LABOR LAW

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Labor Standards
FUNDAMENTAL PRINCIPLES &
POLICIES
CONSTITUTIONAL PROVISIONS
Article ii, secs. 9, 10, 11, 13, 14, 18, 20.
Section 9. 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.
Section 10. The State shall promote social
justice in all phases of national development.
Section 11. The State values the dignity of every
human person and guarantees full respect for
human rights.
Section 13. The State recognizes the vital role of
the youth in nation-building and shall promote
and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs.
Section 14. The State recognizes the role of
women in nation-building, and shall ensure the
fundamental equality before the law of women
and men.
Section 18. The State affirms labor as a primary
social economic force. It shall protect the rights
of workers and promote their welfare.
Section 20. The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and provides
incentives to needed investments.

Article iii, secs. 1, 4, 8.

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Section 1. No person shall be deprived of life,

liberty, or property without due process of law,
nor shall any person be denied the equal
protection of the laws.
Section 4. No law shall be passed abridging the
freedom of speech, of expression, or of the
press, or the right of the people peaceably to
assemble and petition the government for
redress of grievances.
Section 8. The right of the people, including
those employed in the public and private
sectors, to form unions, associations, or societies
for purposes not contrary to law shall not be
abridged.

Art. Xiii, secs. 1, 2, 3, 13, 14.

Section 1. 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.
Section 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative and
self-reliance.
Section 3. 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
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their rights
and benefits as may be provided by law.

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The State shall promote the principle of shared

responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and
shall enforce their mutual compliance therewith
to foster industrial peace.

Article 1702

The State shall regulate the relations between

workers and employers, recognizing the right of
labor to its just share in the fruits of production
and the right of enterprises to reasonable
returns to investments, and to expansion and
growth.

LABOR CODE

Section 13. The State recognizes the vital role of

the youth in nation-building and shall promote
and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs.
Section 14. The State shall protect working
women by providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities
that will enhance their welfare and enable them
to realize their full potential in the service of the
nation.

CIVIL CODE
Article 19
Art. 19. 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.

Article 1700
Art. 1700. The relations between capital and
labor are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common good.
Therefore, such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and
similar subjects.

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Art. 1702. In case of doubt, all labor legislation

and all labor contracts shall be construed in
favor of the safety and decent living for the
laborer.

Article 3
Art. 3. Declaration of basic policy. The State
shall afford protection to labor, promote full
employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the
relations between workers and employers. The
State shall assure the rights of workers to selforganization, collective bargaining, security of
tenure, and just and humane conditions of work.

Article 4
Art. 4. Construction in favor of labor. 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

Article 172
Art. 172. Policy. The State shall promote and
develop
a
tax-exempt
employees
compensation program whereby employees and
their dependents, in the event of workconnected disability or death, may promptly
secure adequate income benefit and medical
related benefits.

Article 217
Art. 217. Declaration of Policy.
(a) It is the policy of the State:
(a) To promote and emphasize the primacy of
free collective bargaining and negotiations,
including voluntary arbitration, mediation and
conciliation, as modes of settling labor or
industrial disputes;
(b) To promote free trade unionism as an
instrument for the enhancement of democracy
and the promotion of social justice and
development;
(c) To foster the free and voluntary
organization of a strong and united labor
movement;

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(d) To promote the enlightenment of workers

concerning their rights and obligations as union
members and as employees;
(e) To provide an adequate administrative
machinery for the expeditious settlement of
labor or industrial disputes;
(f) To ensure a stable but dynamic and just
industrial peace; and
To ensure the participation of workers in
decision and policy-making processes affecting
their rights, duties and welfare
To encourage a truly democratic method of
regulating the relations between the employers
and employees by means of agreements freely
entered into through collective bargaining, no
court or administrative agency or official shall
have the power to set or fix wages, rates of pay,
hours of work or other terms and conditions of
employment, except as otherwise provided
under this Code. (As amended by Section 3,
Republic Act No. 6715, March 21, 1989)

Article 218
Art. 218. Definitions.
(a) "Commission" means the National Labor
Relations Commission or any of its divisions,
as the case may be, as provided under this
Code.
(b) "Bureau" means the Bureau of Labor
Relations and/or the Labor Relations
Divisions in the regional offices established
under Presidential Decree No. 1, in the
Department of Labor.
(c) "Board" means the National Conciliation and
Mediation
Board
established
under
Executive Order No. 126.
(d) "Council" means the Tripartite Voluntary
Arbitration Advisory Council established
under Executive Order No. 126, as amended.
(e) "Employer" includes any person acting in the
interest of an employer, directly or indirectly.
The term shall not include any labor
organization or any of its officers or agents
except when acting as employer.
(f) "Employee" includes any person in the
employ of an employer. The term shall not
be limited to the employees of a particular
employer, unless the Code so explicitly
states. It shall include any individual whose
work has ceased as a result of or in

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connection with any current labor dispute or

because of any unfair labor practice if he has
not obtained any other substantially
equivalent and regular employment.
(g) "Labor organization" means any union or
association of employees which exists in
whole or in part for the purpose of collective
bargaining or of dealing with employers
concerning terms and conditions of
employment.
(h) "Legitimate labor organization" means any
labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof.
(i) "Company union" means any labor
organization whose formation, function or
administration has been assisted by any act
defined as unfair labor practice by this Code.
(j) "Bargaining representative" means a
legitimate labor organization whether or not
employed by the employer.
(k) "Unfair labor practice" means any unfair
labor practice as expressly defined by the
Code.
(l) "Labor dispute" includes any controversy or
matter concerning terms and conditions of
employment or the association or
representation of persons in negotiating,
fixing, maintaining, changing or arranging
the terms and conditions of employment,
regardless of whether the disputants stand
in the proximate relation of employer and
employee.
(m) "Managerial employee" is one who is vested
with the powers or prerogatives to lay down
and execute management policies and/or to
hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees.
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires
the use of independent judgment. All
employees not falling within any of the
above definitions are considered rank-andfile employees for purposes of this Book.
(n) "Voluntary Arbitrator" means any person
accredited by the Board as such or any
person named or designated in the
Collective Bargaining Agreement by the
parties to act as their Voluntary Arbitrator, or

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one chosen with or without the assistance of

the National Conciliation and Mediation
Board, pursuant to a selection procedure
agreed upon in the Collective Bargaining
Agreement, or any official that may be
authorized by the Secretary of Labor and
Employment to act as Voluntary Arbitrator
upon the written request and agreement of
the parties to a labor dispute.
(o) "Strike" means any temporary stoppage of
work by the concerted action of employees
as a result of an industrial or labor dispute.
(p) "Lockout" means any temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute.
(q) "Internal union dispute" includes all disputes
or grievances arising from any violation of or
disagreement over any provision of the
constitution and by-laws of a union,
including any violation of the rights and
conditions of union membership provided for
in this Code.
(r) "Strike-breaker" means any person who
obstructs, impedes, or interferes with by
force, violence, coercion, threats, or
intimidation any peaceful picketing affecting
wages, hours or conditions of work or in the
exercise of the right of self-organization or
collective bargaining.
(s) "Strike area" means the establishment,
warehouses, depots, plants or offices,
including the sites or premises used as
runaway shops, of the employer struck
against, as well as the immediate vicinity
actually used by picketing strikers in moving
to and fro before all points of entrance to
and exit from said establishment.

Article 261
Art. 261. Exclusive bargaining representation
and workers participation in policy and
decision-making. The labor organization
designated or selected by the majority of the
employees in an appropriate collective
bargaining unit shall be the exclusive
representative of the employees in such unit for
the purpose of collective bargaining. However,
an individual employee or group of employees
shall have the right at any time to present
grievances to their employer.

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Any provision of law to the contrary

notwithstanding, workers shall have the right,
subject to such rules and regulations as the
Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the establishment
where they are employed insofar as said
processes will directly affect their rights,
benefits and welfare. For this purpose, workers
and employers may form labor-management
councils: Provided, that the representatives of
the workers in such labor-management councils
shall be elected by at least the majority of all
employees in said establishment. (As amended
by Section 22, Republic Act No. 6715, March 21,
1989)

Article 283
Article 283.Miscellaneous provisions.
All unions are authorized to collect reasonable
membership fees, union dues, assessments and
fines and other contributions for labor
education and research, mutual death and
hospitalization benefits, welfare fund, strike
fund and credit and cooperative undertakings.
(As amended by Section 33, Republic Act No.
6715, March 21, 1989)
Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and
authorized cause and without prejudice to the
requirement of notice under Article 283 of this
Code, the employer shall furnish the worker
whose employment is sought to be terminated a
written notice containing a statement of the
causes for termination and shall afford the
latter ample opportunity to be heard and to
defend himself with the assistance of his
representative if he so desires in accordance
with company rules and regulations
promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any
decision taken by the employer shall be without
prejudice to the right of the worker to contest
the validity or legality of his dismissal by filing a
complaint with the regional branch of the
National Labor Relations Commission. The
burden of proving that the termination was for a
valid or authorized cause shall rest on the
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Labor and Employment may suspend the

effects of the termination pending resolution of
the dispute in the event of a prima facie finding
by the appropriate official of the Department of
Labor and Employment before whom such
dispute is pending that the termination may
cause a serious labor dispute or is in
implementation of a mass lay-off. (As amended
by Section 33, Republic Act No. 6715, March 21,
1989)
Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered as an employee for
purposes of membership in any labor union. (As
amended by Section 33, Republic Act No. 6715)

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(P15,000,000.00) shall be provided in the 1989

annual general appropriations acts.
The amount of subsidy in appropriate cases
shall be determined by the Board in accordance
with established guidelines issued by it upon
the recommendation of the Council.
The Fund shall also be utilized for the operation
of the Council, the training and education of
Voluntary Arbitrators, and the Voluntary
Arbitration Program. (As amended by Section
33, Republic Act No. 6715, March 21, 1989)

The Minister of Labor and Employment and the

Minister of the Budget shall cause to be created
or reclassified in accordance with law such
positions as may be necessary to carry out the
objectives of this Code and cause the upgrading
of the salaries of the personnel involved in the
Labor Relations System of the Ministry. Funds
needed for this purpose shall be provided out of
the Special Activities Fund appropriated by
Batas Pambansa Blg. 80 and from annual
appropriations thereafter. (Incorporated by
Batas Pambansa Bilang 130, August 21, 1981)

The Ministry shall help promote and gradually

develop, with the agreement of labor
organizations
and
employers,
labormanagement cooperation programs at
appropriate levels of the enterprise based on
the shared responsibility and mutual respect in
order to ensure industrial peace and
improvement in productivity, working conditions
and the quality of working life. (Incorporated by
Batas Pambansa Bilang 130, August 21, 1981)
In establishments where no legitimate labor
organization
exists,
labor-management
committees may be formed voluntarily by
workers and employers for the purpose of
promoting industrial peace. The Department of
Labor and Employment shall endeavor to
enlighten and educate the workers and
employers on their rights and responsibilities
through labor education with emphasis on the
policy thrusts of this Code. (As amended by
Section 33, Republic Act No. 6715, March 21,
1989)

A special Voluntary Arbitration Fund is hereby

established in the Board to subsidize the cost of
voluntary arbitration in cases involving the
interpretation and implementation of the
Collective Bargaining Agreement, including the
Arbitrators fees, and for such other related
purposes to promote and develop voluntary
arbitration. The Board shall administer the
Special Voluntary Arbitration Fund in
accordance with the guidelines it may adopt
upon the recommendation of the Council, which
guidelines shall be subject to the approval of
the Secretary of Labor and Employment.
Continuing funds needed for this purpose in the
initial yearly amount of fifteen million pesos

To ensure speedy labor justice, the periods

provided in this Code within which decisions or
resolutions of labor relations cases or matters
should be rendered shall be mandatory. For this
purpose, a case or matter shall be deemed
submitted for decision or resolution upon the
filing of the last pleading or memorandum
required by the rules of the Commission or by
the Commission itself, or the Labor Arbiter, or
the Director of the Bureau of Labor Relations or
Med-Arbiter, or the Regional Director.
Upon expiration of the corresponding period, a
certification stating why a decision or resolution
has not been rendered within the said period
shall be issued forthwith by the Chairman of the

No docket fee shall be assessed in labor

standards disputes. In all other disputes, docket
fees may be assessed against the filing party,
provided that in bargaining deadlock, such fees
shall be shared equally by the negotiating
parties.

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Commission, the Executive Labor Arbiter, or the

Director of the Bureau of Labor Relations or
Med-Arbiter, or the Regional Director, as the
case may be, and a copy thereof served upon
the parties.
Despite the expiration of the applicable
mandatory period, the aforesaid officials shall,
without prejudice to any liability which may have
been incurred as a consequence thereof, see to
it that the case or matter shall be decided or
resolved
without
any
further
delay.
(Incorporated by Section 33, Republic Act No.
6715, March 21, 1989)

RECRUITMENT
PLACEMENT

AND

RECRUITMENT OF LOCAL AND

MIGRANT WORKERS

R.A. 8042 as amended and/or any of his/her

relatives within the 4th civil degree of
consanguinity and affinity. (POEA Rules of
2002)
Non-transferability of license or authority
(1) No license or authority shall be used directly
or indirectly by any person other than the
one in whose favor it was issued or at any
place other than that stated in the license or
authority,
(2) Nor may 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
anywhere shall be subject to the prior approval
of the Department of Labor. (Art. 29, LC)
Duration of Validity: 4 years (POEA Rules of
2002)

LICENSE AND AUTHORITY

Citizenship requirement
(1) Only Filipino citizens or
(2) Corporations, partnerships or entities at least
seventy-five percent (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. (Art. 27, LC)

Entities disqualified from being issued a

license
(1) Travel agencies and sales agencies of airline
companies. (Art. 26)
(2) Officers or members of the Board of any
corporation or members in partnership
engaged in the business of a travel agency.
(3) Corporations and partnerships, when any of
its officers, members of the board or
partners, is also an officer, member of the
board of partner of a corporation or
partnership engaged in the business of a
travel agency.
(4) Persons, partnerships or corporations which
have derogatory records.
(5) Any official or employee of the DOLE, POEA,
OWWA, DFA and other government agencies
directly involved in the implementation of

Capitalization requirement
All applicants for authority to hire or renewal of
license to recruit are required to have such
substantial capitalization as determined by the
Secretary of Labor. (Art. 28, LC)

A license is a document issued by the

Department of Labor and Employment (DOLE)
authorizing a person or entity to operate a
private employment agency, while an authority
is a document issued by the DOLE authorizing a
person or association to engage in recruitment
and placement activities as a private
recruitment agency. (Art. 13(d) and (f), LC)

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Based on POEA Rules the following are the

substantial capital requirements:
(1) Single proprietorships or partnerships with
minimum capitalization of P2,000,000.
(2) Corporations with minimum paid-up capital
of P2,000,000.

ESSENTIAL ELEMENTS OF ILLEGAL

RECRUITMENT
Recruitment and placement" refers to any
act of (C-E-C-T-U-H)
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(a) canvassing,
(b) enlisting,
(c) contracting,
(d) transporting,
(e) utilizing, or
(f) hiring procuring workers,
And also includes
(a) referrals,
(b) contract services,
(c) promising, or
(d) advertising for employment, locally or
abroad, whether for profit or not
Provided, That any person or entity which, in any
manner, offers or promises for a fee
employment to two or more persons shall be
deemed engaged in recruitment and
placement. (Art. 13 (b), LC)
Any of the acts mentioned above constitutes
recruitment and placement.

ILLEGAL RECRUITMENT FOR LOCAL

WORKERS (Governed by the Labor Code)
SIMPLE ILLEGAL RECRUITMENT
Elements:
(1) The person charged with the crime must
have undertaken recruitment activities
defined under Art. 13(b) or prohibited
activities defined under Art. 34; and
(2) The said person does not have a license or
authority to do so. (Art. 38, LC)
Prohibited practices
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
(a) To charge or accept, directly or indirectly,
any amount greater than that specified in
the schedule of allowable fees prescribed
by the Secretary of Labor, or to make a
worker pay any amount greater than that
actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of

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securing a license or authority under this

Code.
(d) 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 designed to liberate the worker
from oppressive terms and conditions of
employment;
(e) To influence or to attempt to influence any
person or entity not to employ any worker
who has not applied for employment
through his agency;
(f) 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;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor or by
his duly authorized representatives;
(h) 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 or information as may be
required by the Secretary of Labor.
(i) To substitute or alter employment
contracts approved and verified by the
Department of Labor from the time of
actual signing thereof by the parties up to
and including the periods of expiration of
the same without the approval of the
Secretary of Labor;
(j) To become an officer or member of the
Board of any corporation engaged in travel
agency or to be engaged directly or
indirectly in the management of a travel
agency; and
(k) To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under this Code and
its implementing rules and regulations.
(Art. 34, LC)
OFFENSE
INVOLVING
ECONOMIC
SABOTAGE (Large-Scale or by a Syndicate)
Illegal recruitment is considered economic
sabotage when the commission thereof is
attended by the ff. qualifying circumstances:

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(1) By a syndicate - if carried out by a group of 3

or
more
persons
conspiring
and
confederating with one another;
(2) In large scale - if committed against 3 or
more persons individually or as a group. (Art.
38(b), LC)

2nd type:
(1) Person charged commits any of the
enumerated acts under Sec. 6 of R.A. 8042,
as amended by, R.A. 10022.
(2) It is immaterial whether he is a holder or not
of any license or authority

Illegal recruitment by a syndicate

(1) The offender undertakes either any activity
within the meaning of "recruitment and
placement" defined under Article 13(b), or
any of the prohibited practices enumerated
under Art. 34 of the Labor Code;
(2) He has no valid license or authority required
by law to enable one to lawfully engage in
recruitment and placement of workers; AND
(3) The illegal recruitment is committed by a
group of three (3) or more persons
conspiring or confederating with one
another. [People v. Gallo (2010)]

Illegal recruitment shall mean any act of

canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and
includes referring, contract services, promising
or advertising for employment abroad, whether
for profit or not, when undertaken by nonlicensee
or
non-holder
of
authority
contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines

Illegal recruitment in large scale

The acts committed by the accused constituted
illegal recruitment in large scale, whose
essential elements are the following:
(1) The accused engages in acts of recruitment
and placement of workers defined under
Article 13(b) of the Labor Code or in any
prohibited activities under Article 43 of the
Labor Code;
(2) The accused has not complied with the
guidelines issued by the Secretary of Labor
and Employment, particularly with respect
to the securing of license or an authority to
recruit and deploy workers, either locally or
overseas; and
(3) The accused commits the unlawful acts
against three or more persons individually
or as a group.

ILLEGAL
RECRUITMENT
FOR
MIGRANT WORKERS (Governed by R.A.
8042, as amended by, R.A. 10022)

SIMPLE ILLEGAL RECRUITMENT

1st type:
(1) Person charged undertakes any recruitment
activity as defined in Art.13 (b) of the Labor
Code; and
(2) Said person does not have a license or
authority to do so.

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Provided, that any such non-licensee or nonholder who, in any manner, offers or promises
for a fee employment abroad to two or more
persons shall be deemed so engaged. (Sec. 6,
RA 8042 as amended)
OTHER PROHIBITED ACTS
It shall likewise include the following acts,
whether committed by any person, whether a
non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly
any amount greater than that specified in
the schedule of allowable fees prescribed
by the Secretary of Labor and Employment,
or to make a worker pay or acknowledge
any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of
securing a license or authority under the
Labor Code, or for the purpose of
documenting hired workers with the POEA,
which include the act of reprocessing
workers through a job order that pertains
to nonexistent work, work different from
the actual overseas work, or work with a
different employer whether registered or
not with the POEA;

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(d) To include or attempt to induce a worker

already employed to quit his employment
in order to offer him another unless the
transfer is designed to liberate a worker
from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence any
person or entity not to employ any worker
who has not applied for employment
through his agency or who has formed,
joined or supported, or has contacted or is
supported by any union or workers'
organization;
(f) 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;
(g) To fail to submit reports on the status of
employment,
placement
vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
other matters or information as may be
required by the Secretary of Labor and
Employment;
(h) To substitute or alter to the prejudice of the
worker, employment contracts approved
and verified by the Department of Labor
and Employment from the time of actual
signing thereof by the parties up to and
including the period of the expiration of the
same without the approval of the
Department of Labor and Employment;
(i) For an officer or agent of a recruitment or
placement agency to become an officer or
member of the Board of any corporation
engaged in travel agency or to be engaged
directly or indirectly in the management of
travel agency;
(j) To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations, or for
any other reasons, other than those
authorized under the Labor Code and its
implementing rules and regulations;
(k) Failure to actually deploy a contracted
worker without valid reason as determined
by the Department of Labor and
Employment;
(l) Failure to reimburse expenses incurred by
the worker in connection with his
documentation and processing for
purposes of deployment, in cases where

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the deployment does not actually take

place without the worker's fault. Illegal
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving economic
sabotage; and
(m) To allow a non-Filipino citizen to head
or
manage
a
licensed
recruitment/manning agency.
In addition to the acts enumerated above, it
shall also be unlawful for any person or entity to
commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino worker
with interest exceeding eight percent (8%)
per annum, which will be used for payment
of legal and allowable placement fees and
make the migrant worker issue, either
personally or through a guarantor or
accommodation party, postdated checks in
relation to the said loan;
(2) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to avail of a loan only
from specifically designated institutions,
entities or persons;
(3) Refuse to condone or renegotiate a loan
incurred by an overseas Filipino worker
after the latter's employment contract has
been prematurely terminated through no
fault of his or her own;
(4) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to undergo health
examinations only from specifically
designated medical clinics, institutions,
entities or persons, except in the case of a
seafarer whose medical examination cost is
shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to undergo training,
seminar, instruction or schooling of any
kind only from specifically designated
institutions, entities or persons, except for
recommendatory trainings mandated by
principals/shipowners where the latter
shoulder the cost of such trainings;
(6) For a suspended recruitment/manning
agency to engage in any kind of
recruitment
activity
including
the

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processing
of
pending
workers'
applications; and
(7) For a recruitment/manning agency or a
foreign principal/employer to pass on the
overseas Filipino worker or deduct from his
or her salary the payment of the cost of
insurance fees, premium or other insurance
related charges, as provided under the
compulsory worker's insurance coverage.
(Sec. 6, RA 8042 as amended)

In every case, conviction shall cause and carry

the automatic revocation of the license or
authority and all the permits and privileges
granted to such person or entity under this Title,
and the forfeiture of the cash and surety bonds
in favor of the Overseas Employment
Development Board or the National Seamen
Board, as the case may be, both of which are
authorized to use the same exclusively to
promote their objectives.

OFFENSE
INVOLVING
ECONOMIC
SABOTAGE (Large-Scale or by a Syndicate)

Illegal Recruitment Involving Migrant

Workers (Sec. 7, RA 8042 as amended by RA
10022)

Illegal recruitment is deemed committed by a

syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with
one another. It is deemed committed in large
scale if committed against three (3) or more
persons individually or as a group.
LIABILITIES & PENALTIES FOR ILLEGAL
RECRUITMENT
Illegal Recruitment Involving Local Workers
(Art. 39, LC)
Act

Penalty

Illegal recruitment Life imprisonment &

constituting
Fine: P100,000.00
economic sabotage
Licensee or holder or
authority violating or
causing another to
violate Title I, Book I,
LC

2 years Imprisonment
5 years OR
P10,000 Fine
P50,000 OR both

Violating or causing 4 years Imprisonment

another to violate 8 years OR
Title I, Book I, LC
P20,000 Fine
P100,000 OR both
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.
If such officer is an alien, he shall, in addition to
the penalties herein prescribed, be deported
without further proceedings.

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Act

Penalty

Illegal
recruitment

12 years and 1 day

Imprisonment 20 years &
P1M Fine P2M

Illegal
recruitment
constituting
economic
sabotage

Life imprisonment AND

P2M Fine P5M
Maximum penalty:
1. illegally recruited person
below 18 years old OR
2. Without license/authority

Prohibited Act/s 6 years and 1 day

Imprisonment 12 years
AND
P500k Fine P1M
If the offender is an alien, he or she shall, in
addition to the penalties herein prescribed, be
deported without further proceedings.
In every case, conviction shall cause and carry
the automatic revocation of the license or
registration of the recruitment/manning
agency, lending institutions, training school or
medical clinic.
Common Rules on Illegal Recruitment (Local
or Overseas)
Venue
A criminal action arising from illegal
recruitment shall be filed with the RTC of the
province or city:
(1) where the offense was committed or
(2) where the offended party actually resides at
the time of the commission of the offense.

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(Sec. 9, R.A. 8042 [this part was not

amended by R.A. 10022]).
Prescriptive Periods
(1) Simple Illegal Recruitment 5 years
(2) Illegal Recruitment involving Economic
Sabotage 20 years. (Sec. 12, R.A. 8042
[this part was not amended by R.A, 10022]).
Pre-Termination of Contract of Migrant
Worker (Sec. 10, R.A. 8042, as amended by
R.A. 10022)
In case of termination of overseas employment
o without just, valid or authorized cause as
defined by law or contract, or
o any unauthorized deductions from the
migrant worker's salary
The worker shall be entitled to the full
reimbursement of:
(1) his placement fee and the deductions made
with interest at twelve percent (12%) per
annum
(2) plus his salaries for the unexpired portion of
his employment contract OR for three (3)
months for every year of the unexpired term,
whichever is less.

DIRECT HIRING

General Rule: No employer may hire a Filipino

worker for overseas employment except through
the Boards and entities authorized by the
Secretary of Labor. (Art. 18, LC)
Exceptions:
(1) Members of the diplomatic corps;
(2) International organizations;
(3) Such other employees as may be allowed by
the Sec. of Labor;
(4) Name hirees those individuals who are
able to secure contracts for overseas
employment on their own efforts and
representation without the assistance or
participation of any agency. Their hiring,
nonetheless, has to be processed through
the POEA. (Part III, Rule III of the POEA
Rules Governing Overseas Employment as
amended in 2002)

GOVERNMENT TECHNIQUES OF
REGULATION & ENFORCEMENT

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SUSPENSION OR CANCELLATION OF
LICENSE OR AUTHORITY

The Secretary of Labor shall have the power to

suspend or cancel any license or authority to
recruit employees for overseas employment for
o violation of rules and regulations issued by
the Department of Labor, the Overseas
Employment Development Board, and the
National Seamen Board
o violation of the provisions of this and other
applicable laws, General Orders and Letters
of Instructions. (Article 35, LC)
The acts prohibited under Article 34 are
grounds for suspension or cancellation of
license. Note that they likewise constitute illegal
recruitment under R.A. 8042 as amended by
R.A. 10022.

REGULATORY
&
VISITORIAL
POWERS OF THE DOLE SECRETARY

REGULATORY POWERS (Art. 36, LC)

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.
VISITORIAL POWERS (Art. 37, LC)
The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the
premises, books of accounts and records of any
person or entity covered by this Title, require it
to submit reports regularly on prescribed forms,
and act on violations of any provisions of this
Title.

POEA STANDARD
CONTRACT

EMPLOYMENT

Document containing the standard terms and

condition of the seafarers employment in
foreign ocean-going vessels
To be integrated in every seafarers contract
The POEA rules and regulations require that the
POEA Standard Employment Contractbe
integrated in every seafarers contract. This,
together with the contract the employees sign

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every time they are hired, constitutes the law

between the parties. I
Construction: liberal
The POEA standard employment contract for
seamen was designed primarily for the
protection and benefit of Filipino seamen in the
pursuit of their employment on board oceangoing vessels. Its provisions must be construed
and applied fairly, reasonably and liberally in
their favor. Only then can its beneficent
provisions be fully carried into effect. [Abante v.
KJGS Fleet Management (2009)]
Breach of contract may give rise to a cause of
action even before commencement of EE-ER
relationship
Even if by the standard contract employment
commences only upon actual departure of the
seafarer, this does not mean that the seafarer
has no remedy in case of non-deployment
without any valid reason. Even before the start
of any employer-employee relationship,
contemporaneous with the perfection of the
employment contract was the birth of certain
rights and obligations, the breach of which may
give rise to a cause of action for damages under
the Civil Code against the erring party. [StoltNielsen v. Medequillo (2012)]

REMITTANCE
OF
EXCHANGE EARNINGS

FOREIGN

It shall be mandatory for all Filipino workers

abroad to remit a portion of their foreign
earnings to their families, dependents, and/or
beneficiaries in the country (Art. 22, LC)
Amount required to be remitted (Executive
Order No. 857)
The amount of ones salary required to be
remitted depends on the type or nature of work
performed by the employee.
The following are the percentages of foreign
exchange remittance required from various
kinds of migrant workers:
(1) Seaman or mariner 80% of their basic
salary
(2) Workers for Filipino contractors and
construction companies 70%

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(3) Doctors, engineers, teachers, nurses and

other professional workers whose contract
provide for free board and lodging 70%
(4) All other professional workers whose
employment contracts do not provide for
free board and lodging facilities 50%
(5) Domestic and other service workers 50%
(6) All other workers not falling under the
aforementioned categories 50%
(7) Performing artists 50%
Individuals exempted from the mandatory
remittance requirement:
(1) The
immediate
family
members,
dependents or beneficiaries of migrant
workers residing with the latter abroad;
(2) Filipino servicemen working within US
military installations;
(3) Immigrants and Filipino professionals
working with the United Nations and its
agencies or other specialized bodies.

Labor Standards
COVERAGE
General rule: Shall apply to employees in all
establishments and undertakings whether for
profit or not. (Art. 82, LC)
Exceptions (NOT Covered):
(1) Government employees (Art. 82; Art. 76)
(2) Managerial Employees including members
of the managerial staff (Art. 82)
(3) Field Personnel (Art. 82)
(4) Members of the family of the employer who
are dependent on him for support (Art. 82);
(5) Domestic helpers and persons in personal
service of another (Art. 141)
(6) Workers who paid by result as determined
by DOLE regulation (Art. 82)
GOVERNMENT EMPLOYEES
The terms and conditions of employment of all
government employees, including employees of
GOCCs, are governed by the Civil Service rules
and regulations, not by the Labor Code (Art.
282).

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MANAGERIAL EMPLOYEES
Two definitions of managerial employees
in the Labor Code
Article 82: Those whose primary duty consists of
the management of the establishment in which
they are employed or of a department or
subdivision thereof, and to other officers or
members of the managerial staff. (Art. 82, LC)
Article 212 (m): One who is vested with the
powers or prerogatives to lay down and execute
management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees. Supervisory employees
are those who, in the interest of the employer,
effectively recommend such managerial actions
if the exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment. All employees
not falling within any of the above definitions
are considered rank-and-file employees for
purposes of this Book
Characteristics of managerial employees
(Book 3, Rule 1, Sec. 2(b), IRR)
Managerial employees qualify for the exception
if they meet all of the following conditions:
(1) Their primary duty consists of the
management of the establishment in which
they are employed or of a department or
sub-division thereof.
(2) They customarily and regularly direct the
work of two or more employees therein.
(3) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion or
any other change of status of other
employees, are given particular weight.
Managerial Staff also included (Book 3, Rule 1,
Sec. 2(c), IRR)
Officers or members of a managerial staff also
qualify for the exception if they perform the
following duties and responsibilities:
(1) The primary duty consists of the
performance of work directly related to

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management policies of their employer;

(2) Customarily
and
regularly
exercise
discretion and independent judgment;
(3) To:
(a) Regularly and directly assist a proprietor
or a managerial employee whose primary
duty consists of the management of the
establishment in which he is employed or
subdivision thereof; OR
(b) Execute under general supervision work
along specialized or technical lines
requiring special training, experience, or
knowledge; OR
(c) Execute, under general supervision,
special assignments and tasks;
(4) Who do not devote more than 20 percent of
their hours worked in a work week to activities
which are not directly and closely related to the
performance of the work described in
paragraphs (1), (2) and (3) above.
FIELD PERSONNEL
Non-agricultural employees
(1) who regularly perform their duties away
from the principal place of business or
branch office of the employer AND
(2) whose actual hours of work in the field
cannot be determined with reasonable
certainty. (Art. 82, LC)
DEPENDENT FAMILY MEMBERS
Workers who are family members of the
employer, and who are dependent on him for
their support, are outside the coverage of this
Title on working conditions and rest periods.
DOMESTIC HELPERS
"Domestic or household service" shall mean
service in the employers home which is usually
necessary or desirable for the maintenance and
enjoyment thereof and includes ministering to
the personal comfort and convenience of the
members of the employers household,
including services of family drivers. (Art. 141, LC)
Note: The Kasambahay Law (RA 10361) has
redefined domestic worker or kasambahay:
Domestic worker or Kasambahay refers to any
person engaged in domestic work within an
employment relationship such as, but not
limited to, the following: general househelp,

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nursemaid or yaya, cook, gardener, or laundry

person, but shall exclude any person who
performs domestic work only occasionally or
sporadically and not on an occupational basis.
(RA 10361 Art. 1, Sec. 4 (d))
PERSONS IN PERSONAL
SERVICE OF
ANOTHER
The provisions of this Rule shall not apply to the
following persons if they qualify for exemption
under the conditions set forth herein:
Domestic servants and persons in the personal
service of another if they perform such services
in the employers home which are usually
necessary or desirable for the maintenance and
enjoyment thereof, or minister to the personal
comfort, convenience, or safety of the employer
as well as the members of his employers
household. (Book 3, Rule 1, Sec. 2 (d), IRR)
WORKERS PAID BY RESULT
Workers who are paid by results, including those
who are paid on piece-work, takay, pakiao or
task basis, and other non-time work if their
output rates are in accordance with the
standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such
rates have been fixed by the Secretary of Labor
and Employment in accordance with the
aforesaid Section. (Book 3, Rule 1, Sec. 2 (e), IRR)

HOURS OF WORK
COVERAGE/EXCLUSIONS
supra

NORMAL HOURS OF WORK

General Rule: 8-Hour Labor Law

The normal hours of work of any employee shall
not exceed eight (8) hours a day. (Art. 83, LC)
Exception to the 8-Hour Law: Work Hours of
Health Personnel
Health personnel in
(1) Cities and municipalities with a population
of at least one million (1,000,000) OR
(2) Hospitals and clinics with a bed capacity of
at least one hundred (100)
shall hold regular office hours for eight (8)

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hours a day, for five (5) days a week, exclusive

of time for meals, except where the exigencies
of the service require that such personnel work
for six (6) days or forty-eight (48) hours, in
which case, they shall be entitled to an
additional compensation of at least thirty
percent (30%) of their regular wage for work on
the sixth day.
For purposes of this Article, "health personnel"
shall include resident physicians, nurses,
nutritionists, dietitians, pharmacists, social
workers, laboratory technicians, paramedical
technicians,
psychologists,
midwives,
attendants and all other hospital or clinic
personnel. (Art. 38, LC)
COMPENSABLE HOURS OF WORK
(Art. 84, LC)
Hours worked shall include
(a) All time during which an employee is
required to be on duty or to be at a
prescribed workplace; AND
(b) All time during which an employee is
suffered or permitted to work.
Rest period short duration or coffee
break
Rest periods of short duration during working
hours shall be counted as hours worked. (Art.
84, par. 2, LC)
Rest periods or coffee breaks running from five
(5) to twenty (20) minutes shall be considered
as compensable working time. (Bk III, Rule 1, Sec.
7, par. 2, IRR)
An employee need not leave the premises of the
work place in order that his rest period shall not
be counted, it being enough that he stops
working, may rest completely and may leave his
work place, to go elsewhere, whether within or
outside the premises of his work place. (Book 3,
Rule 1, Sec. 4 (b) of the IRR)
On call
An employee who is
(a) required to remain on call in the employers
premises or so close thereto
(b) that he cannot use the time effectively and
gainfully for his own purpose

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shall be considered as working while on call.

An employee who is not required to leave word
at his home or with company officials where he
may be reached is not working while on call.
(Book III, Rule 1, Sec. 5(b), IRR)
Inactive due to work interruptions
The time during which an employee is inactive
by reason of interruptions in his work beyond his
control shall be considered working time either:
(a) if the imminence of the resumption of work
requires the employee's presence at the
place of work OR
(b) if the interval is too brief to be utilized
effectively and gainfully in the employee's
own interest. (Book III, Rule 1, Sec. 4(d),
IRR)
Work interruption due to brownouts
Brownouts of short duration, but not exceeding
20 minutes, shall be treated as hours worked,
whether used productively by the employees or
not.
If they last more than 20 minutes, the time may
not be treated as hours worked if the employees
can leave their workplace or go elsewhere
whether within or without the work premises; or
the employees can use the time effectively for
their own interest. In this case, the employer
may extend the working hours beyond the
regular schedule on that day to compensate for
the loss of productive man-hours without being
liable for overtime pay. (Policy Instruction No. 36,
May 22, 1978)
Note: The time during which an employee is
inactive by reason of work interruptions beyond
his control is considered working time, either if
the imminence of the resumption of work
requires the employees presence at the place of
work or if the interval is too brief to be utilized
effectively and gainfully in the employees own
interest. (Book III, Rule 1 Sec. 4-c OR)
Necessary work after normal hours
If the work performed was necessary, or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no replacement,
all the time spent for such work shall be

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considered as hours worked if the work was with

the knowledge of his employer or immediate
supervisor. [IRR, Book III, Rule 1, Sec. 4(c)]
Lectures, meetings, trainings
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 employees
regular working hours;
(2) Attendance is in fact voluntary; and
(3) The employee does not perform any
productive work during such attendance.
(IRR, Book III, Rule 1, Sec. 6)
Note:
(1) Attendance in lectures, meetings, and
training periods sanctioned by the employer
are considered hours worked.
(2) Attendance in CBA negotiations or grievance
meeting is compensable hours worked.
(3) Attendance in hearings in cases filed by the
employee is NOT compensable hours
worked.
(4) Participation in strikes is NOT compensable
working time.
Idle Time
The idle time that an employee may spend for
resting and dining which he may leave the spot
or place of work though not the premises of his
employer, is not counted as working time only
where the work is broken or is not continuous.
[National Development Co. v. CIR (1962)]
Travel Time (Department of Labor Manual)
(1) Travel from home to work An employee
who travels from home before his regular
workday and returns to his home at the end
of the workday is engaged in ordinary hometo-work travel which is NOT worktime,
except:
(a) When called to travel during emergency;
(b) When travel is done through a
conveyance furnished by the employer;
(c) Travel is done under vexing and
dangerous circumstances;
(d) Travel is done under the supervision and
control of the employer.
(2) Travel that is all in the days work Time
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to jobsite during the workday, must be

counted as hours worked. Where an
employee is required to report at a meeting
place to receive instructions or to perform
other work there, the travel from the
designated place to the workplace is part of
the days work.
(3) Travel away from home - Travel that keeps
an employee away from home overnight is
travel away from home. Travel away from
home is worktime when it cuts across the
employees workday. The time is hours
worked not only on regular working hours
but also during the corresponding hours on
non-working days.
COMPRESSED WORK WEEK (CWW)
(DOLE Advisory No. 02, Series of 2004)
Under the CWW scheme, the normal workday
goes beyond eight hours without the
corresponding overtime premium.
The total hours of work, however, shall not
exceed 12 hours a day or 48 hours a week, or the
employer is obliged to pay the worker the
overtime premium in excess of said work hours.
Conditions for CWW
(1) The CWW scheme is undertaken as a result
of an express and voluntary agreement of
majority of the covered employees or their
duly authorized representatives.
(2) In firms using substances, chemicals and
processes or operating under conditions
where there are airborne contaminants,
human carcinogens or noise prolonged
exposure to which may pose hazards to
employees health and safety, there must be
a certification from an accredited health and
safety organization or practitioner from the
firms safety committee that work beyond
eight hours is within threshold limits or
tolerable levels of exposure, as set in the
OSHS.
(3) The employer shall notify DOLE, through the
Regional Office having jurisdiction over the
workplace, of the adoption of the CWW
scheme. The notice shall be in DOLE CWW
Report Form attached to this Advisory.
(DOLE Advisory No. 02-04)

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MEAL BREAK
General Rule: Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the
duty of every employer to give his employees
not less than sixty (60) minutes time-off for their
regular meals (Art. 85, LC)
Exception: Employees may be given a meal
period of not less than twenty (20) minutes
provided that such shorter meal period is
credited as compensable hours worked of the
employee:
(a) Where the work is non-manual work in
nature or does not involve strenuous
physical exertion;
(b) Where the establishment regularly operates
not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies
or there is urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer
would otherwise suffer; and
(d) Where the work is necessary to prevent
serious loss of perishable goods (Book 3,
Rule 1, Sec. 7 par 1, IRR)
SYNTHESIS OF THE RULES
General Rule: Meal periods
compensable.

are

NOT

Exception: It becomes compensable:

(1) Where the lunch period or meal time is
predominantly spent for the employers
benefit. (Azucena citing 31 Am. Jur. 881;
Duka, Labor Laws and Social Legislation)
(2) Meal periods of 1 hour is deemed
compensable when the employee is on
continuous shift. (National Development Co.
v. CIR, G.R. No. L-15422, Nov. 30, 1962)
(3) Shortened meal period of less than 1 hour
(say, 30 minutes) must be compensable.
(Sec. 7, Rule I, Book III, IRR)
Note: To shorten meal time to less than 20
minutes is not allowed. If the so-called meal
time is less than 20 minutes, it becomes only a
REST PERIOD and is considered working time.
Exception to the Exception: Shortened meal
breaks upon the employees request NOT
compensable. The employees themselves may
request that the meal period be shortened so

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that they can leave work earlier than the

previously established schedule. (Drilon: Letter
to Kodak Philippines, Nov. 27, 1989; also Cilindro:
BWC-WHSD Opinion No. 197, s. 1998).

WAITING TIME
Waiting time spent by an employee shall be
considered as working time if waiting is an
integral part of his work or the employee is
required or engaged by the employer to wait.
(Book III, Rule I Sec. 5(a), IRR)
An employee who is required to remain on call
in the employers premises or so close thereto
that he cannot use the time effectively and
gainfully for his own purpose shall be
considered as working while on call. (Book 3,
Rule 1, Sec. 5, IRR)

OVERTIME WORK, OVERTIME PAY

OVERTIME ON ORDINARY WORKING DAY

Work may be performed beyond eight (8) hours
a day provided that the employee is paid for the
overtime work, an additional compensation
equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. (Art. 87, LC)
OVERTIME WORK ON HOLIDAY OR REST
DAY
Work performed beyond eight hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof. (Art. 87, LC)
EMERGENCY OVERTIME (Art. 89, LC)
Any employee may be required by the employer
to perform overtime work in any of the following
cases:
(1) When the country is at war or when any other
national or local emergency has been
declared by the National Assembly or the
Chief Executive;
(2) When it is necessary to prevent loss of life or
property or in case of imminent danger to
public safety due to an actual or impending
emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
(3) When there is urgent work to be performed
on machines, installations, or equipment, in
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order to avoid serious loss or damage to the

employer or some other cause of similar
nature;
(4) When the work is necessary to prevent loss
or damage to perishable goods; and
(5) Where the completion or continuation of the
work started before the eighth hour is
necessary to prevent serious obstruction or
prejudice to the business or operations of the
employer.
CANNOT OFFSET UNDERTIME
Undertime work on any particular day shall not
be offset by overtime work on any other day.
Permission given to the employee to go on leave
on some other day of the week shall not exempt
the employer from paying the additional
compensation required in this Chapter. (Art. 88,
LC)

NIGHT
WORK,
DIFFERENTIAL

NIGHT

SHIFT

Night worker
Any employed person whose work requires
performance of a substantial number of hours
of night work which exceed a specified limit.
This limit shall be fixed by the Sec of Labor after
consulting the workers representatives/labor
organizations and employers. (Art. 154, RA
10151)
Night shift differential
The additional compensation of 10% of an
employees regular wage for each hour of work
performed between 10pm and 6am. (Art. 86,
LC)
Coverage (Book 3, Rule 2, Sec. 1, IRR)
All employees, except:
(a) Those of the government and any of its
political subdivisions, including governmentowned and/or controlled corporations;
(b) Those of retail and service establishments
regularly employing not more than five (5)
workers;
(c) Domestic helpers and persons in the
personal service of another;
(d) Managerial employees as defined in Book
Three of this Code;
(e) Field personnel and other employees whose
time and performance is unsupervised by the
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employer including those who are engaged

on task or contract basis, purely commission
basis, or those who are paid a fixed amount
for performing work irrespective of the time
consumed in the performance thereof.
Rest days (night-off)
Night shift employees are entitled to a weekly
night-off (usually Saturday evening) or a weekly
rest period of 24 hours beginning at the start of
the night shift.
Work on special days
Night shift employees are also entitled to the
premium pay on special days and holidays.
These days are reckoned as calendar days which
start at midnight and end at the following
midnight. The premium pay for the night shift
also starts or ends at midnight. However, the
employment contract, company policy or CBA
may provide that in the case of night shift
workers, daysincluding special days and
regular holidaysshall begin on the night
before a calendar day.

PART-TIME WORK

A single, regular or voluntary form of

employment with hours of work substantially
shorter than those considered as normal in the
establishment.
(International
Labor
Organization)
This excludes those forms of employment
which, although referred to as part-time work,
are in particular, irregular, temporary or
intermittent employment, or in cases where
hours of work have been temporarily reduced
for economic, technical or structural reasons.
The wage and benefits of part-time worker are
in proportion to the number of hours worked.
CONTRACT FOR PIECE OF WORK
A contract for the delivery at a certain price of
an article which the vendor in the ordinary
course of his business manufactures or procures
for the general market, whether the same is on
hand at the time or not, is a contract of sale
BUT if the goods are to be manufactured
specially for the customer and upon his special

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order, and not for the general market, it is a

contract for a piece of work. (Article 1467, CC)

WAGES
Definition
(a) It is the remuneration or earnings, however
designated, capable of being expressed in
terms of money,
(b) whether fixed or ascertained on a time, task,
piece, or commission basis, or other method
of calculating the same,
(c) which is payable by an employer to an
employee
(d) under a written or unwritten contract of
employment for work done or to be done, or
for services rendered or to be rendered and
(e) includes the fair and reasonable value, as
determined by the Secretary of Labor and
Employment, of board, lodging, or other
facilities customarily furnished by the
employer to the employee
Fair and reasonable value - shall not include
any profit to the employer, or to any person
affiliated with the employer. (Art. 97(f))
No work no pay principle
General Rule: the age old rule governing the
relation between labor and capital or
management and employee is that a "fair day's
wage for a fair day's labor."
Exception: When the laborer was able, willing
and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally
prevented from working.
Equal Work for Equal Pay Principle
Employees working in the Philippines, if they are
performing similar functions and responsibilities
under similar working conditions should be paid
equally. If an employer accords employees the
same position and rank, the presumption is that
these employees perform equal work.
Coverage/Exclusions (Art. 98 and Bk 3, Rule
VII, Sec 3, IRR)
The Labor Code Title on wages shall not apply
to the following:
(1) Farm tenancy or leasehold;
(2) Household or domestic helpers, including
family drivers and other persons in the
personal service of another;
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(3) Homeworkers engaged in needlework;

(4) Workers in registered cottage industries who
actually work at home;
(5) Workers in registered cooperatives when so
recommended by the Bureau of Cooperative
Development upon approval of the Secretary
of Labor;
(6) Workers in registered barangay micro
business enterprise (RA 9178).

WAGE VS. SALARY

There are slight differences:

Wage

Salary

Paid for skilled or Paid to white collar

unskilled manual labor
workers and denote
a higher grade of
employment
Not subject to execution,
garnishment or
attachment except for
debts related to
necessities (Art. 1708)

Not exempt from

execution,
garnishment or
attachment (Gaa vs.
CA, 1985)

MINIMUM WAGE
Statutory minimum wage is the lowest wage
rate fixed by law that an ER can pay his workers.
[IRR, RA 6727, (o)]
COVERAGE
General Rule: The wage increases prescribed
under Wage Orders apply to all private sector
workers and EEs receiving the daily minimum
wage rates or those receiving up to a certain
daily wage ceiling, where applicable, regardless
of their position, designation, or status, and
irrespective of the method by which their wages
are paid.
Exceptions:
(1) Domestic Helpers/kasambahay are covered
by RA 10361
(2) Workers of registered barangay micro
business enterprise with Certificates of
Authority issued by the Office of the
Municipal or City Treasurer.
EXEMPTIONS
Upon application with and as determined by the
Regional Tripartite Wages and Productivity

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Board, based on documentation and other

requirements in accordance with applicable
rules and regulations issued by the NWPC, the
following may be exempted from the
applicability of this Order:
(1) Distressed establishments;
(2) Retail/Service establishments regularly
employing not more than 10 workers;
(3) Establishments whose total assets including
those arising from loans but exclusive of the
land on which the particular business entitys
office, plant and equipment are situated, are
not more than P3 Million; and,
(4) Establishments adversely affected by natural
calamities. (Sec. 8, Wage Order No. 18, 2013)
BASIS
The basis of the minimum wage rates
prescribed by law shall be the normal working
hours of 8 hours a day. (Sec 7, IRR of RA 6727)
Factors/Criteria in determining regional
minimum wages:
(1) Demand for living wages;
(2) Wage adjustment the consumer price index;
(3) Cost of living and changes or increases
therein;
(4) The needs of workers and their families;
(5) The need to induce industries to invest in the
countryside;
(6) Improvements in standards of living;
(7) Prevailing wage levels;
(8) Fair return of the capital invested and
capacity to pay of employers;
(9) Effects in employment generation and family
income; and
(10) Equitable distribution of income and wealth
along the imperatives of economic and social
development. (Art. 124)
Procedure for Wage Fixing by Regional
Board (Art. 123)
(1) Investigate and study pertinent facts, based
on criteria set in Art. 124
(2) Conduct public hearings or consultations
with notice to employer and employee
groups, provinces, city, municipal officials
and other interested parties
(3) Decide to ISSUE or NOT TO ISSUE a wage
order
o Frequency: Wage orders issued may not
be disturbed for 12 months from effective

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date; this serves as a bar for petitions for

wage hikes as well
o EXCEPT: when Congress passes a new
law affecting wages or other supervening
circumstances
o Effectivity: If it decides to ISSUE a wage
order, the wage order takes effect after 15
days from complete publication in at
least 1 newspaper of general circulation in
the region
(4) Appeal wage order to Commission
within 10 calendar days; mandatory for the
Commission to decide within 60 calendar
days from filing
Filing of an appeal DOES NOT STAY order
unless appellant files an undertaking with a
surety, to guarantee payment of employees if
the wage order is affirmed (as amended by RA
6727)

MINIMUM WAGE OF WORKERS

WORKERS PAID BY RESULTS
All workers paid by result, including those who
are paid on piecework, takay, pakyawor task
basis, shall receive not less than the prescribed
wage rates per eight (8) hours of work a day, or
a proportion thereof for working less than eight
(8) hours. (Art. 124)
MINIMUM WAGE OF APPRENTICES AND
LEARNERS
Wages of apprentices and learners shall in no
case be less than 75% of the applicable
minimum wage rates. (Art. 61 & 75, LC)
Note: Learners employed in piece or incentiverate jobs during the training period shall be paid
in full for the work done. (Art. 76, LC)
The Secretary of Labor and Employment may
authorize the hiring of apprentices without
compensation whose training on the job is
required by the school or training program
curriculum or as requisite for graduation or
board examination. (Art. 72, LC)
MINIMUM WAGE OF PERSONS WITH
DISABILITY
A qualified disabled EE shall be subject to the
same terms and conditions of employment and

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the same compensation, privileges, benefits,

fringe benefits or allowances as a qualified
able-bodied persons. (Sec 5, RA 7277, The
Magna Carta for Disabled Persons)

COMMISSIONS

Commissions have been defined as the

recompense, compensation or reward of an
agent, salesman, executor, trustee, receiver,
factor, broker or bailee, when the same is
calculated as a percentage on the amount of his
transactions or on the profit to the principal.
[Philippine Duplicators, Inc. v. NLRC (1993)]
Commissions as part of minimum wage
The Court held that the definition of wage
under Art. 97 (f) of the LC explicitly includes
commissions as part of wages. While
commissions are, indeed, incentives or forms of
encouragement to inspire employees to put a
little more industry on the jobs particularly
assigned to them, still these commissions are
direct remunerations for services rendered.
Likewise, there is no law mandating that
commissions be paid only after the minimum
wage has been paid to the employee. Verily, the
establishment of a minimum wage only sets a
floor below which an employees remuneration
cannot fall, not that commissions are excluded
from wages in determining compliance with the
minimum wage law. [Iran v. NLRC (1998)]

DEDUCTIONS FROM WAGES

General Rule: No employer, in his own behalf or

in behalf of any person, shall make any
deduction from the wages of his employees.
(Art. 113)
Exceptions:
(1) In cases where the worker is insured with his
consent by the employer, and the deduction
is to recompense the employer for the
amount paid by him as premium on the
insurance;
(2) For union dues, in cases where the right of
the worker or his union to check-off has been
recognized by the employer or authorized in
writing by the individual worker concerned;
and
(3) In cases where the employer is authorized by
law or regulations issued by the Secretary of
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Labor and Employment (Art. 113), such as:

(a) Employee debt to employer is due and
demandable (CC 1706);
(b) Attachment or execution in cases of
debts incurred for necessities: food,
shelter, clothing, medical attendance
(CC 1708);
(c) Withholding tax;
(d) Deductions of a legally established
cooperative;
(e) Payment to 3rd parties upon written
authority by employee;
(f) Deductions for loss or damage;
(g) SSS, Medicare, Pag-IBIG premiums;
(h) Deduction for value meals and other
facilities.
It shall be unlawful to make any deduction from
the wages of any employee for the benefit of the
employer as consideration of a promise of
employment or retention in employment. (Art.
117) or to retaliate against the employee who
filed a complaint. (Art. 118)
With Employees consent
in writing

Without Employees
consent

(1) SSS Payments

(a) Workers insurance
(2) PHILHEALTH payments
acquired by the
(3) Contributions to PAGemployer
IBIG Fund
(b) Union dues, where
(4) Value of meals and other
the right to checkfacilities
off is recognized by
(5) Payments
to
third
the
employer
persons with employees
(provided in the
consent
CBA)
(6) Deduction of absences (c) Debts
of
the
(7) Union dues, where employee to the
check-off is not provided
employer that have
in the CBA.
become due and
demandable

Persons earning minimum wage are excepted

from income tax.

NON-DIMINUTION OF BENEFITS

General Rule: There is a prohibition against

elimination or diminution of benefits (Art. 100)
No wage order issued by any regional board
shall provide for wage rates lower than the
statutory minimum wage rates prescribed by
Congress. (Art. 127, as amended by Republic Act

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No. 6727, June 9, 1989)

REQUISITES
(1) Ripened company policy
(2) Practice is consistent and deliberate and
(3) Not due to error in the construction or
application of a doubtful or difficult question
of law.
(4) The diminution or discontinuance is done
unilaterally by the employer.
When not applicable: When at least one of the
requisites is absent.
(1) Mistake in the application of the law
(2) Negotiated benefits
(3) Reclassification of Positions e.g. loss of
some benefits by promotion.
(4) Contingent or Conditional Benefits the rule
does not apply to a benefit whose grant
depends on the existence of certain
conditions, so that the benefit is not
demandable if those preconditions are
absent.
Benefits initiated through negotiation between
Employee and Employer, e.g. CBA, can only be
eliminated or diminished bilaterally.

FACILITIES VS SUPPLEMENTS

The distinction between facilities and

supplement is relevant because the former are
wage-deductible while the latter is not. Simply
put, a wage includes facilities. (Art. 97)
The IRR definition (IRR Book III Rule 7-A Sec. 5)
has 2 components:
(1) Facilities are articles or services for the
benefit of the employee or his family. This 1st
part defines facilities.
(2) Facilities shall not include tools of the trade
or articles or service primarily for the benefit
of the employer or necessary to the conduct
of the employers business. This 2nd part is
essentially defines what a supplement.
Requirements for deducting value of
facilities
Mere availment is not sufficient to allow
deductions from employees wages. Before the
value of facilities can be deducted from the
employees wages, the following requisites must
all be attendant:

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(1) proof must be shown that such facilities are

customarily furnished by the trade;
(2) the provision of deductible facilities must be
voluntarily accepted in writing by the
employee; and
(3) facilities must be charged at reasonable
value.

WAGE DISTORTION/RECTIFICATION
A situation where an increase in prescribed
wage rates results in the elimination or severe
contraction
of
intentional
quantitative
differences in wage or salary rates between and
among employee groups in an establishment as
to effectively obliterate the distinctions
embodied in such wage structure based on
skills, length of service, or other logical bases of
differentiation (Art. 124)
HOW TO RESOLVE
Organized Establishment
(1) Employer and the union shall negotiate to
correct the distortions.
(2) Disputes shall be resolved through the
grievance procedure.
(3) If still unresolved, voluntary arbitration.
Grievance Procedure (under the CBA) if
unresolved, VOLUNTARY arbitration
Unorganized Establishment
(1) ERs and Employees shall endeavor to correct
such distortions.
(2) Disputes shall be settled through the
National Conciliation and Mediation Board.
(3) If still unresolved after 10 calendar days of
conciliation, it shall be referred to the
appropriate branch of the NLRC
compulsory arbitration
o Both the employer and employee
cannot use economic weapons.
(4) Employer cannot declare a lock-out;
Employee cannot declare a strike because
the law has provided for a procedure for
settling
(5) The salary or wage differential does not need
to be maintained. (National Federation of
Labor v. NLRC, 1994)
National Conciliation and Mediation Board if
unresolved, COMPULSORY arbitration by the

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NLRC
CBA vis--vis Wage Orders CBA
creditability
In determining an employees regular wage, the
pertinent stipulations in the CBA are
controlling, provided the result is not less than
the statutory requirement (Philippine National
Bank vs. PEMA, 1982)

DIVISOR TO DETERMINE DAILY RATE

Suggested formula for computing the
Estimated Equivalent Monthly Rate (EEMR)
EEMR =(Applicable Daily Rate (ADR) x
days/year) 12
For monthly-paid EEs
Monthly-paid employees are those who are paid
every day of the month, including unworked rest
days, special days, and regular holidays.
365 days/year
Where 365 296 days
days/year =
52 days
12 days
5 days

ordinary working days

rest days
regular holidays
special days

For daily-paid EEs

Daily-paid employees are those who are paid on
the days actually worked and on unworked
regular holidays.
(a) For those who are required to work every day
including Sundays or rest days, special days
and regular holidays:
394.1 days/year
Where 296 days
394.10 24 days
days =
67.60 days
6.50 days

ordinary working days

12 regular holidays x
200%
52 rest days x 130 %
5 special days x 130%

(b) For those who do not work and are not

considered paid on Sundays or rest days:
313 days/year

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Where 313 296 days

days =

12 days
5 days -

ordinary working
days
regular holidays
special days (if
considered paid; if
actually
worked,
this is equivalent to
6.5 days)

(c) For those who do not work and are not

considered paid on Saturdays and Sundays
or rest days:
278 days/year
Where 278 261 days
days =

12 days
5 days -

ordinary working
days
regular holidays
special days (if
considered paid; if
actually
worked,
this is equivalent to
6.5 days)

REST DAY
WEEKLY REST DAY

It shall be the duty of every employer, whether

operating for profit or not, to provide each of his
employees a rest period of not less than twentyfour (24) consecutive hours after every six (6)
consecutive normal work days. [Art. 91 (a)]
Preference of the employee
The employer shall determine and schedule the
weekly rest day of his employees subject to
collective bargaining agreement and to such
rules and regulations as the Secretary of Labor
and Employment may provide. However, the
employer shall respect the preference of
employees as to their weekly rest day when such
preference is based on religious grounds. [Art.
94 (b)]

EMERGENCY REST DAY WORK

The employer may require his employees to

work on any day:
(a) In case of actual or impending emergencies
caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other
disaster or calamity to prevent loss of life

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and property, or imminent danger to public

safety;
(b) In cases of urgent work to be performed on
the machinery, equipment, or installation, to
avoid serious loss which the employer would
otherwise suffer;
(c) In the event of abnormal pressure of work
due to special circumstances, where the
employer cannot ordinarily be expected to
resort to other measures;
(d) To prevent loss or damage to perishable
goods;
(e) Where the nature of the work requires
continuous operations and the stoppage of
work may result in irreparable injury or loss
to the employer; and
(f) Under other circumstances analogous or
similar to the foregoing as determined by the
Secretary of Labor and Employment. (Art. 92,
LC)

HOLIDAY PAY/PREMIUM PAY

Holiday pay is a one-day pay given by law to an

employee even if he does not work on a regular
holiday. This gift of a days pay is limited to each
of the 12 regular holidays.

COVERAGE

General Rule: All employees

Exceptions:
(1) Those of the government and any of the
political subdivision, including governmentowned and controlled corporation;
(2) Those of retail and service establishments
regularly employing less than 10 workers;
(3) Domestic helpers and persons in the
personal service of another;
(4) Managerial employees as defined in Book III
(5) Field personnel and other employees whose
time and performance is unsupervised by the
employer including those who are engaged
on task or contract basis, purely commission
basis, or those who are paid a fixed amount
for performing work irrespective of the time
consumed in the performance thereof. (Sec.
1, Rule IV of the IRR)
Retail Establishment is one principally engaged
in the sale of goods to end-users for personal or
household use;

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Service Establishment is one principally

engaged in the sale of service to individuals for
their own or household use and is generally
recognized as such. (IRR of RA 6727/the Wage
Rationalization Act)
REGULAR HOLIDAYS
Proclamation No. 655 signed by President
Aquino on 25 September 2013, provides for the
observance of the regular holidays and special
(non-working) days for the year 2014 on the
following dates:
(1) New years Day - January 1
(2) Maundy Thursday March 28
(3) Good Friday March 29
(4) Araw ng Kagitingan April 9
(5) Labor Day May 1
(6) Independence Day June 12
(7) National Heroes Day August 26
(8) Bonifacio Day November 30
(9) Christmas Day - December 25
(10) Rizal Day - December 30
(11) Eidl Fitr date to be determined later
(12) Eidl Adha date to be determined later
Special (Non-Working Days)
(1) Chinese New Year January 31
(2) Black Saturday March 30
(3) Ninoy Aquino Day - August 21
(4) All Saints Day - November 1
(5) Additional special (Non-working) days
(a) December 24
(b) December 26
(6) Last Day of the Year - December 31
Special Holiday (for all schools)
EDSA Revolution Anniversary February 25
P.D. 1083 (Code of Muslim Personal Laws) SEE:
Arts. 169-173
Specifically for the Muslim Areas, P.D. 1083, in
its Book V, Title, recognizes five (5) Muslim
Holidays, namely:
(1) Amun Jadid (New Year) which falls on the
first (1st) day of the lunar month of
Muharram;
(2) Mauli-un-Nabi (Birthday of the Prophet
Muhammad) which falls on the twelfth (12th)
day of the third (3rd) lunar month of Rabi-ulAwwal;

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(3) Lailatul Isra Wal Mi Rai (Nocturnal Journey

and Ascencion of the Prophet Muhammand)
which falls on the twenty-seventh (27th) day
of the seventh (7th) lunar month of Rajab;
(4) Id-ul-Fitr (Hari Raja Pausa) which falls on the
first (1st) day of the tenth (10th) lunar month
of Shawwal commemorating the end of the
fasting season; and
(5) Id-ul-Adha (Hari Raha Haji) which falls on
the tenth (10th) of the twelfth (12th) lunar
month of Dhul-Hijja.
Note: Id-ul-Fitr (Eidl Fitr) and Id-ul-Adha (Eidl
Adha) have been added to the list of national
legal holidays.
Note: There should be no distinction between
Muslims & non-Muslims as regards to the
payment of benefits for Muslim holidays. Wages
& other emoluments granted bylaw to the
working manare determined on the basis of the
criteria laid down by laws &not on workers
faith.Art. 3(3), PD 1083 states that nothing
herein shall be construed to operateto the
prejudice of a non-Muslim. (San Miguel Corp vs.
CA, 2002)
HOLIDAY PAY COMPUTATION
General Rule: An employer may require an
employee to work on any holiday but such
employee shall be paid a compensation
equivalent to twice his regular rate. [Art. 94(b)]
According to the LC, IRR and Memo:
Work on any regular
holiday, not exceeding 8
Computation
hrs
Work on any regular 200% of regular daily
holiday, if it exceeds 8 wage (for the 1st 8
hours/overtime
hours)
+ 30% of hourly rate
on said day
Work on any regular
200% of regular daily
holiday which falls on
wage + 30% of such
the scheduled rest day, amount
not exceeding 8 hours
Work on any regular
holiday which falls on
scheduled rest day, if it
exceeds 8

Regular holiday-onrest day rate (200% of

regular daily wage
plus 30% of such

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amount) + 30% of
hourly rate on said
day.

Work on special holiday Regular daily wage +

not exceeding 8 hours 30% thereof
Work on special holiday Regular daily wage +
50% thereof
According to DOLE Memo Circular 1-04, a
special holiday/special day includes the
National Special Days, and declared special
days such as Special Non-working Holiday,
Special Public Holiday and Special National
Holiday. Such days are entitled to the rates
prescribed above. These days are not the same
as a special working holiday.
A special working holiday is considered an
ordinary working day, so there is no premium
pay.
Double holiday pay
According to DOLE Explanatory Bulletin on
Workers Entitlement to Holiday Pay on 9 April
1993, if two holidays fall on the same day:
(1) If unworked, 200% of basic wage.
(2) If worked, 300% of basic wage. (Azucena)
Double Holiday Rule for Monthly-paid
employees
For covered employees whose monthly salaries
are computed based on 365 days and for those
other employees who are paid using factor 314,
or 262, or any other factor which already
considers the payment for the 11 regular
holidays, NO additional payment is due them.
(BWC-WHSD Opinion No. 053, s. 1998)
Successive holiday pay
According to IRR, Rule IV, Sec. 10, an employee
is entitled to holiday pay for both days, IF:
(1) He is present on day immediately preceding
first holiday; or
(2) He works on first holiday, which entitles him
to pay on second holiday.
Divisors
The divisor assumes an important role in
determining whether or not holiday pay is
already computed.

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(1) Monthly paid employees are not entitled to

the holiday pay if their total annual income is
divided by 365 days resulting in a wage
which is beyond the minimum wage per day
because they are considered paid everyday of
the year including holidays, rest days, and
other non-working days. The 365 days are as
follows:
365 days = 296 days ordinary days
52 days rest days
12 days regular holidays
5 days special holidays
(2) As a general rule, for a company with a 6day working schedule, the divisor 313 already
means that the legal holidays are included in
the monthly pay of the employee. The divisor
is arrived at by subtracting all Sundays from
the total number of calendar days in a year.
(3) As a general rule for a company with a 5-day
working schedule, the divisor 287 means
that the holiday pay is already included in
the monthly salary of the employee.
Non-working/scheduled rest day
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked
on the day immediately preceding the nonworking day or rest day. [IRR, Book III, Rule V,
Sec 6 (c)]
RIGHT TO HOLIDAY PAY
In case of absences
All covered employees shall be entitled to the
benefit provided herein when they are on leave
of absence with pay.
Employees who are on leave of absence without
pay on the day immediately preceding a regular
holiday may not be paid the required holiday
pay if he has not worked on such regular
holiday. [IRR, Book III, Rule IV, Sec 6(a)]
In case of temporary cessation of work
(a) In cases of temporary or periodic shutdown
and temporary cessation of work of an
establishment, as when a yearly inventory or
when the repair or cleaning of machineries
and equipment is undertaken, the regular

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holidays falling within the periods shall be

compensated in accordance with this Rule.
(b) The regular holiday during the cessation of
operation of an enterprise due to business
reverses as authorized by the Secretary of
Labor may not be paid by the employer. (IRR,
Book III, Rule IV, Sec 7)
An employee is entitled to holiday pay for the
regular holidays falling within the period in
cases of temporary shutdowns or cessation of
work, when:
(1) an annual inventory; or
(2) repair or cleaning of machineries and
equipment is undertaken.
The employer may not pay his employees for the
regular holidays during the suspension of work
if: the cessation of operation is due to business
reverses, and is authorized by the Secretary of
Labor.

TEACHERS,
PIECE
WORKERS,
SEAFARERS, SEASONAL WORKERS,
ETC.

Private school teachers, including faculty

members of colleges and universities, may not
be paid for the regular holidays during
semestral vacations. They shall, however, be
paid for the regular holidays during Christmas
vacation;
Where a covered employee, is paid by results or
output, such as payment on piece work, his
holiday pay shall not be less than his average
daily earnings for the last seven (7) actual
working days preceding the regular holiday;
Provided, However, that in no case shall the
holiday pay be less than the applicable
statutory minimum wage rate.
Seasonal workers may not be paid the required
holiday pay during off-season when they are not
at work
o Workers who have no regular working days
shall be entitled to the benefits provided in
this Rule. (Book III, Rule IV, Sec. 8 of IRR)
Piece workers
Philosophy underlying the exclusion of piece
workers from the 8-hour law is that said workers

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are paid depending upon the work they do

irrespective of the amount of time employed in
doing said work. (Red v. Coconut Products Ltd.,
v. CIR, 1966)
Seafarers
Any hours of work or duty including hours of
watch-keeping performed by the seafarer on
designated rest days and holidays shall be paid
rest day or holiday pay. (Section 11.C, Standard
Terms
and Conditions
Governing the
Employment of Filipino Seafarers on Board
Ocean-Going Vessels)
Seasonal workers
Seasonal workers who do not work during offseason are not entitled to pay for the regular
holidays occurring during their off-season.
Workers assigned to skeleton crews that work
during the off-season have the right to be paid
on regular holidays falling in that duration.

PREMIUM PAY

Premium pay refers to the additional

compensation for work performed within 8
hours on non-work days, such as rest days and
special days.
COVERAGE (Book 3, Rule 3, Sec. 7 of the IRR)
General Rule: All employees
Exceptions:
(1) Those of the government and any of the
political
subdivision,
including
government-owned
and
controlled
corporations;
(2) Managerial employees as defined in Book
III;
(3) Househelpers and persons in the personal
service of another;
(4) Workers who are paid by results, including
those who are paid on piece rate, takay,
pakyaw, or task basis, and other noontime
work, if their output rates are in accordance
with the standards prescribed in the
regulations, or where such rates have been
fixed by the Secretary of Labor and
Employment;
(5) Field personnel, if they regularly perform
their duties away from the principal or
branch office or place of business of the ER
and whose actual hours of work in the filed
cannot be determined with reasonable
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certainty.
Premium pay rates (DOLE Memorandum
Circular 1, Series of 2004)
When work performed
On scheduled rest day

Premium pay
30% of regular wage

On Sunday ONLY IF
30% of regular wage
ESTABLISHED rest day
No regular work and
rest days

30% of regular wage

for work performed on
Sundays and holidays

On any special
holiday/special day

30% of regular wage

On any special holiday

/special day falling on
scheduled rest day

50% of regular wage

On any regular holiday

falling on scheduled
rest day

230% of regular wage

Where the collective bargaining agreement or

other
applicable
employment
contract
stipulates the payment of a higher premium pay
than that prescribed under this Article, the
employer shall pay such higher rate. (Art. 93 (d))
Nothing in this Rule shall justify an employer in
reducing the compensation of his employees for
the unworked Sundays, holidays, or other rest
days which are considered paid-off days or
holidays by agreement or practice subsisting
upon the effectivity of the Code. (Book III, Rule
III, Sec. 8 of the IRR)
Nothing herein shall prevent the employer and
his employees or their representatives in
entering into any agreement with terms more
favorable to the employees than those provided
herein, or be used to diminish any benefit
granted to the employees under existing laws,
agreements, and voluntary employer practices.
(Book III, Rule II, Sec. 9 of the IRR)

LEAVES
SERVICE INCENTIVE LEAVE PAY

Every employee who has rendered at least one

year of service shall be entitled to a yearly

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service incentive leave of five days with pay. (Art.

95(a))
Service Incentive Leave DOES NOT apply to the
following employees:
(1) Those of the government and any of its
political subdivisions, including GOCCs;
(2) Domestic helpers and persons in the
personal service of another;
(3) Managerial employees as defined in Book 3
of this Code;
(4) Field personnel and other employees whose
performance is unsupervised by the
employer including those who are engaged
on task or contract basis, purely commission
basis, or those who are paid a fixed amount
for performing work irrespective of the time
consumed in the performance thereof;
(5) Those who are already enjoying the benefit
herein provided;
(6) Those enjoying vacation leave with pay of at
least 5 days;
(7) Those employed in establishments regularly
employing less than 10 employees. (Book 3,
Rule 5, Sec. 1 of the IRR)
Employer may require employee to work
The employer may require an employee to work
on any holiday but such employee shall be paid
a compensation equivalent to twice his regular
rate (Art. 95(b))
Meaning of 1 year of service
The term "at least one-year service" shall mean
service for not less than 12 months, whether
continuous or broken, reckoned from the date
the employee started working, including
authorized absences and paid regular holidays
unless the working days in the establishment as
a matter of practice or policy, or that provided in
the employment contract is less than 12
months, in which case said period shall be
considered as one year. (Book III, Rule V, Sec. 3 of
the IRR)
Entitlement
The grant of benefit in excess of that provided
herein shall not be made a subject of arbitration
or any court or administrative action. (Art. 95 (c))
Commutable nature of benefit

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The service incentive leave shall be commutable

to its money equivalent if not used or exhausted
at the end of the year.

MATERNITY LEAVE

[Sec. 14-A of RA 1161 (Social Security Law) as

amended by RA 7322 and RA 8282]
COVERAGE
Every pregnant woman in the private sector,
whether married or unmarried, is entitled to the
maternity leave benefits.
This is applicable to both childbirth and
miscarriage.
Requisites:
(1) Employment: A female employee employed
at the time of delivery, miscarriage or
abortion
(2) Contribution: who has paid at least 3
monthly contributions in the 12-month
period immediately preceding the semester
of her childbirth, or miscarriage.
(3) Notice: employee notified employer of her
pregnancy and the probable date of her
childbirth, which notice shall be transmitted
to the SSS in accordance with the rules and
regulations it may provide.
Benefit received
A daily maternity benefit equivalent to 100% of
her average daily salary credit for:
(1) 60 days for normal delivery
(2) 78 days for caesarean delivery
This benefit shall NOT be included in the
computation of 13th month pay as it is granted
to an employee in lieu of wages which is the
basis for computing 13th month.
Only 4 maternity leaves available
The maternity benefits provided under the
Social Security Law shall be paid only for the
first four (4) deliveries or miscarriages
SSS pays for the maternity leave
The employer advances the benefit to the
employee but the SSS shall immediately

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reimburse the employer of one hundred

percent (100%) of the amount upon receipt
of satisfactory proof of such payment and
legality thereof
Other conditions
(1) Employer shall advance the payment subject
to reimbursement by the SSS within 30 days
from filing of leave application.
(2) Availment shall be a bar to the recovery of
sickness benefits provided by this Act for the
same period for which daily maternity
benefits have been received.
(3) Employee may only avail of benefit for the
first four (4) deliveries or miscarriages.
(4) Sanction: That if an employee should give
birth or suffer miscarriage
(a) without the required contributions having
been remitted for her by her ER to the
SSS, or
(b) without the latter having been previously
notified by the ER of time of the
pregnancy, then the employer shall pay
to the SSS damages equivalent to the
benefits which said employee member
would otherwise have been entitled to.

PATERNITY LEAVE
[RA 8187 (Paternity Leave Act of 1996)]
Coverage and purpose
Paternity leave is granted to all married male
employees in the private and public sectors,
regardless of their employment status (e.g.
probationary, regular, contractual, project
basis). The purpose of this benefit is to allow the
husband to lend support to his wife during her
period of recovery and/or in nursing her
newborn child. (Sec. 3, RA 8187)
Benefit
It shall apply to the first 4 deliveries of the
employees lawful wife with whom he is
cohabiting.
It shall be for 7 calendar days, with full pay,
consisting of basic salary and mandatory
allowances fixed by the Regional Wage Board, if
any, provided that his pay shall not be less than
the mandated minimum wage. (Sec. 2, RA 8187)

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Cohabiting means the obligation of the

husband and wife to live together. If the
spouses are not physically living together
because of the workstation or occupation, the
male employee is still entitled to the paternity
leave benefit. (Sec. 1, IRR, RA 8187)
Usage of the benefit
Usage of the leave shall be after the delivery,
without prejudice to an employers policy of
allowing the employee to avail of the benefit
before or during the delivery, provided that the
total number of days shall not be more than 7
days for each covered delivery. (Sec. 5, IRR, RA
8187)
Conditions for entitlement
(Sec. 3, IRR, RA 8187)
(1) He is married;
(2) He is an employee at the time of the delivery
of his child;
(3) He is cohabiting with his spouse at the time
that she gives birth or suffers a miscarriage;
(4) He has applied for paternity leave with his
ER within a reasonable period of time from
the expected date of delivery by his pregnant
spouse, or within such period as may be
provided by company rules and regulations,
or by CBA; and,
(5) His wife has given birth or suffered a
miscarriage.
Application for paternity leave
See number 4 under conditions for entitlement.
In case of miscarriage, prior application for
paternity leave shall not be required. (Sec. 4,
IRR, RA 8187)
Non-conversion to cash
In the event that the paternity leave is not
availed of, it shall not be convertible to cash and
shall not be cumulative. (Sec. 7, IRR, RA 8187)
Crediting of existing benefits
(1) If the existing paternity leave benefit under
the CBA, contract, or company policy is
greater than 7 calendar days as provided for
in RA 8187, the greater benefit shall prevail.
(2) If the existing paternity leave benefit is less
than that provided in RA 8187, the ER shall

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adjust the existing benefit to cover the

difference.
Where a company policy, contract, or CBA
provides for an emergency or contingency leave
without specific provisions on paternity leave,
the ER shall grant to the employee 7 calendar
days of paternity leave. (Sec. 9, IRR, RA 8187)

PARENTAL LEAVE

[RA 8972 (Solo Parents Welfare Act of 2000)]

Leave benefits granted to a solo parent to
enable him/her to perform parental duties and
responsibilities where physical presence is
required. [Sec. 3 (d), RA 8972]
COVERAGE
Any solo parent or individual who is left alone
with the responsibility of parenthood due to:
(1) Giving birth as a result of rape or and other
crimes against chastity even without a final
conviction of the offender: Provided, That
the mother keeps and raises the child;
(2) Death of spouse;
(3) Spouse is detained or is serving sentence
for a criminal conviction for at least one (1)
year;
(4) Physical and/or mental incapacity of
spouse as certified by a public medical
practitioner;
(5) Legal separation or de facto separation
from spouse for at least one (1) year:
Provided, that he/she is entrusted with the
custody of the children;
(6) Declaration of nullity or annulment of
marriage as decreed by a court or by a
church: Provided, that he/she is entrusted
with the custody of the children;
(7) Abandonment of spouse for at least one (1)
year;
(8) Unmarried father/mother who has
preferred to keep and rear his/her
child/children, instead of having others
care for them or give them up to a welfare
institution;
(9) Any other person who solely provides
parental care and support to a child or
children: Provided, that he/she is duly
licensed as a foster parent by the
Department of Social Welfare and

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Development (DSWD) or duly appointed

legal guardian by the court; and
(10) Any family member who assumes the
responsibility of head of family as a result
of
the
death,
abandonment,
disappearance, or prolonged absence of
the parents or solo parent for at least one
(1) year. [Sec. 3 (a), RA 8972]
Conditions for entitlement
A solo parent employee shall be entitled to the
parental leave under the following conditions:
(1) He/she has rendered at least one (1) year of
service, whether continuous or broken;
(2) He/she has notified his/her employer that
he/she will avail himself/herself of it, within
a reasonable period of time; and
(3) He/she has presented to his/her employer a
Solo Parent Identification Card, which may
be obtained from the DSWD office of the city
or municipality where he/she resides. (Sec 19,
Art. V, IRR, RA 8972)
Availment
The parental leave is in addition to leave
privileges under existing laws with full pay,
consisting of basic salary and mandatory
allowances. It shall not be more than seven (7)
working days every year. (Sec. 8, RA 8972)
Grant of flexible work schedule
The employer shall provide for a flexible
working schedule for solo parents: Provided,
That the same shall not affect individual and
company productivity: Provided, further, That
any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds. (Sec. 6, RA 8972)
Protection against work discrimination
No employer shall discriminate against any solo
parent employee with respect to terms and
conditions of employment on account of his/her
status. (Sec. 7, RA 8972)
Termination of the benefit
A change in the status or circumstance of the
parent claiming the benefit under the law, such
that he/she is no longer left alone with the
responsibility of parenthood, shall terminate
his/her eligibility for these benefits. [Sec. 3 (a),
RA 8972]

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LEAVES FOR VICTIMS OF VIOLENCE

AGAINST WOMEN

[RA 9262 (Anti-Violence against Women and

Their Children Act of 2004)]
Coverage and purpose
VAWC leave is granted to women employees
who are victims of violence, as defined in RA
9262. The leave benefit covers the days that the
women employee has to attend to medical or
legal concerns.
Requirement for entitlement
To be entitled to the leave benefit, the only
requirement is for the victim-employee to
present to her employer a certification from the
barangay chairman or barangay councilor or
prosecutor or the Clerk of Court, as the case
may be, that an action relative to the matter is
pending.
Benefit
In addition to other paid leaves under existing
labor laws, company policies, and/or CBA, the
qualified victim-employee shall be entitled to a
leave of up to 10 days with full pay, consisting of
basic salary and mandatory allowances fixed by
the Regional Wage Board, if any.
Usage of the benefit
The usage of the 10-day leave shall be at the
option of the woman employee. In the event
that the leave benefit is not availed of, it shall
not be convertible into cash and shall not be
cumulative.
A victim of VAWC who is employed shall be
entitled to a paid leave of up to ten (10) days in
addition to other paid leaves under the Labor
Code and Civil Service Rules and Regulations
and other existing laws and company policies:
(1) At any time during the application of any
protection order, investigation, prosecution
and/or trial of the criminal case, extendible
when the necessity arises as specified in the
protection order.
(2) Upon the issuance of the Punong
Barangay/kagawad or prosecutor or the
Clerk of Court, as the case may be, of a
certification (at no cost) to the woman that
such an action is pending, and this is all that
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is required for the employer to comply with

the 10- day paid leave.
(3) For government employees, in addition to
the aforementioned certification, the
employee concerned must file an application
for leave citing as basis R.A. 9262. (Sec. 42,
IRR, RA 8972)

SPECIAL LEAVE BENEFITS (SLB) FOR

WOMEN [RA 9710 (The Magna Carta of
Women), DOLE DO No. 112, Series of 2011 as
amended by DO No. 112-A Series of 2012]

Special leave benefit for women a female

employees leave entitlement of two (2) months
with full pay from her employer based on her
gross monthly compensation following surgery
caused by gynecological disorders, provided
that she has rendered continuous aggregate
employment service of at least six (6) months
for the last 12 months.
Gynecological disorders disorders that would
require surgical procedures such as, but not
limited to, dilatation and curettage and those
involving female reproductive organs such as
the vagina, cervix, uterus, fallopian tubes,
ovaries, breast, adnexa and pelvic floor, as
certified by a competent physician. It shall also
include hysterectomy, ovariectomy, and
mastectomy.
Gross monthly compensation the monthly
basic pay plus mandatory allowances fixed by
the regional wage boards. (Sec. 7, Rule II, IRR,
RA 9710)
At least six months continuous aggregate
employment service for the last 12 months prior
to surgery the woman employee should have
been with the company for 12 months prior to
surgery. An aggregate service of at least six (6)
months within the said 12-month period is
sufficient to entitle her to avail of the special
leave benefit.
Employment service - includes absences with
pay such as use of other mandated leaves,
company-granted leaves and maternity leaves
Competent physician - a medical doctor
preferably specializing in gynecological
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disorders or is in the position to determine the

period of recuperation of the woman employee.
(Sec. 1, DO 112, as amended)
Conditions for entitlement of special leave
Any female employee, regardless of age and
civil status, shall be entitled to a special leave
benefit, provided she has complied with the
following conditions:
(1) She has rendered at least 6 months
continuous aggregate employment service
for the last 12 months prior to surgery;
(2) She has filed an application for special leave
(3) She has undergone surgery due to
gynecological disorders as certified by a
competent physician. (Sec. 2, DO 112)
Application for special leave
Application before surgery
The employee shall file her application for leave
with her employer within a reasonable period of
time from the expected date of surgery, or
within such period as may be provided by
company rules and regulations or by CBA.
Application after surgery
Prior application for leave shall not be necessary
in cases requiring emergency surgical
procedure, provided that the employer shall be
notified verbally or in written form within a
reasonable period of time and provided further
that after the surgery or appropriate
recuperating period, the female employee shall
immediately file her application using the
prescribed form. (Sec. 3, DO 112)
Period of entitlement
The 2 months special leave is the maximum
period of leave with pay that a woman
employee may avail of under RA 9710.
For purposes of determining the period of leave
with pay that will be allowed to a female
employee, the certification of a competent
physician as to the required period of
recuperation shall be controlling. (Sec. 4, DO
112, as amended)
Availment
The special leave shall be granted to the
qualified employee after she has undergone
surgery. (Sec. 5, DO 112, as amended)

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Frequency of availment
A woman employee can avail of the SLB for
every instance of surgery due to gynecological
disorder for a maximum total period of 2
months per year. (Sec. 6, DO 112, as amended)
Special leave benefit vis--vis SSS sickness
benefit
The SLB is different from the SSS sickness
benefit. The former is granted by the employer
in accordance with RA 9710.
It is granted to a woman employee who has
undergone surgery due to gynecological
disorder. The SSS sickness benefit, on the other
hand, is administered and given by the SSS in
accordance with RA 1161 as amended by RA
8282. (Sec. 7, DO 112, as amended)
Special leave benefit vis--vis existing
statutory leaves
The SLB cannot be taken from existing statutory
leaves (i.e. 5-day SIL, leave for victims of VAWC,
Parental leave for solo parents). The grant of
SLB under the law is in recognition of the fact
that patients with gynecological disorder
needing surgery require a longer period of
recovery. The benefit is considered an addition
to the leave benefits granted under existing
laws and should be added on top of said
statutory leave entitlements.
If the SLB has already been exhausted, the
company leave and other mandated leave
benefits may be availed of by the woman
employee. (Sec. 8, DO 112, as amended)
Special leave benefit vis--vis maternity
leave benefit
Where the woman employee had undergone
surgery due to gynecological disorder during
her maternity leave, she is entitled only to the
difference between the SLB and maternity leave
benefit. (Sec. 9, DO 112, as amended)
Crediting of existing or similar benefits
If there are existing or similar benefits under a
company policy, practice or CBA providing
similar or equal benefits to what is mandated by
law, the same shall be considered as

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compliance, unless the company policy, practice

or CBA provides otherwise.
In the event the company policy, practice or CBA
provides lesser benefits, the company shall
grant the difference.
More liberal existing or similar benefits cannot
be withdrawn or reduced by reason of the
mandate of RA 9710.
The term similar or equal benefits refers to
leave benefits, which are of the same nature
and purpose as that of the SLB. (Sec. 10, DO 112,
as amended)
Mode of payment
The SLB is a leave privilege. The woman
employee shall not report for work for the
duration of the leave but she will still receive her
salary covering said period. The employer, in its
discretion, may allow said employee to receive
her pay for the period covered by the approved
leave before or during the surgery. The
computation of her pay shall be based on her
prevailing salary at the time of the surgery. (Sec.
11, DO 112, as amended)
Non-commutation of the benefit
The SLB shall be non-cumulative and nonconvertible to cash unless otherwise provided by
a CBA (Sec. 12, DO 112, as amended)

SERVICE CHARGES
COVERAGE

Employers (Sec 1, Rule VI, Book 3, IRR)

This rule shall apply only to establishments
which collect service charges such as:
(a) Hotels, restaurants, lodging houses, night
clubs, cocktail lounge, massage clinics,
bars, casinos and gambling houses and
similar enterprises
(b) Including those entities operating primarily
as private subsidiaries of the Government
Employees
Shall apply to ALL employees of covered
employers
(a) Regardless of their positions, designations,
or employment status,

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(b) Irrespective of the method by which their

wages are paid.

EXCEPTIONS

Managerial employees or one who is vested

with powers or prerogatives to lay down and
execute managerial policies and/or hire,
transfer, suspend, layoff, recall, discharge,
assign or discipline employees or to effectively
recommend such managerial actions. All
employees not falling within this definition shall
be considered rank-and-file employees. (Sec 2,
Rule VI, Book 3, IRR)
Distribution
Service charges are distributed in accordance
with the following percentage of sharing:
(1) Eighty-five percent (85%) for the employees
to be distributed equally among them;
(2) Fifteen percent (15%) for the management to
answer for losses and breakages and, at the
discretion of the management, distribution
to managerial employees. (Sec 3, Rule VI,
Book 3, IRR)
The shares shall be distributed to employees
not less than once every 2 weeks or twice a
month at intervals not exceeding 16 days. (Sec 4,
Rule VI, Book 3, IRR)
Note: The P2,000.00 salary ceiling for
entitlement thereto is no longer applicable.
Integration
In case service charge is abolished shares of
covered employees shall be considered
integrated in their wages. (Art 96)
The basis of the amount to be integrated shall
be the average monthly share of each employee
for the past twelve (12) months immediately
preceding the abolition of withdrawal of such
charges. (Sec. 5, Rule VI, Book 3, IRR)
SYNTHESIS OF THE RULES
(1) Service charges must be pooled;
(2) Where a restaurant or similar establishment
does not collect service charges but has a
practice or policy of monitoring and pooling
tips given voluntarily by its customers to its
employees, the pooled tips should be
monitored, accounted for and distributed in

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the same manner as the services charges.

(DOLE Handbook on Workers Statutory
Monetary Benefits, 2014ed.)
(3) The amount collected is divided between the
company (15%) and employees (85%);
(4) It shall be given twice a month with intervals
of not more than 15 days;
(5) If discontinued, removed, or stopped, the
average share of the employees of their
service charge or tips shall be integrated
with their basic wage.

THIRTEENTH (13TH) MONTH

PAY & OTHER BONUSES

(PD 851 (The 13th-Month Pay Law) and the

Revised Guidelines on the Implementation of the
13th Month Pay Law)

COVERAGE

General Rule: ALL EMPLOYERS are hereby

required to pay all their rank and file employees
a 13th month pay not later than Dec 24 of every
year, Provided that they have worked for at least
one (1) month during a calendar year.
Exempted Employers:
(1) Government, its political subdivisions,
including GOCCs except those operating
essentially as private subsidiaries of the
Government;
(2) Employers already paying their employees a
13th month pay or more in a calendar year or
its equivalent at the time of this issuance;
(3) Employers of household helpers and persons
in the personal service of another relation to
such workers; and
(4) Employers of those who are paid on purely
commission, boundary or task basis and
those who are paid a fixed amount for
performing specific work, irrespective of the
time consumed in the performance thereof
(except those workers who are paid on piecerate basis, in which case their employer shall
grant them 13th month pay).
Equivalent includes:
(a) Christmas bonus, mid-year bonus, cash
bonuses
(b) and other payments amounting to not less
than 1/12 of the basic salary
(c) but shall NOT INCLUDE cash and stock

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dividends, cost of living allowances and all

other allowances regularly enjoyed by the
employee as well a non-monetary benefits.
Workers paid on a piece-rate basis
Those who are paid a standard amount for every
piece or unit of work produced that is more or
less regularly replicated, without regard to the
time spent in producing the same.
Minimum Amount: 1/12 of the total basic salary
earned by an employee within a calendar year
BASE AMOUNT, which is the basic salary shall
include:
(1) cost of living allowances (COLA) integrated
into the basic salary of a covered employee
pursuant to EO 178.
(2) all remunerations or earnings paid by this
employer for services rendered.
(3) But not the allowances and monetary
benefits which are not considered or
integrated as part of the regular or basic
salary, such as the cash equivalent of:
(a) unused vacation and sick leave credits,
(b) overtime,
(c) premium,
(d) night differential,
(e) holiday pay and, and
(f) cost-of-living allowances.

TIME OF PAYMENT

General Rule: paid not later than Dec 24 of each

year.
Exception: ER may give to his employees half
() of the required 13th Month Pay before the
opening of the regular school year and the other
half on or before the 24th of December every
year.
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized CBA
of the employees.
13TH MONTH PAY IN SPECIAL CASES
(1) Paid by Results: Employees who are paid on
piece work basis are, by law, entitled to the
13th Month Pay. (Revised Guidelines on the
Implementation of the 13th Month Pay Law)

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(2) Fixed or Guaranteed Wage: Employees who

are paid a fixed or guaranteed wage plus
commission are entitled to 13th month pay
(not purely commission); the basis for
computation shall be both their fixed or
guaranteed wage and commission. (Revised
Guidelines)
(3) Those with Multiple Employers: Government
Employees working part time in a private
enterprise, including private educational
institutions, as well as Employees working in
two or more private firms, whether on full or
part time bases, are entitled to the required
13th Month Pay from all their private
Employers regardless of their total earnings
from each or all their employers. (Revised
Guidelines)
(4) Private School Teachers: Private school
teachers, including faculty members of
universities and colleges, are entitled to the
required 13th month pay, regardless of the
number of months they teach or are paid
within a year, if they have rendered service
for at least one (1) month within a year.
(Revised Guidelines)
(5) Resigned or Separated Employee: An
Employee who has resigned or whose
services were terminated at any time before
the time for payment of the 13th month pay
is entitled to this monetary benefit in
proportion to the length of time he worked
during the year, reckoned from the time he
started working during the calendar year up
to the time of his resignation or termination
from service. (Revised Guidelines)
(6) Wage Difference: The difference between the
minimum wage and the actual salary
received by the Employee cannot be deemed
as his 13th month pay as such difference is
not equivalent to or of the same import as
the said benefit contemplated by law. (JPL
Marketing Promotions vs CA, 2005)
(7) Terminated Employees: The payment of the
13th month pay may be demanded by the
employee upon the cessation of employeremployee
relationship.
(Archilles
Manufacturing Corp. vs NLRC, 1995)

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ADDITIONAL RULES:
(1) Commissions: If the commissions may be
properly considered part of the basic salary,
then they should be INCLUDED. If they are
not an integral part of the basic salary, then
they should be EXCLUDED. (Phil.
Duplicators Inc. vs NLRC, 1995)
(2) Substitute Payment not allowed: Benefits in
the form of food or free electricity, assuming
they were given, were not a proper substitute
for the 13th month pay required by law.
Neither may year-end rewards for loyalty and
service be considered in lieu of 13th month
pay. (Framanlis Farms, Inc. vs MOLE, 1989)
(3) 14th Month Pay is not mandated: Employers
already paying their employees a 13th month
pay or its equivalent are not covered by this
Decree. (Kamaya Point Hotel vs NLRC, 1989)

SEPARATION PAY
(Art. 283 & 284, LC, DOLE Handbook on Workers
Statutory Monetary Benefits, 2014)
General rule: The rule embodied in the Labor
Code is that a person dismissed for cause as
defined therein (see Art. 282) is not entitled to
separation pay. (PLDT vs NLRC, 1988)
Exception: Considerations of equity and the
employee was not dismissed on the ground of
misconduct or for cause reflecting his moral
character.

AMOUNT

ONE-HALF (1/2) MONTH PAY PER YEAR OF

SERVICE
An EE is entitled to receive separation pay
equivalent to month pay for every year of
service, a fraction of at least six (6) months
being considered as one whole year, if his/her
separation from the service is due to any of the
following authorized causes:
(1) Retrenchment to prevent losses (i.e.
reduction of personnel effected by
management to prevent losses);
(2) Closure or cessation of operation of an
establishment not due to serious losses or
financial reverses; and,
(3) When the EE is suffering from a disease not
curable within a period of six (6) months and
his/her continued employment is prejudicial

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to his/her health or to the health of his/her

co-employees
In no case will an EE get less than one (1) month
separation pay if the separation is due to the
above stated causes and he/she has served for
at least six (6) months. (DOLE Handbook on
Workers Statutory Monetary Benefits, 2014 ed.)
ONE-MONTH PAY PER YEAR OF SERVICE
An EE is entitled to separation pay equivalent to
his/her one-month pay for every year of service,
a fraction of at least 6 months being considered
as one whole year, if his/her separation from
service is due to any of the following:
(1) Installation by ER of labor-saving devices;
(2) Redundancy, as when the position of the EE
has been found to be excessive or
unnecessary in the operation of the
enterprise;
(3) Impossible reinstatement of the EE to
his/her former position or to a substantially
equivalent position for reasons not
attributable to the fault of the ER, as when
the reinstatement ordered by a competent
authority cannot be implemented due to
closure of cessation of operations of the
establishment/ER, or the position to which
he/she is to be reinstated no longer exists
and there is no substantially equivalent
position in the establishment to which
he/she can be assigned. (Gaco vs NLRC,
1994)
BASIS OF SEPARATION PAY
The computation of separation pay of an EE
shall be based on his/her latest salary rate.
(DOLE Handbook on Workers Statutory
Monetary Benefits, 2014 ed.)
INCLUSION OF REGULAR ALLOWANCE IN
THE COMPUTATION
In the computation of separation pay, it would
be error not to integrate the allowance with the
basic salary. The salary base properly used in
computing the separation pay should include
not just the basic salary but also the regular
allowances that an EE has been receiving.
(Planters Products, Inc. vs NLRC, 1989)

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RETIREMENT PAY
(RA 7641 - The Retirement Pay Law)

ELIGIBILITY

All employees in the private sector, regardless

of their position, designation, or status, and
irrespective of the method by which their wages
are paid (Sec. 1, IRR, RA 7641)
The only exceptions are:
(1) employees covered by the Civil Service Law;
(2) domestic helpers and persons in the
personal service of another, and
(3) employees in retail, service and agricultural
establishments or operations regularly
employing not more than ten employees
(Sec. 2, IRR, RA 7641)
Exclusions from coverage
R.A. No. 7641, otherwise known as "The
Retirement Pay Law," only applies in a situation
where
(1) there is no collective bargaining agreement
or other applicable employment contract
providing for retirement benefits for an
employee; OR
(2) there is a collective bargaining agreement or
other applicable employment contract
providing for retirement benefits for an
employee, but it is below the requirements
set for by law.
AGE OF RETIREMENT
Optional retirement in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE may retire upon reaching
the age of 60 or more if he has served for at
least 5 years in said establishment.
Compulsory retirement in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE shall be retired at the age
of 65 years. (Sec. 4, IRR, RA 7641)

AMOUNT OF RETIREMENT PAY

The minimum retirement pay shall be

equivalent to one-half (1/2) month salary for
every year of service, a fraction of at least six (6)
months being considered as one whole year.

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For the purpose of computing retirement pay,

one-half month salary shall include all of the
following:
(1) Fifteen (15) days salary based on the latest
salary rate;
(2) Cash equivalent of five (5) days of service
incentive leave;
(3) One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52)
Thus, one-half month salary is equivalent to
22.5 days. (Capitol Wireless, Inc. vs Sec.
Confessor, 1996)
Other benefits may be included in the
computation of the retirement pay upon
agreement of the ER and the EE or if provided in
the CBA.
Retirement Benefits under a CBA or
Applicable Contract
Any EE may retire or be retired by his/her ER
upon reaching the age established in the CBA
or other applicable agreement/contract and
shall receive the retirement benefits granted
therein; provided, however, that such retirement
benefits shall not be less than the retirement
pay required under RA 7641, and provided
further that if such retirement benefits under
the agreement are less, the ER shall pay the
difference.
Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable
agreement, the ERs total contributions and the
accrued interest thereof should not be less than
the total retirement benefits to which the EE
would have been entitled had there been no
such retirement benefits fund. If such total
portion from the ER is less, the ER shall pay the
deficiency.

RETIREMENT
BENEFITS
WORKERS WHO ARE PAID
RESULTS

OF
BY

For covered workers who are paid by result and

do not have a fixed monthly salary rate, the
basis for the determination of the salary for 15
days shall be their average daily salary (ADS).

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The ADS is derived by dividing the total salary or

earning for the last 12 months reckoned from
the date of retirement by the number of actual
working days in that particular period, provided
that the determination of rates of payment by
results are in accordance with established
regulations

RETIREMENT BENEFIT OF PARTTIME WORKERS

Part-time workers are also entitled to
retirement pay of one-month salary for every
year of service under RA 7641 after satisfying
the following conditions precedent for optional
retirement:
(a) Theres no retirement plan between the ER
and the EE; and,
(b) The EE should have reached the age of 60
years, and should have rendered at least 5
years of service with the ER.
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits
due them. (DOLE Handbook on Workers
Statutory Monetary Benefits, 2014 ed.)

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at least ten (10) years and is not less than

fifty years of age at the time of his
retirement;
(2) That the retirement benefits shall be availed
of by an official or employee only once; and,
(3) That in case of separation of an official or
employee from the service of the employer
due to death, sickness or other physical
disability or for any cause beyond the control
of the said official or employee, any amount
received by him or by his heirs from the
employer as a consequence of such
separation shall likewise be exempt as
hereinabove provided.
"Reasonable private benefit plan" means a
pension, gratuity, stock bonus or profit sharing
plan maintained by an employer for the benefit
of some or all of his officials and employees,
wherein contributions are made by such
employer or officials and employees, or both, for
the purpose of distributing to such officials and
employees the earnings and principal of the
fund thus accumulated, and wherein it is
provided in said plan that at no time shall any
part of the corpus or income of the fund be used
for, or be diverted to, any purpose other than for
the exclusive benefit of the said officials and
employees.

TAXABILITY (Sec. 1, RA 4917)

Any provision of law to the contrary
notwithstanding, the retirement benefits
received by officials and employees of private
firms, whether individual or corporate, in
accordance with a reasonable private benefit
plan maintained by the employer
(1) shall be exempt from all taxes and
(2) shall not be liable to attachment,
garnishment, levy or seizure by or under any
legal or equitable process whatsoever
Exception
Except to pay a debt of the official or employee
concerned to the private benefit plan or that
arising from liability imposed in a criminal
action:
Additional conditions
(1) That the retiring official or employee has
been in the service of the same employer for

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WOMEN WORKERS
PROVISIONS
DISCRIMINATION

AGAINST

It shall be unlawful for any employer to

discriminate against any woman employee with
respect to terms and conditions of employment
solely on account of her sex.
The following are acts of discrimination:
(1) Payment of a lesser compensation, including
wage, salary or other form of remuneration
and fringe benefits, to a female employees
as against a male employee, for work of
equal value; and
(2) Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants
solely on account of their sexes. (Art.133)

STIPULATION AGAINST MARRIAGE

It shall be unlawful for an employer to:
(a) require as a condition of employment or
continuation of employment that a woman
employee shall not get married, or
(b) stipulate expressly or tacitly that upon
getting married a woman employee shall be
deemed resigned or separated or
(c) actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee
merely by reason of her marriage. (Art. 134)
Exceptions:
(1) Reasonable demands of business require the
distinction based on marital status AND
there is no better available policy to
accomplish the business purpose.
(2) Spouse is an employee of the competitor

PROHIBITED ACTS (Art. 135)

Note: Nightwork/ Exception (Art 130-131) No
more nightwork prohibition under R.A. 10151.
Discrimination (Art 133, RA 9710)
See previous section
Stipulation against marriage (Art 134)
See previous section

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Discharge to prevent enjoyment of benefits

To deny any woman employee the benefits
provided for in this Chapter or to discharge any
woman employed by him for the purpose of
preventing her from enjoying any of the benefits
provided under this Code. [Art. 135 (1)]
Discharge on account of pregnancy
To discharge such woman on account of her
pregnancy, while on leave or in confinement due
to her pregnancy. [Art. 135 (2)]
Discharge on account of testimony
To discharge or refuse the admission of such
woman upon returning to her work for fear that
she may again be pregnant. [Art. 137 (3)]
It shall be unlawful for any employer: to
discharge any woman or child or any other
employee for having filed a complaint or having
testified or being about to testify under the
Code [Book III, Rule XII, Sec 13(d), IRR]
Expulsion of Women faculty/ female student due
to pregnancy outside of marriage
Expulsion and non-readmission of women
faculty due to pregnancy outside of marriage
shall be outlawed. No school shall turn out or
refuse admission to a female student solely on
the account of her having contracted pregnancy
outside of marriage during her term in school.
[Sec. 13(c), RA 9710]

ANTI-SEXUAL HARASSMENT

(RA 7877 - Anti-Sexual Harassment Act of 1995)

FORMS OF SEXUAL HARASSMENT
(1) Employment or Work Related
(a) The sexual favor is made as a condition
(i) in the hiring or in the employment, reemployment
or
continued
employment of said individual or
(ii) in granting said individual favorable
compensation, terms, conditions,
promotions, or privileges, or
(iii) in the refusal to grant the sexual favor
results in limiting, segregating or
classifying the EE which in any way
would discriminate, deprive or
diminish employment opportunities or
otherwise adversely affect said
employee;

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(b) The above acts would either:

(i) impair the employees rights or
privileges under existing labor laws; or
(ii) result in an intimidating, hostile, or
offensive environment for the
employee.
(2) Education or Training environment. In an
education or training environment, sexual
harassment is committed:
(a) Against one who is under the care,
custody or supervision of the offender
(b) Against one whose education, training,
apprenticeship or tutorship is entrusted
to the offender;
(c) When the sexual favor is made a
condition to the giving of a passing grade,
or the granting of honors and
scholarships, or the payment of a stipend,
allowance or other benefits, privileges, or
considerations; or
(d) When the sexual advances result in an
intimidating,
hostile
or
offensive
environment for the result, trainee or
apprentice.
PERSONS WHO MAY BE LIABLE
(1) Any
employer,
employee,
manager,
supervisor, agent of the employer, teacher,
instructor, professor, coach, trainer or any
other person, regardless of whether the
demand, request for requirement for
submission is accepted by the object of said
act having authority, influence or moral
ascendancy over another in a work or
training or education environment, who
demands, requests or otherwise requires any
sexual favor from another,
(2) Any person who directs or induces another to
commit any act of sexual harassment as
herein defined. OR
(3) Any person who cooperates in the
commission by another without which it
would NOT have been committed, shall also
be held liable under this Act (Sec. 3, RA 7877)
ROLE OF THE EMPLOYER OR HEAD OF
OFFICE
The Employer or Head of Office shall have the
duty:
(1) to prevent the commission of such acts and

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(2) to lay down the procedure for the resolution,

settlement or prosecution of committed acts.
(Sec. 4, RA 7877)
He shall be solidarily liable for damages:
(1) if he is informed of such acts by the offended
party and
(2) no immediate action is taken thereon. (Sec.
5, RA 7877)
INDEPENDENT ACTION FOR DAMAGES
The victim of work, education or training-related
sexual harassment can institute a separate and
independent action for damages and other
affirmative relief. (Sec. 6, RA 7877)
Sanctions
(1) Criminal: imprisonment of 1 month to mos.
Or fine of P10k to P20k or both
*Prescription of such action is in 3 years.
(2) Termination (Sec. 7, RA 7877)

MINOR WORKERS
Relevant Laws: RA 7610 (Special Protection of
Children Against Abuse, Exploitation and
Discrimination Act), RA 9231 (Special Protection
of Children Against Child Abuse, Exploitation
and Discrimination Act), Art. 137(a)
Constitutional basis: Art II, Sec. 13 of the 1987
Constitution
The State recognizes the vital role of the youth
in nation-building and shall promote and
protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs.
General Rule: Children below 15 shall NOT be
employed
Exceptions
(1) Child works directly under the sole
responsibility of his parents or legal guardian
and where only members of the ERs family
are employed, provided:
(a) his employment does NOT endanger his
life, safety, health and morals,
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(b) nor impairs his normal development, and

(c) the parent or legal guardian shall provide
the said minor child with the prescribed
primary and/or secondary education;
(Sec. 12 of RA 7610 as amended by RA
7658)
(2) Childs employment or participation in public
entertainment or information through
cinema, theater, radio or television is
essential, provided that:
(a) employment does NOT involve ads or
commercials promoting alcohol, tobacco
and its by-products or violence [Sec. 14 of
RA 7610]
(b) the employment contract is concluded by
the childs parents or guardian, and
approved by DOLE
(c) The ER shall ensure the protection,
health, safety and morals of the child
(d) The ER shall institute measures to
prevent the childs exploitation or
discrimination taking into account the
system and level of remuneration, and
the duration and arrangement of working
time
(e) The ER shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing
program for training and skills acquisition
of the child. (Sec. 12 of RA 7610 as
amended by RA 7658)
EMPLOYMENT OF CHILDREN FROM 15 - 18
Employment is allowed but restricted to nonhazardous work.
Non-hazardous work shall mean any work or
activity in which the EE is not exposed to any
risk which constitutes an imminent danger to
his safety and health. (Sec. 3, Rule XII, Book III,
IRR of LC)
The Secretary of Labor shall from time to time
publish a list of hazardous work and activities in
which persons 18 years of age and below cannot
be employed (Sec. 3, Rule XII, Book III, IRR of
LC)
The following are HAZARDOUS workplaces:
(1) Nature of the work exposes the workers to
dangerous
environmental
elements,
contaminants or working conditions;

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(2) construction work, logging, fire-fighting,

mining, quarrying, blasting, stevedoring,
dock work, deep sea fishing, and mechanized
farming;
(3) manufacture or handling of explosives and
other pyrotechnic products;
(4) exposure to or use of heavy power-driven
machinery or equipment;
(5) exposure to or use of power-driven tools
WORKING HOURS OF A CHILD
Quantity
Age Bracket

Daily Max

Below 15 y/o

4 hours

20 hours

15 to below 18

8 hours

40 hours

Night work prohibition

Age Bracket

Weekly Mac

Prohibited Hours

Below 15 y/o

8pm to 6am (10hrs)

15 to below 18

10pm to 6am (8hrs)

EMPLOYMENT
HOUSEHELPERS

OF

RA 10361 (Batas Kasambahay or Domestic

Workers Act) has expressly repealed Chapter III,
Employment of Househelpers, Title III of Book
III of the LC.
Domestic work
This refers to work performed in or for a
household or households. (Sec 4(C). RA 10361)
Domestic worker or Kasambahay
Refers to any person engaged in domestic work
within an employment relationship such as, but
not limited to, the following: general househelp,
nursemaid or yaya, cook, gardener, or laundry
person. (Sec 4(D). RA 10361)
The term domestic worker or kasambahay
excludes any person who performs domestic
work only occasionally or sporadically and not
on an occupational basis. (Sec.4(D), RA 10361)

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RIGHTS & PRIVILEGES

(1) Minimum wage

The minimum wage of domestic workers
shall not be less than the following:
(a) P2,500/month: employed in NCR
(b) P2,000/ month: employed in chartered
cities and first class municipalities
(c) P1,500/month: employed in other
municipalities
(d) Within one year from the effectivity of the
Act, and periodically thereafter, the
Regional Tripartite and Productivity Wage
Boards shall review, and if proper,
determine and adjust the minimum wage
rates of domestic workers. (Sec. 24, RA
10361)
(2) Standard of Treatment
The employer or any member of the
household shall not subject a domestic
worker or kasambahay to any kind of abuse
nor inflict any form of physical violence or
harassment or any act tending to degrade
the dignity of a domestic worker. (Sec. 5, RA
10361)
(3) Board, Lodging and Medical Attendance
The employer shall provide for the basic
necessities of the domestic worker to include
at least three (3) adequate meals a day and
humane sleeping arrangements that ensure
safety and shall provide appropriate rest and
assistance to the domestic worker in case of
illnesses and injuries sustained during
service without loss of benefits. (Sec. 6, RA
10361)
(4) Privacy
Respect for the privacy of the domestic
worker shall be guaranteed at all times and
shall extend to all forms of communication
and personal effects (Sec. 7, RA 10361)
(5) Access to Outside Communication
The employer shall grant the domestic
worker access to outside communication
during free time: Provided, That in case of
emergency, access to communication shall
be granted even during work time. (Sec. 8,
RA 10361)

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(6) Education and Training

The employer shall afford the domestic
worker the opportunity to finish basic
education and may allow access to
alternative learning systems and, as far as
practicable, higher education or technical
and vocational training. (Sec. 9, RA 10361)
(7) Social and Other Benefits
A domestic worker who has rendered at least
one (1) month of service shall be covered by
the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be
entitled to all the benefits in accordance with
the pertinent provisions provided by law.
(8) Leave Benefits
A domestic worker who has rendered at least
one (1) year of service shall be entitled to an
annual service incentive leave of five (5) days
with pay (Sec. 29, RA 10361)

PRE-EMPLOYMENT REQUIREMENT

Prior to the execution of the employment

contract, the employer may require the
following from the domestic worker:
(a) Medical certificate or a health certificate
issued by a local government health officer;
(b) Barangay and police clearance;
(c) National Bureau of Investigation (NBI)
clearance; and
(d) Duly authenticated birth certificate or if not
available, any other document showing the
age of the domestic worker such as voters
identification card, baptismal record or
passport.
However, Section 12(a), (b), (c) and (d) shall be
standard requirements when the employment
of the domestic worker is facilitated through the
PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case
may be. (Sec. 12, RA 10361)

TIME & MANNER OF PAYMENT:

Payment of wages shall be made on time

directly to the domestic worker in cash at least
once a month and unless allowed by the
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domestic worker through a written consent,

employer shall make no deductions from the
wages other than that which is mandated by
law. (Sec. 25, RA 10361)
Right against assignment to non-household
work at a wage rate lower than that mandated
for agricultural or non-agricultural enterprises
depending on the case. (Sec. 22, RA 10361)
Employment Age of Domestic Workers: Unlawful
to employ any person below fifteen (15) years of
age as a domestic worker (Sec. 16, RA 10361)
Persons between 15-18 years old should only be
employed in non-hazardous work. (DO 4-99
Sec. 4)
Daily Rest Period: Aggregate of eight (8) hours
per day. (Sec. 20, RA 10361)
Employment Certification: ER shall give the
househelper a written statement of the nature
and duration of the service and his or her work
performance as househelper upon severance.
(Sec. 35, RA 10361)

TERMINATION
(1) Initiated by the domestic worker (at any time)
(a) Verbal or emotional abuse of the
domestic worker by the employer or any
member of the household;
(b) Inhuman treatment including physical
abuse of the domestic worker by the
employer or any member of the
household;
(c) Commission of a crime or offense against
the domestic worker by the employer or
any member of the household;
(d) Violation by the employer of the terms
and conditions of the employment
contract and other standards set forth
under this law;
(e) Any disease prejudicial to the health of
the domestic worker, the employer, or
member/s of the household; and
(f) Other causes analogous to the foregoing.
(Sec. 33, RA 10361)
(2) Initiated by the employer (at any time)
(a) Misconduct or willful disobedience by the
domestic worker of the lawful order of the

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employer in connection with the formers

work;
(b) Gross or habitual neglect or inefficiency by
the domestic worker in the performance
of duties;
(c) Fraud or willful breach of the trust
reposed by the employer on the domestic
worker;
(d) Commission of a crime or offense by the
domestic worker against the person of
the employer or any immediate member
of the employers family;
(e) Violation by the domestic worker of the
terms and conditions of the employment
contract and other standards set forth
under this law;
(f) Any disease prejudicial to the health of
the domestic worker, the employer, or
member/s of the household; and
(g) Other causes analogous to the foregoing.
(Sec. 34, RA 10361)
UNJUST DISMISSAL
Neither the domestic worker nor the employer
may terminate the contract before the
expiration of the term except for grounds
provided in Sec. 33 and 34 of RA 10361.
If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the
compensation already earned plus the
equivalent of 15 days work by way of indemnity.
Leaving without justifiable reason by the
domestic worker
(1) Any unpaid salary due not exceeding the
equivalent 15 days work shall be forfeited
AND
(2) The employer may recover from the domestic
worker the costs incurred related to the
deployment expenses, if any: Provided, that
the service has been terminated within 6
months from the domestic workers
employment.
Notice to end the working relationship
If the duration of the domestic service is not
determined either in stipulation or by the nature
of the service, the employer or the domestic
worker may give notice to end the working

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relationship five (5) days before the intended

termination of the service.
The domestic worker and the employer may
mutually agree upon written notice to preterminate the contract of employment to end
the employment relationship. (Sec. 32, RA
10361)

EMPLOYMENT
HOMEWORKERS

OF

LIABILITY OF EMPLOYER

DO 5, DOLE (February 4, 1992), is now Rule XIV,

Book III of the IRR.
Industrial homework
A system of production under which work for an
ER or contractor is carried out by a homeworker
at his/her home.
(1) Materials may or may not be furnished by the
ER or contractor.
(2) Decentralized form of production, where
there is ordinarily very little supervision or
regulation of methods of work. (Sec. 2(a),
Rule XIV, Book III, IRR)
Industrial Homeworker means a worker who is
engaged in industrial homework
Employer means any person who
(1) Acts as a contractor delivers or causes to
be delivered any goods, articles, or materials
to be processed or fabricated in or about a
home and thereafter to be returned or to be
disposed of or distributed in accordance with
ERs direction; OR
(2) Sells any goods, articles, or materials to be
processed or fabricated in or about a home
and then rebuys them after. (Art. 153, LC)
Sec 2(d), Rule XIV, Book III is substantially
similar to the above.

RIGHTS & BENEFITS

HOMEWORKERS

of the certification of registration (Sec 4, Rule

XIV, Book III, IRR)
(3) Immediate payment upon ERs receipt of
finished goods or articles (Sec 6, Rule XIV,
Book III, IRR)
(4) SSS, MEDICARE and ECC premium
contributions shall be deducted from their
pay
and
shall
be
remitted
by
ER/contractor/subcontractor to the SSS (Sec
6, Rule XIV, Book III, IRR)
(1) ER may require homeworker to redo work
improperly executed without additional pay
(Sec 9a, Rule XIV, Book III, IRR)
(2) ER need not pay homeworker for any work
done on goods or articles not returned due
to homeworkers fault (Sec 9b, Rule XIV, Book
III, IRR)
(3) If subcontractor/contractor fails to pay
homeworker, ER is jointly and severally liable
with the former to the homeworker for
his/her wage (Sec 11, Rule XIV, Book III, IRR)
(4) ER shall assist the homeworkers in the
maintenance of basic safe and healthful
working conditions at the homeworkers
place of work. (Sec 11, Rule XIV, Book III, IRR
of LC)
Regional Office shall provide technical
assistance
to
registered
homeworkers
organizations (Sec 14, Rule XIV, Book III, IRR of
LC)

PROHIBITED HOMEWORK

Homework is prohibited in the ff:

(1) explosives, fireworks and articles of like
character;
(2) drugs and poisons; and
(3) other articles, the processing of which
requires exposure to toxic substances. (Sec
13, Rule XIV, Book III, IRR)

ACCORDED

(1) Right to form, join or assist organizations

(Sec 3, Rule XIV, Book III, IRR)
(2) Right to acquire legal personality and the
rights and privileges granted by law to
legitimate labor organizations upon issuance

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Conditions for deduction from homeworkers

earnings
No deduction from the homeworkers earnings
for the value of materials lost, destroyed or
damaged unless:
(1) Homeworker is clearly shown to be
responsible for loss or damage
(2) Reasonable opportunity to be heard
(3) Amount of deduction is fair and reasonable,
and does not exceed actual loss or damage
(4) Deduction does not exceed 20% of
homeworkers weekly earnings (Sec. 8, Rule
XIV, Book III, IRR)

APPRENTICES & LEARNERS

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(2) Possess vocational aptitude and capacity for

appropriate tests;
(3) Possess the ability to comprehend and
follow oral and written instructions. (Art. 59
of the LC, as amended by R.A. 7610).
(4) Physically fit for occupation
EMPLOYMENT OF APPRENTICES:
When applicable:
(1) Only employers in highly technical industries
may employ apprentices; and
(2) Only
in
apprenticeable
occupations
approved by the Secretary of Labor. (Art. 60,
LC)

Relevant Law: RA 7796 (Technical Education

and Skills Development Act of 1994 or TESDA
Act of 1994)

PERIOD
The period of apprenticeship shall not exceed
six months.

APPRENTICES

ENFORCEMENT
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. (Art. 67, LC)

Art. 58 has been superseded by Section 4 (j), (k),

(l), (m) of RA 7796 quoted below:
(j)"Apprenticeship" training within employment
with
compulsory
related
theoretical
instruction involving a contract between an
apprentice and an employer on an approved
apprenticeable occupation.
(k)Apprentice" is a person undergoing training
for an approved apprenticeable occupation
during an apprenticeship agreement.
(l)"Apprenticeship Agreement" is a contract
wherein a prospective employer binds
himself to train the apprentice who in turn
accepts the terms of training for a
recognized
apprenticeable
occupation
emphasizing the rights, duties and
responsibilities of each party.
(m)Apprenticeable
Occupation
is
an
occupation officially endorsed by a tripartite
body and approved to be apprenticeable by
the authority. (Sec. 4, RA 7796)
Integrating both the abovementioned provisions
then the qualifications of an apprentice are as
follows:
(1) At least 15 years of age (as amended by R.A.
7610), provided that if he is below 18 years,
he shall not be eligible for hazardous
occupation;

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SUMMARY OF RULES:
(1) The apprentice must be paid not less than
75% of the prescribed minimum salary (Art.
61);
HOWEVER, the employer MAY NOT pay any
wage if the apprenticeship training is:
(a) part of the school curriculum,
(b) a requirement for graduation, or
(c) a requirement for board examination (Art.
72)
(2) The apprenticeship agreement must be
approved by the DOLE Secretary (without
such one shall be deemed a regular
employee) (Nitto Enterprises v. NLRC, G.R.
No. 114337, Sept. 29, 1995);
(3) The employer is not compelled to continue
ones employment upon termination of
apprenticeship;
(4) One-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices of
the training cost is deducted from the
employers income tax but it shall not exceed
10% of direct labor wage (Art. 71)

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Working scholars there is no employeremployee relationship between students on one

hand, and schools, colleges or universities on
the other, 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, provided, the students
are given real opportunities, including such
facilities as may be reasonable and necessary to
finish their chosen courses under such
agreement. (Sec. 14, Rule X, IRR)

LEARNERS

Persons hired as trainees in semi-skilled and

other industrial occupations which are nonapprenticeable. Learnership programs must be
approved by the authority. (Sec. 4, RA 7796)
Occupations which may be learned through
practical training on the job in a relatively short
period of time which shall not exceed three (3)
months. (Art. 73(2), LC)
When may learners be hired
(1) No experienced workers are available;
(2) The employment of learners being necessary
to prevent the curtailment of employment
opportunities; and
(3) The employment will neither create unfair
competition in terms of labor costs nor
impair working standards. (Art. 74, LC)
Learnership Agreement
Any employer desiring to employ learners shall
enter into a learnership agreement with them,
which agreement shall include:
(1) The names and addresses of the learners;
(2) The duration of the learnership period, which
shall not exceed three (3) months;
(3) The wages or salary rates of the learners
which shall begin at not less than seventyfive percent (75%) of the applicable
minimum wage; and
(4) A commitment to employ the learners if they
so desire, as regular employees upon
completion of the learnership. All learners
who have been allowed or suffered to work
during the first two (2) months shall be
deemed regular employees if training is
terminated by the employer before the end
of the stipulated period through no fault of
the learners.

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The learnership agreement shall be subject to

inspection by the Secretary of Labor and
Employment
or
his
duly
authorized
representative. (Art. 75, LC)
Learners employed in piece or incentive-rate
jobs during the training period shall be paid in
full for the work done. (Art. 76, LC)

HANDICAPPED WORKERS
DIFFERENTLY-ABLED
WORKERS (RA 7277 - Magna Carta for
Disabled Persons, as amended by RA 9442)

Disabled Persons are those suffering from

restriction or different abilities, as a result of a
mental, physical or sensory impairment, to
perform an activity in the manner or within the
range considered normal for a human being
[Sec. 4(a), RA 7277]
Impairment is any loss, diminution or aberration
of psychological, physiological, or anatomical
structure or function [Sec. 4(b), RA 7277]
Disability shall mean:
(a) physical or mental impairment that
substantially
limits
one
or
more
psychological, physiological or anatomical
function of an individual or activities of such
individual; OR
(b) a record of such an impairment; OR
(c) being regarded as having such an
impairment [Sec 4(c), RA 7277]
Handicap refers to a disadvantage for a given
individual, resulting from an impairment or a
disability that limits or prevents the function, or
activity that is considered normal given the age
and sex of the individual. [Sec 4(d), RA 7277]

RIGHTS OF DISABLED WORKERS

(1) Equal opportunity for employment

(2) Reserved contractual positions
(3) 5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and
other government agencies, offices or
corporations engaged in social development
[Sec 5 (par. 2), RA 7277]
(4) Sheltered employment

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(5) Apprenticeship opportunity

(6) Full minimum wage (Sec 6, Wage Order No.
NCR-17, May 17, 2012)

Termination of
Employment
EMPLOYER-EMPLOYEE
RELATIONSHIP
FOUR-FOLD TEST
(1) Selection and engagement of the employee;
(2) Payment of wages;
(3) Power of dismissal; and
(4) Employers power to control the employees
conduct with respect to the means and
methods by which the work is to be
accomplished. (Brotherhood Labor Unity
Movement of the Philippines et. al. v. Zamora,
G.R. No. 48645, Jan. 7, 1987).
Power to control is the most important element.
(Sonza v. ABS-CBN Broadcasting Corp, G.R. No.
138051, June 10, 2004)
ECONOMIC DEPENDENCE TEST
(1) First Tier: Control Test (refer to the Four-Fold
Test)
(2) Second Tier: The underlying economic
realities of the activity or relationship:
whether the worker is dependent on the
alleged employer for his continued
employment in that line of business.

KINDS OF EMPLOYMENT

PROBATIONARY EMPLOYMENT
Probationary employment shall not exceed 6
months from the date the employee started
working, unless it is covered by an
apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he fails to
qualify as a regular employee in accordance
with reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to

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work after a probationary period shall be

considered a regular employee. (Art. 281, LC)
In all cases of probationary employment, the
employer shall make known to the employee
the standards under which he will qualify as
regular employee at the time of his
engagement. Where no standards are made
known to the employee at the time of
engagement, he shall be deemed a regular
employee. [IRR, Book VI, Rule 1, Sec. 6(d)]
TERMINATION
Can only be terminated for:
(1) Just causes; or
(2) Failure to qualify as a regular employee in
accordance with reasonable standards made
known by the employer to the employee at
the time of engagement.
The probationary employee is entitled to
substantial and procedural due process before
termination.
DURATION
General Rule: Probationary employment shall
not exceed six (6) months from the date the
employee started working.
Exceptions:
(1) When the parties to an agreement contract
otherwise:
(2) When the same is established by company
policy;
(3) When the same is required by the nature of
the work performed by the employee; and
(4) When it is covered by an apprenticeship
agreement stipulating a longer period
REGULAR EMPLOYMENT
There are two separate instances whereby it can
be determined that an employment is regular:
(1) The particular activity performed by the
employee is necessary or desirable in the
usual business or trade of the employer;
(2) The employee has been performing the job
for at least a year.
Standard of determination
(Reasonable Connection rule)
The primary standard in determining regular
employment is the reasonable connection

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between the particular activity performed by the

employee in relation to the usual business or
trade of the employer. The connection can be
determined by considering the nature of the
work performed and its relation to the scheme
of the particular business or trade in its entirety.
The repeated and continuing need for the
performance of the job has been deemed
sufficient evidence of the necessity, if not
indispensability of the activity to the business.
(Lopez vs. MWSS, 2005)

indefinite period. If they are employed in a

particular project, the completion of the project
or any phase thereof will not mean severance of
the employer-employee relationship. (Aguilar
Corp. vs. NLRC, 1997)

Length of time involved

Length of time is not controlling, merely serves
as a badge of regular employment. (Maraguinot
vs. NLRC, 1998)

If there is continuous rehiring of employees

showing no intent to employ them for only one
season, laws for regular employees must be
applied.

PROJECT EMPLOYMENT
Employment fixed on a specific project or
undertaking, completion or termination of
which is determined at the time of engagement
of the employee.

CASUAL EMPLOYMENT
When not a regular, project or seasonal
employee.

Whether or not the project has a direct relation

to the business of the ER is not important, BUT:
(1) EE must be informed of the nature and
duration of project
(2) project and principal business of ER are two
separate things
(3) no attempt to deny security of tenure to the
worker
Work pool employee
A project EE or a member of a work pool may
acquire the status of a regular employee when
the following concur:
(1) There is a continuous rehiring of project
employees even after cessation of a project;
and
(2) The tasks performed by the alleged project
employee are vital, necessary, and
indispensable to the usual business or trade
of the employer. However, the length of time
during which the EE was continuously
rehired is not controlling, but merely serves
as a badge of regular employment.
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work pool,
are non-project employees, or employees for an

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SEASONAL EMPLOYMENT
(1) Work or services performed are seasonal in
nature.
(2) Employed only for the duration of one
season.

To become regular employee:

(1) one (1) year service, continuous or broken
(2) with respect to activity employed
(3) employment shall continue while such
activity exists
FIXED-TERM EMPLOYMENT
Article 280 of the Labor Code does not
proscribe or prohibit an employment contract
with a fixed period provided the same is entered
into by the parties, without any force, duress or
improper pressure being brought to bear upon
the employee and absent any other
circumstance vitiating consent.
Agreement should not violate security of tenure
This arrangement does NOT circumvent
Security of Tenure when:
(1) Knowingly and voluntarily agreed upon by
the parties without any force, duress, or
improper
pressure
or
any
other
circumstances vitiating his consent; OR
(2) The employer and the employee dealt with
each other on more or less equal terms with
no moral dominance exercised by the former
or the latter. (Brent School v. Zamora, 1990;
Romares v. NLRC, 1998; Medenilla v. Phil.
Veterans Bank, 2000)
(3) If a contract is for a fixed term and the
Employee is dismissed without just cause, he
is entitled to the payment of his salaries

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corresponding to the unexpired portion of

the employment contract. (Medenilla v. Phil.
Veterans Bank, 2000)

JOB CONTRACTING

Articles 106 to 109 of the Labor Code

Article 106. Contractor or subcontractor.
Whenever an employer enters into a contract
with another person for the performance of the
formers work, the employees 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
subcontractor fails to pay the wages of his
employees in accordance with this Code, the
employer shall be jointly and severally liable
with his contractor or subcontractor to such
employees to the extent of the work performed
under the contract, in the same manner and
extent that he is liable to employees directly
employed by him.
The
Secretary
of
Labor
and
Employment may, by appropriate regulations,
restrict or prohibit the contracting-out of labor
to protect the rights of workers established
under this Code. In so prohibiting or restricting,
he may make appropriate distinctions between
labor-only contracting and job contracting as
well as differentiations within these types of
contracting and determine who among the
parties involved shall be considered the
employer for purposes of this Code, to prevent
any violation or circumvention of any provision
of this Code.
There is "labor-only" contracting where
the person supplying workers to an employer
does not have substantial capital or investment
in the form of tools, equipment, machineries,
work premises, among others, and the workers
recruited and placed by such person are
performing activities which are directly related
to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer
who shall be responsible to the workers in the
same manner and extent as if the latter were
directly employed by him.
Article 107. Indirect employer. The provisions of
the immediately preceding article shall likewise

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apply to any person, partnership, association or

corporation which, not being an employer,
contracts with an independent contractor for
the performance of any work, task, job or
project.
Article 108. Posting of bond. An employer or
indirect employer 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
employees
should
the
contractor
or
subcontractor, as the case may be, fail to pay
the same.
Article 109. Solidary liability. The provisions of
existing laws to the contrary notwithstanding,
every employer or indirect employer shall be
held responsible with his contractor or
subcontractor for any violation of any provision
of this Code. For purposes of determining the
extent of their civil liability under this Chapter,
they shall be considered as direct employers.
DEPARTMENT ORDER NO. 18-A, SERIES OF
2011: Rules Implementing Articles 106 to 109 of
the LC, as amended (14 November 2011)
Cabo a persons or group of persons or a labor
groups which, in the guise of a labor
organization, cooperative or any entity, supplies
workers to an employer, with or without any
monetary or other consideration, whether in the
capacity of an agent of the employer or as an
ostensible independent contractor.
Contracting or subcontracting an arrangement
whereby a principal agrees to put out or farm
out with a contractor the performance or
completion of a specific job, work or service
within a definite or predetermined period,
regardless of whether such job, work or service
is to be performed or completed within or
outside the premises of the principal.
Contractor any person or entity, including a
cooperative, engaged in a legitimate
contracting or subcontracting arrangement
providing either services, skilled worker,
temporary workers or a combination of services
to a principal under a Service Agreement.
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Contractors employee includes one employed

by a contractor to perform or complete a job,
work, or service pursuant to a Service
Agreement with a principal.
It shall also refer to regular EEs of the
contractor whose functions are not dependent
on the performance or completion of a specific
job, work or service within a definite period of
time i.e. administrative staff.
In-house agency a contractor which is owned,
managed, or controlled directly or indirectly by
the principal or one where the principal
owns/represents any share of stock, and which
operates solely or mainly for the principal.
Net Financial Contracting Capacity (NFCC)
refers to the formula to determine the financial
capacity of the contractor to carry out the job,
work or services sought to be undertaken under
a Service Agreement.
Formula

NFCC = (current assets - current liabilities) x (K

value of all outstanding or ongoing projects
including contracts to be started)
**
K stands for contract duration equivalent to:
a. 10 for one year or less
b. 15 for more than 1 year up to 2 years
c. 20 for more than 2 years
Principal any ER, whether a person or entity,
including government agencies and GOCCs,
who/which puts out or farms out a job, service
or work to a contractor.
Right to control the right reserved to the
person for whom the services of the contractual
workers are performed, to determine not only
the end to be achieved, but also the manner
and means to be used in reaching that end.
Substantial capital refers to paid-up capital
stocks/shares of at least P3,000,000 in the
case of corporations, partnerships and
cooperatives; in case of single proprietorship, a
net worth of at least P3,000,000. (Sec 3, D.O.
18-A-11)

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Service agreement refers to the contract

between the principal and contractor containing
the terms and conditions governing the
performance or completion of a specific job,
work or service being farmed out for a definite or
predetermined period.
Legitimate contracting or subcontracting
Contracting or subcontracting shall be
legitimate if ALL the following circumstances
occur:
(1) The contractor must be registered in
accordance with these rules and carries a
distinct and independent business
(2) The contractor undertakes to perform the
job, work or service on its own responsibility,
according to its own manner and method,
and free from control and direction of the
principal in all matters connected with the
performance of the work except as to the
results thereof;
(3) The contractor has substantial capital and/or
investment; and
(4) The Service Agreement ensures compliance
with all the rights and benefits under Labor
laws.
Prohibition against labor-only contracting
Labor only contracting is prohibited. There is
labor-only contracting where:
(1) The contractor does not have substantial
capital or investments in the form of tools,
equipment, machineries, work premises,
among others, and the employees recruited
and places are performing activities which
are usually necessary or desirable to the
operation of the company, or directly related
to the main business of the principal within a
definite or predetermined period, regardless
of whether such job, work or service is to be
performed or completed within or outside
the premises of the principal; OR
(2) The contractor does not exercise the right to
control the performance of the work of the
employee.
Rights of contractors EEs
All contractors EEs, whether deployed or
assigned ass reliever, seasonal, week-ender,
temporary, or promo jobbers, shall be entitled
to all the rights and privileges as provided for in
the LC, as amended.

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Security of tenure of contractors EEs

It is understood that all contractors EEs enjoy
security of tenure regardless of whether the
contract of employment is co-terminus with the
service agreement, or for a specific job, work, or
service, or phase thereof.
Effect of termination of employment
The termination of the contractor EE prior to the
expiration of the Service Agreement shall be
governed by Arts. 282-284 of the LC.
In case the termination is caused by the pretermination of the Service Agreement not due to
authorized causes under Art. 283, the right of
the contractor EE to unpaid wages and other
unpaid benefits including unremitted legal
mandatory contributions, e.g., SSS, Philhealth,
Pag-ibig, ECC, shall be borne by the party at
fault, without prejudice to the solidary liability of
the parties to the Service Agreement.
Where the termination result from the
expiration of the Service Agreement, or from the
completion of the phase of the job, work or
service for which the EE is engaged, the latter
may opt for payment of separation benefits as
may be provided by law or the Service
Agreement, without prejudice to his/her
entitlement to the completion bonuses or other
emoluments, including retirement benefits
whenever applicable.
Mandatory registration
It shall be mandatory for all persons or entities,
including cooperative, acting as contractors, to
register with the Regional Office of the DOLE
where it principally operates.
Failure to register shall give rise to the
presumption that the contractor is engaged in
labor-only contracting.
Contracting or subcontracting arrangements
in the Construction & other industries
Contracting or subcontracting arrangements in
the Construction Industry, under the licensing
coverage of the Philippine Construction
Accreditation Board (PCAB), shall be covered by
the applicable provisions of these Rules and
shall continue to be governed by Dept Order

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No. 19, Series of 1993 (Guidelines Governing the

Employment of Workers in the Construction
Industry) Dept. Order No 13, Series of 1998
(Guidelines Governing the Occupational Safety
and Health in the Construction Industry); DOLEDPWH-DILG-DTI and PCAB Memorandum of
Agreement-Joint Administrative Order No. 1,
Series of 2011 (on coordination and
harmonization of policies and programs on
occupational safety and health in the
construction industry.
DEPARTMENT CIRCULAR NO. 01, SERIES OF
2012: Clarifying the Applicability of DO No. 18A, 2011 to Business Processing Outsourcing
(BPO)/ Knowledge Process Outsourcing (KPO)
and the Construction Industry
Applicability to BPO
DO 18-A speaks of a trilateral relationship that
characterizes the covered contracting/subcontracting arrangement. Thus, vendor-vendee
relationship for entire business processes
covered by the applicable provisions of the Civil
Code on Contracts is excluded.
DO 18-A contemplates generic or focused
singular activity in one contract between the
principal and the contractor (for example,
janitorial, security, merchandising, specific
production work) and does not contemplate
information
technology-enabled
services
involving an entire process (for example, BPO,
KPO, legal process outsourcing, hardware
and/or software support, medical transcription,
animation
services,
back
office
operations/support). These companies engaged
in BPOs may hire employees in accordance with
applicable laws, and maintain these EEs based
on business requirements, which may or may
not be for different clients of the BPOs at
different periods of the EEs employment.
Applicability to the Construction Industry
Licensing and the exercise of regulatory powers
over the construction industry is lodged with
PCAB which is under the Construction Industry
Authority of the Philippines and not with the
DOLE or any of its regional offices.
Thus, the DOLE, through its regional offices
shall not require contractors licensed by PCAB

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in the Construction Industry to register under

DO 18-A. Moreover, findings of violation/s on
labor standards and occupational health and
safety standards shall be coordinated with
PCAB for its appropriate action, including the
possible cancellation/suspension of the
contractors license.
EFFECTS OF FINDING THAT THERE IS
LABOR-ONLY CONTRACTING
A finding by a competent authority of labor-only
contracting shall render the principal jointly and
severally liable with the contractor to the latters
EEs, in the same manner and extent that the
principal is liable to EEs directly hired by
him/her.
A finding of commission of any of the prohibited
activities in Sec. 7 or violation of either Secs. 8 or
9 hereof, shall render the principal the direct ER
of the EEs of the contractor or subcontractor.
(Sec. 27, DO 18-A, 2011)
TRILATERAL
RELATIONSHIP
IN
CONTRACTING ARRANGEMENTS
There are three parties involved:
(1) Principal who decides to farm out a job,
work or service to a contractor;
(2) Contractor who has the capacity to
independently undertake the performance of
the job, work, or service; and
(3) Contractual workers engaged by the
contractor to accomplish the job, work or
service. (Sec. 3 D.O. 18-A-11)
In legitimate contracting there exists:
(1) An ER-EE relationship between the
contractor and the employees it engaged to
perform the specific job, work or service
being contracted
(2) A contractual relationship between the
principal and the contractor as governed by
the provisions of the CC.
In the event of any violation of any provisions of
the LC (including failure to pay wages) there
exists a solidary liability on the part of the
principal and the contractor for purposes of
enforcing the provisions of the LC and other
social legislation, to the extent of the worked
performed under the employment contract.
(Sec. 5, D.O. 18-A-11)

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DISMISSAL
FROM
EMPLOYMENT
Art. 279: In case of regular employment, the
employer shall not terminate the services of an
employee except for
(a) just cause (Art. 282)
(b) authorized cause (Art. 283-284)
Security of Tenure
Right not be removed from ones job without
valid cause and valid procedure. (Kiamco v.
NLRC, 1999)
COVERAGE
1987 Constitution: all workers (Art. XIII Sec. 3)
Labor Code: regular employees (Art. 279) in all
establishments or undertakings, whether for
profit or not (Art. 278), except government and
its political subdivisions including government
owned or controlled corporations or GOCCs
(IRR Book VI Rule I Sec. 1)
REQUISITES FOR THE VALIDITY OF
MANAGEMENT PREROGATIVE AFFECTING
SECURITY OF TENURE
(1) Exercised in good faith for the advancement
of the Employer's interest, and
(2) NOT for the purpose of defeating or
circumventing the rights of the Employees
under special laws or under valid
agreements (San Miguel vs. Ople, 1989)
Just Causes
Serious
Misconduct

Requisites
Serious
(1) Grave and aggravated
character,
(2) In connection with work;
and
(3) Shows that Employee is unfit
to work for Employer.

Willful
Willful conduct wrongful and
Disobedience perverse attitude; and
Order violated must be:
(1) Reasonable,
(2) Lawful,
(3) Sufficiently
known
to
Employee,

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service, whichever is higher

(4) In connection to the duties.

Redundancy
Gross and
Habitual
Neglect

Neglect must be both gross and

habitual.

Fraud or
Loss of Confidence
Willful Breach (1) Committed against the
of Trust
Employer
or
his
representative (direct);
(2) willful since fraud implies
wrongful intent;
(3) EE
concerned holds a
position of trust and
confidence (Mabeza vs.
NLRC, 1997);
(4) Act complained of must be
work-related.
Additional Guidelines
(1) NOT simulated;
(2) NOT used as a subterfuge;
(3) NOT arbitrarily asserted; &
(4) genuine, NOT a mere
afterthought
(Vitarich v. NLRC, 1999; CocaCola Bottlers, Phils., Inc. v.
Kapisanan ng Malayang
Manggagawa sa Coca-Cola,
2005)

Commission
of a crime or
offense
against
Employer

Crime against the

(1) Employer,
(2) Immediate member of
employers family, or
(3) Employers duly authorized
representative; and
Conviction or prosecution NOT
required.

Analogous
causes

Due to a voluntary and/or

willful act or omission by
Employee (Nadura vs. Benguet
Consolidated, 1962)

Authorized
causes

Requisites

Installation of (1) 1 month written notice to

Labor Saving
DOLE and Employee
Devices
(2) separation pay equivalent
to one month pay or one
month pay for every year of

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(1) 1 month written notice to

DOLE and Employee
(2) separation pay equivalent
to one month pay or one
month pay for every year of
service,
whichever
is
higher;
(3) Good faith in abolishing
the redundant positions;
and
(4) Fair and reasonable criteria
in choosing those affected
(Asian Alcohol Corp. v. NLRC,
1999), such as but not limited to:
preferred status (e.g. temporary,
casual or regular Employees)
efficiency, or seniority. (Panlilio v.
NLRC, 1997; Golden Thread
Knitting Industries, Inc. v. NLRC,
1999)

Retrenchment

(1) Necessary to prevent or

minimize losses and such
losses are proven
(2) 1 month written notice to
DOLE and the Employees
(3) Separation pay equivalent
to at least one month pay
or at least 1/2 month pay
for every year of service,
whichever is higher;
(4) Exercise is in good faith;
and
(5) Fair
and
reasonable
criteria in ascertaining
who will be affected
(a) preferred status (e.g.
temporary, casual or
regular Employees)
(b) efficiency,
(c) physical fitness,
(d) age,
(e) financial hardship, or
(f) seniority.
(Asian
Alcohol Corp. v. NLRC,
1999)
General Standards: When
retrenchment is preventive
rather than curative
(1) Losses expected are

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substantial
and
not
merely de minimis in
extent;
(2) Apprehended losses are
reasonably imminent;
(3) Retrenchment must be
reasonably necessary to
prevent the expected
losses; and
(4) Expected or actual losses
must be proved by
sufficient and convincing
evidence. (Lopez Sugar
Corp. vs. Federation of Free
Workers, 1990)

Closure or
Cessation of
Operations

Disease

(1) Must be done in good

faith (bona fide)
(2) 1 month written notice to
DOLE and Employee
(3) Separation pay equivalent
to one month pay or 1/2
month pay for every year
of service, whichever is
higher.

A very basic requirement of substantive due

process; it has to be observed. Indeed, the rights
to counsel and to due process of law are two of
the fundamental rights guaranteed by the 1987
Constitution to any person under investigation,
be the proceeding administrative, civil, or
criminal. (Salaw v. NLRC, 1991)
Procedural Due Process
Employee must be given notice with adequate
opportunity to be heard before he/she is
notified of his/her actual dismissal for Cause.
(Fujitsu v. CA, 2005)
ER may NOT substitute the required prior notice
& opportunity to be heard with the mere
payment of 30 days' salary. (PNB v. Cabanag,
2005)
TWIN-NOTICE REQUIREMENT
First notice notice specifying the grounds for
which dismissal is sought
Second notice notice of the decision to dismiss

(1) Employee is suffering

from any disease;
(2) His
continued
employment is prohibited
by law or is prejudicial to
his health as well as as to
the health of his coemployees. (Art. 284)
(3) Separation pay equivalent
to at least one month pay
or at least 1/2 month pay
for every year of service,
whichever is higher; and
(4) Medical certification by a
competent public health
authority that the disease
cannot be cured within 6
mos even with proper
medical treatment. (IRR
Book VI Rule I Sec. 8)

DUE PROCESS

Substantive Due Process

Dismissal for any of the just or authorized
causes under Arts. 282 284
Right to counsel

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Procedure to be observed in termination cases

Basis for
Requirements
Termination
Just cause (1) Notice
specifying
the
grounds for which dismissal
Art. 282
is sought

(2) Hearing or opportunity to be

heard
(3) Notice of the decision to
dismiss (Art. 277(b))

Authorized
Notice to:
Cause
(1) Employee, &
Arts. 283 & 284 (2) DOLE
at least 1 month prior to the
effectivity of the separation
Consequences for non-compliance
Effect
Situation
Liability of ER
Just
or Dismissal No liability
Authorized
valid
* separation pay if
Cause + Due
for
authorized
Process
cause
No Just or Dismissal Reinstatement +
Authorized
invalid
Full Backwages
Cause
* if reinstatement
+ Due Process
NOT possible =
separation pay
No Just or Dismissal Reinstatement +
Authorized
invalid
Full Backwages
Cause + No
* if reinstatement
Due Process
NOT possible =
separation pay
Just
or Dismissal Liable for damages
Authorized
valid
due
to
nonCause + No
compliance
with
Due Process
procedural req'ts
*separation pay if
for
authorized
cause
HEARING; MEANING OF OPPORTUNITY TO
BE HEARD
A formal or trial type hearing is not at all times
and in all instances essential to due process; it
is enough to that the parties are afforded fair
and reasonable opportunity to explain their side
of the controversy. (Mendoza vs. NLRC, 1991)

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Degree of Proof
Substantial evidence; proof beyond reasonable
doubt not required. (Manila Electric Co., Inc. v.
NLRC, 1991)
Agabon doctrine
Prior to 1989

Illegal dismissal

Wenphil Corp.
v. NLRC, 1989
- Belated Due
Process Rule

Dismissal
isvalid
(NO
reinstatement
and
backwages)
BUT Employer to indemnify
Employee for damages

Serrano v.
NLRC, 2000

Dismissal is valid.
EE is entitled to the payment
of full backwages - Computed
from the time of dismissal
until the Court finds the
dismissal to be for just cause.

Current
rule: Dismissal is valid (NO
Agabon
v. reinstatement
and
NLRC, 2004
backwages)
BUT Employer to indemnify
Employee in the form of
nominal damages
Indemnity is stiffer than
Wenphil Corp. vs. NLRC to
discourage the practice of
dismiss now, pay later.

RELIEFS
DISMISSAL

FOR

ILLEGAL

A finding of illegal dismissal entitles the

Employee to:
(1) Reinstatement without loss of seniority
rights and privileges, and
(2) Full backwages inclusive of allowances and
to benefits or their monetary equivalent from
the time withheld up to actual reinstatement
(Art. 279)

REINSTATEMENT

It is the restoration of an employee who was

unjustly dismissed to the position from which he
was removed, that is, to his status quo ante
dismissal (Santos vs. NLRC, 1987)

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Alternative to Reinstatement
In lieu of reinstatement, Employee is entitled to
separation pay of 1 month pay per year of
service. (Gaco vs. NLRC, 1994)
General Rule: Reinstatement is a matter of right
to an illegally dismissed Employee.
Exceptions:
(1) Closure of business (Retuya vs. Dumarpa,
2003)
(2) Economic
business
conditions:
The
reinstatement remedy must always be
adapted to economic-business conditions.
(Union of Supervisors v. Sec. of Labor, 1984)
(3) EEs unsuitability (Divine World High School
vs. NLRC, 1986)
(4) EEs Retirement/Coverage (Espejo vs. NLRC,
1996)
Prescription Period
An action for reinstatement by reason of illegal
dismissal is one based on an injury which may
be brought within 4 years from the time of
dismissal.(Art. 1146 of the Civil Code)
REINSTATEMENT PENDING APPEAL
Art. 223 is clear that an award for reinstatement
shall be immediately executory even pending
appeal and the posting of a bond by the
employer shall not stay the execution for
reinstatement.
SEPARATION
PAY
IN
LIEU
OF
REINSTATEMENT
Strained Relation rule
If reinstatement is not feasible, expedient, or
practical, as where there is strained relations
between the parties, particularly where the
illegally dismissed employee held a managerial
or key position (Quijano v. Mercury Drug Corp.
1998)
Kinds of separation pay
(1) SP as a statutory requirement for authorized
causes
(2) SP as financial assistance found in the next
section
(3) SP in lieu of reinstatement where
reinstatement is not feasible; and
(4) SP as a benefit in the CBA or company policy

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SP as a statutory requirement is computed by

integrating the basic salary with regular
allowances employee has been receiving
(Planters Products Inc. v. NLRC, 1989);
allowances
include
transportation
and
emergency living allowances (Santos v. NLRC,
1987)

BACKWAGES

According to St. Theresas School of Novaliches

Foundation v. NLRC (1998), backwages are
earnings lost by a worker due to his illegal
dismissal; a form of relief that restores the
income lost by reason of such unlawful
dismissal; it is not private compensation or
damages; nor is it a redress of a private right
but, rather, in the nature of a command to the
employer to make a public reparation for
illegally dismissing an employee.
Effect of failure to order backwages
A plain error which may be rectified, even if
employee did not bring an appeal regarding the
matter (Aurora Land v. NLRC, 1997)
LIMITED BACKWAGES
General rule: An illegally dismissed employee is
entitled to full backwages.
Exceptions
(1) Where the employee was illegally dismissed
but the employer was found to be in good
faith.
(2) Delay of the EE in filing the case for illegal
dismissal

PREVENTIVE SUSPENSION
Definition
It is a disciplinary measure for the protection of
the company's property pending investigation of
any alleged malfeasance or misfeasance
committed by the employee. The employer may
place the worker concerned under preventive
suspension if his continued employment poses a
serious and imminent threat to the life or
property of the employer or of his co-workers.
(PAL v. NLRC, 1998)
Preventive suspension is limited to 30 days; any
more than that amounts to constructive
dismissal. (Pido vs. NLRC, 2007)

Computation

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CONSTRUCTIVE DISMISSAL
The following constitute constructive dismissal:
(1) Bona fide suspension of the operation of a
business or undertaking exceeding 6 months
(Valdez v. NLRC, 1998)
(2) Floating status of more than 6 months (Agro
Commercial Security Services v. NLRC, 1989)
An involuntary resignation is resorted to 1) when
continued employment is rendered impossible,
unreasonable, or unlikely; 2) when there is a
demotion in rank and/or a diminution in pay; 3)
or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to
the employee. (Phil. Wireless, Inc. v. NLRC, 1998)
If an employee was forced to remain without
work or assignment for a period exceeding 6
months, then he is in effect constructively
dismissed (Valdez v. NLRC, 1998)

Management Prerogative
So long as a companys management
prerogatives are exercised in good faith for the
advancement of the employers interest and not
for the purpose of defeating or circumventing
the rights of the employees under special laws
or under valid agreements, this Court will
uphold themEven as the law is solicitous of
the welfare of the employees, it must also
protect the right of an employer to exercise
what are clearly management prerogatives. The
free will of management to conduct its own
business affairs to achieve its purpose cannot be
denied. (Ernesto G. Ymbong vs. ABS-CBN
Broadcasting Corp., 2012)

DISCIPLINE

The employers right to conduct the affairs of his

business, according to its own discretion and
judgment, includes the prerogative to instill
discipline in its employees and to impose
penalties, including dismissal, upon erring
employees. (Consolidated Food Corporation vs.
NRLC, 1999) (St. Michaels Institute vs. Santos,
2001)
Although we recognize the right of employers to
shape their own work force, this management

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prerogative must not curtail the basic right of

employees to security of tenure. (Alert Security
& Investigation Agency, Inc. vs. Saidali
Pasawilan, et. al., 2011)

TRANSFER OF EMPLOYEES

It is management prerogative for employers to

transfer employees on just and valid grounds
such as genuine business necessity. (William
Barroga vs. Data Center College of the
Philippines, 2011)
Limitation
(1) Must not be unreasonable, or inconvenient,
or prejudicial to the employee, AND
(2) Must not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges. (Bisig ng Manggagawa sa TRYCO
v. NLRC, 2008)

PRODUCTIVITY STANDARD
The employer has the right to demote and
transfer an employee who has failed to observe
proper diligence in his work and incurred
habitual tardiness and absences and indolence
in his assigned work. (Petrophil Corporation vs.
NLRC, 1986)

GRANT OF BONUS
A grant of a bonus is a prerogative, not an
obligation of the employer. The matter of giving
a bonus over and above the workers lawful
salaries and allowances is entirely dependent
on the financial capability of the employer to
give it. (Kimberly-Clark Philippines, Inc. vs.
Dimayuga, 2009)

CHANGE OF WORKING HOURS

Further, management retains the prerogative,
whenever exigencies of the service so require, to
change the working hours of its employees. So
long as such prerogative is exercised in good
faith for the advancement of the employers
interest and not for the purpose of defeating or
circumventing the rights of the employees
under special laws or under valid agreements,
this Court will uphold such exercise. (Sime

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Darby Pilipinas Inc. v. NLRC, 1998)

RULES
ON
MARRIAGE
BETWEEN
EMPLOYEES
OF
COMPETITOR-EMPLOYERS
Prohibition is reasonable because relationships
of that nature might compromise the interests
of the employer. The prohibition is to protect its
interests against the possibility that a
competitor company will gain access to its
secrets and procedures.

POST-EMPLOYMENT BAN
In cases where an employee assails a contract
containing a provision prohibiting him or her
from accepting competitive employment as
against public policy, the employer has to
adduce evidence to prove that the restriction is
reasonable and not greater than necessary to
protect the employers legitimate business
interests. The restraint may not be unduly harsh
or oppressive in curtailing the employees
legitimate efforts to earn a livelihood and must
be reasonable in light of sound public policy.
(Rivera v Solidbank, 2006)

Labor Relations Law

RIGHT TO SELF-ORGANIZATION
STATUTORY BASIS
1987 Constitution
Art. III Sec. 8. The right of the people, including
those employed in the public and private
sectors, to form unions, associations, or societies
for purposes not contrary to law shall not be
abridged.
Art. XIII Sec. 3. The state shall afford full
protection to labor, local and overseas,
organized and unorganized, and promote full
employment opportunities for all. It shall
guarantee the rights of all workers to selforganization, collective bargaining and
negotiations, and peaceful concerted activities,

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including the right to strike in accordance with

law.
Labor Code
Art. 249. All persons employed in commercial,
industrial and agricultural enterprises and in
religious, charitable, medical, or educational
institutions, whether operating for profit or not,
shall have the right to self-organization and to
form, join, or assist labor organizations of their
own choosing for purposes of collective
bargaining.
Ambulant, intermittent, and itinerant
workers, self-employed people, rural
workers and those without any definite
employers
may
form
labor
organizations for their mutual aid and
protection.
Art. 250. Employees of government
corporations established under the
corporation code shall have the right to
organize and to bargain collectively
with their respective employers.

WHO MAY UNIONIZE FOR PURPOSES

OF COLLECTIVE BARGAINING
General Rule: All employees
Art. 283 (c). Any employee, whether employed
for a definite period or not, shall, beginning on
his first day of service, be considered as an
employee for purposes of membership in any
labor union.
Government Employees In Civil Service and
of Government Corporations Under the
Corporation Code
1987 Constitution, Art. IX-B, Sec. 2 [5]. The right
to self-organization shall not be denied to
government employees.
EO 180 Section 2. All government employees
can form, join, or assist employees
organizations of their own choosing for the
furtherance and protection of their interests.
They can also form, in conjunction with
appropriate government authorities, labormanagement committees, work councils and
other forms of workers participation schemes to
achieve the same objectives.

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Supervisory Employees
Art. 218 (m). Supervisory employees are those
who, in the interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely routinary
or clerical in nature but requires the use of
independent judgment.
Art. 251. Supervisory employees shall not be
eligible for membership in a labor organization
of the rank-and-file employees but may join,
assist or form separate labor organizations of
their own.
Effect of Mixed Membership
Art. 251-A. The inclusion as union members of
employees outside the bargaining unit shall not
be a ground for the cancellation of the
registration of the union. Said employees are
automatically deemed removed from the list of
membership of said union.
Same Federation or National Union
Art. 251 The rank and file union and the
supervisors union operating the same
establishment may join the same federation or
national union.
Aliens with Valid Working Permits
General rule: All aliens xxx are strictly prohibited
from engaging directly or indirectly in all forms
of trade union activities.
Exception: Aliens working in the country with
valid permits issued by the DOLE xxx are
nationals of a country which grants the same or
similar rights to Filipino workers. (Art. 275)
The DFA provides the certification on the
requirement of reciprocity. (Book V, Rule II, Sec.
2, Par. 1, 3rd sentence)
Security Personnel
The security guards and other personnel
employed by the security service contractor
shall have the right:
(1) To form, join, or assist in the formation of a
labor organization of their own choosing for
purposes of collective bargaining and
(2) To engage in concerned activities which are
not contrary to law including the right to
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strike. (D.O. No. 14 Series of 2001 Guidelines

Governing the Employment and Working
Conditions of Security Guards and Similar
Personnel in the Private Security Industry)
WHO CANNOT FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS
(1) Managerial employees (Art 251)
(2) Confidential employees
(3) Non-employees
(4) Member-employee of a cooperative
(5) Employees of international organizations
(6) High-level government employees (E.O. 180
Sec.3)
(7) Members of the AFP, police officers,
policemen, firemen and jail guards

BARGAINING UNIT

Bargaining Unit refers to a group of employees

sharing mutual interests within a given
employer unit, comprised of all or less than all
of the entire body of employees in the employer
unit or any specific occupational or
geographical grouping within such employer
unit. (Book V, Rule 1, Sec. 1[d])
TEST TO DETERMINE THE CONSTITUENCY
OF AN APPROPRIATE BARGAINING UNIT
4 Factors
(1) Will of the Employees (Globe Doctrine) a
practice which sanctions the holding of a
series of elections, not for the purpose of
allowing the group receiving an overall
majority of votes to represent all employees,
but for the specific purpose of permitting the
employees in each of the several categories
to select the group which each chooses as a
bargaining unit. (Kapisanan ng mga
Manggagawa sa Manila Road Co. v. Yard
Crew Union, 1960)
(2) Affinity and unity of employees interest
(3) Prior collective bargaining history
(4) Employment status (UP v. Ferrer-Calleja,
1992)
Other factors:
(1) Geography and Location
(2) Policy of avoiding fragmentation of the
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VOLUNTARY RECOGNITION
Voluntary Recognition refers to the process by
which a legitimate labor union is recognized by
the employer as the exclusive bargaining
representative or agent in a bargaining unit,
reported with the Regional office in accordance
to Rule VII, Sec 2 of these Rules. (Book V, Rule I,
Sec. 1 [bbb])
REQUIREMENTS
Substantive Requirements
(1) Unorganized establishment;
(2) Only one union asking for recognition;
(3) The members of the bargaining unit did not
object to the projected recognition of the
union. (Book V, Rule VII, Sec. 2)
Procedural Requirements
The notice of voluntary recognition shall be
accompanied by the original copy and two (2)
duplicate copies of the following documents:
(1) A joint statement under oath of voluntary
recognition attesting to the fact of voluntary
recognition
(2) Certificate of posting of the joint statement
of voluntary recognition for fifteen (15)
consecutive days in at least two (2)
conspicuous places in the establishment or
bargaining unit where the union seeks to
operate;
(3) The approximate number of employees in
the bargaining unit, accompanied by the
names of those who support the voluntary
recognition comprising at least a majority of
the members of the bargaining unit; and
(4) A statement that the labor union is the only
legitimate labor organization operating
within the bargaining unit.
All accompanying documents of the notice for
voluntary recognition shall be certified under
oath by the employer representative and
president of the recognized labor union.
CERTIFICATION
ELECTION
Certification
election is the process of determining, through
secret ballot, the sole and exclusive bargaining
agent of the employees in an appropriate
bargaining unit, for purposes of collective
bargaining. (Book V Rule I Sec. 1 [x])

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WHO MAY FILE A PETITION FOR

CERTIFICATION ELECTION
(1) Legitimate labor organization (registered
with DOLE)
(2) Unregistered local chapter with charter
certificate from duly registered national
union or federation
(3) National union or federation in behalf of its
local/chapter
(4) Employer (when requested to bargain
collectively and no existing CBA)
EMPLOYER-BYSTANDER RULE
The employer shall not be considered a party in
the petition with a concomitant right to oppose
a petition for certification election. The
employers participation shall be limited to:
(1) Being notified or informed of petitions of
such nature
(2) Submitting the list of employees during the
pre-election conference should the Medarbiter act favorably on the petition (Art 258A introduced by RA 9481)
VENUE FOR FILING THE PETITION
BLR Regional Office which issued the
petitioning unions certificate of registration or
certificate of creation of chartered local.
CERTIFICATION ELECTION IN AN
UNORGANIZED ESTABLISHMENT
PROCEDURE
(1) Filing of petition
(2) Med- Arbiter shall automatically conduct a
certification election.
VENUE
BLR Regional Office which issued the
petitioning unions certificate of registration or
certificate of creation of chartered local.
CERTIFICATION
ELECTION
ORGANIZED ESTABLISHMENT

IN

AN

PROCEDURE
(1) A verified petition questioning the majority
status shall be filed by a legitimate labor
organization
(2) It must be filed within the 60-day period
before expiration of CBA (freedom period)
(3) Supported by written consent of at least 25%
of ALL employees in the bargaining unit
(substantial support)

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VALIDITY
Double majority requirement (voters, valid votes)
Art. 262. To have a valid election, at least a
majority of all eligible voters in the unit must
have cast their votes. The labor union receiving
the majority of the valid votes cast shall be
certified as the exclusive bargaining agent of all
the workers in the unit.
FORCED INTERVENOR

The incumbent bargaining agent shall

automatically be one of the choices in the
certification election as forced intervenor.
(Book V Rule VIII Sec. 7)
Bars to certification election
(1) One year bar rule
(2) Negotiation bar rule
(3) Deadlock bar rule
(4) Contract bar rule
One year bar rule
No certification election may be held within 1
year from the fact that voluntary recognition has
been entered, or a valid certification, consent or
run-off election has been conducted within the
bargaining unit.
If appealed, the reckoning period is the date
when the decision becomes final and executory.
(Book V, Rule VIII, Sec 3 [a])
Negotiation bar rule
A petition for certification election may be filed
anytime EXCEPT:
(1) When the duly certified union has
commenced and sustained negotiations in
good faith with the employer
(2) In accordance with Art. 250 of the Labor
Code
(3) Within one year after the certification
election. (Book V, Rule VIII, Sec 3 [b])
Deadlock bar rule
A petition for certification election may be filed
anytime, EXCEPT:
xxx when a bargaining deadlock to which an
incumbent or certified bargaining agent is a
party had been submitted to conciliation or
arbitration or had become the subject of a valid

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notice of strike or lockout (Book V, Rule VIII, Sec.

3 [c])
CONTRACT BAR RULE
Art. 238. The Bureau shall not entertain any
petition for certification election or any other
action which may disturb the administration of
duly registered existing collective bargaining
agreements affecting the parties except under
Articles 253, 253-A and 256 of this code.
The contract bar rule shall not apply:
(1) When the petition is filed during the freedom
period in Articles 253, 253-A, and 256.
(2) When the CBA is incomplete
(3) When the CBA is substandard
6 9 When the CBA is prematurely renewed
(4)
(5) When the CBA is unregistered
FREEDOM PERIOD
The last 60 days in a Collective Bargaining
Agreement (CBA) is referred to as the freedom
period when rival union representation can be
entertained during the existence of a CBA.
(Tanduay Distillery Labor Union v. NLRC, 1987)
CERTIFICATION
REQUIREMENTS

ELECTION;

OTHER

POSTING OF NOTICE
The election Officer shall cause the posting
of the notice of election in 2
conspicuous places in company
premises at least 10 days before actual
election.
Contents of Notice
(1) Date and Time of election;
(2) Names of all contending unions;
(3) Description of the bargaining unit
(4) List of eligible and challenged Voters.
The posting of the notice of election, the
information required to be included
therein and the duration of the posting
cannot be waived by the contending
unions or the employer. (Book V Rule IX
Sec 6, IRR)
Voting List and Voters
The basis of determining voters may be
agreed upon by the parties (i.e. the use

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of payroll). (Acoje Workers Union v

NAMAWU, 1963)
VOTING DAY
The election shall be set on a regular
business day. (IRR, Book V Rule IX Sec.
2)
RUN-OFF ELECTION
Run-Off refers to an election between the labor
unions receiving the two (2) higher number of
voters in a certification election where
(1) Majority of the bargaining unit voted (first
majority of the double majority rule)
(2) There are three or more choices (note: no
union is a choice)
(3) Not one of the choices receives a majority of
the valid votes cast AND
(4) Total number of votes for all contending
unions is at least 50% of the total number of
votes cast (this means that at least 50% of
the bargaining unit wants to have a union)
RE-RUN ELECTION
A motion for the immediate holding of another
certification or consent election can be filed
within six (6) months from the date of the
declaration of failure of election. (Book V, Rule IX
Sec 18)
CONSENT ELECTION
Consent Election means the election voluntarily
agreed upon by the parties to determine the
issue of majority representation of all the
workers in the appropriate collective bargaining
unit.
The contending unions may agree to the
holding of an election. In which case, it shall be
called a consent election. The Med-Arbiter shall
forthwith call for the consent election reflecting
the parties agreement and the call in the
minutes of the conference. (Book V RVIII Sec 10)
AFFILIATION AND DISAFFILIATION OF A
LOCAL UNION
AFFILIATE
An affiliate is an independent union affiliated
with a federated, national union or a chartered
local which was subsequently granted

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independent registration but did not disaffiliate

from its federation, reported to the Regional
Office and the Bureau in accordance with Rule
III Secs. 6 and 7 of the IRR. (Book V Rule 1 Sec. 1
[a])
INDEPENDENT UNION
A labor organization operating at the enterprise
level that required legal personality through
independent registration under Art. 234 of the
Labor Code and Rule III Sec. 2-A of the IRR.
(Book V Rule 1 Sec. 1 [w])
CHARTERED LOCAL (LOCAL CHAPTER)
A labor organization in the private sector
operating at the enterprise level that acquired
legal personality through the issuance of a
charter certificate by a duly registered
federation or national union, and reported to
the Regional Office in accordance with Rule III
Sec. 2-E of the IRR. (Book V Rule 1 Sec. 1 [i])
NATIONAL UNION OR FEDERATION
A group of legitimate labor unions in a private
establishment
organized
for
collective
bargaining or for dealing with employers
concerning
terms
and
conditions
of
employment for their member union or for
participating in the formulation of social and
employment policies, standards and programs,
registered with the BLR in accordance with Rule
III Sec. 2-B of the IRR. (Book V Rule 1 Sec. 1 [kk])
DISAFFILIATION
Disaffiliation Must be by a Majority Decision
Art. 247 (d). The members shall determine by
secret ballot, after due deliberation, any
question of major policy affecting the entire
membership of the organization, unless the
nature of the organization or force majeure
renders such secret ballot impractical, in which
case, the board of directors of the organization
may make the decision.
Effect of disaffiliation
A registered independent union retains its legal
personality while a chartered local loses its
legal personality unless it registers itself.

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LABOR LAW

SUBSTITUTIONARY DOCTRINE

The employees cannot revoke the validly

executed collective bargaining contract with
their employer by the simple expedient of
changing their bargaining agent. The
employees, thru their new bargaining agent,
cannot renege on their collective bargaining
contract, except of course to negotiate with
management for the shortening thereof.
(Benguet Consolidated v. BCI Employees and
Workers Union-PAFLU, 1998)

UNION DUES AND SPECIAL ASSESSMENTS

Art. 247 (h). Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the organization to be kept and
maintained for the purpose.
Art. 247 (n). No special assessment or other
extraordinary fees may be levied upon the
members of a labor organization unless
authorized by a written resolution of a majority
of all the members of a general membership
meeting duly called for the purpose.
Art. 247 (o). Other than for mandatory activities
under the Code, no special assessments,
attorneys fees, negotiation fees or any other
extraordinary fees may be checked off from any
amount due to an employee without an
individual written authorization duly signed by
the employee. The authorization should
specifically state the amount, purpose and
beneficiary of the deduction.
ATTORNEYS FEES, NEGOTIATION FEES,
AND SIMILAR CHARGES
Art. 228 (b). No attorneys fees, negotiation fees
or similar charges of any kind arising from any
collective bargaining negotiations or conclusion
of the collective agreement shall be imposed on
individual member of contracting union.
Provided, however, that attorneys fees may be
charged against union funds in an amount to be
agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the
contrary shall be null and void.
JURISDICTION OVER CHECK-OFF DISPUTES

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The Bureau of Labor Relations has jurisdiction

to hear, decide and to mete out punishment any
reported violation under Article 241
Note: Sec of Labor or his duly authorized
representative may inquire into financial
activities of legitimate labor orgs UPON filing
of complaint under oath and supported by
written consent of at least 20% of total
membership, Provided, such inquiry shall not be
conducted during (60)-day freedom period nor
within the thirty (30) days immediately
preceding the date of election of union officials
(Art. 274).
AGENCY FEES
Art. 254 (e). Employees of an appropriate
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the
dues and other fees paid by members of the
recognized collective bargaining agent, if such
non-union members accept the benefits under
the collective bargaining agreement: Provided,
that the individual authorization required under
Article 242, paragraph (o) of this Code shall not
apply to the non-members of the recognized
collective bargaining agent.

RIGHT
TO
BARGAINING

COLLECTIVE

DUTY TO BARGAIN COLLECTIVELY

Art. 258. The performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith for the purpose of
negotiating an agreement with respect to
wages, hours of work and all other terms and
conditions of employment including proposals
for adjusting any grievances or questions arising
under such agreement and executing a contract
incorporating such agreement if required by
either party but such duty does not compel any
party to agree to a proposal or to make any
concession.
WHEN EMPLOYERS MAY BE COMPELLED TO
BARGAIN COLLECTIVELY
(1) Majority representation by the representative
labor organization (exclusive bargaining
agent)

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(2) Demand by the labor organization [Art. 250

par(a)]

ascertain the will of the employees in the

appropriate bargaining unit.

RIGHTS OF THE PARTIES DURING

BARGAINING
Art. 248 (c). To be furnished by the employer,
upon written request, with its annual audited
financial statements, including the balance
sheet and the profit and loss statement, within
thirty (30) calendar days from the date of
receipt of the request, after the union has been
duly recognized by the employer or certified as
the sole and exclusive bargaining representative
of the employees in the bargaining unit, or
within sixty (60) calendar days before the
expiration of the existing collective bargaining
agreement, or during the collective bargaining
negotiation.
Book V Rule XVI Sec 2. The parties may agree to
make available such up-to-date financial
information which is normally submitted to
relevant government agencies material and
necessary for meaningful negotiations. They
may also agree to the condition that the
information be kept confidential.

xxx At the expiration of the freedom period, the

employer shall continue to recognize the
majority status of the incumbent bargaining
agent where no petition for certification election
is filed. (Art. 256)

WHEN THERE IS ABSENCE OF A CBA

Art. 257. In the absence of an agreement or
other voluntary arrangement providing for a
more expeditious manner of collective
bargaining, it shall be the duty of employer and
the representatives of the employees to bargain
collectively in accordance with the provisions of
this Code.
WHEN THERE IS A CBA
The duty to bargain collectively shall also mean
that neither party shall terminate nor modify
such agreement during its lifetime.
Exception: In organized establishments, when a
verified petition questioning the majority status
of the incumbent bargaining agent is filed
before the Department of Labor and
Employment within the sixty-day period before
the expiration of the collective bargaining
agreement, the Med-Arbiter shall automatically
order an election by secret ballot when the
verified petition is supported by the written
consent of at least twenty-five percent (25%) of
all the employees in the bargaining unit to

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COLLECTIVE
AGREEMENT (CBA)

BARGAINING

A collective bargaining agreement refers to the

negotiated contract between a legitimate labor
organization and the employer concerning
wages, hours of work and all other terms and
conditions of employment in a bargaining unit,
including mandatory provisions for grievances
and arbitration machineries. (Book V Rule I
Section 1[j])
CBA IMPRESSED WITH PUBLIC POLICY
The relations between capital and labor are not
merely contractual. They are so impressed with
public interest that labor contracts must yield to
the common good. Therefore, such contracts
are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours
of labor and similar subjects. (Art. 1700, Civil
Code)
EFFECT OF UNREGISTERED CBA
An unregistered CBA is binding upon the parties
but cannot serve as a bar to a petition for
certification election under the contract-bar
rule.
BENEFICIARIES OF THE CBA
The CBA benefits all workers in a collective
bargaining unit. When a collective bargaining
contract is entered into by the union
representing the employees and the employer,
even the non-member employees are entitled to
the benefits of the contract. (New Pacific Timber
and Supply v. NLRC, 2000)
BARGAINING PROCEDURE:
(Book V, Rule XVI)
(1) Private Procedure
The parties may provide for their own
procedures in collective bargaining. The law
only requires that these procedures be more
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expeditious than the procedure in Art. 250. (Art

251)
(2) Labor Code Procedure (Art. 250)
(a) Written notice and statement of
proposals.
(b) Reply of the other party within 10 days
from receipt of notice
(c) Conference should differences arise, to be
held not later than 10 calendar days from
request
(d) Board intervention and conciliation
(e) Voluntary arbitration
During the conciliation proceedings in the
Board, the parties are prohibited from doing any
act which may disrupt or impede the early
settlement of the disputes.
CONCILIATION / PREVENTIVE MEDIATION
Privileged communication
Art. 233. Information and statements made at
conciliation proceedings shall be treated as
privileged communication and shall not be used
as evidence in the Commission. Conciliators and
similar officials shall not testify in any court or
body regarding any matters taken up at
conciliation proceedings conducted by them.
MANDATORY BARGAINABLE ISSUES
(1) Wages
(2) Hours of work
(3) All other terms and conditions of
employment including proposals for
adjusting any grievances or questions arising
under such agreement (Art. 252)
PERMISSIVE ISSUES:
Unilateral benefits extended by the employer
(cf., Union of Filipro Employees-Drug v. Nestle,
2008)
MANDATORY PROVISIONS OF CBA
GRIEVANCE PROCEDURE
The parties to a Collective Bargaining
Agreement shall include therein:
(1) Provisions that will ensure the mutual
observance of its terms and conditions.
(2) A machinery for the adjustment and
resolution of grievances arising from:

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(a) the interpretation or implementation of

their CBA; and
(b) those arising from the interpretation or
enforcement of company personnel
policies.
(3) All grievances submitted to the grievance
machinery which are not settled within 7
calendar days from the date of its
submission shall be automatically referred to
voluntary arbitration prescribed in the CBA.
(Art. 260)
VOLUNTARY ARBITRATION
Constitutional basis
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and
shall enforce their mutual compliance therewith
to foster industrial peace. (Art. XIII Section 3)
Automatic referral if grievance machinery fails
Art. 266. All grievances submitted to the
grievance machinery which are not settled
within 7 calendar days from the date of its
submission shall automatically be referred to
voluntary arbitration prescribed in the CBA.
VOLUNTARY ARBITRATION PROVISION IN THE
CBA
(1) Parties to a CBA shall:
(a) Name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, OR
(b) Include in the agreement a procedure for
the selection of such Voluntary Arbitrator
or panel of Voluntary Arbitrators
preferably from the listing of qualified
Voluntary Arbitrators duly accredited by
the Board.
(2) In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators,
the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators,
as may be necessary, pursuant to the
selection Voluntary Arbitrator or panel of
Arbitrators procedure agreed upon in the
CBA, which shall act with the same force and
effect as if the has been selected by the
parties as described above. (Art. 260)

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ARBITRABLE ISSUES
(1) interpretation or implementation of the CBA
(Art. 261)
(2) interpretation or enforcement of company
personnel policies (Art. 261)
(3) gross violations of CBA provision
(flagrant/malicious refusal to comply with
the economic provisions of the CBA (Art. 261)
(4) all other labor disputes including ULP and
bargaining deadlock, if the parties agree
(Art. 262)
POWERS OF THE VOLUNTARY ARBITRATORS
(1) hold hearings
(2) receive evidence
(3) take whatever action is necessary to resolve
the issue or issues subject of dispute,
including efforts to effect a voluntary
settlement between parties
(4) determine attendance of any third parties
(5) determine exclusion of any witness
(6) issue writ of execution for sheriff of NLRC or
regular courts to execute the final decision,
order, or award (Art 262-A)
FINALITY OF THE FINAL DECISION, ORDER, OR
AWARD
Art 268-A. Award or decision of the voluntary
arbitrator shall be final and executory after 10
days from receipt of the copy of the award or
decision by the parties.
NO MOTION FOR RECONSIDERATION
The voluntary arbitrator lost jurisdiction over the
case submitted to him the moment he rendered
his decision. Therefore, he could no longer
entertain a motion for reconsideration of the
decision for its reversal or modification.
(Solidbank v. BLR)
APPEAL
While there is an express mode of appeal from
the decision of a labor arbiter, Republic Act No.
6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
Assuming arguendo that the voluntary
arbitrator or the panel of voluntary arbitrators
may not strictly be considered as a quasijudicial agency, board or commission, still both
he and the panel are comprehended within the
concept of a "quasi-judicial instrumentality." A

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fortiori, the decision or award of the voluntary

arbitrator or panel of arbitrators should likewise
be appealable to the Court of Appeals. (Luzon
Development Bank v. Assoc of Luzon Devt
Employees, 1995)
COSTS
The parties to a Collective Bargaining
Agreement
shall
provide
therein
a
proportionate sharing scheme on the cost of the
voluntary arbitration including the Voluntary
Arbitrators fee. (Art. 262-B)
NO STRIKE-NO LOCKOUT CLAUSE
A "no strike, no lock-out" provision in the CBA is
a valid stipulation although the clause may be
invoked by an employer only when the strike is
economic in nature or one which is conducted to
force wage or other concessions from the
employer that are not mandated to be granted
by the law itself. It would be inapplicable to
prevent a strike which is grounded on unfair
labor practice. (Panay Electric Co. v. NLRC,
1995;
Malayang
Samahan
ng
mga
Manggagawa sa Greenfield v. Ramos, 2000)
LABOR MANAGEMENT COUNCIL
Art. 255. Any provision of law to the contrary
notwithstanding, workers shall have the right,
subject to such rules and regulations as the
Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the establishment
where they are employed insofar as said
processes will directly affect their rights,
benefits and welfare. For this purpose, workers
and employers may form labor-management
councils: Provided, That the representatives of
the workers in such labor-management councils
shall be elected by at least the majority of all
employees in said establishment.
DURATION
Art. 259-A. Any Collective Bargaining
Agreement that the parties may enter into shall,
insofar as the representation aspect is
concerned, be for a term of five (5) years. No
petition questioning the majority status of the
incumbent bargaining agent shall be
entertained and no certification election shall be
conducted by the Department of Labor and

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Employment outside of the sixty-day period

immediately before the date of expiry of such
five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution.
Any agreement on such other provisions of the
Collective Bargaining Agreement entered into
within six (6) months from the date of expiry of
the term of such other provisions as fixed in
such Collective Bargaining Agreement, shall
retroact to the day immediately following such
date. If any such agreement is entered into
beyond six months, the parties shall agree on
the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the Collective
Bargaining Agreement, the parties may exercise
their rights under this Code.

(Manila Electric Company vs. Quisumbing,

1999)

CBA EFFECTIVITY
If it is the first ever CBA, the effectivity date is
whatever date the parties agree on.

UNION SECURITY

If it is renegotiated CBA, the effectivity date

depends upon the duration of conclusion.
(1) If it is concluded within 6 months from the
expiry date, the new CBA will retroact to the
date following the expiry date (Illustration:
expiry date: December 13; effectivity date:
December 14).
(2) If the renegotiated CBA is concluded beyond
6 months from the expiry date, the matter of
retroaction and effectivity is left with the
parties.
HOLD OVER PRINCIPLE
Art. 259. In the absence of a new CBA, the
parties must maintain the status quo and must
continue in full force and effect the terms and
conditions of the existing agreement during the
sixty (60) day period and/or until a new
agreement is reached.
ARBITRATED CBA
In the absence of an agreement between the
parties, an arbitrated CBA takes on the nature
of any judicial or quasi-judicial award. It
operates and may be executed only
prospectively
unless
there
are
legal
justifications for its retroactive application.

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CBA AND 3RD PARTY APPLICABILITY

General Rule: An innocent transferee of a
business establishment has no liability to the
employees of the transferor to continue
employing them. Nor is the transferee liable for
past unfair labor practices of the previous
owner.
Exception:
(1) When the liability therefore is assumed by
the new employer under the contract of sale,
or
(2) When liability arises because of the new
owner's participation in thwarting or
defeating the rights of the employees.

Art. 254 (e) Nothing in this Code or in any other

law shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees who are
already members of another union at the time
of the signing of the collective bargaining
agreement.
LIMITATION
Art. 254 (e) Employees who are already
members of another union at the time of the
signing of the collective bargaining agreement
may not be compelled by any union security
clause to join any union.
UNION SECURITY CLAUSES; CLOSED SHOP,
UNION
SHOP,
MAINTENANCE
OF
MEMBERSHIP SHOP, ETC.
CLOSED SHOP
Only union members can be hired by the
company and they must remain as members to
retain employment in the company. (Azucena)
Maintenance of membership shop
No employee is compelled to join the union, but
all present or future must, as a condition of
employment, remain in good standing in the
union. (Azucena)

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UNION SHOP
Non-members may be hired, but to retain
employment, they must become union
members after a certain period. The
requirement applies to present and future
employees. (Azucena)
MODIFIED UNION SHOP
Employees who are not union members at the
time of signing the contract need not join the
union, but all hired workers thereafter must join.
(Azucena)
AGENCY SHOP
An agreement whereby employees must either
join the union or pay to the union as exclusive
bargaining agent a sum equal to that paid by
the members. (Azucena)
UNFAIR LABOR PRACTICE IN COLLECTIVE
BARGAINING
Both employers and labor organizations can
commit acts of unfair labor practices in
collective bargaining. However, the labor
organization must be the representative of the
employees before any act it does may be
considered as a violation of the duty to bargain
collectively. (Art. 248 (g) and Art. 249 (c)]
(1) Bargaining in bad faith
(2) Refusal to bargain
(3) Individual bargaining
(4) Blue sky bargaining
(5) Surface bargaining
UNFAIR LABOR PRACTICE (ULP)
Unfair labor practice refers to acts that violate
the workers right to organize. The prohibited
acts are related to the workers right to selforganization and to the observance of a CBA.
Without that element, the acts, no matter how
unfair, are not unfair labor practices. The only
exception is Art. 248 (f) [i.e. to dismiss,
discharge or otherwise prejudice or discriminate
against an employee for having given or being
about to give testimony under this Code].
(Philcom Employees Union v. Phil. Global,
2006)
ULP of employers
(1) Interference/ Restraint/ Coercion
(2) Yellow dog contracts
(3) Contracting out

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General rule: contracting out is not ULP

Exception:
(a) contracted-out services or functions are
performed by union members AND
(b) contracting out will interfere with,
restrain, or coerce employees in the
exercise of their right to self-organization.
[Art. 248 (c)]
Company unionMeans any labor organization
whose formation, function or administration has
been assisted by any act defined as unfair labor
practice by this Code. (Art. 212[i])
(4) Discrimination Encourage/Discourage
Unionism
General rule: it is ULP to discriminate in
regard to wages, hours of work and other
terms and conditions of employment in order
to encourage or discourage membership in
any labor organization.
Exception (union security clause):
Nothing in this Code or in any other law shall
stop the parties from requiring membership
in a recognized collective bargaining agent
as a condition for employment.
Exception to exception: Those employees
who are already members of another union
at the time of the signing of the collective
bargaining agreement. (Art. 254 [e])
(5) Testimony
Art. 254 (f) It is an act of ULP by an employer
to dismiss, discharge or otherwise prejudice
or discriminate against an employee for
having given or being about to give
testimony under this Code.
(6) Violate duty to bargain collectively
(7) Payment of negotiation or attorney's fees
Sweetheart contracts
Sweetheart contracts are favorable both to
the union and the employer at the expense
of the employees. The settlement of
bargaining issues must be made by fair
bargaining in good faith, and not through
the payment of negotiation or attorney's fees
which will ultimately lead to sweetheart
contracts.
(8) To violate a collective bargaining agreement
Flagrant and/or malicious refusal required
Violations
of
collective
bargaining
agreements, except flagrant and/or
malicious refusal to comply with its
economic provisions, shall not be considered

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unfair labor practice and shall not be

strikeable. (IRR)
Note: The list in Art. 254 LC is not
exhaustive. Other acts which are analogous
to those enumerated can be ULP.
ULP of labor organizations
(1) Restraint, or coercion
Interfere is not included in Art. 249 simply
because any act of a labor organization
amounts to interference to the right of selforganization.
(2) Discrimination
Encourage/Discourage
Unionism
General rule: it is ULP for a labor
organization to cause an employer to
discriminate against an employee
Exception: provisions of a valid union security
clause and other company policies
applicable to all employees.
(3) Violate duty to bargain or the CBA
(4) Exaction (Featherbedding)
Featherbedding or make-work by the union
is the practice of the union asking (exacting)
for money or other things of value from the
employer in return for services which are not
performed or are not to be performed.
(5) Asking or accepting negotiation and other
attorney's fees
(6) Violate a collective bargaining agreement
Flagrant and/or malicious refusal required

RIGHT
TO
PEACEFUL
CONCERTED ACTIVITIES
CONSTITUTIONAL BASIS
The state shall guarantee the rights of all
workers to xxx peaceful concerted activities,
including the right to strike in accordance with
law. (Art. XIII Section 3)
Right to self-organization includes the right
to engage in lawful concerted activities and
may not be abridged
Art. 252. It shall be unlawful for any person to
restrain, coerce, discriminate against or unduly
interfere with employees and workers in their
exercise of the right to self-organization. Such
right shall include the right to form, join, or
assist labor organizations for the purpose of

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collective bargaining through representatives of

their own choosing and to engage in lawful
concerted activities for the same purpose or for
their mutual aid and protection, subject to the
provisions of Article 264 of this Code.

FORMS OF CONCERTED ACTIVITIES

(a) Strike
(b) Picketing

Employer's economic weapon: Lockout

STRIKE
Art. 218 (o). A strike is any temporary stoppage
of work by the concerted action of employees as
a result of an industrial or labor dispute.
PAYMENT OF WAGES DURING LAWFUL
STRIKES
General rule: Striking employees are not entitled
to the payment of wages for un-worked days
during the period of the strike pursuant to the
no work-no pay principle.
Exception: Agreement to the contrary.
REINSTATEMENT AFTER A LAWFUL STRIKE
When strikers abandon the strike and apply for
reinstatement despite the existence of valid
grounds but the employer either:
(a) refuses to reinstate them or
(b) imposes upon their reinstatement new
conditions then the employer commits an
act of ULP.
Art. 269 (b). Workers shall have the right to
engage in concerted activities for purposes of
collective bargaining or for their mutual benefit
and protection. The right of legitimate labor
organizations to strike and picket and of
employers to lockout, consistent with the
national interest, shall continue to be
recognized and respected. However, no labor
union may strike and no employer may declare
a lockout on grounds involving inter-union and
intra-union disputes.
The strikers who refuse to accept the new
conditions and are consequently refused
reinstatement are entitled to the losses of pay
they may have suffered by reason of the

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employers discriminatory acts from the time

they were refused reinstatement.
FORMS OF STRIKES
As to legality
Legal strike one called for a valid purpose and
conducted through means allowed by law.
Illegal strike one staged for a purpose not
recognized by law, or if for a valid purpose,
conducted through means not sanctioned by
law.
As to grounds
Economic strike one staged by workers to
force wage or other economic concessions from
the employer which he is not required by law to
grant (Consolidated Labor Association of the
Phil. v. Marsman and Company 1964)
ULP strike called against a company's unfair
labor practice to force the employer to desist
from committing such practices.
As to how committed
Slowdown strike one by which workers,
without a complete stoppage of work, retard
production or their performance of duties and
functions to compel management to grant their
demands.
Wild-cat strike one declared and staged
without filing the required notice of strike and
without the majority approval of the recognized
bargaining agent.
Sit-down strike one wherein workers take over
possession of the property of such business to
cease production and to refuse access to
owners.
Sympathetic strike one in which the striking
workers have no demands of their own, but
strike to make common cause with other strikers
in other establishments.
Strike cannot be converted to a lockout by a
return to work offer
A strike cannot be converted into a pure and
simple lockout by the mere expedient filing
before the trial court a notice of offer to return
to work during the pendency of the labor
dispute between the union and the employer.
(Rizal Cement Workers Union v. CIR, 1962)

PICKETING

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Art 269 (b). The right of legitimate labor

organizations to strike and picket and of
employers to lockout, consistent with the
national interest, shall continue to be
recognized and respected.
Picketing is the right of workers to peacefully
march to and fro before an establishment
involved in a labor dispute generally
accompanied by the carrying and display of
signs, placards and banners intended to inform
the public about the dispute. (NCMB Manual,
Sec. 1)

WHO MAY DECLARE A STRIKE OR

LOCKOUT?
Who may declare a strike
(Book V, Rule XXII, Sec. 6)
(1) certified or duly recognized bargaining
representative
(2) any legitimate labor organization in the
absence of #1, but only on grounds of ULP
Who may declare a lockout (Book V, Rule XXII,
Sec. 6) - employer

REQUISITES FOR A VALID STRIKE

SUBSTANTIAL REQUIREMENTS/GROUNDS
(Art. 263 [c])
A strike or lockout may be declared in cases
of:
(1) Bargaining deadlocks
(2) ULP
When no lawful strike can be declared
(1) Ground is an inter-union or intra-union
dispute
(2) No notice of strike
(3) No lock-out vote obtained and reported to
the NCMB
(4) After assumption or certification by the
Secretary of Labor
PROCEDURAL REQUIREMENTS
(1) Effort to bargain
Art. 270 (a). No labor organization or employer
shall declare a strike or lockout without first
having bargained collectively in accordance with
Title VII of this Book.
(2) Filing and service of notice of strike
Bargaining deadlocks

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Art. 269(c). The duly certified or recognized

bargaining agent may file a notice of strike or
the employer may file a notice of lockout
with the Department at least 30 days before
the intended date thereof.
Unfair labor practice; union busting
Art. 269 (c). In cases of unfair labor practice,
the period to file notice of strike shall be 15
days. However, in cases of union busting
(dismissal of duly elected union officers from
employment), the cooling period shall not
apply.

CONTENTS OF NOTICE OF STRIKE

(Book V Rule XXII Sec. 8)

(1) Names and addresses of the employer and
the union involved
(2) Nature of the industry to which the employer
belongs
(3) Number of union members and of workers in
the bargaining unit
(4) Such other relevant data as may facilitate
the settlement of the dispute.

ADDITIONAL REQUIREMENTS

In cases of bargaining deadlocks:

(1) Statement of Unresolved issues in the
bargaining negotiations
(2) Written Proposals of the union
(3) Counterproposals of the employer
(4) Proof of a request for conference to settle
the differences.
In cases of ULP:
(1) Statement of Acts complained of
(2) Efforts taken to resolve the dispute amicably.
Action on notice
(Book V Rule XXII Sec. 9)
Upon receipt of a valid notice of strike or
lockout, the NCMB, through its ConciliatorMediators, shall call the parties to a
conference the soonest possible time in
order to actively assist them to explore all
possibilities for amicable settlement.
The Conciliator-Mediator may suggest/offer
proposals as an alternative avenue for the
resolution of their disagreement/conflict
which may not necessarily bind the parties.

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If conciliation/mediation fails, the parties

shall be encouraged to submit their dispute
for voluntary arbitration.
(3) Observance of cooling-off periods
Cooling off periods
(a) bargaining deadlock 30 days
(b) ULP but not union busting 15 days
(c) ULP and union busting no cooling-off
period
Art. 269 (e). During the cooling-off period, it
shall be the duty of the Ministry to exert all
efforts at mediation and conciliation to effect
a voluntary settlement. Should the dispute
remain unsettled until the lapse of the
requisite number of days from the
mandatory filing of the notice, the labor
union may strike or the employer may
declare a lockout.
(4) Strike vote (Art. 263 (f))
Requirements for a declaration of a strike in a
strike vote
(a) approval by a majority of the total union
membership in the ABU
(b) approval is obtained by secret ballot in a
meeting/referendum called for the
purpose
(5) Strike Vote Report (Art. 263(f))
In every case, the union or the employer shall
furnish the Department the results of the
voting at least 7 days before the intended
strike or lockout, subject to the cooling-off
period herein provided.
(6) Observance of the waiting period
The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management to
take the appropriate remedy in case the
strike or lockout vote report is false or
inaccurate. (National Federation of Sugar
Workers v. Ovejera, 1982)

REQUISITES FOR A VALID LOCKOUT

Lockout by the employer

Art. 218 (p). Lockout is the temporary refusal of
an employer to furnish work as a result of an
industrial or labor dispute.

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No lockout based on intra or inter union

disputes
Art. 269 (b). No labor union may strike and no
employer may declare a lockout on grounds
involving inter-union and intra-union disputes.
GROUNDS
Similar to a strike, the proper grounds for a
lockout are
(1) bargaining deadlock
(2) ULP by labor organizations
REQUISITES
(1) Effort to bargain
Art. 270 (a). No labor organization or employer
shall declare a strike or lockout without first
having bargained collectively in accordance with
Title VII of this Book.
(2) Filing and service of notice of lockout
Bargaining deadlock
Art. 269 (c). The notice of lockout may be
filed by the employer at least 30 days before
the intended date thereof.
ULP
Art. 269 (c). In cases of unfair labor practice,
the period of notice shall be 15 days.
CONTENTS OF NOTICE
(1) Names and addresses of the employer and
the union involved
(2) Nature of the industry to which the employer
belongs
(3) Number of union members and of workers in
the bargaining unit
(4) Such other relevant data as may facilitate
the settlement of the dispute.
ADDITIONAL REQUIREMENTS
In cases of bargaining deadlocks
(1) Statement of unresolved issues in the
bargaining negotiations
(2) Written proposals of the union
(3) Counterproposals of the employer
(4) Proof of a request for conference to settle
the differences.

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In cases of ULP
(1) Statement of acts complained of
(2) Efforts taken to resolve the dispute amicably.
ACTION ON NOTICE
Upon receipt of a valid notice of strike or
lockout, the NCMB, through its ConciliatorMediators, shall call the parties to a conference
the soonest possible time in order to actively
assist them to explore all possibilities for
amicable settlement.
The Conciliator-Mediator may suggest/offer
proposals as an alternative avenue for the
resolution of their disagreement/conflict which
may not necessarily bind the parties.
If conciliation/mediation fails, the parties shall
be encouraged to submit their dispute for
voluntary arbitration. (Book V Rule XXII Sec. 9)
(3) Observance of cooling-off periods
Lockout cooling-off periods:
based on bargaining deadlock 30 days
based on ULP 15 days
(4) Lockout vote
Art. 269 (f). A decision to declare a lockout
must be approved by a majority of the board
of directors of the corporation or association
or of the partners in a partnership, obtained
by secret ballot in a meeting called for that
purpose.
The decision shall be valid for the duration of
the dispute based on substantially the same
grounds considered when the strike or
lockout vote was taken.
(5) Report of lockout vote
Art. 269 (f). In every case, the union or the
employer shall furnish the Ministry the
results of the voting at least seven days
before the intended strike or lockout, subject
to the cooling-off period herein provided.
(6) Observance of waiting period (7 days)
Effect of Illegal Lockout

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Art. 270 (a), par. 3, 1st sentence. Any worker

whose employment has been terminated as
a consequence of any unlawful lockout shall
be entitled to reinstatement with full
backwages.

REQUISITES
PICKETING

FOR

LAWFUL

Prohibited activities in picketing (Art. 264)

(1) By any person. No person shall obstruct,
impede, or interfere with, by force, violence,
coercion, threats or intimidation, any
peaceful picketing by employees during any
labor controversy or in the exercise of the
right to self-organization or collective
bargaining, or shall aid or abet such
obstruction or interference. [Art. 264 (b)]
(2) By police force. The police force shall keep
out of the picket lines unless actual violence
or other criminal acts occur therein:
Provided, That nothing herein shall be
interpreted to prevent any public officer from
taking any measure necessary to maintain
peace and order, protect life and property,
and/or enforce the law and legal order. [Art.
264 (d)]
(3) By person engaged in picketing. No person
engaged in picketing shall commit any act of
violence, coercion or intimidation or obstruct
the free ingress to or egress from the
employers premises for lawful purposes, or
obstruct public thoroughfares. [Art. 264 (e)]
Picketing as part of freedom of
speech/expression; limitations
General rule: picketing enjoys constitutional
protection as part of freedom of speech and/or
expression.
Exceptions/limitations:
(1) when picketing is coercive rather than
persuasive (Security Bank Employees Union
v. Security Bank)
(2) when picketing is achieved through illegal
means (Mortera v. CIR)
(3) courts
may
confine
the
communication/demonstration
to
the
parties to the labor dispute (PCIB v.
Philnabank Employees Association)
(4) Innocent bystander rule. An "innocent

bystander," who seeks to enjoin a labor

strike, must satisfy the court that aside

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from the grounds specified in Rule 58 of

the Rules of Court, it is entirely different
from, without any connection whatsoever
to, either party to the dispute and, its
interests are totally foreign to the context
thereof. (MSF Tire and Rubber Inc. v. CA,
1999)

Peaceful picketing is legal even in the

absence of employer-employee relationship
Picketing, peacefully carried out, is not illegal
even in the absence of employer-employee
relationship, for peaceful picketing is a part of
the freedom of speech guaranteed by the
Constitution. (De Leon v. National Labor Union,
1957)

ASSUMPTION OF JURISDICTION BY
THE
DOLE
SECRETARY
OR
CERTIFICATION OF THE LABOR
DISPUTE TO THE NLRC FOR
COMPULSORY ARBITRATION

Conditions for the assumption/certification

powers
(1) labor dispute in an industry indispensable to
the national interest
(2) such dispute is causing or is likely to cause a
strike or lockout
Powers of the Secretary of Labor (alternative)
(1) Assumption of jurisdiction. The Secretary of
Labor will decide the labor dispute
himself/herself.
(2) Certification for compulsory arbitration. The
Secretary of Labor will certify the labor
dispute to the NLRC for compulsory
arbitration.
Powers of the President (not precluded by
the powers of the Secretary of Labor)
(1) determine the industries indispensable to
the national interest
(2) assume jurisdiction over any such labor
dispute to settle or terminate such dispute
WHO
DETERMINES
INDUSTRIES
INDISPENSABLE TO THE NATIONAL
INTEREST
Art. 263 (g), last paragraph. It is in the discretion
of the Secretary of Labor to determine which

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industries are indispensable to the national

interest. However, the President may determine
such industries himself:
The foregoing notwithstanding, the President of
the Philippines shall not be precluded from
determining the industries that, in his opinion,
are indispensable to the national interest, and
from intervening at any time and assuming
jurisdiction over any such labor dispute in order
to settle or terminate the same.

NATURE OF ASSUMPTION ORDER

OR CERTIFICATION ORDER
(1) Automatic injunction
(2) Return-to-work and admission
(3) Immediately executory

(1) Automatic injunction of intended of

impending strike or lockout
Art. 269 (g), 2nd sentence. Such assumption
or certification shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in
the assumption or certification order.
(2) Return-to-work and readmission if strike or
lockout has already taken place
Art. 269 (g), 3rd sentence. If one has already
taken place at the time of assumption or
certification, all striking or locked out
employees shall immediately return-to-work
and the employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before
the strike or lockout.
(3) Immediately executory
The assumption and certification orders are
executory in character and must be strictly
complied with by the parties. (Allied Banking
v. NLRC, 1996)
Strikes and lockouts in hospitals, clinics and
similar medical institutions
Art. 269 (g). It shall be the duty of the
striking union or locking-out employer to
provide and maintain an effective skeletal
workforce of medical and other health
personnel, whose movement and services
shall be unhampered and unrestricted, as

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are necessary to insure the proper and

adequate protection of the life and health of
its patients, most especially emergency
cases, for the duration of the strike or
lockout.
In such cases, therefore, the Secretary of
Labor and Employment may immediately
assume, within twenty four (24) hours from
knowledge of the occurrence of such a strike
or lockout, jurisdiction over the same or
certify it to the Commission for compulsory
arbitration.

EFFECT
OF
DEFIANCE
OF
ASSUMPTION OR CERTIFICATION
ORDERS
Art. 270 (a). No strike or lockout shall be
declared after assumption of jurisdiction by the
President or the Minister or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency of
cases involving the same grounds for the strike
or lockout.

SUMMARY
OF
LIABILITIES
OF
PARTICIPANTS
IN
AN
ILLEGAL
STRIKE/LOCKOUT (ART. 264)
Employer in an illegal lockout workers
terminated due to illegal lockout shall be
entitled to reinstatement plus full
backwages.
Union officers who participated in illegal
strike deemed to have lost their
employment
Union officers who participated in illegal acts
during a lawful strike deemed to have lost
their employment.
Ordinary workers deemed to have lost
their employment only if they participated in
illegal acts.

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STRICTER
PENALTIES
FOR
NONCOMPLIANCE
WITH
ORDERS,
PROHIBITIONS, AND/OR INJUNCTIONS
ISSUED BY THE SECRETARY OF LABOR IN
STRIKES INVOLVING HOSPITALS, CLINICS,
& SIMILAR MEDICAL INSTITUTIONS
(1) immediate disciplinary action against both
union and employer
(2) dismissal/loss of employment for members
of the striking union
(3) payment by employer of backwages,
damages, and other affirmative relief
(4) criminal prosecution against either or both
the union and employer

who knowingly participates in the commission

of illegal acts during a strike may be declared to
have lost his employment status.

ILLEGAL STRIKE

Exception: When the worker participated in

illegal acts during the strike.

Reasons for being illegal

(1) Prohibited by law
(2) Improper grounds
(3) Noncompliance
with
procedural
requirements
(4) Unlawful means and methods
(5) Violation of injunction order
(6) No strike/lockout provisions in the CBA
Purpose and means test
There must be concurrence between the validity
of the purpose of the strike and the means of
conducting it.
To be valid, a strike must be pursued within legal
bounds.
The right to strike as a means for the attainment
of social justice is never meant to oppress or
destroy the employer. The law provides limits
for its exercise. Among such limits are the
prohibited activities under Art. 264, particularly
paragraph (e), which states that no person
engaged in picketing shall:
commit any act of violence, coercion, or
intimidation or
obstruct the free ingress to or egress from
the employer's premises for lawful purposes
or
obstruct public thoroughfares. (Association
of Independent Unions in the Philippines
(AIUP), et. al. v NLRC, 1999)
LIABILITY OF UNION OFFICERS
Any union officer who knowingly participates in
an illegal strike and any worker or union officer

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Mere participation in an illegal strike by a union

officer is sufficient ground to terminate his
employment. In case of a lawful strike, the union
officer must commit illegal acts during a strike
for him to be terminated.
LIABILITY OF ORDINARY WORKERS
General rule: Participation by a worker in a
lawful strike is not ground for termination of his
employment.

When the strike is or becomes illegal, the

workers who participate in it are not deemed to
have lost their employment status by express
omission in the second sentence of the third
paragraph of Art. 264. Only the union officers
are deemed to have lost their employment
status.
LIABILITY OF EMPLOYER
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages.
WAIVER OF ILLEGALITY OF STRIKE
The defense of illegality will be considered
waived if after the illegal strike, the employer
voluntarily reinstates and accepts the striking
workers back. However, this is only applicable
for striker who signified their intent to come
back and were reinstated.

INJUNCTIONS
General rule: injunction prohibited
Art. 260. No temporary or permanent injunction
or restraining order in any case involving or
growing out of labor disputes shall be issued by
any court or other entity, except as otherwise
provided in Articles 218 and 264 of this Code.
REQUISITES FOR LABOR INJUNCTIONS
Requisites for injunction to issue
(Art. 224(e) Powers of the NLRC)

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(1) actual or threatened commission of a

prohibited or unlawful act OR requirement of
performance of a particular act in a labor
dispute
(2) if unrestrained or unperformed, the act will
cause grave or irreparable damage to any
party OR render ineffectual any decision in
favor of such party
Prohibited activities (Art. 270)
(1) No labor organization or employer shall
declare a strike or lockout without first
having bargained collectively in accordance
with Title VII of this Book or without first
having filed the notice required in the
preceding Article or without the necessary
strike or lockout vote first having been
obtained and reported to the Ministry.
No strike or lockout shall be declared after
assumption of jurisdiction by the President or
the Minister or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency
of cases involving the same grounds for the
strike or lockout.
Any worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages. Any
union officer who knowingly participates in
an illegal strike and any worker or union
officer who knowingly participates in the
commission of illegal acts during a strike
may be declared to have lost his
employment status: Provided, That mere
participation of a worker in a lawful strike
shall not constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the employer
during such lawful strike.
(2) No person shall obstruct, impede, or
interfere with, by force, violence, coercion,
threats or intimidation, any peaceful
picketing by employees during any labor
controversy or in the exercise of the right to
self-organization or collective bargaining, or
shall aid or abet such obstruction or
interference.

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(3) No employer shall use or employ any strikebreaker, nor shall any person be employed
as a strike-breaker.
(4) No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall bring
in, introduce or escort in any manner, any
individual who seeks to replace strikers in
entering or leaving the premises of a strike
area, or work in place of the strikers. The
police force shall keep out of the picket lines
unless actual violence or other criminal acts
occur therein: Provided, That nothing herein
shall be interpreted to prevent any public
officer from taking any measure necessary to
maintain peace and order, protect life and
property, and/or enforce the law and legal
order.
(5) No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress to or
egress from the employers premises for
lawful purposes, or obstruct public
thoroughfares.
INNOCENT BYSTANDER RULE
An innocent by-stander is entitled to injunction
if it is affected by the activities of a picketing
union where no connection or interest exists
between the union and the innocent by-stander.

Procedure & Jurisdiction

LABOR ARBITER
JURISDICTION

Except as otherwise provided under the Code

the Labor Arbiters shall original and exclusive
jurisdiction to hear and decide:
(1) Unfair labor practices cases;
(2) Termination disputes;
(3) If accompanied with a claim for
reinstatement, those cases that workers
may file involving wages, rates of pay,
hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations;

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(5) Cases arising from any violation of Art. 264

of this Code, including questions involving
the legality of strikes and lockouts;
(6) Except
claims
for
Employees
Compensation, Social Security, Medicare
and maternity benefits, all other claims,
arising from employer-employee relations,
including those of persons in domestic or
household service, involving an amount
exceeding five thousand pesos (P5,000)
regardless of whether accompanied with a
claim for reinstatement. (Art. 217)
(7) Money claims arising out of employeremployee relationship or by virtue of any
law or contract, involving claims for actual,
moral, exemplary an other forms of
damages, as well as employment
termination of OFWs;
(8) Wage distortion disputes in unorganized
establishments not voluntarily settled by
the parties. (Art. 124)
(9) Enforcement of compromise agreements
when there is non-compliance by any of the
parties. (Art. 227)
(10) Other cases as may be provided by law.
Exclusive and Original Jurisdiction subject
to Articles 261 and 262.
A case under Art 217 may be lodged instead
with a voluntary arbitrator. The policy of the law
is to give primacy to voluntary modes of settling
dispute.
VERSUS REGIONAL DIRECTOR
Jurisdiction on Money Claims (Labor Arbiter vs.
Regional Director)
A money claim arising from employer-employee
relations, except SSS, ECC/Medicare claims, is
within the jurisdiction of a labor arbiter if:
(1) The claim, regardless of amount, is
accompanied with a claim of reinstatement;
or
(2) The claim exceeds P5,000, whether or not
there is a claim for reinstatement.
The Regional Director has jurisdiction if:
(1) the money claim is not accompanied by
reinstatement AND
(2) the claim does not exceed P5,000
Notes:

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o The money claim must arise from law or

contracts other than CBA.
o Money arising from an implementation of
the CBA Voluntary Arbitrator or Panel of
Voluntary Arbitrators have jurisdiction
o Money claims which does not arise from EREE relations Regular Courts have
jurisdiction.
o Nature of Proceeding: Non-litigious. The
Labor Arbiter is not bound by the technical
rules of procedure.
o The Labor Arbiter shall use every and all
reasonable means to ascertain the facts in
each speedily and objectively. (Art. 221)
o Employer-employee relationship is a
jurisdictional requisite, absent of which, the
NLRC has no jurisdiction to hear and decide
the case. (Hawaiian-Philippine Company v.
Gulmatico)
o Venue: Regional Arbitration Branch (RAB)
having jurisdiction over the workplace of the
complainant or petitioner.
o Workplace place or locality where the
employee is regularly assigned at the time
the cause of action arose.
o In the case of field employees, ambulant or
itinerant workers, their workplace is (a)
where they are regularly assigned or (b)
where they are supposed to regularly receive
their salaries and wages or work instructions
from, and report the results of their
assignment to their employers.

REINSTATEMENT PENDING APPEAL

An order for reinstatement entitles an employee

to receive his accrued backwages from the
moment the reinstatement order was issued up
to the date when the same was reversed by a
higher court without fear of refunding what he
had received. (Garcia v. Philippine Airlines, Inc.,
G.R. No.164856, 2009)

NATIONAL LABOR RELATIONS

COMMISSION (NLRC)
JURISDICTION

NLRC divisions
(1) Original Jurisdiction: Over petitions for
injunction or temporary restraining order
under Art. 218 (e).

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(2) Exclusive Appellate Jurisdiction: over all

cases decided by labor arbiters (Art 217[b])
and the DOLE regional directors under Art
129.
Period of Appeal (2005 NLRC Rules of
Procedure)
From Labor Arbiter to NLRC: Decisions and
resolutions of the Labor Arbiter shall be final
and executory unless appealed to the
Commission by any or both parties within (10)
calendar days from receipt thereof
From Regional Director to NLRC pursuant to
Art. 129: Decisions and resolutions of the
Regional Director shall be final and executory
unless appealed within 5 days from receipt
thereof.
Note: If the 5th or 10th day falls on a Saturday,
Sunday, or a holiday, the last day shall be the
next working day.
Grounds of Appeal
(1) If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter or
Regional Director;
(2) If the decision, resolution or order was
secured through fraud or coercion, including
graft and corruption;
(3) If made purely on questions of law; and/or
(4) If serious errors in the findings of fact are
raised which, if not corrected, would cause
grave or irreparable injury to the appellant
Appeals must be verified and certified against
forum-shopping by the parties-in-interest
themselves. (Antonio B. Salenga, et al. v. CA,
2012)

EFFECT OF NLRC REVERSAL OF

LABOR ARBITERS ORDER OF
REINSTATEMENT

Even if the order of reinstatement of the Labor

Arbiter is reversed on appeal, it is obligatory on
the part of the employer to reinstate and pay
the wages of the dismissed employee during the
period of appeal until reversal by the higher
court.

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On the other hand, if the employee has been

reinstated during the appeal period and such
reinstatement order is reversed with finality, the
employee is not required to reimburse whatever
salary he received for he is entitled to such,
more so if he actually rendered services during
the period. (Garcia v. Philippine Airlines, Inc.,
G.R. No.164856, 2009)

REMEDIES

Requisites for Perfection of Appeal to the Court

of Appeals (Rule 43)
(1) The appeal shall be:
o Filed within the reglementary period;
o Verified by the appellant himself in
accordance with Section 4, Rule 7 of the
Rules of Court;
o In the form of a memorandum of appeal
which shall state the grounds relied upon
and the arguments in support thereof, the
relief prayed for, and with a statement of
the date the appellant received the
appealed decision, resolution or order;
o In three (3) legibly typewritten or printed
copies; and
o Accompanied by (a) proof of payment of
the required appeal fee; (b) posting of a
cash or surety bond as provided in
Section 6 of the 2005 NLRC Rules, (c) a
certificate of non-forum shopping; and (d)
proof of service upon the other parties.
(2) A mere notice of appeal without complying
with the other requisites aforestated shall
not stop the running of the period for
perfecting an appeal.
(3) The appellee may file with the Regional
Arbitration Branch or Regional Office where
the appeal was filed, his answer or reply to
appellants memorandum of appeal, not
later than 10 calendar days from receipt
thereof. Failure on the part of the appellee
who was properly furnished with a copy of
the appeal to file his answer or reply within
the said period may be construed as a
waiver on his part to file the same.
(4) Subject to the provisions of Article 218 of the
Labor Code, once the appeal is perfected in
accordance with these Rules, the
Commission shall limit itself to reviewing
and deciding only the specific issues that
were elevated on appeal.

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CERTIFIED CASES
DEFINITION
Certified labor disputes are cases certified to the
Commission for compulsory arbitration under
Art. 263 (g) of the Labor Code. (Sec. 2, The 2011
NLRC Rules and Procedures)
When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in
an industry indispensable to the national
interest, the Secretary of Labor and
Employment may assume jurisdiction over the
dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such
assumption or certification shall have the effect
of automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. (Art. 263)
FUNCTION OF THE NLRC
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the NLRC
is not sitting as a judicial court but as an
administrative body charged with the duty to
implement the order of the Secretary. (Union of
Filipino Employees v. NLRC, 1990)
PROCEDURE IN CERTIFIED CASES
(1) When there is no need to conduct a
clarificatory hearing, the Commission shall
resolve all certified cases within 30 calendar
days from receipt by the assigned
Commissioner of the complete records,
which shall include the position papers of
the parties and the order of the SOLE
denying the motion for reconsideration of the
certification order, if any.
(2) Where a clarificatory hearing is needed, the
Commission shall, within 5 calendar days
from receipt of the records, issue a notice to
be served on the parties through the fastest
means available, requiring them to appear
and submit additional evidence, if any. All
certified cases shall be resolved by the
Commission within 60 calendar days from
receipt of the complete records by the
assigned Commissioner.
(3) No motion for extension or postponement
shall be entertained. (Sec. 5, 2011 NLRC
Rules and Procedures)

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Upon issuance of the entry of judgment, the

Commission motu proprio or upon motion by
the proper party, may cause the execution of the
judgment in the certified case. (Sec. 6, 2011
NLRC Rules and Procedures)

BUREAU OF LABOR RELATIONS

MED-ARBITERS
JURISDICTION (ORIGINAL & APPELLATE)
Art. 232. The Bureau of Labor Relations and the
Labor Relations Divisions in the regional offices
of the Department of Labor and Employment
shall have original and exclusive authority to
act, at their own initiative or upon request of
either or both parties, on all inter-union and
intra-union conflicts, and all disputes,
grievances or problems arising from or affecting
labor-management relations in all workplaces
whether agricultural or non-agricultural, except
those arising from the implementation or
interpretation
of
collective
bargaining
agreements which shall be the subject of
grievance
procedure
and/or
voluntary
arbitration.
The Bureau shall have fifteen (15) calendar days
to act on labor cases before it, subject to
extension by agreement of the parties.
APPELLATE JURISDICTION
(1) BLR has the power to review the decision of
the Regional Director
(2) Decisions rendered through its appellate
power are final and executory. Hence, the
remedy of the aggrieved party is to
seasonably avail of the special civil action of
certiorari under Rule 65 of the Rules of
Court.

NATIONAL CONCILIATION AND

MEDIATION BOARD
NATURE OF PROCEEDINGS

Conciliation and mediation is non-litigious/nonadversarial, less expensive, and expeditious.

Under this informal set-up, the parties find it
more expedient to fully ventilate their respective
positions without running around with legal
technicalities and, in the course thereof, afford

EXECUTION OF JUDGMENT

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them wider latitude of possible approaches to

the problem.

CONCILIATION VS. MEDIATION

Conciliation
A mild form of intervention by a neutral third
party, the Conciliator-Mediator, relying on his
persuasive expertise, takes an active role in
assisting parties by trying to keep disputants
talking, facilitating other procedural niceties,
carrying messages back and forth between the
parties, and generally being a good fellow who
tries to keep things calm and forward-looking in
a tense situation.
Mediation
A mild intervention by a neutral third party, the
Conciliator-Mediator, wherein the CM advises
the parties or offers solutions or alternatives to
the problems with the end in view of assisting
them towards voluntarily reaching their own
mutually acceptable settlement of the dispute.

PREVENTIVE MEDIATION

Preventive mediation case refers to the

potential or brewing labor dispute which is the
subject of a formal or informal request for
conciliation and mediation assistance sought by
either or both parties in order to remedy,
contain or prevent its degeneration into a full
blown dispute through amicable settlement.

DOLE REGIONAL DIRECTORS

JURISDICTION

Small money claims

Recovery of wages, simple money claims and
other benefits.
Upon complaint of any interested party, the
Regional Director of the Department of Labor
and Employment or any of the duly authorized
hearing officers of the Department is
empowered, through summary proceeding 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 an employee or person
employed in domestic or household service or
househelper under this Code, arising from
employer-employee relations: Provided, That

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such complaint does not include a claim for

reinstatement: Provided, further, That the
aggregate money claims of each employee or
househelper do not exceed five thousand pesos
(P5,000).
The Regional Director or hearing officer shall
decide or resolve the complaint within thirty
(30) calendar days from the date of the filing of
the same.
o Any sum thus recovered on behalf of any
employee or househelper pursuant to this
Article shall be held in a special deposit
account by, and shall be paid, on order of the
Secretary of Labor and Employment or the
Regional Director directly to the employee or
househelper concerned.
o Any such sum not paid to the employee or
househelper, because he cannot be located
after diligent and reasonable effort to locate
him within a period of three (3) years, shall
be held as a special fund of the Department
of Labor and Employment to be used
exclusively for the amelioration and benefit
of workers.
Xxx
The Secretary of Labor and Employment or
his duly authorized representative may
supervise the payment of unpaid wages and
other monetary claims and benefits,
including legal interest, found owing to any
employee or househelper under this Code.
(Art. 129)

DOLE SECRETARY
VISITORIAL
POWERS

&

ENFORCEMENT

Art. 128. The Secretary of Labor and

Employment
or
his
duly
authorized
representatives, including labor regulation
officers, shall have access to employers records
and premises at any time of the day or night
whenever work is being undertaken therein, and
the right to copy therefrom, to question any
employee and investigate any fact, condition or
matter which may be necessary to determine
violations or which may aid in the enforcement
of this Code and of any labor law, wage order or
rules and regulations issued pursuant thereto.

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Notwithstanding the provisions of Articles 129

and 217 of this Code to the contrary, and in
cases where the relationship of employeremployee still exists, the Secretary of Labor and
Employment
or
his
duly
authorized
representatives shall have the power to issue
compliance orders to give effect to the labor
standards provisions of this Code and other
labor legislation based on the findings of labor
employment and enforcement officers or
industrial safety engineers made in the course
of inspection. The Secretary or his duly
authorized representatives shall issue writs of
execution to the appropriate authority for the
enforcement of their orders, except in cases
where the employer contests the findings of the
labor employment and enforcement officer and
raises issues supported by documentary proofs
which were not considered in the course of
inspection.
Art. 37. The Secretary of Labor or his duly
authorized representatives may, at any time,
inspect the premises, books of accounts and
records of any person or entity covered by this
Title, require it to submit reports regularly on
prescribed forms, and act on violation of any
provisions of this Title.
Art. 280. The Secretary of Labor and
Employment
or
his
duly
authorized
representative is hereby empowered to inquire
into the financial activities of legitimate labor
organizations upon the filing of a complaint
under oath and duly supported by the written
consent of at least twenty percent (20%) of the
total membership of the labor organization
concerned and to examine their books of
accounts and other records to determine
compliance or non-compliance with the law and
to prosecute any violations of the law and the
union constitution and by-laws: Provided, That
such inquiry or examination shall not be
conducted during the sixty (60)-day freedom
period nor within the thirty (30) days
immediately preceding the date of election of
union officials.

effects of the termination pending resolution of

the dispute in the event of a prima facie finding
by the appropriate official of the Department of
Labor and Employment before whom such
dispute is pending that the termination may
cause a serious labor dispute or is in the
implementation of a mass lay-off.

POWER TO SUSPEND/EFFECTS OF
TERMINATION

SUBJECT MATTER OF GRIEVANCE

Article 283 (b). The Secretary of the Department

of Labor and Employment may suspend the

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ASSUMPTION OF JURISDICTION
Art. 269 (g). When in his opinion, there exist a
labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the
national interest, the SOLE may assume
jurisdiction over the dispute and decide it or
certify the same to the Commission for
compulsory arbitration.

APPELLATE JURISDICTION

(1) Orders issued by the duly authorized

representative of the SOLE under Art. 128
may be appealed to the latter.
(2) Denial of application for union registration or
cancellation of union registration originally
rendered by the BLR may be appealed to the
SOLE (if originally rendered by the Regional
Office, appeal should be made to the BLR)
(3) Decisions of the Med-Arbiter in certification
election cases are appealable to the SOLE
(decisions of med-arbiters in intra-union
disputes are appealable to the BLR) [Art.
259]

VOLUNTARY ARBITRATION POWERS

Art. 269 (h). Before or at any stage of the
compulsory arbitration process, the parties may
opt to submit their dispute to voluntary
arbitration.
Art. 269 (i). The Secretary of Labor and
Employment, xxx shall decide or resolve the
dispute xxx.

GRIEVANCE MACHINERY
VOLUNTARY ARBITRATION

&

Grievance is any question by either the ER or the

union regarding the interpretation or
application of the CBA or company personnel
policies or any claim by either party that the

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other party is violating any provisions of the CBA

or company personnel policies.
It is a complaint or dissatisfaction arising from
the interpretation or implementation of the CBA
and those arising from interpretation or
enforcement of personnel policies
Grievance machinery
It refers to the mechanism for the adjustment
and resolution of grievances. It is part of the
continuing process of collective bargaining.

VOLUNTARY ARBITRATOR
JURISDICTION
Exclusive and original jurisdiction over
grievances
The VA or panel of VAs shall have original and
exclusive jurisdiction to hear and decide all
unresolved grievances.
Violations of a CBA, except those which are
gross in character, shall no longer be treated as
ULP and shall be resolved as grievances under
the CBA.
Note: Gross violations of CBA shall mean
flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
Art. 267. The Commission, its Regional Offices
and the Regional Directors of the DOLE shall
not entertain disputes, grievances or matters
under the exclusive and original jurisdiction of
the Voluntary Arbitrator or panel of Voluntary
Arbitrators and shall immediately dispose and
refer the same to the grievance machinery or
Voluntary Arbitration provided in the Collective
Bargaining Agreement.
Other labor disputes
The VA or panel of VAs, upon agreement of the
parties, shall also hear and decide all other
labor disputes including ULP and bargaining
deadlocks. (Art. 268)
PROCEDURE (IRR, BOOK V, RULE XI)
Hearing
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion of
any witness from the proceedings shall be

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determined by the VA or panel of Vas. Hearing

may be adjourned for cause or upon agreement
by the parites.
Days to render an award/decision
Unless the parties agree otherwise, it shall be
mandatory for the VA or panel of Vas to render
an award or decision within 20 calendar days
from the date of submission of the dispute to
voluntary arbitration.
Form of award/decision
The award or decision of the VA or panel of Vas
must state in clear, concise and definite terms
the facts, the law and/contract upon which it is
based.
Finality
It shall be final and executory after 10 calendar
days from the receipt of the copy of the award or
decision by the parties.
Execution of award/decision
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the
absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for
any reason, may issue a writ of execution
requiring either the sheriff of the Commission or
regular courts or any public official whom the
parties may designate in the submission
agreement to execute the final decision, order
or award. (Art, 262-A, LC)
REMEDIES
Rule 43 Sec. 1, Rules of Court
The decision of a Voluntary Arbitrator or panel
of Voluntary Arbitrators is appealable by
ordinary appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of Appeals.

COURT OF APPEALS
RULE 65, RULES OF COURT

Section 1. Petition for certiorari. When any

tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
excess its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain,

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speedy, and adequate remedy in the ordinary

course of law, a person aggrieved thereby may
file a verified petition in the proper court,
alleging the facts with certainty and praying
that judgment be rendered annulling or
modifying the proceedings of such tribunal,
board or officer, and granting such incidental
reliefs as law and justice may require.
The petition shall be accompanied by a certified
true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and
documents relevant and pertinent thereto, and
a sworn certification of non-forum shopping as
provided in the third paragraph of section 3,
Rule 46. (1a)
Section 2. Petition for prohibition. When
the proceedings of any tribunal, corporation,
board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions,
are without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no
appeal or any other plain, speedy, and adequate
remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in
the proper court, alleging the facts with
certainty and praying that judgment be
rendered commanding the respondent to desist
from further proceedings in the action or matter
specified therein, or otherwise granting such
incidental reliefs as law and justice may require.
The petition shall likewise be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of section 3, Rule 46. (2a)
Section 3. Petition for mandamus. When
any tribunal, corporation, board, officer or
person unlawfully neglects the performance of
an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and
enjoyment of a right or office to which such
other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary
course of law, the person aggrieved thereby may

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file a verified petition in the proper court,

alleging the facts with certainty and praying
that judgment be rendered commanding the
respondent, immediately or at some other time
to be specified by the court, to do the act
required to be done to protect the rights of the
petitioner, and to pay the damages sustained by
the petitioner by reason of the wrongful acts of
the respondent.

SUPREME COURT
Therefore, all references in the amended
Section 9 of B.P. No. 129 to supposed appeals
from the NLRC to the Supreme Court are
interpreted and hereby declared to mean and
refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals in
strict observance of the doctrine on the
hierarchy of courts as the appropriate forum for
the relief desired. (St. Martin Funeral Home vs.
NLRC, 1998)

PRESCRIPTION OF ACTIONS
No claim for compensation shall be given due
course unless said claim is filed with the System
within three (3) years from the time the cause of
action accrued. (Article 201, as amended by
Section 5, Presidential Decree No. 1921)
(1) MONEY CLAIMS
Art. 297. Money claims. All money claims
arising from employer-employee relations
accruing during the effectivity of this Code
shall be filed within three (3) years from the
time the cause of action accrued; otherwise
they shall be forever barred.
All money claims accruing prior to the
effectivity of this Code shall be filed with the
appropriate entities established under this
Code within one (1) year from the date of
effectivity, and shall be processed or
determined in accordance with the
implementing rules and regulations of the
Code; otherwise, they shall be forever
barred.
Workmen's compensation claims accruing
prior to the effectivity of this Code and
during the period from November 1, 1974 up

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to December 31, 1974, shall be filed with the

appropriate regional offices of the
Department of Labor not later than March
31, 1975; otherwise, they shall forever be
barred. The claims shall be processed and
adjudicated in accordance with the law and
rules at the time their causes of action
accrued.
The Labor Code has no specific provision on
when a monetary claim accrues. Thus, again the
general law on prescription applies. Article 1150
of the Civil Code provides that:
Article 1150. The time for prescription for all
kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be brought.
Illegal dismissal
In illegal dismissal cases, the employee
concerned is given a period of four years from
the time of his dismissal within which to
institute a complaint. This is based on Article
1146 of the New Civil Code which states that
actions based upon an injury to the rights of the
plaintiff must be brought within four years.
(Victory Liner, Inc. v Race, 2007)
Article 1146. The following actions must be
instituted within four years:
(a) Upon an injury to the rights of the plaintiff;
(b) Upon a quasi-delict;

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the preceding paragraph. During the

pendency
of
such
administrative
proceeding, the running of the period of
prescription of the criminal offense herein
penalized shall be considered interrupted:
Provided, however, that the final judgment
in the administrative proceedings shall not
be binding in the criminal case nor be
considered as evidence of guilt but merely
as proof of compliance of the requirements
therein set forth. (As amended by Batas
Pambansa Bilang 70, May 1, 1980 and later
further amended by Section 19, Republic
Act No. 6715, March 21, 1989)
(3) OFFENSES

PENALIZED BY THE
LABOR CODE & IRR ISSUED
PURSUANT THERETO
Art. 290. Offenses penalized under this Code
and the rules and regulations issued
pursuant thereto shall prescribe in three (3)
years.

(4) PRESCRIPTIVE PERIOD OF ILLEGA

L RECRUITMENT CASES
Section 7. Prescription. Illegal recruitment
cases under this Rule shall prescribe in five (5)
years; Provided, however, that illegal
recruitment cases involving economic sabotage
shall prescribed in twenty (20) years. (RA 804)

(2) UNFAIR LABOR PRACTICE

Art. 296. Offenses penalized under this
Code and the rules and regulations issued
pursuant thereto shall prescribe in three (3)
years. All unfair labor practice arising from
Book V shall be filed with the appropriate
agency within one (1) year from accrual of
such unfair labor practice; otherwise, they
shall be forever barred.
Art. 253. Concept of unfair labor practice
and procedure for prosecution thereof. (last
par.)
No criminal prosecution under this Title
may be instituted without a final judgment
finding that an unfair labor practice was
committed, having been first obtained in

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Social Welfare Legislation

SSS

GSIS

Enabling law RA 1161 as amended by RA 8282: Social Security Act of 1997

RA 8291 amending PD 1146

Definition of Employer any person, natural or juridical, domestic or

Terms
foreign, who carries on in the Philippines any trade business,
industry, undertaking, and uses the services of another
person who is under his orders as regards the employment,
except those considered as employer under the GSIS. A selfemployed person shall be both employer and employee at
the same time.

Employer National government, its

political subdivisions, branches,
agencies or instrumentalities,
including government-owned or
controlled corporations and financial
institutions with original charters
(GOCCs); constitutional commissions;
and judiciary

Employee any person who performs services for an

employer in which either or both mental and physical efforts
are used and who receives compensation for such services,
where there is an employeremployee relationship; also, a
self-employed person who is both employee and employer at
the same time

Employee any person receiving

compensation while in service of an
employer whether by election or
appointment, irrespective of status of
appointment; baranggay officials;
and sangguniang officials

Self-employed any person whose income is not derived

from employment, including, but not limited to:
Note: No
employed.
self-employed professionals;
partners and single proprietors of businesses;
actors, directors, scriptwriters, news correspondents not
considered as employees under the above definition;
athletes, coaches, trainers, jockeys; and
individual farmers and fishers.

counterpart

for

self-

Dependents:
Same except that a child here is
below 18
Legal spouse entitled by law to receive support;
Child unmarried, not gainfully employed, and below 21
or
Child over 21 if he or she became permanently
incapacitated and incapable of self-support, physically or
mentally,; child may be legitimate, legitimated, legally
adopted, or illegitimate;
Parent who is receiving regular support.
Beneficiaries
Same except that RA 8291 does not
distinguish share of legitimate and
- Primary
illegitimate children
Dependent spouse until remarriage (see above);
Dependent children (see above); illegitimate children
are entitled only to 50% of the share of legitimate
children unless there are no legitimate children, in
which case, they get 100%.
- Secondary shall only receive when the primary
beneficiaries are absent: Dependent parents
- Other any other person designated by the member as
his/her secondary beneficiary.
Compensation all actual remuneration for employment,
including living allowance, as well as the cash value of any
remuneration paid in any medium other than cash except
that portion already above the max salary credit under Sec. 18
of the Act.

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Compensation basic pay received

excluding per diems, bonuses,
overtime, honoraria, allowances and
other emoluments not integrated into
the basic pay under existing laws.

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Coverage

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Compulsory
Employers as defined above;
Employees not over 60 years including household helpers
with at least P1,000 monthly pay; and
Self-employed.
Domestic worker who has rendered at least one month of
service

Public sector employees below the

compulsory retirement age of 65.

Exceptions:
a. AFP and PNP;
b. Members of the Judiciary and
Constitutional Commissions who
are covered only by life insurance
as they have separate retirement
Voluntary
schemes;
Spouses who devote full time to managing household and
c. Contractual employees with no
family affairs;
employee-employer relationship
OFWs recruited by foreign-based employers;
with the agency they serve.
Employees already separated from employment or those
self-employed with no realized income for a given month,
who chose to continue with contributions to maintain right
to full benefit.
Note: Foreign governments, international organizations or
their wholly owned instrumentality employing workers in the
Philippines may enter into an agreement with the Philippine
government to include their employees in the SSS except
those already covered by their civil service retirement system.
st

Effective
Employer: 1 day of operation
st
Date
of Employee: 1 day at work
Coverage
Self-employed: upon registration with SSS
Summary of a)
Benefits
b)
c)
d)
e)
f)
g)

Monthly pension
Dependents pension
Retirement benefits
Permanent disability benefits
Death benefits
Funeral benefits
Loan Social Security Commission Resolution No. 669.
Moreover, several SSS-issued circulars such as Circular
No. 21-P and No. 52 pertain to the treatment of salary
loans, sometimes providing for more flexible payment
terms or condonation for delinquent payers; Santiago v.
CA and SSS, GR # L-39949 (1984) resolved an issue
involving the treatment of salary loan repayments; SSS
website also shows loans
h) Sickness benefits
i) Maternity leave benefits

SSS LAW (RA 8282)

EXCLUSIONS FROM COVERAGE

(SEC. 8 [J])
(1) Employment purely casual and not for the
purpose of occupation or business of the
employer;

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a)
b)
c)
d)
e)
f)

Monthly pension
Retirement benefits
Permanent disability benefits
Death Benefits
Funeral benefits
Loan GSIS website provides for
this
g) Temporary disability benefits
(similar to sickness)
h) Separation benefits
i) Unemployment benefits Sec 11
j) Survivorship benefits
k) Life insurance benefits
Note: Judiciary and Constitutional
Commissions are entitled to life
insurance only.

(2) Service performed on or in connection with

an alien vessel by an employee if he is
employed when such vessel is outside the
Philippines;
(3) Service performed in the employ of the
Philippine Government or instrumentality or
agency thereof;

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(4) Service performed in the employ of a foreign

government or international organization, or
their wholly-owned instrumentalities; and
(5) Services performed by temporary and other
employees which may be excluded by SSS
regulation. Employees of bona fide
independent contractors shall not be
deemed employees of the employer
engaging the services of said contractors.

BENEFITS
(1) MONTHLY PENSION (SEC.12)
Computation of monthly pension
The monthly pension shall be the highest of the
following amounts:
(a) P300 + [20% x (ave. monthly credit)] + [2%
x (ave. monthy credit) x (# of cash credited
years of service in excess of 10 years)]; or
(b) 40% x (ave. monthly credit); or
(c) P1,000; provided, that the monthly pension
shall in no case be paid for an aggregate
amount of less than 60 months.
(d) Notwithstanding the abovementioned,
minimum pension is P1,200 for members
with at least 10 years credit service, P2,400
for those with 20 years.
(2) DEPENDENTS PENSION (SEC. 12-A)
(a) Paid when member dies, retires or with
permanent total disability;
(b) Paid to each child conceived on or prior to
contingency, but not exceeding 5,
beginning with the youngest and
preferring the legitimate;
(c) Amount is either P250 or 10% of the
monthly pension as computed above,
whichever is higher.
(3) RETIREMENT BENEFITS (SEC. 12-B)
Eligibility requirements
(1) 120 monthly contributions;
(2) Age
(a) 65 years old; or
(b) a member who has reached 60 years may
also avail if he is already separated from
employ-ment or has ceased to be selfemployed.

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Lump Sum Alternative

Member may opt to receive his first 18 monthly
pensions in lump sum but such is discounted at
a preferential rate of interest.
Lump Sump Eligible
A 60 year old member with less than 120
monthly contributions who is no longer
employed or self-employed, and who is not
continuing contributions independently, he is
entitled to a lump sum equal to his total
contributions paid.
(4) PERMANENT DISABILITY BENEFITS (SEC.
13-A)
Eligibility requirement
36 monthly contributions prior to the semester
of disability; same as death benefit; only
difference is that the pension is paid directly to
the member.
In case the permanently disabled member dies,
it would be given the same treatment as a
retiree dying.
For permanent partial disability, the pension is
not lifetime. (e.g. loss of thumb entitles member
to only 10 months of pension, while loss of arm
50 months). It shall be paid in lump sum if the
period is less than 12 months.
For multiple partial disabilities, they shall be
additive when related or deteriorating the
percentage shall be equal to the number of
months the partial disability is entitled to
divided by 75 months. (e.g. loss of sight in one
eye 25/75; loss of arm 50/75; if both
occur due to same cause, then 25/75 + 50/75 =
100% so treated as if it were permanent total
disability)
(5) DEATH BENEFITS (SEC. 13)
Eligibility requirement
36 monthly contributions prior to the semester
of death.
Benefit monthly pension to primary or
secondary beneficiaries.

Benefit entitlement to monthly pension from

retirement until death.

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To those ineligible lump sum benefit which

shall be the higher between the two:
(monthly pension) x 12; or
(monthly pension) x (# of monthly
contributions)

(limited only to first four deliveries or

miscarriage)

(6) FUNERAL BENEFITS (13-B)

(1) Primary
(i) Dependent spouse until remarriage
(see above);
(ii) Dependent
children
(legitimate,
legitimated, legally adopted, and
illegitimate) (see above); illegitimate
children are entitled only to 50% of the
share of legitimate children unless there
are no legitimate children, in which
case, they get 100%.
(2) Secondary shall only receive when the
primary beneficiaries are absent
(i) Dependent parents
(3) Others shall only receive when the primary
and secondary beneficiaries are absent
(i) Any other person designated by
member
as
his/her
secondary
beneficiary.

P12,000 in cash or in kind, upon death of

member
(7) LOAN
Social Security Commission Resolution No. 669.
Moreover, several SSS-issued circulars such as
Circular No. 21-P and No. 52 pertain to the
treatment of salary loans, sometimes providing
for more flexible payment terms or condonation
for delinquent payers; Santiago v. CA and SSS,
GR # L-39949 (1984 )resolved an issue involving
the treatment of salary loan repayments; SSS
website also shows loans
(8) SICKNESS BENEFITS (SEC. 14)
Eligibility requirements and other conditions
(1) Inability to work due to sickness or injury
(2) Confined for at least 4 days either in a
hospital or elsewhere with SSS approval;
(3) At least 3 months of contributions in the 12
month period immediately before the
semester of sickness or injury has been paid;
(4) All company sick leaves with pay for the
current year has been used up;
(5) Maximum of 120 days per 1 calendar year
(so maximum permissible for the same
sickness and confinement is 240 days for 2
consecutive years);
(6) The employer has been notified, or, if a
separated, voluntary or self-employed
member, the SSS directly notified within 5
days of confinement;
(7) Notice to employer or SSS not needed when
confinement is in a hospital; notice to
employer not required as well when
Employee became sick or injured while
working or within premises of the employer.

Note: All of these benefits are tax-exempt.

BENEFICIARIES

Benefit: daily cash allowance paid for the

number of days a member is unable to work due
to sickness or injury equivalent to 90% x
(average daily salary credit)
(9) MATERNITY LEAVE BENEFITS (SEC. 14-A)

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GSIS (RA 8291)

BENEFITS

(1) MONTHLY PENSION

The amount shall be:
(a) 37.5% x (revalued ave. monthly
compensation)
(b) Plus 2.5 x (revalued ave. monthly
compensation) x (years in service in
excess of 15 years).
The monthly pension shall not exceed 90% of
the average monthly compensation.
It shall not be less than P2,400 for those with
20 years of service and not less than P1,300 for
everyone else.
(2) RETIREMENT BENEFITS
Eligibility requirements
(a) 15 years service;
(b) 60 years of age; and
(c) Not receiving pension benefit from
permanent total disability.
Note: Retirement is compulsory for employees
65 years of age who have rendered at least 15
years of service; if employee has less than 15
years of service, he may be allowed to continue
in accordance with civil service laws.
Benefit: choice between
(a) 60 x (basic monthly pension) lump sum
payment at the time of retirement plus basic
monthly pension payable monthly for life
after expiry of the 5-year guaranteed period
which is already covered by the lump sum; or
(b) Cash payment equivalent to 18 x (basic
monthly pension) plus monthly pension for
life immediately but with no 5-year
guarantee
(3) PERMANENT DISABILITY BENEFITS
Eligibility requirements for Permanent Total
Disability
(1) Disability not due to employees own grave
misconduct, notorious negligence, habitual
intoxication, or willful intention to kill himself
or another;

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(2) Employee is: in service at the time of

disability; or b) even if separated, he has paid
at least 36 monthly contributions within the
5-year period immediately prior to disability
or has paid a total of at least 180 monthly
contributions prior to disability; and
(3) Member is not enjoying old-age retirement
benefit.
Benefit for Permanent Total Disability
Monthly income benefit for life equal to basic
monthly pension This is effective from date of
disability;
If member is in service at the time of disability
and he has paid at least 180 monthly
contributions, in addition to the monthly income
benefit, he shall receive an additional cash
payment of 18 times basic monthly pension.
To the ineligible
If member has rendered at least 3 years of
service, then he shall receive cash payment
equal to 100% of ave. monthly compensation
for each year of service (essentially total amount
of contributions made) or P12,000 whichever is
higher.
Partial Disability
Paid according to GSIS prescribed schedule
(this is similar to the scheme used by SSS; refer
to section II subsection D-3 above); member
availing of permanent partial disability must
satisfy condition E.1.a. above regarding the
disability not being due to his own fault and
either E.1.b.i. or E.1.b.ii. regarding employment
status and services rendered.
(4) DEATH BENEFITS
When member dies, the primary beneficiaries
are entitled to only one of the following:
(a) Survivorship pension
(i) If he was in the service when he died; or
(ii) Even if separated from the service, he has
at least 3 years of service and has paid 36
monthly contributions within the 5 years
immediately preceding death; or
(iii) Even if separated from the service, he has
paid 180 monthly contributions prior to
death.

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(b) Survivorship pension plus cash payment of

100% ave. monthly compensation for every
year of service (so essentially, pension plus
total contributions made)
(i) If he was in the service when he died; and
(ii) With 3 years of service.
(c) Cash payment equivalent to 100% ave.
monthly compensation for each year of
service he paid contributions or P12,000
whichever is higher
(i) With 3 years of service; and
(ii) He has failed to qualify in the prior 2
schemes.
(5) FUNERAL BENEFITS
Fixed by GSIS rules and regulations
Entitled to this are the following:
(1) Active member;
(2) Member separated from service but still
entitled to funeral benefit;
(3) Pensioner;
(4) Retiree who at the time of retirement was of
pensionable age but opted to retire under
RA 1616.
(6) LOAN GSIS website provides for this
(7) TEMPORARY
DISABILITY
(SIMILAR TO SICKNESS)

BENEFITS

Eligibility requirements and other conditions:

(1) Employee must be
(a) in service at the time of disability; or
(b) if separated, he has rendered at least 3
years of service and paid at least 6
monthly contributions in the 12 month
period immediately prior to disability;
(2) All sick leave credits including CBA sick
leaves for the current year has been used
up; and
(3) Maximum of 120 days per 1 calendar year
(so maximum permissible for the same
sickness and confinement is 240 days for 2
consecutive years).
Benefit
75% of the current daily compensation for every
day or fraction thereof of disability or P70
whichever is higher.

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(8) SEPARATION BENEFITS

Eligibility requirements
(1) 60 years of age, or separation from service
with at least 3 years but not over 15 years
served
(2) Below 60 years of age, but at least 15 years
of service rendered.
Benefit
(1) For 60 years of age or separated from
service with 3 to 15 years of service: cash
payment of 100% of ave. monthly
compensation for each year of service (so
essentially, the total amount of all
contributions paid) or P12,000 whichever is
higher.
(2) Below 60 years of age and at least 15 years
of service: cash payment equivalent to 18 x
(monthly pension) at the time of resignation
or separation plus an old-age pension
benefit equal to basic monthly pension.
(9) UNEMPLOYMENT BENEFITS (SEC 11)
Eligibility requirements
(a) Employee separated from service due to
abolition of his office or position; and
(b) Employee has been paying integrated
contributions for at least 1 year prior to
separation.
Benefit
Monthly cash payments of 50% of average
monthly compensation for a duration which is
proportional to years rendered, ranging from 2
months to 6 months.
(10)
SURVIVORSHIP BENEFITS
Beneficiaries are entitled to the following:
(a) Basic survivorship pension which is 50% of
basic monthly pension; and
(b) Dependent childrens pension not exceeding
50% of the basic monthly pension.
(11)
LIFE INSURANCE BENEFITS
Note: Judiciary and Constitutional Commissions
are entitled to life insurance only.

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1)

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BENEFICIARIES

i.
ii.

Primary
Dependent spouse until remarriage;
Dependent
children
(legitimate,
legitimated, legally adopted, and
illegitimate) but RA 8291 does not
distinguish share of legitimate and
illegitimate children.

2)
Secondary shall only receive when the
primary beneficiaries are absent
i.
Dependent parents
ii.
Legitimate descendants, subject to the
restrictions on dependent children

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LABOR STANDARDS

LIMITED PORTABILITY LAW

(RA 7699)
COVERAGE

(1) Workers who transfer employment from

one sector to another; or
(2) Those employed in both sectors (public
and private).

PROCESS

The covered worker shall have his credible

services or contributions in both Systems
credited to his service or contribution record in
each of the Systems and shall be totalized for
purposes of old-age, disability, survivorship
and other benefits in case the covered
member does not qualify for such benefits in
either or both systems without totalization:
Provided, however, That overlapping periods
of membership shall be credited only once for
purposes of totalization (Sec. 3)
Totalization shall refer to the process of
adding up the periods of creditable services or
contributions under each of the Systems, for
purposes of eligibility and computation of
benefits (Sec. 2e).
Overlapping periods of membership in case of
those employed in both sectors at once are to
be counted only ONCE for purposes of
totalization to be able to satisfy eligibility
requirements of benefits provided for by either
SSS or GSIS.

EMPLOYEES COMPENSATION
COVERAGE & WHEN
COMPENSABLE

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(4) An employee who is coverable by both the

GSIS and SSS shall be compulsorily
covered by both Systems. (Sec. 2, IRR of
Title II, Book IV of LC)
(5) Filipinos working abroad in the service of
an employer as defined in Section 3 hereof
shall be covered by the System, and
entitled to the same benefits as are
provided for employees working in the
Philippines. (Sec. 5, IRR of Title II, Book IV
of LC)

EFFECTIVITY

Coverage of employees shall take effect on

the first day of employment. (Sec. 6)

WHEN COMPENSABLE

Grounds:
(1) For the injury and the resulting disability
or death to be compensable, the injury
must be the result of accident arising out
of and in the course of the employment.
(2) For the sickness and the resulting
disability or death to be compensable, the
sickness must be the result of an
occupational disease listed under Annex
A of these Rules with the conditions set
therein satisfied, otherwise, proof must be
shown that the risk of contracting the
disease is increased by the working
conditions.
Limitation: No compensation shall be allowed
to the employee or his dependents when the
injury, sickness, disability, or death was
occasioned by any of the following:
(1) his intoxication;
(2) his willful intention to injure or kill himself
or another; or
(3) his notorious negligence
(4) As otherwise provided by law

COVERAGE

(1) Every employer shall be covered.

(2) Every employee not over sixty (60) years of
age shall be covered.
(3) An employee over sixty (60) years of age
shall be covered if he had been paying
contributions to the System prior to age
sixty (60) and has not been compulsorily
retired.

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