his transaction services. (
* Messengerial/Janitorial Services : Janitors were hired by CSI and
assigned to La Union Carbide. They drew their salaries from CSI. CSI
exercised control over them through a SCI EE who gave orders and
instructions. Moreover, CSI had the power to assign its janitors to

24
various clients and pull them out. CSI was a registered service
contractor and did business with a number of known companies in the
country. It maintains its own office and had its own office equipment. It
furnishes its janitors the cleaning equipment. (Rhone-Poulene vs. NLRC)
BCC, capitalized at P1 million fully subscribed and paid for
provided janitorial and other services to various firms. It hired A and B
and assigned them to work for FEBTC. The two reported for work
wearing the prescribed uniform of the BCC; their leave of absences
were filed directly with BCC; and their salaries drawn only from BCC.
FEBTC however issued a job description which detailed the functions of
two. Applying the control test, BCC is the ER of the two. Furthermore, it
had substantial capital. The guidelines in the job description were laid
down merely to ensure the desired result was achieved. It did not,
however, tell how the work should be performed. (Neri vs. NLRC)
* Repair and Maintenance Service : F doing business, was hired
by Shell to conduct a hydro-pressure test. He was paid a lump sum for
the work he and his men accomplished. He utilized his own tools and
equipment. He accepted business from other companies. He was not
controlled by Shell with regard to the manner in which he conducted
the test. (Pilipinas Shell vs. CA)
** Instances of Labor-Only Contracting
* Agency hiring : PBC and CESI entered into an agreement under
which the latter undertook to supply the former with 11 messengers.
The agreement provided that the messengers would remain EEs of
CESI; PBC remitted to CESI amount equivalent to the wages of the
messengers; CESI in turn paid them and their names are not included
in the PBCs payroll; the bank, in cases of dismissal would request CESI,
and CESI would in fact withdraw such messenger, and the messengers
performed their functions within the banks premises. CESI cannot be
considered a job contractor because its undertaking is not the
performance of a specific job; it merely undertook to provide the bank
with a certain number of persons able to carry out the work of
messengers. (PBC vs. NLRC)
Under the Work Contract between A and a motorshop, A
undertook to supply labor and supervision in the performance of
automotive body painting work. A and his men were paid lump sum,
the company supplied the tools, equipment, machineries and materials
and moreover, the jobs were done in the premises of the motor shop.
Aside from the fact that the company exercised control and direction
over the work done by A and his men, the line of work-automobile
painting was directly related to, if not an integral part of the regular
business of the motor shop. (Broadway Motors vs. NLRC)
LS provided helpers, janitors, mechanics to NP, a corporation
engaged in garment manufacturing. The agreement between the two
provided that LS shall provide NP with workers, NP shall pay LS a fee
based on rates fixed by the agreement, there is no ER-EE relationship
between the two and LS shall have exclusive direction in the selection,
engagement and discharge of its personnel and the latter shall be

25
within is full control. LS is a labor-only contractor since it is merely an
agent to procure workers for the real ER. (Guarin)
* Security Guard Hiring : Hyatt and VSS entered into a contract of
services wherein VSS agreed to protect the properties and premises of
Hyatt by providing security guards. The security guards filled up Hyatt
employment application forms and submitted the forms to the Security
Department of the hotel. Their wages were paid directly by Hyatt and
their assignments, promotions, supervisions and dismissal were
approved by the Chief Security Officer of Hyatt. (Vallum Security vs. NLRC)
Section 6. Employment Policies, Recruitment and Placement of
Workers, and Agencies
6. 1 Employment Policies
1. Art. 12 : Statement of Objectives It is the policy of the State:
a. To promote and maintain a state of Full employment through
improved manpower training, allocation and utilization;
b. To protect every citizen desiring to work locally or overseas by
securing for him the best possible terms and conditions of
employment;
c. To facilitate a free choice of Available employment by persons
seeking work in conformity with national interest;
d. To facilitate and regulate the Movement of workers in conformity
with national interest;
e. To regulate the employment of Aliens, including the establishment of
a registration and/or work permit system;
f. 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;
g. To issue careful selection of Filipino workers for overseas
employment in order to protect the good name of the Philippines
abroad. (AFP MARC)
6.2 Employment Agencies
Private Sector-Agencies and Entities
A. PARTIES
A.1. Worker
* Art. 13 (a) Worker any member of the labor force, whether
employed or unemployed
A.2 Agency

26
* Art. 13 (c) : Private fee-charging employment agency any
person or entity engaged in the recruitment or placement of workers
for a fee which is charged directly or indirectly, from the workers or
ERs or both.
A.3 Entity
* Art. 13 (e) : Private recruitment entity any person or
association engaged in the recruitment and placement of workers,
locally or overseas, without charging, directly or indirectly, any fee
from the workers or the ERs or both.
B. ALLOWED ENTITIES
B.1 Allowed Private Agencies and Entities
* Art. 16 : Except as provided in Chapter II of this Title, no person or
entity, other than the public employment offices, shall engage in the
recruitment and placement of workers.
Sec. 1, Rule III, Book I, IRRs No person or entity shall engage in
the recruitment and placement of workers either for local or overseas
employment except the following: [allowed agencies]
1. public employment agencies
2. POEA
3. private recruitment entities
4. private employment agencies
5. shipping or manning agents or representatives; and
6. such other persons or entities as may be authorized by the
Secretary.
*Art. 25 : . . . the private employment sector shall participate in the
recruitment and placement of workers, locally and overseas, under
such guidelines, rules and regulations as may be issued by the
Secretary of Labor.
B.2 Prohibited Business Agencies and Entities
1. Art. 18 : Ban on Direct Hiring No ER may hire a Filipino worker for
overseas employment except through the Boards and entities
authorized by the Secretary of Labor.
a. Direct hiring by members of the diplomatic corps;
b. International organizations and such other ERs as may be;
c. allowed by the Secretary of Labor is exempted from this provision.
2. Art. 26 : Travel agencies and sales agencies of airline companies
are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment, whether for profit or
not.
C. GOVERNMENT TECHNIQUES OF REGULATION
RECRUITMENT AND PLACEMENT BUSINESS
C.1
Licensing,
Citizenship,
Transferability and Fees

Capitalization,

PRIVATE
Duration,

27
1. Art. 27 : Citizenship Requirement:
a. Only Filipino citizens or
b. Only corporations, partnerships or entities at least 75% of
the authorized and voting capital stock of which is owned
and controlled by Filipino citizens shall be permitted to
participate in the recruitment and placement of workers,
locally or overseas.
2. Art. 28 : Capitalization Substantial capitalization as determined
by the Secretary of Labor. (P1 M)
Sec. 1, Rule V, Book I, IRRs : Qualification of Applicants for
Private employment agencies All applicants for licenses to operate
private employment agencies either for local or overseas
recruitment
and
placement
shall possess
the following
qualifications. . .
3. Art. 29 : Non-tranferability of License or Authority
* No license or authority shall be used directly or indirectly by any
other person other than the one in whose favor it was issued; or
* at any place other than that stated in the license of authority
* nor such license or authority be transferred, conveyed or assigned
to any other person or entity.
* Any transfer of business address, appointment or designation of
any agent or representative including the establishment of
additional offices everywhere shall be subject to the prior approval
of the DOLE.
4. Art. 15 (a) 2 : (a) The Bureau of Employment Services shall be
primarily responsible for developing and monitoring a
comprehensive employment program. It shall have the power
and duty:
2) To establish and maintain a registration and/or licensing
system to regulate private sector participation in the recruitment
and placement of workers, locally or overseas, and to secure the
best possible terms and conditions of employment for Filipino
contract workers and compliance therewith under such rules and
regulations as may be issued by the Minister of Labor.
5. Distinguish authority from license? Authority means a
document issued by the Secretary of Labor and Employment
authorizing a person or association to engage in recruitment and
placement activities as a private recruitment entity; while a
license is the document issued to a person or entity to
operate a private employment agency. (Art. 13)
6. What is the duration of a license recruit? A license is valid for a
period of 2 years from the date of issuance unless sooner
cancelled, revoked or suspended for violation of the Labor Code
or its IRRs.
* non-tranferrable
C.2 Bonds
1. Art. 31 : All applicants for license or authority shall post such
cash and surety bonds as determined by the Secretary of Labor

28
to
guarantee
compliance
with
prescribed
recruitment
procedures, rules and regulations, and terms and conditions of
employment as appropriate.
2. The purpose of bonds is to insure that if the rights of these
overseas workers are violated by their ERs recourse would still
be available to them against the local companies that recruited
them for the foreign principal. (Stronghold vs. CA)
C.3 Workers Fees
* Art. 32 : Any person applying with a private fee-charging
employment agency for employment assistance shall not be
charged any fee until
1. he has obtained employment through its efforts; or
2. he has actually commenced employment. Such fee shall be
always covered with the appropriate receipt clearly showing the
amount paid. The Secretary of Labor shall promulgate the
schedule of allowable fees.
C.4 Reports Submission
* Art. 33 : Whenever the public interest requires, the Secretary of
Labor 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 job, wages, other
terms and conditions, and other employment data.
Percentage of salary remittance
1. seaman 80%
2. construction worker 70%
3. professional workers with free board and lodging 70%
4. professional without board and lodging 50%
5. domestic helpers 50%
6. other workers 50%
C.5 Prohibited Practices [IF FAITS CHOW]
1. Art. 34 : Prohibited Practices It shall be unlawful for any
individual, entity license or holder of authority:
1. To charge or accept; directly or indirectly, any amount greater
than that specified in the schedule of allowable fees, or make a
worker pay any amount greater than that actually received by
him as a loan or advance;
2. To furnish or publish any false notice or information or document
in relation to recruitment or employment; [includes the act of
furnishing fake employment documents to a worker. (Azucena)
3. To give any false notice, testimony, information or document or
commit any Act of misrepresentation for the purpose of securing
a license of authority under this Code;
4. To induce or attempt to induce a worker already employed to quit
his employment in order to offer him to another unless the
transfer is so designed to liberate the worker from oppressive
terms and conditions of employment;

29
5. To influence or attempt to influence any person or entity not to
employ any worker who has not applied for employment through
his agency;
6. To engage in the recruitment or placement of workers in jobs
Harmful to public health or morality or to the dignity of the
Republic of the Philippines;
7. To obstruct or attempt to obstruct inspection by the secretary of
Labor or by his duly authorized representatives;
8. To Fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation
from jobs, departures and such other matters of information as
may be required by the Secretary of Labor;
9. To substitute or alter 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 expiration of the
same without the approval of the Secretary of Labor Unless it is
to improve the terms and conditions of employment. (Vir-Jen vs.
NLRC);
10.
To become an officer or member of any corporation
engaged in Travel agency or to be engaged directly or indirectly
in the management of a travel agency;
11.
To Withhold or deny travel documents from applicant
workers before departure for monetary or financial consideration
other than those authorized under this Code and its
implementing rules and regulations.
2. A, Filipina, was recruited by a local private employment agency
for a tutoring job abroad. Upon arrival in the place of employment,
she was made to work as a housemaid. What advice will you give
her? I will advice the Filipina to commence a criminal action against
the employment agency for violation of Art. 34 of the Labor Code.
She was recruited under false pretense. (Alcantara)
3. STC, a travel agency, advertised for young women to work as
domestic helpers in Hongkong. Five women who left for Hongkong
were later brought to prostitution houses. Have the officers of STC
committed any unlawful acts? Yes. Violation of Art. 26 and Art. 34
(d) and (f) of the Labor Code. (Alcantara)
C.6 Illegal Recruitment
1. Art. 13 (b) : Recruitment and Placement - Act of [CECTUHPI]
a. Canvassing
b. Enlisting
c. Contracting
d. Transporting
e. Utilizing
f. Hiring or
g. Procuring workers and
h. Includes referrals, contracts 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 2 or more persons shall be deemed engaged in

30
recruitment or placement. [The number of persons dealt with is not, an
essential ingredient of the act of recruitment or placement. The
provision merely lays down a rule of evidence that where a fee is
collected in consideration of a promise or offer of employment to 2 or
more prospective workers, the individual or entity dealing with them
shall be deemed to be engaged in the act of recruitment or placement.
(Pp vs. Panis)
** Illegal termination
- full reimbursement fees + 12%
- salaries for unexpired portion or 3 mos. For every year of
unexpired term whichever is lower
** Liability of private employment agency employment
contract
- joint and solidary with employer
- all claims and liabilities that may arise in connection with
the implementation of the contracts
2. Any recruitment activities, including the prohibited practices,
enumerated under Art. 34 of this Code, to be undertaken by nonlicensees or non-holders of authority shall be deemed illegal and
punishable under Art. 39 of this Code.
* Illegal recruitment when committed by a:
syndicate
or in large scale
shall be considered an offense involving economic sabotage and shall
be penalized in accordance with Art. 39 hereof.
- non-bailable
- life imprisonment
** Illegal recruitment by a syndicate Carried out by a group of 3
or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme
defined under the first paragraph hereof.
** Illegal recruitment in large scale Committed against 3 or more
persons individually or as a group.
[When the Labor Code speaks of illegal recruitment, committed
against 3 or more persons, it must be understood as referring to the
number of complainants therein, otherwise, prosecutions for single
crimes of illegal recruitment can be cumulated to make out a case of
large scale illegal recruitment. In other words, a conviction for largescale illegal recruitment must be based on a finding in each case if
illegal recruitment of 3 or more persons whether individually or as a
group. (Pp vs. Reyes)
3. Sec. 8, Migrant Workers Act : A criminal action arising from
illegal recruitment as defined herein shall be filed with the RTC of the
province or city where the offense was committed or where the
offended party actually resides at the time of the commission of the
offense: provided, That the court where the criminal action is first filed
shall acquire jurisdiction to the exclusion of other courts.

31
4. The crime of illegal recruitment has 2 elements:
a. That the offender is a non-license or non-holder of
authority to lawfully engage in the recruitment and
placement of workers; and
b. That the offender undertakes any of the recruitment
activities defined under Art. 13 (b) of the Labor Code or
any of the prohibited practices enumerated under Art. 34
of the same Code.
5. G convinced F and S, that they could be employed for France for a
fee. G was also able to persuade A that he could give A a working visa.
Nothing happened to F, S and A. G did not have any license to recruit
or authority to recruit? A may be charged and convicted of a largescale illegal recruitment since he did not have the license or authority
to recruit, and yet recruit at least 3 persons. (Pp vs. Turda) Furthermore,
he can also be convicted and charged of estafa since the latter is a
malum in se while the former is a malum prohibium (Id.)
6. NATO, a national union of teachers was able to find jobs abroad for
its member by directly contacting other teachers organizations in
foreign countries, without charging additional fees. Is this legal? No.
Only persons or entities with appropriate license or authority can
engage in recruitment and placement of workers. Contact services are
activities that fall within the scope of recruitment and placement of
workers. (Alcantara)
7. A paper manufacturing company in Cainta would like to know if it
needs to obtain a license authority before it can recruit workers for its
plant. No license or authority is necessary. The company is not
engaged in the business of recruitment and placement of workers, it is
not recruiting workers to be employed by others. It does not represent
a principal. It is recruiting its own workers. (Alcantara)
C.7 Rule Making
* The Secretary of Labor and Employment has the power and authority
not only to restrict and regulate the recruitment and placement
activities of all agencies but also promulgate rules and regulations to
carry out the objectives and implement the provisions governing said
activities. (Eastern Assurance vs. Secretary of Labor)
C. 8 Enforcement
1. Art. 36 : The Secretary of Labor shall have the power to restrict
and regulate the recruitment and placement activities of all
agencies within the coverage of this Title and is hereby
authorized to issue orders and promulgate rules and regulations
to carry out the objectives and implement the provisions of this
Title.
Sec. 2, Rule VI, Book I, IRRs : Pending investigation of the
complaint or report, the Secretary may suspend the license of the
private employment agency concerned. . .
2. Art. 37 : The Secretary or his duly authorized representatives
may, at any time, inspect the premises, books of account and

32
records of any person or entity covered by this Title, require it to
submit records regularly on prescribed forms, and act on
violations of any provisions of any provisions of this Title.
Public Sector Agencies
A. EMPLOYMENT OFFICES AND THE POEA
1. Art. 14 (a) : The Secretary of Labor shall have the power and
authority: (a) To organize and establish new employment
agencies in addition to the existing employment offices under
the DOLE as the need arises.
2. Sec. 3, EO 247 : POEA functions
a. Regulate private sector participation in the recruitment
and overseas placement of workers by setting up a
licensing and registration system;
b. Formulate and implement in coordination with appropriate
entities concerned, a system for promoting and monitoring
the overseas employment of Filipino workers taking into
consideration their welfare and the domestic manpower
requirements;
c. Protect the rights of Filipino workers to fair and equitable
recruitment and employment practices and ensure their
welfare;
d. Exercise original and exclusive jurisdiction to hear and
decide all pre-employment cases which are administrative
in character involving or arising out of violation of
recruitment laws, rules and regulations, or violation of the
conditions for issuance of license or authority to recruit
workers. The POEA has no jurisdiction to hear and decide a
claim for enforcement of a foreign judgment. Such a claim
must be brought before the regular courts. (Pacific Asia vs.
NLRC)
B. Definition of Terms
Sec. 1 (j), (w), (z), (ff), and (qq), Rule II, Book I, Rules and
regulations on Overseas Employment
1. Contract Worker - Any person working or who has worked
overseas under a valid employment contract.
2. Manning agency Any person or entity recruiting seamen for
vessels plying international waters and fore related maritime
activities.
3. Name Hire Worker who is able to secure employment
overseas on his own without the assistance or participation of an
agency.
4. Overseas employment Employment of a worker outside
the Philippines, including employment on hoard vessels plying
international waters covered by a valid employment contract.

33
5. Placement fee Amount charged by a private employment
agency from a worker for its services in securing employment.
6. Service fee Amount charged by a license from its foreign ER
as payment for actual services rendered in relation to the
recruitment and employment of workers for said principal.
6. 3 Sanctions
1. Art. 35 : Suspension and/or Cancellation of License or Authority
The Secretary of Labor shall have the power to suspend or
cancel any license or authority to recruit EEs for overseas
employment for violations of rules and regulations by the DOLE,
the POEA, or for violation of the provisions of this, and other
applicable laws . .
2. Art. 39 : Penalties Violations of any provisions of this Tile or
IRRs by license or holder of authority :
a. imprisonment of not less than 2 years nor more than 5
years
b. or a fine of not less than P10,000.00 nor more than
P50,000.00
c. or both such imprisonment and fine, at the discretion of
the court.
3. Violation of any of the provisions thereof or its implementing
rules and regulations by a non-license or non-holder of authority
a. imprisonment of not less than 4 years nor more than 8
years
b. or a fine of not less than P20,000.00 nor more than
P100,000.00
c. or both such imprisonment and fine, at the discretion of
the court.
4. If the offender is a corporation, partnership, association or entity,
the penalty shall be imposed upon the officer or officers of the
corporation, partnership, association or entity responsible for
violation; and if such officer is an alien, he shall in addition to the
penalties herein prescribed, be deported without further
proceedings:
* Illegal recruitment:
a. imprisonment of not less than 6 years and 1 day but not
more than 12 years and
b. a fine of not less than P200,000.00 nor more than
P500,000.00.
* Illegal recruitment constituting Economic Sabotage:
c. life imprisonment; and
d. a fine of not less than P500,000.00 nor more than
P1,000,000.00.
* The maximum penalty shall be imposed if:
a . the person illegally recruited is less than 18 years of age;
or
b. committed by a non-license or non-holder of authority.

34

* The Secretary of Labor or his duly authorized representative may


order the closure of illegal recruitment establishments.
5. Art. 38 (c) of the Labor Code granting the Secretary of Labor the
power to issue search or arrest warrants is declared
unconstitutional and null and void. (Salazar vs. Achacoso)
-

money claims arising from ER-EE relationship prescribes in


3 years
strict rules of evidence are not applicable in claims for
compensation and disability benefits

5. In case of breach of the employment contract by a foreign-based ER,


may the private employment agency or recruitment entity be held
liable? What is the nature of the liability of the recruitment and
placement agency and its principal? Yes. The agency or entity
undertakes under oath to assume full and complete responsibility for
all claims and liabilities which may arise in connection with the use of
the license or authority. The agency is jointly severally liable with the
principal or foreign-based ER for any of the violations of recruitment
agreement contract of employment. (Ambraque vs. NLRC; Pp vs. Catan)
Section 7. Alien Employment
7. 1 Technique of Regulation-Employment Permit
1. Art. 40 : Employment Permit of Non-resident Aliens Any alien
seeking admission to the Philippines for employment purposes
and any domestic or foreign ER who desires to engage an alien
for employment in the Philippines shall obtain an employment
permit from the DOLE . . .
For an enterprise registered in preferred areas of investments, said
employment permit must be issued upon recommendation of the
government agency charged with the supervision of the registered
enterprise.
Sec. 7, Rule XIV, Book I, IRRs : The employment permit shall be
valid for a minimum period of 1 year.
2. Art. 41 : Prohibition Against Transfer of Employment (a) After
the issuance of an employment permit, the alien shall not
transfer to another job or change his ER without prior approval of
the Secretary of Labor.
Art. 288 : Any alien found guilty shall be summarily deported upon
completion of service of sentence.
3. May an ER in the Philippines employ a worker who is not a
Filipino citizen? Yes, except to nationalized activities such as:
a. public utility to develop, exploit and utilize natural
resources 60% Filipino;
b. Mass media 100% owned by Filipino citizens
c. Advertising 70% Filipino owned
d. Retail Business 100% Filipino owned

35
e. Financing business 60% Filipino owned
4. Are there exceptions to the prohibition against employment of
aliens in entities engaged in nationalized activities? Yes, when (a)
the Secretary of Justice specifically authorizes the employment of
technical personnel; or (b) where aliens are elected members of
Board of Directors in proportion to their allowable participation in
the capital; or (c) when allowed under certain special laws.
(Alcantara)
Coverage
* A resident alien need not obtain an employment permit in order to be
employed in the Philippines. (Almodiel vs. NLRC)
Employment Permit Conditions for Grant
1. Art. 40 : The employment permit may be issued to a nonresident alien or to the applicant ER after a determination of: [W
A C]
a. competent
b. able and
c. willing
at the time of the application to perform the services for which the
alien is desired. [The DOLE is the agency vested with jurisdiction to
determine the question of availability of the local workers. (General
Milling vs. Torres)
2. Sec. 5, Rule XIV, Book I, IRRs
: Requirements for
Employment Permit Applicants The applicant for an
employment permit shall be accompanied by the following:
a. Curriculum vitae signed by the applicant indicating the
educational background, his work experience and other
data showing that he possesses technical skills in his trade
or profession.
b. Contract of employment between the ER and the principal,
which shall embody the following, among others:
That the non-resident alien shall comply with all applicable
laws and rules and regulations;
That the non-resident alien worker and ER shall bind
themselves to train at least 2 Filipino understudies; and
A designation by the ER of at least 2 understudies which
must be the most ranking regular EEs in the section or
department for which the expatriates are being hired to
ensure actual transfer of technology.
Section 8. Development of Human Resources
8.1 Objectives - Definitions
1. Art. 43 : It is the objectives of this [F E D]
a. Title to Develop human resources
b. Establish training institutions, and
c. Formulate such plans and programs as will ensure efficient
allocation, development and utilization of the nations

36
manpower and thereby promote employment
accelerate economic and social growth.

and

2. What is human resources development? Process by which the


actual and potential labor force is made systematically to acquire
greater knowledge, skills and capabilities for the nations
sustained economic and social growth. (Sec. 1, Rule I, Book II,
IRRs)
3. Define manpower? Is the portion of the population which has
actual or potential capability to contribute to the production of
goods and services. (Sec. 1 (c), Rule I, Book II, IRRs)
4. Is human resources development intended solely to train
workers? No. Manpower development also means training for
self-employment. This is known as entrepreneurship (Art. 44
(b).
5. What is dual system/training? It refers to a delivery system of
quality technical and vocational education which requires
training to be carried out alternatively in 2 venues:
a. in school and
b. in the production plant.
In school, training provides the trainee the theoretical foundation, basic
training, develops his skill and proficiency in actual working conditions
as it continues personal discipline and work value. (Sec. 4 (p), RA
7796)
8.2 Program Incentive
* Art. 52 : Deduction from taxable income of of the value of labor
training but not to exceed 10% direct labor wage: Provided, That in the
case of apprenticeship programs, the program is recognized by DOLE.
8.3 Training and Employment of Special Workers Apprentices,
Learners and Handicapped Workers
Policy Objectives
* What is the policy of the State on apprenticeship?
1. To help meet the demand of the economy for trained manpower;
2. To establish a national apprenticeship program through
participation of ERs workers, and government and nongovernment agencies; and
3. To establish apprenticeship standards for the protection of
apprentices. (Art. 57)
Definition
1. Art. 58 : Apprenticeship Practical training on the job
supplemented by related theoretical instruction.
2. Art. 73 : Learners 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 3 months.

37
3. Art. 78 : Handicapped workers Those whose earning
capacity is impaired by age or physical or mental deficiency or
injury
Who Can Employ and When
A. APPRENTICES must be approved by TESDA
1. Art. 60 : Only ERs in highly technical industries and only in
apprenticeable occupations may employ apprentices.
Sec. 1, Rule IV, Book II, IRRs : Highly Technical Industries
Trade, business, enterprise, industry or other activity which is
engaged in the application of advanced technology.
Art. 58 : Apprenticeship Occupation Requires more than 3
months of practical training supplemented by related theoretical
instruction.
-

1 month probation
prior approval by TESDA of the proposed apprenticeship
program is a condition sine qua non before an
apprenticeship can be validly entered into
employer is not obliged to employ the apprentice after the
completion of his training

2. Art. 70 : Apprenticeship programs shall be primarily voluntary


except:
a. When national security or particular requirements of
economic development so demand, the President may
require compulsory training where the shortage of trained
manpower is deemed critical by the Secretary of Labor.
b. Where services of foreign technicians are utilized by
private companies in apprenticeable trades.
B. LEARNERS
- Learnership programs must be approved by TESDA
* Art. 74 : Learners may be employed when:
1. no experienced worker is available
2. the employment of learners is necessary to prevent curtailment
of employment opportunities
3. and the employment does not create unfair competition in terms
of labor costs or impair or lower working standards.
C. HANDICAPPED WORKERS
* Art. 79 : Handicapped workers may be employed when their
employment
1. is
necessary
to
prevent
curtailment
of
employment
opportunities; and
2. when it not create unfair competition in labor costs or lower
working standards.
Conditions of Employment
- not exceed 8 hours

38
-

allowed overtime

* Art. 61 :
1. Period of apprenticeship shall not exceed 6 months.
2. Wages shall not start below 75% of the minimum wage.
3. Apprenticeship program must be duly approved by TESDA or
apprentices becomes regular EE. This must be evidenced by an
apprenticeship agreement. (Nitto Enterprises vs. NLRC)
Ratio of theoretical vs. on the job training > 100: 2000
- may work overtime duly credited as his training time
* Art. 72 : The Secretary of Labor may authorize the:
1. hiring of apprentices without compensation whose training on
the job is required by the school or training program curriculum
as a requisite for graduation or board examination. There is no
ER-EE relationship between students on one hand, and schools,
where there is written agreement between them under which
the former agree to work for the latter in exchange for the
privilege to study free of charge. (Sec. 14, Rule X, Book III, IRRs)
2. A clerk in the College of Law of a University worked without pay
but was allowed to take up no more than 3 units per semester
free of charge. The clerk resigned and demanded payment of
unpaid wages. Is the clerk entitled to unpaid wages? Yes. Sec. 14,
Rule X, Book III, IRRs : only applies in instances where the
students are given real opportunity, including such facilities as
may be reasonably necessary to finish their chosen courses
under such arrangement. In this problem, the clerk was not given
any real opportunity to finish law as he was allowed to take up no
more than 3 units per semester. There is therefore an ER-EE
relationship between the clerk and the university. (Alcantara)
3. Qualifications of an Apprentice:
a. At least 15 years of age: provided, those below 18
years of age shall not work in hazardous
occupations;
b. Be physically fit for the occupation.
c. Possess vocational aptitude and capacity.
d. Possess the ability to comprehend, and follow oral
and written instructions. (Sec. 11, Rule VI, Book III,
IRRs)
4. A 5-star hotel would like to have an apprentice program
dishwashers? No. This is not an apprenticeable program
occupation because proficiency can be attained within a very
short period. Besides, the hotel industry is not highly technical.
(Alcantara)
5. After working for 1 month may an apprentice be dismissed
without cause? No. After the probationary period of 1 month, the
apprenticeship agreement may be terminated only for cause.
6. Causes for termination of apprenticeship agreement by
apprentice:
a. Repeated violation by ER of agreement

39
b. Cruel or inhuman treatment
c. Personal problems which prevents
performance (bad health)
d. Substandard working conditions

satisfactory

EMPLOYER
a. habitual absentism
b. willful disobedience e.g. rules
c. insubordination lawful order
d. poor physical conditions apprentice
e. theft or malicious destruction
f. poor efficiency of performance
g. engaging in violence
h. gross misconduct
i. bad health or continuing illness. (Sec. 25, Rule VI, Book II,
IRRs)
* employer must make a commitment to employ the business
B. LEARNERS
- learnership must be approved by TESDA
1. Art. 75 :
1. Duration of the learnership period shall be 3 months;
2. Wages and salary rates begin at not less than 75% minimum
wage; and
3. A commitment to employ learners if they so desire, as regular
EEs upon completion of the learnership.
All learners who have been allowed or suffered work during
the first 2nd months to be deemed EEs training is
terminated by the ER before the end of the stipulated
period though no fault of the learner.
2. Art. 76 : Learners employed in piece or incentive-rate jobs during
training shall be paid in full for the work done.
3. J entered into a learnership agreement with employer A. Before the
end of 2 months, A terminated the agreement. When J requested for a
chance to let him finish the 3 months period. At the end of 3 months, A
refused to hire J. Is the stand of A sustainable? No. A has a
commitment under the learnership agreement to employ J as a regular
worker upon the completion of the learnership.
C. HANDICAPPED WORKERS [A P M I]
1. Art. 80 :
Rates to be paid to handicapped workers shall not be less
than 75% of the applicable minimum wage.
Employment agreement must state the duration of the
employment period and the work to be performed.
2. Art. 81 : Handicapped workers may be hired as apprentices or
learners if their handicap is not such as to effectively impede the
performance of job operations in the particular occupations for
which they are hired.

40
Enforcement
1. Art. 66 : Appeal to the Secretary of Labor - The decision of the
authorized agency of the DOLE may be appealed to the
Secretary of Labor within 5 days from receipt of the decision. The
decision of the Secretary of Labor shall be final and executory.
2. Art. 67 : Exhaustion of Administative Remedies 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.
Section 9. Conditions of Employment Hours of Work
9. 1 Hours Regulation
Rationale and Enforcement
* The 8-hour labor law was designed not only to safeguard the health
and welfare of the laborer but in a way to minimize unemployment by
forcing ERs, in cases, where more than an 8-hour operations is
necessary, to utilize different shifts of laborers working only for 8 hours
each. (Manila Terminal vs. CIR)
9.2 Coverage
I. Art. 82 : The provisions of this Title shall apply to EEs in all
establishments and undertakings whether for profit or not but to
[GMS- FMDP]
1. Government EEs [whether employed by the National
Government or any of its political subdivisions, including those
employed in GOCCs with original charters. (Sec. 2, Rule I, Book
III, IRRs]
2. Managerial EEs [refer to those who meet all of the following
conditions, namely:
a. Their primary duty consists of the management of the
establishment in which they are employed or of a
department or sub-division thereof;
b. Customarily or regularly direct the work of 2 or more EEs
c. Has the authority to hire or fire other EEs of lower rank; or
their suggestions and recommendations as to the hiring
and firing and as to the promotion or any change of status
of other EEs are given, particular weight. (d.)]
Mere designation to a position with a high-sounding title,
does not make an EE a managerial EE where the exercise
of the independent judgment is not present. (Sierra vs.
NLRC)
3. Other officers or members of the managerial staff if they perform
the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the ER;

41
b. Customarily and regularly, exercise discretion and
independent judgment;
c. Regularly directly assist a proprietor or managerial EE or
execute under general supervision work along specialized
or technical lines requiring special training, experience or
knowledge; or execute under general supervision special
assignment and tasks; and
d. Do not devote more than 20% of their hours worked to
activities which are not directly and closely related to the
performance of the work described in the preceding
paragraphs. (Id.)
4. Field personnel [Non-agricultural EEs who regularly perform their
duties away from the principal place of business or branch office
of the ER and whose actual hours of work in the field cannot be
determined with reasonable certainty. (Art. 82)
5. Members of the family of the ER who are dependent on him for
support domestic helpers and persons in the personal service of
another. Perform such service:
a. In the ERs home which are usually necessary or desirable
for the maintenance or enjoyment thereof;
b. Or minister to the personal comfort, convenience or safety
of the ER as well as the members of his ERs household.
(sec. 2, Rule I, Book III, IRRs)
However, house personnel hired by a ranking company
official, but paid for the company itself, to maintain a staff
house provided for the official, are not the latters domestic
helpers but regular EEs of the company. (Cadiz vs. Philippine
Sinter)
The function of a managerial employee requires the use of
discretion and independent judgment (nature of his
functions)
6. And workers who are paid by results. [Including those who are
paid on piece-work, takay, pakiao, or task basis if their
output rates are in accordance with the standards prescribed.]
II. Give the reason for the exceptions?
1. Government EEs Terms and conditions of employment are
governed by the Civil Service Law
2. Managerial EEs Employed by reason of their special training,
expertise or knowledge and for positions requiring the exercise of
discretion and independent judgment. Value of work cannot be
measured in terms of hours.
3. Non-agricultural field personnel These regularly perform their
duties away from the principal or branch office or place of
business of the ER; they are on their own in the field and the
number of hours
of actual work they render cannot be
reasonably ascertained.

42
4. Members of the family dependent upon him for support
Amounts given by way of support may far exceed the benefits to
which the EEs are entitled under the laws on overtime.
5. Domestic helpers and persons in the personal service of another
They minister to the personal needs and comfort their ER and
his family and terms and conditions of employment are governed
in other parts of the Labor Code.
6. Workers paid by results Compensation computed on the basis
of work accomplished and not on time spent in accomplishing
the work. (Alcantara)
III. Determine whether exempted EE or not?
1. Foremen, inspectors and supervisors given the power to
recommend hiring and firing of EEs but where ultimate power to
hire or fire rested with personnel manager? No. Where such
recommendatory powers are subject to evaluation and review,
the same are not effective and not an exercise of independent
judgment as required by law. ( Franklin Baker Company vs. Trajano)
2. Supervisory EEs are given the following duties and functions
assist the department superintendent in various aspects of
management such as in the planning of systems and procedures,
recommends disciplinary action against erring subordinates or
promotion of deserving personnel, train and guide subordinates;
communicate and coordinate with other supervisors; recommend
measures to improve work method; and other related tasks as
may be assigned by his immediate superior. Yes. They discharge
duties and responsibilities which qualify them as members of the
managerial staff. (Alcantara)
3. Cutter in tailoring shop was assigned chore of distributing work
to shops tailors when the shops manager were absent. He saw
to it that work conformed with pattern he had prepared and if
not, had them redone, repaired or sewn. No. He did not
participate in policy-making. It is true that in the absence of the
manager and assistant manager, he distributes and assigns work
to EEs but such duty though involving discretion is occasional
and not regular and customary. (Villuga vs. NLRC)
9.3 Normal Hours
* Art. 83 : The normal of hours of work of any EE shall not exceed 8
hours a day.
** Health personnel in cities and municipalities with a population of at
least 1,000,000 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 of 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 at
least 30% of their regular wage for work on the 6 th day. [Health
personnel Includes resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory technicians,

43
paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel]
* The 40-hour work week would not be applicable if there is a training
agreement between the resident physician and the hospital and the
training program is duly accredited or approved by appropriate
government agency. (Azucena)
9.4 Hours Worked
1. Art. 84 : Hours worked shall include:
A. all time during which an EE is required
to be on duty
to be at a prescribed workplace and
B. all time during which an EE is suffered or permitted to
work.
Rest periods of short duration during working hours shall be counted as
hours worked.
2. Sec. 4, Rule III, Book III, IRRs :
Principles in Determining Hours Worked
1. All hours are hours worked which the EE is required to give to his
ER regardless of whether or not such hours are spent in
productive labor or involve physical or mental exertion;
2. An EE need not leave the premises of the workplace in order that
his rest period shall not be counted, it being enough that
a. he stops working,
b. may rest completely and
c. may leave his workplace, to go elsewhere, whether within
or outside the premises of the workplace;
3. If the work performed was necessary or it benefited the ER or the
EE could not abandon his work at the end of the normal working
hours because he had no replacement, all the time spent for
such work shall be considered as hours worked, if the work was
with the knowledge of his ER or immediate supervisor;
4. The time during which an EE is inactive by reasons of
interruptions in his work beyond his control shall be considered
working time either if the imminence of the resumption of the
work requires the EEs presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the
EEs own interest.
3. Jose works as a janitor. He continues sweeping the floors after 5:00
p.m The manager is aware of this, but he does not stop Jose from
doing work after 5:00 p.m. Is this hours of work? Yes. Although Jose was
not instructed expressly to render work, he was impliedly allowed to do
so by failure of the ER to warn him against rendering such work.
Besides the work rendered by Jose benefited the ER.
Waiting Time

44
1. Sec. 5, Rule I, Book III, IRRs : Waiting time spent by an EE
shall be considered as working time if waiting is an
a. integral part of his work, or
b. the EE is required to engage by an ER to wait
The controlling factor is whether waiting time spent in idleness is
so spent predominantly for the ERs benefit or for the EEs.
(Azucena)
2. S, a company driver has the following work schedule: 8:30 a.m. fetches G.M.; 9:00 a.m. 12:00 noon does nothing on call for
G.M. at the company premises ; 12 noon 1:00 p.m. lunch;
1:00 p.m. 5:00 p.m. drives the G.M. to conferences; 5:00 p.m.
goes home. The company refuses to pay him for the 9:00 a.m. to
12:00 noon period. Is this valid? No. S is not free to make use of
the period effectively and gainfully for his own purposes. He
must remain in the premises as at any time he may be called to
drive for the G.M. (Alcantara)
3. 30 minutes prior to the start of the scheduled working hours, the
workers of an enterprise assembled at a designated area to
answer roll call. As their houses are situated right where the
farms are located, the workers can go back in their houses after
roll call to do some chores. Is the assembly time working time?
No. The works are not subject to the absolute control of the
company during the period. The workers were not deprived of
the time to attend to other personal pursuits. (Aria vs. NLRC)
Idle Time
1. A laborer need not leave the premises of the factory, shop or
boat in order that his period of rest shall not be counted, it being
enough that he cease to work, may rest completely and leave
or may leave at his will the spot where he actually stays while
working, or go somewhere else, whether within or without the
factory, shop or boat. (Luzon Stevedoring vs. Luzon Marine Dept. Union)
2. A, an accountant in the manufacturing firm, has idle time in her
work schedule, waiting for company papers to work on. She
dovotes this time working on papers of other firms for which she
receives remuneration. Is the firm obligated to pay her for this
time? Yes. Although she is working on the papers of other
companies, she has no absolute control over her time. Her ER
may at any time require her to do some work. She cannot
furthermore leave the place of work during her work schedule.
(Alcantara)
3. T, a machine operator was forced to stop operating his machine
for 1 hour during a brownout. Is this working time? Yes. The
interruption was not due to the fault of T. Besides 1 hour is too
brief to be utilized effectively and gainfully for his own interest.
Meal Time
1. Sec. 7, Rule I, Book III, IRRs : Every ER shall give his EEs not
less than 1 hour time-off for regular meals, except in the
following cases where a meal period of not less than 20 minutes
may be given by the ER provided

45

*(That such shorter meal period is credited as compensable hours


worked hours worked of the EE But if it is the EE who requested for the
shorter meal time, then such shortened meal period is not
compensable. (Azucena):
[N O P E]
Where work is Non-manual in nature or does not involve
strenuous physical exertion;
Where the establishment regularly Operates less than 16
hours a day;
In cases of actual or impending Emergency or there is
urgent work to be performed on machineries and
equipment to avoid serious loss which the ER would
otherwise suffer; and
Where the work is necessary to Prevent serious loss of
perishable goods.
* Rest periods or coffee breaks running from 5 to 20 minutes shall be
considered as compensable working time.
2. Where during the so-called meal period, the laborers are required
to stand by for emergency work, or where said meal hour is not
one of complete rest, such period is considered overtime. (Pan Am
vs. Pan Am EEs Association)
Working While Sleeping
* Sleeping time may be considered working time if it is subject to
serious interruption or takes place under conditions substantially less
desirable than would be likely to exist at the EE home i.e. firemen
permitted to sleep a portion of the time they are so on duty at the fire
station. (Azucena)
On Call
1. Sec. 5, Rule I, Book III, IRRs : An EE while he is required to
remain on call in the ERs premises or so close thereto that he
cannot use the time effectively and gainfully for his own purpose
shall be considered as working hours while on call. An EE who is
not required to leave word at his own or with company officials
where he may be reached is not working while on call.
2. If an EE is kept within reach through a cellular phone. Is it on
call? No. (Azucena)
Travel Time
***Principles which determine whether or not time spent in travel is working time:
Travel from Home to Work Normal travel from home to
work is no work time but an emergency call outside of
regular working hours requiring him to go to his regular
place of business is working time.

46

Travel that is all in the days work Time spent by an


EE in traveling from one job site to another, during the
workday, must be counted as hours worked.
Travel away from home Travel away from home is
clearly worktime when it cuts across the EEs workday,
except during meal period or when EE is permitted to sleep
in adequate facilities furnished by the ER. The time is not
only hours worked on regular workdays but also during
corresponding working hours on non-working days. Outside
of these regular working hours, travel away from home is
not considered working time. (Azucena)
Lectures, Meetings, Training Programs
* Sec. 6, Rule I, Book III, IRRs : Attendance at lectures, meetings,
training programs and other similar activities shall not be counted as
working time if all of the following conditions are met:
1. Attendance is outside of the ERs regular working hours;
2. Attendance is in fact voluntary; and
3. The EE does not perform any productive work during such
attendance.
Semestral Break
* Regular full-time teachers are entitled to salary and COLA during
semestral break. (U.Pang. Faculty Union vs. U. Pang.)
9.5 Overtime Work and Offsetting Prohibition
1. Art. 87 : Overtime Work
regular work day plus 25% basic hourly rate
Special days, holiday or rest day plus 30% of the regular
hourly rate on said days.
2. Art. 89 : Emergency Overtime Work - Any EE may be required
by the ER to perform overtime work in any of the following cases:
[WED-UPS]
a. When the country is at war
b. When any other national or local emergency has been
declared
c. When it is necessary to prevent loss of life or property or in
case of imminent danger to the public safety due to an
actual or impending emergency in the locality caused by
serious accidents, fire, flood, typhoon, earthquake,
epidemic or other Disaster or calamity.
d. When there is Urgent work to be performed on machines
and installations in order to avoid serious loss or damage
to the ER or some other cause of similar nature.
e. When the work is necessary to prevent loss or damage to
Perishable goods.
f. Where the completion or continuation of the work started
before the 8th hour is necessary to prevent Serious
obstruction or prejudice to the business operations of the
ER.

47

The EEs refusal to obey the order of the EE constitutes


insubordination for which he may be subjected to disciplinary
action. (Alcantara)
3. Art. 88 : Undertime work in any particular day shall not be offset
by overtime work on another day BUT not on someday.
Permission given to the EE to go on leave on some other
day of the week shall not exempt the ER from paying the
additional compensation required.
4. Art. 90
: For purposes of computing overtime and other
additional remuneration as required by this Chapter the regular
wage of an EE shall include the cash wage only, without
deduction on account of facilities provided by the ER.
5.

Y, corporation, as a company policy, required its EEs to render


only 6 hours of work daily but pays them the minimum wage
corresponding to 8 hours work. Later, the full 8-hours was
required without any increase in wages. Are the EEs entitled to
overtime pay? Yes. Though voluntary practice or policy, the
company has fixed the normal workday at 6 hours. It now
constitute part of the terms and conditions of employment and
cannot be unilaterally withdrawn by the ER. (Alcantara)

6. Distinguish overtime pay from premium pay : Overtime pay is


additional compensation for work done beyond the normal work
hours on ordinary working days. Premium pay is additional
compensation for work rendered by the EE on days normally he
should not be working. But additional compensation for work
rendered in excess of 8 hours during these days is also
considered overtime pay.
7. A was late for work on a particular day. To offset for the time he
was late, A worked on additional period equivalent to the period
he was late for work. The period was offset against A undertime.
Is this valid? Yes. The prohibition to offset overtime against
undertime applies to undertime incurred and overtime rendered
on different days.
Provisions for overtime covers both profit and non-profit
establishment or undertaking
For purposes of computing overtime
REGULAR WAGE includes the cash wage only; without
deduction of facilities provided.
8. May the right to overtime pay be waived? As a general rule, the
right cannot be waived. (Cruz vs. Yes Sing) However, when the
waiver is exchange for certain benefits and privileges, which may
be more than what will accrue to them in overtime pay, the
waiver may be permitted. (MERALCO Workers Union vs. MERALCO)
Rationale Overtime Pay
* The reasons for overtime pay is that the worker is made to work
longer than what is commensurate with the agreed compensation for
the statutorily fixed or voluntary agreed hours of labor he is supposed

48
to do. When he thus spends additional time to his work, the effect upon
him is multi-faceted; he puts in more effort, physical or mental; he is
delayed in going home to his family to enjoy the comforts thereof; he
might have no time for relaxation, amusement or sports; he might miss
important pre-arranged arrangements. (PNB vs. PEMA)
Compressed Week voluntary basis
* While as a general rule, the right to overtime pay cannot be waived
under existing laws, the EEs and ER can agree to a compressed
workweek of 5 days of 9 hours each with no payment of overtime if
this will redound to the benefit of the workers i.e. if the original
workweek is reduced from Monday Saturday to Monday Friday.
(Azuzena) However, Alcantara answered in a 1984 problem differently
when he answered that overtime pay should be paid. In that problem,
the workers were required to render 9.5 hours of work for 5 days.
(What is the answer, I really do not know, ask the reviewer)
Conditions for Compressed Work Week
1. voluntary agreed upon
2. not to exceed 48 hours/ week
3. no diminution on take home pay or fringe benefits
4. waivers must be made
5. all hours exceeding 48 hours/week considered overtime
6. must submit report to DOLE
Retail Establishment
- sale of goods for personal or household use
ex. grocery
Service Establishment
- sale of services to individuals for their own or household
use
ex. T.V. repair shop
No Formula Basic Contract
* When the contract of employment requires work for more than 8
hours at specific wages per day, without providing for a fixed hourly
rate or that the daily wages include overtime pay, said wages cannot
be considered as including overtime compensation. (Manila Terminal vs.
CIR)
Built-In Compensation
* The employment contract may provide for a built-in overtime pay.
Because of this, non-payment of overtime pay by the ER is valid.
(Engineering equipment vs. Minister of Labor)
9.6 Night Work
1. Art. 86 : Every EE shall be paid night shift differential of not less
than 10% of his regular wage for each hour of work performed
between 10:00 p.m. and 6:00 a.m.

49
2. Sec. 1, Rule II, Book III, IRRs : This rule shall apply to all EEs
except:
[G R S D M F]
a. Those of the government and any of its political
subdivisions, including GOCCs.
b. Retail and service establishments regularly employing not
more than 5 workers.
c. Domestic helpers and persons in the personal service of
another.
d. Managerial EEs.
e. Field personnel and other EEs whose time and
performance is unsupervised by the ER.
f. Includes task and contract basis
3. X works at a gasoline station which has only 5 EEs. Is he entitled
to night shift differential? No. He works in a retail establishment
employing not more than 5 workers. (Alcantara)
4. What if X works at Kings Minimarts, a retail store chain with 10
outlets of 2 EEs each outlet. Is he entitled to night shift
differential? Yes. The total number of EEs of the ER exceeds 5. It
is at least 20. (Id)
Rationale Prohibition
* First, there are remotely injurious effects of permanent nightwork
manifested in the later years of workers life. Of the more immediate
importance is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations
of normal family relations. From an economic point of view, it is to be
discouraged because of its adverse effect upon efficiency and output.
A moral argument in the case of workers is that they go to and from
the factory in the darkness. (Shell vs. NLU)
Exercise of a profession is neither a retail nor service
Section 10 : Weekly Rest Periods
* Art. 82 : The provisions of this Title shall apply to EEs in all
establishments and undertakings whether for profit or not, but not to
[G M S F I F D R]
1. Government EEs [whether employed by the National
Government or any of its political subdivisions, including those
employed in GOCCs with original charters. (Sec. 2, Rule I, Book
III, IRRs]
2. Managerial EEs [refer to those who meet all of the following
conditions, namely:
a. Their primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof;
b. Customarily and regularly direct the work of 2 or more
EEs;
c. Has the authority to hire or fire other EEs of lower rank; or
their suggestions and recommendations as to the

50
promotion or any other change of status of other EEs are
given particular weight. (Id)
> Mere designation to a position with a high-sounding title, does not
make an EE where the exercise of independent judgment is not
present. (Sierra vs. NLRC)
3. Other officers or members of the managerial staff [if they
perform the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the ER;
b. Customarily and regularly exercise discretion and
independent judgment;
c. Regularly directly assist a proprietor or managerial EE or
execute under general supervision work along specialized
or technical lines requiring special training, experience or
knowledge, or execute under general supervision special
assignment and tasks; and
d. Do not devote more than 20% of their hours worked to
activities which are not directly and closely related to the
performance of the work described in the preceding
paragraphs. (Id)
4. Field personnel [Non-agricultural EEs who regularly perform
their duties away from the principal place of business or branch
office of the ER whose actual hours of work in the field cannot be
determined with reasonable certainty (Art. 82)]
5. Members of the family of the ER who are dependent on
him for support
6. Domestic helpers and persons in the personal service of
another. [Perform such services:
a. In the ERs home which are usually necessary or desirable
for the maintenance or enjoyment thereof;
b. Or minister to the personal comfort, convenience, or safety
of the ER as well as the members of his ERs household
(Sec. 2, Rule I, Book III, IRRs)
However, house personnel hired by a ranking company
official, but paid for by the company itself, to maintain a
staff house provided for the official, are not the latters
domestic helpers but regular EEs of the company. (Cadiz vs.
Philippine Sinter)
7. And workers who are paid by results. [Including those who
are paid on piece-work, takay, pakiao, or task basis if their
output rates are in accordance with the standards prescribed.]
Sec. 1, Rule III, Book III, IRRs : This rule shall apply to all ERs
whether operating for profit pr not, including public utilities
operated by private persons.
10.2 Scheduling of Rest Day; When Compulsory Work Allowed;
and Compensation
1. Art. 91 : It shall be for the duty of every ER, whether operating
for profit or not, to provide EE a rest period of not less than 24

51
consecutive hours after every 6 consecutive normal working
days.
* The ER shall determine and schedule the weekly rest day of his
EEs
However, the ER shall respect the preference of EEs as to
their weekly rest day when such preference is based on
religion grounds.
Sec. 4, Rule III, Book III, IRRs : Where however the choice of the
EEs as to their rest day based on religious grounds will inevitably
result in serious prejudice or obstruction to the operation of the
undertaking, the ER may so schedule the weekday rest day of their
choice at least 2 days in a month.
2. Art. 92 : When ER may require Work on rest day [D U
A - P N A]
a. In case of actual or impending emergency caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic, or other Disaster or calamity to prevent loss of
life, or imminent danger to public safety.
b. In case of Urgent work, to avoid serious loss which the ER
would otherwise suffer;
c. In the event of Abnormal pressure of work due to special
circumstances, where the ER cannot ordinarily be expected
to resort to other measures;
d. To prevent or damage to Perishable goods;
e. Where the Nature of work requires continuous operations
and stoppage of the work may result in irreparable injury
or loss to the ER; and
f. Analogous (avail of favorable weather) or similar
circumstances [PANADU]
3. How much is a worker entitled if he works on a rest day?
Scheduled rest day additional compensation of at least
30% of his regular wage.
Scheduled rest day which is a non-working holiday
entitled to additional compensation of at least 50% of his
regular wage.
Scheduled rest day which is a regular holiday
entitled to additional compensation of at least 30% of his
regular holiday rate of 200% based on his regular wage
rate. (Sec. 4, Rule III, Book I, IRRs)
4. V works on board the M/V Starfish. Sometimes, the boat remains
at sea for 2 weeks, while at other times, especially during bad
weather, the vessel returns to port only after a few days. While
the vessel is in port, V stays home with his family. Can V claim
the additional compensation for work on rest day? Vs work is
such that no regular workdays and no rest days can be
scheduled. In such cases, the law provides that if he performs
work on Sundays and holidays, he shall be paid an additional
compensation of at least 30 % of his regular wage. [Art. 39 (b)]

52

Rationale Rest day


* Ordinarily, Sundays and legal holidays are dedicated to reading and
instruction so as to fill the mind with culture or some sort of
advancement. On these days, the laborer spends longer hours in the
company of his family. The deprivation of that opportunity to satisfy
mental, moral and spiritual needs should not be ignored, and should be
properly compensated. (MERALCO vs. Public Utilities EEs Association)
Section 11 : Conditions of Employment Holidays
11.1 Coverage
1. * Art. 94 : Every worker shall be paid his regular daily wage during
holidays, except: [RSIO, G, DH, M, FP]
a. in retail and service establishments regularly employing less than 10
workers;
Sec. 1, Rule IV, Book III, IRRs :
b. Those of the government and any of its political subdivisions,
including GOCCs.
c. Domestic helpers and persons in the personal service of another.
d. Managerial EEs.
e. Field personnel and other EEs whose time and performance is
supervised by the ER.
* If required to work on regular holidays,
regular rate x 2
Regular Holidays
1. New Years day
2. Maundy Thursday
3. Good Friday
4. Bataan Day
5. Labor day
6. Independence day
7. National heroes day
8. Bonifacio day
9. X-mas day
10.
Rizal day
Nationwide Special Holidays
1. Nov. 1
2. Dec. 31
2. Monthly paid EEs are not excluded from the benefits of holiday pay.
(Mantrade vs. Bacungan)
3. X is a manicurist in the DStyle Barbershop which has 20 barbers
and manicurists. Is she entitled to holiday pay? Yes. X is an EE who is
paid by results ad she works in a service establishment employing
more than 10 persons. (Sec. 8, Rule IV, Book III, IRRs)
12.2 Holiday Pay

53
1. Art. 94 : The ER may require an EE to work on a holiday but
such EE shall be paid a compensation equivalent to twice his
regular rate.
2. To receive holiday pay, the EE should not have been absent
without pay on the working day preceding the regular holiday.
(Azucena)
3. A legal holiday falling on a Sunday creates no legal obligation for
the ER to pay extra to the EE who does not work on that day,
aside from the usual holiday pay, to its monthly-paid EEs.
(Wellington vs. Trajano)
4. X was told by ER to work during a legal holiday which fell on a
Sunday. How much is he entitled to? X will get 200% of his daily
rate plus premium pay pf 30% of the holiday pay = regular daily
rate * 230%.
5. If X works overtime during that day, how much will he earn?
Holiday pay rate/8 plus overtime pay of 30% of the holiday
hourly rate = holiday pay rate/8 * 130%.
6. R was absent without pay on December 24. Is he entitled to
holiday pay for Christmas day? No. An EE may not be paid on
holiday pay if he was absent on the day preceding holiday, or in
the case of Maundy Thursday and Good Friday, if he was absent
on the day preceding the first holiday. It would be different if the
day preceding the legal holiday was the EEs rest day. Then he is
entitled to holiday pay. (Alcantara)
On leave with pay
7. Can monthly pay under employment contract already include
pay for any unworked regular holiday within the month? Yes. This
is management prerogative provided that the monthly pay
comply with the least minimum rates prescribed under minimum
wage laws.
What an employer has voluntarily given cannot be
unilaterally withdrawn
If the employees are already paid for all non-working days,
the divisor should be 365 and not 251
Vacation and sick leave must be claimed otherwise waived
- cannot be converted into cash unless allowed by employer
Faculty Private School
* Regular holidays specified by law are known to both school and
faculty members as no class days. Thus, hourly paid faculty
members are not entitled to their pay for unworked regular holidays.
On the other hand, hourly paid faculty members are however entitled
to their regular hourly rate on days declared as special holidays or
when classes are called off or shortened since the faculty member,
although forced to take a rest, does not earn what he should earn on
that day. (JRC vs. NLRC)

54

Divisor as Factor
* The daily rate is a constant figure for the purpose of computing
overtime and night differential pay and commutation of sick and
vacation leave credits, and this should also be the same basis for
computing unpaid holidays. (Union of Filipro vs. Vivar)
Section 12. Conditions of Employment Service Incentive
Leave
Vacation and Sick leave
- employer must still bind himself in CBA or grant it
unilaterally
- not granted by law
12.1 Coverage
Coverage
* Art. 95 : The provision on service incentive leave shall not apply
to:
[E,S, IO, E, G, D, M, F]
1. Those who are already enjoying the benefit.
2. Those enjoying vacation leave with pay of at least 5 days.
3. Those employed in establishments regularly employing less than
10 workers
4. Exempt establishments.
Sec. 1, Rule V, Book III, IRRs :
5. Those of the government and any of its political subdivisions
including GOCCs.
6. Domestic helpers and persons in the personal services of
another.
7. Managerial EEs.
8. Field personnel and other EEs whose performance is
unsupervised by the ER including those who are engaged on task
or contract basis, purely commission basis, or those who are paid
in a fixed amount of performing work irrespective of the time
consumed in the performance thereof.
* Teachers of private schools on contract basis are entitled to service
incentive leave. (Cebu Institute of Technology vs. Ople)
12.2 Entitlement
- can be converted to cash
* Art. 95 : 5 days incentive leave with pay for at least 1 year of
service.
[The term at least 1 year of service shall mean service within 12
months, whether continuous or broken, reckoned from the date the EE
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 are less
than 12 months, in which case said period shall be considered as 1
year. (Sec. 3, Rule V, Book III, IRRs)

55

VACATION AND SICK LEAVE


employer must still bind himself in CBA or grant it unilaterally
not granted by law
Section 13. Minimum Wages and Wage Fixing Machinery
13.1 Minimum Wages
1. Art. 99 : The minimum wages for agricultural and nonagricultural EEs and workers in each and every region of the
country shall be those prescribed by the Regional Tripartite
Wages and Productivity Boards.
2. Explain the rule a fair days wage for a fair days labor?
Unless specifically required by law, contract or established
policy, the ER is not bound to pay wages to a worker who has not
actually rendered any service.
3. Give 2 aspects of agriculture ? The primary aspect covers
cultivation and tillage of the soil, growing and harvesting of any
agricultural and horticultural commodities and raising of
livestock and poultry. The secondary aspect covers any practices
performed by a farmer on a farm as an incident to or in
conjunction with the farming operations.
4. Farmers employed by B cultivate the soil and plant and harvest
tobacco and they also cut big trees grown on the land which they
used for fencing and repair of the owners house. They claim for
minimum wages for non-agricultural workers. Is the claim valid?
No. They are still agricultural workers. They perform activities which
fall under the primary aspect of agriculture and the cutting of trees
to be used for fencing is incidental to the farming operations and
falls under the secondary aspect of agriculture.
Coverage
* Art. 98 :

This Title shall not apply


to farm tenancy or leasehold
domestic services and
persons working in their respective homes in needle or in
any cottage industry duly registered in accordance with
law.

Section 3, Rule VII, Book III, IRRs :


* Workers in duly registered cooperatives when so recommended by
the bureau of Cooperative Development and upon approval of the
Secretary of Labor . . .

Minimum Wage
1. Art. 97 (1) : Wage paid to
* The remuneration or earnings, however designated, (LEGAL TENDER)

56
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,
which is payable by an ER to an EE under a written or
unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered
* and includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging or other facilities customarily
furnished by the ER to EE. [Fair and reasonable value shall not
include any profit to the ER or to any person affiliated with the ER.
2. Art. 61 : Apprentices : Wage rates shall in no case fall below 75
% of the applicable minimum wage.
3. Art. 75 : Learners : Wage rates shall begin at not less than 75%
of the applicable minimum wage.
4. Art. 80 : Handicapped Workers : Wage rates shall not be less
than 75% of the applicable minimum wage.
5. Art. 124 : All recognized learnership and apprentice agreements
shall be considered automatically modified insofar as their wage
clauses are concerned to reflect the prescribed wage rates [set
by the Regional tripartite and Wages Productivity Board].
A. FACILITIES AND SUPPLEMENTS
* The law guarantees the laborer a fair and just wage. The minimum
wage can by no means imply only the actual minimum. Some margin
or leeway must be provided, over and above the minimum, to take
care of contingencies, such as increase in wants, and to provide means
for a desirable improvement in his mode of living. (Atok-Big Wedge vs.
Atok-Big-Wedge Mutual Benefit Association)
B. SUPPLEMENTAL FACILITY
1. Distinguish between supplements and facilities?
Supplements Extra remuneration or special privileges
or
benefits given to or received by the worker over and above his
ordinary earnings or wages.
- granted for the convenience of the ER
Facilities Items of expense necessary for the laborers and his
familys existence and subsistence. They form part of the wage and
when furnished by the ER are deductible therefrom since if they are
not furnished, the laborer would spend and pay for them just the
same i.e. meals; housing for dwelling purposes; fuel including
electricity, gas, water for the non-commercial personal use of the
EE; and other articles and services given primarily for the benefit of
the worker or his family.
- for the benefit of the worker and his family
2. The criterion in determining whether an item is a supplement or
facility is not so much with the kind of benefit or item given, but
its purpose. (State Marine vs. Cebu Seamens Association)

57

3. CMC has 3 buses used to transport its workers, free of charge


from Makati to its plat in Muntinlupa. The buses became
dilapidated and the service was discontinued by the company.
The EEs demanded for their replacement. Decide with reasons.
The company may be compelled to continue providing the
transportation free of charge. This is considered a supplement given
over and above the ordinary earnings or wages of the workers. Once
given, a supplement cannot be eliminated or diminished. (Alcantara)
-

Test on whether or not items are facilities [C F, V A,


F R]
a. Are these items automatically furnished by the
trade?
b. Did the employee voluntarily accepted the same in
writing?
c. Is the value thereof fair and reasonable?
If the employer fails to prove this:
a. Then it is a supplement not a facility.
b. Once given, a supplement cannot be eliminated or
diminished.
c. Grant of bonus may be unilaterally be reduced by
the employer if it depends on profits acquired.

4. Because he lived 50 kilometers from its work, X requested his ER


if he can sleep in the company premises. The latter agreed with
the condition that he will deduct P5.00 per day as board charges
from X. Is the deduction legal?
No. Lodging is not customarily finished by the ER to his EEs. The
deduction, furthermore, is not with the written consent of X.
C. CASH WAGE legal tender
1. What is basic salary? In its common, generally accepted
meaning, it is the rate of pay for a standard work period,
exclusive of such additional payment as bonuses and overtime.
(Boic-Takeda vs. Dela Serna)
2. Are emergency cost of living allowances considered part of
regular wage?
Yes. This is taken into account in determining overtime and
premium pay , premium contributions, social security, maternity
pay, etc. (EO 178)
D. EFFECT - INABILITY TO PAY
* If a company cannot pay a living wage, it has no business operating
at the expense of the lives of the workers. (Phil. Apparel vs. NLRC)
E. GRATUITY and WAGES

58
* Gratuity That paid to the beneficiary for past services rendered
purely out of the generosity of the giver or grantor. While it may be
enforced once it forms part of a contractual undertaking, the grant of
such benefit is not mandatory so as to be considered a part of labor
standard law. (Plastic Town vs. NLRC)
F. BENEFICIARY OF THE MINIMUM WAGE LAW
* The minimum wage law directly benefits the lowly paid EEs who
receive inadequate wages on which they support themselves and their
families. It benefits all wage earners indirectly by setting a floor below
which their remuneration cannot fall. It increases the standard of
competition among ERs since it would protect the fair-minded ER who
operates at lower costs by reason of paying his workers a wage below
subsistence. (Pp vs. Gatchalian)
G. BENEFITS
1. Art. 100 : Nothing in this Book shall be construed to eliminate
or in any way diminish supplements, or other EE benefits being
enjoyed at the time of promulgation of this Code.
2. Unless agreed otherwise, statutory benefits are apart from
contractual benefits. (Meycauayan College vs. Drilon) Thus, EEs are
entitled to the full amounts of both a wage increase under a CBA
and an increase in living allowances prescribed by law during the
period when both increases are concurrently effective, for want
of an agreement between the parties to treat the increase in
living allowances as applicable to the wage increases. (Filipinas
Golf vs. NLRC)
3. The work of batillos, cargadores of fish catch, were limited to
days of arrival of fishing vessels. From 1976 to 1980, operators
paid them a fixed monthly emergency allowance which included
non-working days. Can the operators now discontinue the
practice and pay the batillos only for actual days worked,
following the principle of no work, no pay ?
No. Benefits voluntarily given cannot be unilaterally withdrawn by
the ER. Art. 100 prohibits the elimination or diminution of existing
benefits.
4. Workers in a plastic manufacturing company are able to clean
and inspect only 250 containers of 8 hours despite repeated
appeals from management. They were paid a daily rate of
P150.00. Through time and motion studies set by the DOLE, the
ER was able to ascertain that an ordinary worker can clean and
inspect 450 containers for 8 hours. The company then changed
its mode of payment from time basis to piecework at P0.40 per
container. Is this valid?
Yes. The company has the right to change the basis of the payment
of the wages of the workers. The workers would not suffer since it is
within their capability to clean and inspect the number of containers
to enable them to at least earn the rate they were receiving at the
time the change was effected. They cannot however be deprived of

59
benefits they were already enjoying at the time of such change.
(Alcantara)
** While normally discretionary, the grant of a gratuity or bonus, by
reason of its long and regular concession, may become part of a
regular compensation.
* OR employer agreed to give its regularly without any condition
imposed for its payment
13.2 Rationale for Wage Rationalization
* Section 2, Wage Rationalization Act : It is hereby declared the
policy of the State to rationalize the fixing of minimum wages and to
promote productivity-improvement and gain-sharing measures: [J A D
E]
1. To ensure Decent standard of living for the workers and their
families;
2. To guarantee the rights to its Just share in the fruits of
production;
3. To enhance Employment generation in the countryside through
industry dispersal; and
4. To Allow business and industry reasonable returns on investment,
expansion and growth.
13.3 Agencies for Wage Fixing Machinery
Advisory agency National Wages and Productivity Commission
1. Art. 120 : National Wages and Productivity Commission
attached to the DOLE the policy and program coordination.
2. Give at least 5 major powers and functions of the
National Wages and Productivity Commission :
a. To act as the national consultative and advisory body to
the President and Congress on matters relating to wages,
incomes and productivity.
b. To formulate policies and guidelines on wages, incomes
and productivity improvement at the enterprise, industry
and national levels.
c. To prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at
the regional, provincial or industry levels.
d. To review regional wage levels set by the Regional
Tripartite Wages and Productivity Boards .
3. Art. 126 : No preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or any
entity against any proceedings before the Commission or the
regional Boards.
Wage Fixing Agency
1. Art. 122 : Regional Tripartite Wages and Productivity
Boards In all regions, including autonomous regions.

60

2. Give at least 3 major powers and functions of the


Regional Tripartite and Productivity Boards within their
territorial jurisdiction:
a. To develop plans, programs and projects relative to wages,
incomes and productivity improvement for their respective
regions.
b. To determine and fix minimum wage rates applicable in
their region, provinces or industries therein and to issue
the corresponding wage orders, subject to guidelines by
the Commission.
c. To receive, process and act on applications for exemption
from prescribed wage rates as may be provided by law or
any Wage Order. [Implementation of the plans shall be
through the respective offices of the DOLE but the Regional
Boards shall have technical supervision over the said DOLE
offices.]
3. Art. 126 : 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.
The ECOLA now forms part regular wage
Employees paid by results should receive not less than the
applicable wage rates provided for 8 hours workday
13.4 Area Minimum Wages and Criteria
* Art. 124 : Standards/Criteria for Minimum Wage Fixing
Regional minimum wages shall be nearly as adequate as is
economically feasible to maintain the minimum standards of living
necessary for the health, efficiency and general well-being of the EEs
within the framework of the national economic and social development
program. In the determination of such regional minimum wages, the
Regional Board shall, among other relevant factors, consider the
following:
1. The demand of living wages;
2. Wage adjustment vis--vis the consumer price index;
3. The cost of living and changes and their families;
4. The need to induce industries to invest in the countryside;
5. Improvements in the standard of living
6. The prevailing wage levels
7. Fair return of the capital invested and capacity to pay of ERs
8. Effects on employment generation and family income; and
9. The equitable distribution of income and wealth along the
imperatives of economic and social development.
These wages shall include wages varying within industries,
provinces or localities if in the judgment of the Regional Board
conditions make such local differentiation proper and necessary to
effectuate the purpose of this Title.
13.5 Wage Order
* Art. 123 : Whenever conditions in the region so warrant, the
Regional Board shall investigate and study pertinent facts and, based

61
on the standards and criteria herein prescribed, shall proceed to
determine whether a Wage Order should be issued.
In the performance of its wage-determining functions, the
Regional Board shall conduct public hearings, consultations, giving
notices to EEs and ERs groups, provincial, city and municipal officials
and other interested parties.
Any party aggrieved by the Wage Order issued by the Regional
Board may appeal such order to the Commission within 10 calendar
days from the publication of such order. It shall be mandatory for the
Commission to decide such appeal within 60 calendar days from the
filing thereof.
Methods of Fixing
*The determination of wages has generally involved two methods, the
floor-wage method and the salary-ceiling method. The 1 st method
involves the fixing of determinate amount that would be added to the
prevailing statutory minimum wage. In the 2 nd method, the wage
adjustment is applied to EEs receiving a certain denominated salary
ceiling. (ECOP vs. NWPC)
Wage Distortion
* A severe contraction of the wage or salary differences is enough
1. Art. 24 : Wage Distortion - Distortion where an increase in the
prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage salary
rates between and among EE groups in an establishment as to
effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases
of differentiation.
2. How is a wage distortion corrected? Any dispute arising
from wage distortions shall be resolved through the grievance
procedures under their CBA, and if it remains unresolved,
through arbitrary arbitration. If there is no recognized labor union
or there are no collective bargaining agreements, the dispute
shall be settled through the National Conciliation and Mediation
Board, or if unresolved after 10 days of conciliation, through the
NLRC which shall decide the dispute within 20 calendar days.
(Art. 24) The law recognizes the validity of negotiated wage
increases to correct wage distortions. The legislative intent is to
encourage the parties to seek solution to the problems of wage
distortions through voluntary negotiation or arbitration, rather
than strikes, lockouts, or other concerted activities of the EEs or
management. (ALU-TUCP vs. NLRC) In a case where a union
went on strike over a salary distortion dispute, the Court held the
strike illegal. (Ilaw at Buklod ng Manggagawa vs. NLRC)
13. 6 Wages and Productivity Measures
Wage/Salary
Differentiate wages from salary?

62
* Wages Compensation for manual labor, skilled or unskilled paid
at stated times, and measured by the day, week, month, or season. It
indicates considerable pay for a lower and less responsive character of
employment.
* Salary Denotes a higher degree of employment, or a superior
grade of services, and implies a position of office; by contrast, the term
wages, while salary is suggestive of a larger and more important
service. (Gaa vs. CA)
Wage Payment
1. Art. 102 : Forms of Payment : No ER shall pay the wages of an
EE by means of promissory notes, vouchers, coupons, tokens,
tickets, chits or any object other than legal tender, even when
expressly requested by the EE. [The laborers wage shall be paid
in legal currency. (Art. 1705, NCC)]
-

Payment of wages by check or money order shall be


allowed when :
a. such manner of payment is customary on the date
of the effectivity of this Code, or
b. is necessary because of special circumstances as
specified in appropriate regulations to be issued by
the Secretary of Labor or as stipulated in a CBA.
CONDITIONS
a. bank 1 km
b. written consent of EE
c. ER does not receive any pecuniary benefit
d. EE given time to withdraw from the bank
considered as compensable his work

2. Art. 103 : Time of Payment


* Generally : Once every two weeks or twice a month at intervals
not exceeding 16 days. No ER shall make payment with less
frequency than once a month.
* Force Majeure : Immediately after the force majeure or the
circumstances have ceased.
* Task cannot be completed in 2 weeks in the absence of a
CBA or arbitration award:
a. The payments are made at intervals not exceeding 16
days, in proportion to the amount of work completed;
b. That final settlement is made upon completion of work;
3. Art. 104 : Place of Payment : Payment of wages shall be made
at or near the place of undertaking, except as otherwise provided
by such regulations as the Secretary of Labor may prescribe
under conditions to ensure greater protection of wages.
1. deterioration of peace and order conditions
2. actual or impending emergencies calamity
- ER must provide or reimburse transportation back and
forth
- Time spent collecting wages considered compensable his
work

63

4. Art. 105 : Direct Payment of Wages


* General Rule : Wages paid directly to workers.
* Exceptions:
1. Force majeure rendering such payment impossible or under the
special circumstances, in which case the worker may be paid
through another person under written authority given by the
worker for the purpose.
2. Where the worker has died, in case the ER may pay the wages of
the deceased worker to the heirs of the latter without the
necessity of intestate proceedings.
A. DIRECT PAYMENT
Payment of wages to leader of group not violation of direct
payment since the contract to perform the services was made by the
leader of the group, for and in behalf of the latter, not for each and
everyone of them individually. (Bermiso vs. Escano)
Wage Prohibition
1. Art. 112 : Non-Interference in Disposal of Wages
- No ER shall limit or otherwise interfere with the freedom of
any EE to dispose of his wages.
- He shall not in any manner force, compel or oblige his EEs
to purchase merchandise, commodities or other property
from the ER or from any other person, or otherwise make
use of any store or services of such ER or any other person.
2. A meat processing company gives a 25% discount to EEs for
purchase on credit of its product. However, said purchases on
credit will be considered payment of his wages. An EE purchases
10 cans of the product but objects to the application of his
purchases as part of his wages. Is the objections valid?
Yes. The application of his purchases on credit as part of his wages
the products in lieu of legal tender. (Alcantara)
3. May an ER make any deductions from the wages of EEs?
General Rule : No. His own behalf or in behalf of any person.
Exceptions: [Allowable Deductions]
1. Deductions of SSS, Medicare and Pag-ibig Premiums (Alcantara)
2. Withholding tax (NLRC)
3. Deductions for reimbursement of insurance premium advanced
by the ER where the worker is insured with his consent by the
former. (Art. 113)
4. Deductions for unions dues where the right to check-off has been
recognized by the ER or individual EE himself. (Id)
5. Deductions made with the written authorization of the EE for
payment to a 3rd person and the ER agrees to do so, provided
that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction. (Alcantara)
6. Deductions for reimbursement of loss or damage to tools,
materials or equipment supplied by the ER to the EE, in trades,
occupations or business where the practice of making such
deductions is recognized. (Art. 114)

64
7. Deductions as a disciplinary measure for habitual tardiness
(Alcantara)
8. Agency fees under Art. 248 (e) of the Code.
9. Deductions for debts due the ER from the EE, when such debts
become due and demandable. (Art. 1706, NCC)
10.
In court awards, wages may be the subject of execution or
attachment, but only for debts incurred for food, shelter, clothing
and medical attendance. (Art. 1708)
11.
Deductions for value of meals and others. (Alcantara)
3. Art. 114 : Deposits for Loss or Damage : No ER shall require his
worker to make deposits from which deductions shall be made for the
reimbursement for loss or damage to tools, materials or equipment
supplied by the ER except:
a. When the ER is engaged in such trades, occupations or business
where the practice of making deductions or requiring deposits is a
recognized one, or
b. is necessary or desirable as determined by the Secretary of Labor in
appropriate rules and regulations.
4. J works as a dishwasher in a big restaurant. At the time of his
employment, he was told that it was an industry practice that the
value of plates broken by him while in the performance of his work will
be deducted from his wages. May management deduct the said value
from Js wages?
Yes, provided the following conditions are met: [PRO-F20]
1. The practice of making deductions is a recognized one or is
necessary and desirable in the business of the ER.
2. J is clearly shown to be responsible
3. He is given reasonable opportunity to show cause why the
deduction should not be made.
4. The amount of deductions is fair and reasonable and does not
exceed the actual loss or damage.
5. The deduction does not exceed 20% of Js wages in a week. (Sec.
14, Rule VIII, Book III, IRRs)
5. Art. 116 : Withholding of Wages and kickbacks prohibited It shall
be unlawful for any person, directly or indirectly,
To withhold any amount from the wages of a worker or
Induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means
whatsoever without the workers consent.
6. Art. 117 : Deduction to ensure employment - It shall be unlawful to
make any deduction from wages of any EE for the benefit of the ER or
his life representative or intermediary as consideration of a promise of
employment or retention in employment.
7. Art. 222 - No attorneys fees, negotiation fees or similar charges of
any kind arising from any collective bargaining negotiations or
conclusions of the CBA shall be imposed on any individual member of
the contracting union: Provided, however that attorneys fees may be
charged against union funds in an amount agreed upon by the parties.
Any contract, agreement or arrangement of any sort to the contrary
shall be null and void.

65

8. Art. 1708 : The laborers wages shall not be subject to execution or


attachment except for debts incurred for food, shelter, clothing and
medical attendance.
A. WAGE DEDUCTION
1. An obligation arising from non-payment of stock subscriptions to
a corporation cannot be offset against a money claim of an EE
against an ER. (Apodaca vs. NLRC)
2. The wife of an EE tells the manager that her husband has not
been giving her support. Taking pity, the manager instructs the
cashier to deduct 1/3 of the EEs pay and give the same to the
wife. Is this valid?
No. The EE concerned did not give his written authorization for the
deduction. (Alcantara)
3. Z borrowed P500.00 from his ER. When the loan became due and
demandable, Z did not pay his ER. May the ER, without the
written authorization of Z, deduct the loan from the latters
wages?
Yes. Compensation can take place under Art. 1706 of the NCC.
(Alcantara)
B. CHECK-OFF
* An ER may be compelled to check-off union dues from the wages of
his EE when the ER has been authorized to do so by the EE. This is
upon the theory that it is necessary to promote the welfare and
integrity of the union to which he belongs. (Manila Trading vs. Manila
Trading Labor Association)
C. GARNISHMENT/ATTACHMENT
1. Under Art. 1708 of the NCC, laborers wages shall not be subject
to execution or attachment, except for debts incurred for food,
shelter, clothing and medical attendance (Pacific Customs vs. InterIsland Dockmen and Labor Union)
2. Art 1708 which exempts laborers wage from attachment or
execution does not apply to a responsibly placed EE, supervisory
or managerial EE, but only to the rank-and-file. (Gaa vs. CA)
D. DEPOSIT
1. A marketing firm retains 5% of the weekly salary of its collectors
as a deposit to answer for any shortage in their collections.
These are refunded at the end of the month, if no shortages are
incurred. Is the practice legal?
It depends. If it is a recognized practice of ERs to require such
deposits, then such is legal, since the sum retained is not excessive
and is kept by the ER only for a reasonable period. (Alcantara)

66

2. A taxicab company requires its drivers to make deposits to


defray boundaries and to cover car wash payments. Is this legal?
Art. 114 does not permit deposits for deficiency in the remittances
of drivers boundary but the requirement for deposit for car wash
payments is lawfull. (5-J Taxi vs. NLRC)
Prohibited Acts
1. Art. 118 : It shall be unlawful for an ER to reuse to pay or reduce
the wages and benefits, discharge or in any manner discriminate
against any EE who has filed any complaint or instituted any
proceedings under this Title or has testified or is about to testify
in such proceedings.
2. Art. 119 : It shall be unlawful for any person to make any
material false statement, report or record filed or kept pursuant
to the provisions of this Code.
A. RECORD KEEPING
* The records shall be kept and maintained in or about the premises of
workplace or in the branch where the EE is regularly assigned, the
keeping of the records in any other place is prohibited. (South Motorists
vs. Tosoc)
14. 7 Liability of ER and other Parties
ER, Independent Contractor and Subcontractor and Labor-Only
Contracting
1. The rules on the liability of Job contractors, Indirect ERs and
Labor-only contractors are the following:
1. General Rule : An ER who enters into a contract with a
contractor to perform work for the ER, does not thereby create
an ER-EE relationship between himself and the EEs of the
contractor. Thus the EEs of the contractor remain the
contractors EEs and his alone. (PBC vs. NLRC)
2. Nonetheless : When a contractor fails to pay the wages of his
EEs in accordance with the Labor Code, the ER who contracted
out the job to the contractor becomes jointly and severally
liable with the contractor to the EEs of the latter to the extent
of the work performed under the contract as if such ER were the
ER of the contractors EE. (Id)
The law itself, established an ER-EE relationship between the ER and
the job contractors EEs for a limited purpose i.e. in order to ensure
that the latter get paid for wages due them.
3. Indirect ER : These provisions shall likewise apply to any
person, partnership , association or corporation which, not being
an ER, contracts with an independent contractor for the
performance of any work, task, job or project. (Art. 107)

67
4. Labor-Only Contractor : The conclusion is different where
there is labor-only contracting. The labor-only contractor i.e.
person or intermediary, is considered merely as an agent of the
ER. The statute makes the ER directly responsible to the EEs of
the labor-only contractor as if such EEs had been directly
employed by the ER. The statute establishes an ER-EE
relationship between the ER and the EEs of the labor-only
contractor, this time for a comprehensive purpose, to prevent
any violation of this Code. (Broadway Motors vs. NLRC)
The legitimate job contractor provides services while the
labor-only contractor only provides manpower.
Job contractor undertakes to perform a specific job while
labor-only contractor merely provides personnel to work for
the employer.
2. Art. 108 : An ER or indirect ER may require the contractor or
subcontractor to furnish a bond equal to the cost of labor under
contract, on condition that the bond will answer for the wages due the
EEs should the contractor or subcontractor, as the case may be fail to
pay the same.
3. C, a former EE of ABC entered into an agreement with the
company wherein C will hire person to work in the painting
department and the company will reimburse him for whatever
wages he will pay plus 10% of this amount. If C fails to pay the
wages, can the workers claim from the company?
Yes. C is merely a labor-only contractor and is considered merely
an agent of the ER who shall be responsible to the workers in the
same manner and extent as if the latter were directly employed by
him. (Alcantara)
4. X entered into a contract with R for the construction of Xs house.
Some workers of R were not paid their wages. Is X liable?
Yes. Under Art. 107, the person, though not an ER, who contracts
with the independent contractor for the damages employed by the
latter are indirect ERs. (Alcantara)
5. A entered into a verbal agreement with S wherein A would be
paid a commission for milled rice she sold or palay for the farmer.
A would spend her own money for the undertaking, but to enable
her to carry out the agreement more effectively, she was
authorized to borrow from other persons, subject to
reimbursement from S and either of them may terminate the
business arrangement at will, with or without cause. May A be
considered an independent contractor?
Yes. A was contracted to do a piece of work according to her own
method and without being subject to the control of the ER except as
to the result of the work. (Sara vs. Agarrado)
Extent of Liability

68
1. The direct ER and the indirect ER are jointly and severally liable
to petitioners for the monetary claims. (Deferia vs. NLRC) For
purposes of determining the extent of their civil liability, they
shall be considered as direct ERs. (Art. 109)
In legitimate job contracting, no ER-EE relationship exist
between the principal and the job contractors employees.
Insolvency or unwillingness to pay by the contractor or
direct ER is not a prerequisite for the joint and solidary
liability of the principal or indirect ER. (DBP vs. NLRC)

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


janitors its supplies to XYZ, is XYZ liable for the unpaid wages?
Yes. According to Art. 106, the ER shall be jointly and severally
liable to the EEs of the contractor or subcontractor to the extent of
the work performed under the contract. (Alcantara)
3. Would your answer change if XYZ already paid the independent
contractor the contract price?
No, XYZ will still be liable for the unpaid wages of the janitor since
the obligation is imposed by law. (Id)
4. PTS, a government agency, entered into a service agreement
with ABC or the supply of janitors to PTS. ABS failed to pay the
wages of the janitors. PTS refused to pay on the ground that it is
a government agency. Is this claim valid?
No. The janitors employed by ABC are considered indirect EEs and
not to indirect EEs coming from the private sector. (Rabago vs. NLRC)
14. 8 Worker Preference-Bankruptcy
1. Art. 110. In the event of bankruptcy or liquidation of an ERs
business, his workers shall enjoy first preference as regards their
wages and other monetary claims, any provisions of law to the
contrary notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before claims of the government and
other creditors may be paid.
* The right or preference has to be asserted in distribution
proceedings such as insolvency where all the creditors convened,
their claims ascertained and inventories and the preferences
determined.
2. A declaration of bankruptcy or a judicial liquidation must be
present before the workers preference may be enforced. The
said article cannot be viewed in isolation; it must always be read
in relation to the provisions of the Civil Code concerning the
classification, concurrence and preference of the credits. (DBP vs.
Santos) The aforesaid provisions of the Civil Code, including Art.
110 requires judicial proceedings in rem in adjudication of
creditors
claims against the debtors assets to become
operative. (Alcantara)

69
3. TUCP obtained a judgment from the NLRC in an unfair labor case.
Two days before the judgment, the PCIB, mortgage creditors of
the company, foreclosed all mortgages in their favor. The union
sought to garnish in its favor a portion of the purchase price. Is
the bank subject to the claims of the union?
Yes, under Art. 110 workers enjoy first preference as regards wages
owed them for services rendered during the period prior to the
bankruptcy or liquidation. (PCIB vs. National Mines and Allied Union)
4. Atlas Textile mortgaged its assets to DBP. DBP foreclosed the
asset. The EEs filed a complaint against Atlas and DBP for the
wage differentials. The labor arbiter and the NLRC held that the
workers preference under Art. 110 does not create a lien?
No. Art. 110 does not create a lien in favor of the workers. (Alcantara)
Art. 110
establishes merely a rule of preference and does not create
a lien in favor of the workers
workers claim for unpaid wages and other monetary
benefits cannot prevail over a mortgages lien
14. 9 Wage Recovery
1. Art. 217 (a) (2), (3), (4), (6) : Jurisdiction of Labor Arbiters
and the Commission The Labor Arbiters shall have exclusive
and original jurisdiction, except as otherwise provided, the
following cases involving all workers:
a. Termination Disputes (qualified by Art. 261which
grant voluntary arbitrators original and exclusive
jurisdiction over all unresolved grievances arising
from CBAS and company personnel policies);
b. Cases involving terms and conditions and
employment, if accompanied with a claim for
reinstatement (including claims of an ER-EE
relationship, including claims for actual, moral and
exemplary damages, as provided in Sec. 10,
Migrant Workers Act)
c. Claims for actual, moral, exemplary and other
damages arising from the ER-EE relations;
d. Except claims for EEs Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from the ER- EE relations, including
those of persons in domestic or household service,
involving an amount exceeding P5,000.00 regardless of
whether accompanied with a claim for reinstatement.
2. Art. 128 : Visitorial and
Enforcement Power oft the
Secretary of Labor or his duly authorized representative
Access to ERs records and premises at anytime of the day
or night whenever work is being undertaken therein and
copy therefrom; question any EE; and investigate any fact,

70
condition or matter which may be necessary to determine
violations of this Code and of any labor law, wage order or
rules and regulations issued pursuant thereto.
In cases where the relationship or ER-EE still exists, the
power to issue Compliance Orders to give effect to the
labor standard provisions of this Code and other social
legislation.
Writ of execution to the appropriate authority shall
be issued for the enforcement of the said orders,
except in cases where the ER 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.
Order stoppage of work or suspension of operations of any
unit of or department of an establishment when noncompliance poses grave and imminent danger to the
health and safety of workers in the workplace.
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 ER, he shall pay EEs their salaries or wages
during the said period.
It shall be unlawful for any person to Obstruct, impede,
delay or otherwise render ineffective the order of the
Secretary of Labor.
* No inferior court shall issue a temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders in accordance with this Article.
Any government EE found guilty of violation, after
appropriate administrative investigation, be subject to
Summary dismissal from the service.
The Secretary of labor may require ERs to keep and
maintain employment records as may be necessary. (AS
CONES)
* Under what circumstances may the Regional Director be divested of
his jurisdiction to issue compliance orders under Art. 128 (b)?
a. ER contests the findings of the labor regulations officer and
raises issue thereon;
b. In order to resolve such issue, there is need to examine
evidentiary matters;
c. Such matters are not verifiable in the normal course of
inspection. (Red V. Coconut vs. Leogrado)
3. Art. 129 : Recovery of wages, simple money claims and other
benefits

71
The Regional Director of the DOLE or any of the duly
authorized hearing officers of the Department is
empowered, through summary proceedings and after due
notice, to hear and decide any monetary claims and
benefits, including legal interest to a person employed in
domestic or household service; Provided
a. Such complaint does not include claim for reinstatement
b. Aggregate money claims of each househelper does not
exceed P5,000
The complaint shall be resolved within 30 days from the
date of filing of the same.
4. Art. 111 :
In cases of unlawful withholding of wages the culpable
party may be assessed attorneys fees equivalent to 10%
of the amount of wages recovered.
It shall be unlawful for any person to demand or accept, in
any judicial or administrative proceedings for the recovery
of the wages, attorneys fees, which exceed 10% of the
amount of wage recovered.
Section 14: Service Charges
14. 1 Coverage
1. Section 1, Rule V, Book III, IRRs : This rule shall apply only to
establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as
private subsidiaries of the Government.
2. Section 2, Rule VI, Book III : This rule shall apply to all EEs of
covered ERs except to managerial EEs.
Managerial EE
a. powers of prerogatives to lay down, and execute
management to lay don and execute management policies
and/or
b. hire, transfer, suspend, lay-off, recall, discharge, assign, or
discipline EEs or to effectively recommend such
managerial actions.
Collection of service charges is a management decision
and not a requirement of law
14. 2 Service Charges
* Art. 96 : To be distributed at the rate of 85% for covered EEs
[distributed equally among them] and 15% for management.
X a waiter at DC Diner was receiving a share in the restaurants service
charges. Later, the restaurant discontinued the collection of service
charges. The take-home pay of X was reduced by the value of the

72
discontinued service charges. May X ask his ER to continue paying the
service charges?
Yes. In case the service charge is abolished, the share or the covered
EEs shall be considered integrated in their wages. (Art. 96)
The employees share in the service charges is part of the
other benefits to which he is entitled, in addition to full
backwages
Section 15: Thirteenth Month Pay
15.1 Law Coverage
Coverage
1. Section 2, Revised Guidelines on the 13 th Month Pay Law : The
following ERs are still not covered by PD 851:
The government and any of its political subdivisions,
including GOCCs, except those corporations operating
essentially as private subsidiaries of the government.
ERs already paying their EEs a 13th month pay or more in
a calendar year or its equivalent at the time of this
issuance.
[The term its equivalent shall include Christmas
bonus, mid-year bonus, cash bonuses and other payments
but shall not include cash and stock dividends, cost of
living allowances and other allowances regularly enjoyed
by the EE, as well as non-monetary benefits. Where an ER
pays less than required 1/12th of the EEs basic salary, the
ER shall pay the differences.]
ERs of household helpers and persons in the personal
service of another in relation to such workers, and
ERs 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 in which case the
ER shall grant the required 13th month pay to such workers.
A distressed ER may qualify for exemption for the 13 th
month pay if there is prior authorization from the DOLE.
(Dentech vs. NLRC)
2. The CBA provides for the payment of Christmas bonuses to all
regular EEs in the bargaining unit with of at least 1 year of
continuous service. Is this equivalent to the 13th month pay?
No. The Christmas bonuses provided in the CBA accords a reward
for loyalty to certain EEs. This is evident from the stipulation
granting the bonus in question to workers with at least 1 year of

73
continuous service. The bonus therefore is to be in addition to the
legal requirement. (UCP vs. NLRC)
15.2 Amount and Payment Date
1. Sec

4 Revised Guidelines on the 13th Month Pay Law:


Amount : of the total basic salary earned by an EE
within a calendar year.
The 13th month pay is to be paid only to rank-and file
employees regardless of the amount of their basic salary.
Time of Payment: Not later than December 24.

2. Define basic salary: For purposes of computing the 13th month pay,
basic salary
include remuneration or earnings paid by this ER for
services rendered
but does not include allowances and monetary benefits
which are not considered or integrated as part of the
regular or basic salary, such as the cash equivalent or
unused vacation and sick leave credits, overtime,
premium, night-differential and holiday pay, and cost-ofliving allowances.
However, these salary-related benefits should be
included as part of the basic salary in the
computation of the 13th month pay if the individual
or collective agreement, company practice or
policy, the same are treated as part of the basic
salary of the EEs.
3. From 191 to 1997, DFC included in the computation of this 13 th
month pay, the EEs sick, vacation and maternity leaves, In 1998,
the company discontinued the inclusion of the aforementioned
items in the 13th month pay. Is this valid?
The considerable length of time the questioned items had been
included by the company indicates a unilateral and voluntary action
on its part, sufficient in itself to negate any claim of mistake. A
company practice favorable to the EEs had been established, and
the payments made pursuant thereto ripened into benefits enjoyed
by them. Any benefit and supplement being enjoyed by the EEs
cannot be reduced, diminished, discontinued or eliminated by the
ER. (Alcantara)
Basic Wage
1. Are the sales commission of a salesman paid a guaranteed wage
plus commissions included in the computation of this 13 th month
pay?
It depends on what kind of commissions may properly be
considered part of the basic salary, they should be included in
computing the 13th month pay. If the commission are not an integral
part of the basic salary, then they should be excluded. (Azucena)
Sales commissions which comprised an automatic increment to the

74
monetary value assigned to each unit of work rendered by the
salesman, or that of the wages-or sales-percentage type should be
included in the 13th month pay computation. On the other hand,
commission in the form of productivity bonuses which closely
resembles profit-sharing payments and have no clear direct or
necessary relation to the amount of work actually done by each
individual EE, or the profit-sharing or bonus-type, should be
excluded from the computation of the 13 th month pay. (Philippine
Duplicators vs. NLRC)
Substitute Payment
1. Benefits in the form of food or free electricity not proper substitute
for the 13th month pay. (Framanlis vs. Minister of Labor)
14th Month Pay
1. The grant of the 14th month pay is a management prerogative,
gratuitous in nature and therefore it cannot be forced. (Kamaya Hotel vs.
NLRC)
15. 3 Non-inclusion
1. Sec. 7, Revised Guidelines on the 13th Month Pay Law: The
mandated 13th month pay need not be credited as part of the
regular wage of EEs for purposes of determining overtime and
premium pays, fringe benefits as well as contributions to the
state insurance fund, Social Security, Medicare and private
retirement plans.
Section 16 : Bonus
16. 1 Definition
1. A bonus is an amount is an amount granted and paid to an EE for
his industry and loyalty which contributed to the success of the
ERs business and made possible the realization of profits.
(Azucena)
16.2 When Demandable
1. From the legal point of view, a bonus is not a demandable and
enforceable obligation. But it is so when it is made part of the
wage or salary or compensation. In such case, the latter would
be a fixed amount and the former would be a contingent one
dependent upon the realization of profit. (Azucena) Furthermore,
while normally discretionary, the grant if gratuity or bonus by
reason of its long and regular concession, may become regarded
as part of the regular compensation. (Liberation Steamship vs. CIR)
Section 17. Working Conditions for Special Groups of Workers
Women
17.1 Women and the Constitution

75
1. Art. II, Sec. 14, Const.
: The State recognizes the role of
women in nation-building, and shall ensure the fundamental
equality before the law of women and men.
17.2 Coverage
1. Section 1, Rule XII, Book III, IRRs : This rule shall apply to all
ERs except to:
a. government and GOCCs and
b. to ERs of household helpers and persons in their personal
service insofar as such workers are concerned
17.3 Prohibited Acts
NIGHT WORK AND EXCEPTION
1. Art. 130 : No woman shall be employed or permitted or suffered
to work, with or without compensation:
a. Industrial undertaking : Between 10:00 pm and 6:00 am
of the following day.
b. Commercial undertaking : Between midnight and 6:00
am of the following day.
c. Agricultural undertaking : Nighttime unless she is given
a period of rest of not less than 9 consecutive hours.
2. Art. 131 : Exceptions to Nightwork prohibition
[A, F, U, P M, H, M, - FA]
a. In cases of actual or impending emergencies caused by a
serious accident, fire, flood, earthquake, epidemic or other
Disasters or calamity, to prevent loss of life or property.
b. Cases of force majeure or imminent danger to public
safety.
c. Cases of urgent work to be performed on machineries,
equipment or installation, to avoid serious loss which the
ER would otherwise suffer.
d. Work is necessary to prevent serious loss of perishable
goods
e. Woman EE holds a responsible position of managerial or
technical in nature.
f. Woman EE has been engaged to provide health and
welfare service.
g. Where the nature of the work requires the manual skill and
dexterity of women workers;
h. Where the women EEs are immediate members of the
family operating the establishment or undertaking; and
i. Analogous cases. (HUMMPS FAD)
3. LG, a manufacturer and exporter of jeans, has a 3-shift work
schedule but maintains a policy of not assigning women in the 3 rd
shift from 10:00 pm to 6:00 am. Is this policy discriminatory to
women?
Yes. The women sewers, by reason of their sex, are denied the
opportunity to earn additional pay. The nature of the work requires
the manual skill and dexterity of women workers and cannot be

76
performed with equal efficiency to male workers. This is one of the
exceptions to the night work prohibition. (Art. 131)
B. DISCRIMINATION
1. Art. 135: It shall be unlawful for any ER to discriminate against
woman EE with respect to terms and conditions of employment
solely on account of her sex.
The following are acts of discrimination [P, F]
a. Payment of lesser compensation, as against a male EE, for
work of equal value.
b. Favoring a male EE over a female EE with respect to the
promotion, training opportunities, study and scholarship
grants solely on account of their sexes.
Criminal liability for violations shall be penalized as provided in
Art. 288 and 289 of this Code. The institution of any criminal
action under this provision shall not bar the aggrieved EE from
filing an entirely separate and distinct action for money claims,
which may include claims for damages and other affirmative
reliefs. The actions
hereby authorized
shall proceed
independently of each other.
2. C, a 45-year old teacher was dismissed by the school after she
got married to Q, her 18-year old 4 th year high school student. Is
the dismissal lawful?
No, in the absence of substantial evidence to show that C took
advantage of her position to court her student. There is nothing
wrong if the two fell in love despite the disparity in their ages.
(Chua-Qua vs. Clave)
C. MARRIAGE
1. Art. 136 : Stipulation against marriage It shall be unlawful
for an ER to : [C, S, D]
a. Require as a condition of employment or continuation of
employment that a woman EE shall not get married;
b. Stipulate expressly or tacitly that upon getting married a
woman shall be deemed resigned or separated;
c.

Actually dismiss, discharge, discriminate or otherwise


prejudice a woman EE merely by reason of her marriage.

D. GENERAL
1. Art. 137 : It shall be unlawful for any ER to : [DB, DP, RA]
a. Deny any woman EE the benefits provided for in this
Chapter or to discharge any woman employed by him for
the purpose of preventing her from enjoying any of the
benefits provided under this Code;
b. Discharge such woman on account of her pregnancy, or
while on leave or in confinement due to her pregnancy;

77

c. Discharge or refuse the admission of such woman upon


returning to her work for fear that she may again be
pregnant.
2. In Ls contract of employment with Club E, it was stipulated that
her employment as a dancer would cease once she gets
pregnant. When L got pregnant, L was no longer allowed to
dance and since there were no other work available for which her
talents were suitable, her employment was terminated. Is the
action legal?
Yes. It is both awkward and dangerous for her to dance during her
pregnancy. Of course the ER has the obligation to give her another
job, but as stated in the problem there is no other work for which
her talents are suited. It is not fair to require the ER to continue
employing her. (Alcantara)
3. A pharmaceutical company rejected the applications of 5
pregnant women as sales representatives for contraceptive pills
and family planning devices. Is this valid?
Yes. The company has the prerogative to select its EEs. What is
unlawful is for the ER to discriminate against or dismiss a woman by
reason of their pregnancy. (Alcantara)
17. 4 Facilities
1. Art. 132 : The Secretary of Labor shall establish standards that
will ensure the safety and health of women EEs. In appropriate
cases, he shall, by regulations, require ER to:
a. Provide seats proper for women and permit them to use
seats when they are free from work and during working
hours, provided they can perform their duties in the
position without detriment to efficiency.
b. To establish a nursery in a workplace.
c. To determine appropriate minimum age and other
standards for retirement or termination in special
occupations such as those of flight attendants and the like.
2. Art. 134 : (a) Establishments which are required by law to
maintain clinic or infirmary shall provide free family planning
services to their EEs.
3. Is the ER required by law to give maternity benefits to its female
workers?
No. Maternity benefits are to be paid in appropriate instances by the
SSS. The only obligation of the ER is to advance the benefit subject
to reimbursement by the SSS. (Alcantara)
17.5 Special classification Special Women Workers
1. X works as a hostess in a nightclub, she is paid a percentage of
the ladys drink ordered by customers. There are nights when

78
she does not earn anything because there are no customers. Is X
an EE of the nightclub?
Yes. Any woman who is permitted or suffered to work, with or
without compensation, in any nightclub, cocktail lounge, massage
clinic, bar, or similar establishment, under the effective control or
supervision of the ER for a substantial period of time as determined
by the Secretary of Labor shall be considered an EE of such
establishment for purposes of labor and social legislation. (Art.
138)
Section 18. Working Conditions for Special group of Workers
Minors
18.1 Minors and the Constitution
Art. II, Sec. 13, Const. : The State recognized the role of the youth in
nation-building and shall promote and protect their physical, moral
spiritual, intellectual, and social well-being. It shall inculcate in the
youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.
18.2 Coverage
Section 1, Rule XII, Book III, IRRs : This Rule shall apply to all ERs
except
[G H]
1. to the Government and GOCCs and
2. to ERs of household helpers and persons in their personal
service insofar as such workers are concerned.
18.3 Employable Age
Section 12, RA 7610 as amended by RA 7658 :
* General rule: Children below 15 years of age shall not be employed.
* Exceptions: [P, E]
1. Child works directly under the sole responsibility of his parents or
legal guardian and where only members of the ER family are
employed, provided:
a. his employment neither endangers his life, safety, health
and morals, nor impairs his normal development:
b. the parent or legal guardian shall provide the said minor
child with the prescribed primary and/or secondary
education.
2. Child is employed in entertainment or information through
cinema,
theater, radio or television, provided:
c. Employment contract is concluded by the childs parents or
legal guardian, with the expressed agreement of the child
concerned, if possible, and the approval of the DOLE.
d. The ER shall ensure the protection, health, safety and
morals of the child;
e. The ER shall institute measures to prevent the childs
exploitation or discrimination.
f. The ER shall formulate and implement, subject to the
approval and supervision of competent authorities, a

79
continuing program for training and skills acquisition of the
child.
g. The ER shall first secure, a work permit from the DOLE
which shall ensure observance of the above requirements.
2. Art. 139 : Any person, between 15 and 18 may be employed in
any non-hazardous work. In any hazardous work, the employable
age is 18 and up.
3. What are considered hazardous work places? [D C M P]
a. Where the nature of work exposes the worker to Dangerous
environmental
elements,
contaminations
or
work
conditions.
b. Stevedoring, construction work, logging, firefighting,
mechanized farming and similar work.
c. Manufacture or handling of Explosives and other
pyrotechnic products.
d. Where the workers are exposed to heavy or power-driven
machinery or equipment or tools.
4. L, 10 years old, was hired as a singer in a carnival which stages
shows wherever there is a town fiesta. She is paid P5,000.00 a
month. L is therefore always on the road, traveling to different
parts of the country. Is her employment lawful?
No. Such employment will endanger her health and impair her
normal development. She is also deprived of the opportunity to get
primary education as she is always traveling to different parts of the
country. (Alcantara)
18.4 Discrimination
1. Art. 140 : Prohibition against child discrimination No ER
shall discriminate against any person in respect to terms and
conditions of employment on account of his age.
2. Would a company rule providing for lower wages for workers
below 18 years who are inexperienced violate the prohibition?
No. The payment of lower wages is by reason of the workers
inexperience, not his age. There is no discrimination on account of
the workers minority. (Alcantara)
Section 19. Working Conditions for Special group of Workers
Househelpers
19.1 Coverage
Art. 141 : This chapter shall apply to all persons rendering services in
households for compensation
19.2 Househelpers
1. Define domestic or household service : Service in the ERs
home which is usually necessary or desirable for the
maintenance and enjoyment thereof and includes ministering to

80
the personal comfort and convenience of the members of the
ERs household, including services of family drivers. (Art. 141)
2. C was employed by A company to work as a maid in the
cottages of its Baguio mining site to attend to the needs of its
executives or guests who now and then visit the site. Is S a
househelper or domestic servant?
No. The services of a househelper is rendered exclusively for the
personal comfort and enjoyment of the family of the ER and are
performed in the latters home. Services rendered in an executive
cottage cannot be considered domestic. S must be considered a
regular EE of the mining company. (Apex Mining vs. NLRC)
19.3 Non-Household Work Assignment
T lives in a compound where he operates a modest candy business.
Sometimes, when there is no work in his house, his maids help in the
packing of the candies and his family driver delivers the candies to the
outlets. How should the work rendered in connection with the candy
business be compensated?
For work rendered by the maids and the family driver, they should be
paid at the rate prescribed by law for non-agricultural workers.
(Alcantara) No household helper shall be assigned to work in a
commercial industrial or agricultural enterprise at a wage or salary
rates lower than that provided for agricultural or non-agricultural
workers as prescribed therein. (Art. 145)
19. 4 Conditions for Employment
1. M, 15 years old, worked as a maid in the house of L. She was
paid in advance for 3 years and she agreed that she will work for
L for the said period. Is there any legal infirmity in the said
agreement?
Yes. The period contract exceeds the maximum set by the law. Art.
142 provides that the original contract of domestic service shall not
last for more than 2 years, although it may be renewed for such
periods as may be agreed upon by the parties. Ms contract will
therefore be good for only 2 years. (Alcantara)
2. What are the minimum wages for househelpers?
a. Metro Manila and highly urbanized cities : P800.00
b. Chartered cities and 1st class municipalities : P650.00
c. Other municipalities : P550
Househelpers receiving P1,000.00 shall be covered by the
SSS.
3. Aside from the rights to minimum wage, what other
rights are enjoyed by a househelper? [E J B - I F]
a. Opportunity for elementary education if a househelper is
less than 18 years old (Art. 146)

81

b. Just and human treatment (Art. 147)


c. Board, lodging and medical attendance (Art. 148)
d. Indemnity for unjust termination of services of 15 days plus
the compensation already earned.
e. Funeral benefits if the househelper has no relatives with
sufficient means in the place where the head of the family
lives. (Art. 1696, NCC) [F I B E J]
f. If househelper is unjustly dismissed,
pay wages already earned + 15 days wages (Indemnity)
g. If househelper leaves without justifiable cause,
forfeits any unpaid salary not exceeding 15 days
4. M works as a live-in labandera in the house of T somewhere in
Quezon City. She works for 11 hours a day. Based on their
contract, she is paid P800.00. Is she entitled to additional
compensation?
Yes. Although she is merely a househelper, she should not be
allowed to work more than 10 hours a day. (Art. 1695, NCC) Since
she worked for 11 hours daily, she should be paid an additional
compensation beyond the minimum wage of P800.00 set by the law.
(Alcantara)
5. Art. 150 : If the duration of the household service is not
determined either in the stipulation or by the nature of the
service, the ER or the househelper may give notice to put an end
to the relationship of the service.
Section 20. Working Conditions for Special group of Workers
Homeworkers
20.1 ER
1. Art. 155 : ER of homeworkers includes any person,
natural or artificial, who for his account or benefit, or on behalf of
any person residing outside the country, directly or indirectly or
though any EE, agent, contractor, sub-contractor or any other
person:
a. Delivers or causes to be delivered, any goods, fabricated in
or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions;
or
b. Sells any goods, articles or materials to be processed or
fabricated in or about a home then rebuys them after such
processing or fabrication, either himself or through some
other person.
20.2 ER Liability

82
1. Section 8, Rule XIV, Book III, IRRs : The ER shall be jointly
and severally liable to the EEs or homeworkers of the contractor
or sub-contractor, in the same manner as if the EEs or
homeworkers were directly engaged by the ER.
2. S represents in the Philippines the Sears chain of department
stores in the US. She sells wood and leather to housewives who
makes these into wooden clogs according to the patterns and
specifications of S. Is there an ER-EE relationship between S and
the housewives?
Yes. The housewives are considered homeweorkers and S is their
ER. (Alcantara)
3. What is the liability of Sears?
Sears is jointly and severally liable if S is not able to pay the wages
of the homeworkers. (Sec. 8, Rule XIV, Book III, IRRs)
4. Terms and conditions of employment involving money claims of
homeworker shall be heard by the Regional Director of the DOLE.
Beyond that, the case falls under the jurisdiction of the Labor
Arbiter. (Azucena)