2016 University of the Philippines

College of Law
Bar Reviewer

Dean Overall Head

Dean Danilo L. Concepcion Evert Callueng

Associate Dean Subject Heads

Prof. Concepcion L. Jardeleza Sarah Elaiza Buyco
Erika Diane Wijangco

Academics Committee Heads

Evert Callueng
Paulo Faustino
Carlos Hernandez
Audrey Ng
Desiree Sokoken

1ST WEEK

LABOR
LAW

UP Law Bar Operations Commission 2016

UP Law Bar Operations Commission 2016
 UP LAW
BAR OPS 2016
UP LAW BOC TABLE OF CONTENTS LABOR LAW

Table of Contents
LABOR STANDARDS 1 F.3. Paternity Leave 55
F.4. Parental Leave 56140
I. Fundamental Principle and Policies 2 F.5. Leaves For Victims of
A. Constitutional Provisions 2 Violence Against Women 57
B. Civil Code 6 F.6. Special Leave Benefits
C. Labor Code 8 (SLB) For Women 59
II. Recruitment and Placement 12 G. Service Charges 61
A. Recruitment of Local and H. Thirteenth (13th) Month Pay
Migrant Workers 12 and Other Bonuses 62
A.1. Illegal Recruitment 13 I. Separation Pay 65
III. Labor Standards 26 J. Retirement Pay 67
A. Coverage 26 J.1. Eligibility 67
A.1. Government Employees 26 J.2. Amount of Retirement Pay 68
A.2. Managerial Employees 27 J.3. Retirement Benefits of Workers
A.3. Field Personnel 28 Who Are Paid By Results 68
A.4. Dependent Family Members 28 J.4. Retirement Benefit of
A.5. Domestic helpers 28 Part-Time Workers 68
A.6. Persons in Personal J.5. Taxability 69
Service of Another 28 K. Women Workers 70
A.7. Workers Paid by Result 29 K.1. Provisions Against Discrimination 70
B. Hours Of Work 29 K.2. Stipulation Against Marriage 70
B.1. Coverage/Exclusions 29 K.3. Prohibited Acts 70
B.2. Normal Hours of Work 29 K.4. Anti-Sexual Harassment 72
B.3. Meal Break 34 L. Minor Workers 73
B.4. Waiting Time 35 M. Employment Of Househelpers 76
B.5. Overtime Work, Overtime Pay 35 N. Employment Of Homeworkers 79
B.6. Night Work, O. Apprentices And Learners 80
Night Shift Differential 37 O.1. Apprentices 80
B.7. Part-Time Work 39 O.2. Learners 83
B.8. Contract for Piece of Work 39 P. Handicapped Workers Differently-Abled
C. Wages 40 Workers 85
C.1. Wage vs. Salary 40 IV. Termination of Employment 90
C.2. Minimum Wage 41 A. Employer-employee relationship 90
C.3. Minimum Wage of Workers Paid By A.1. Four-fold test 91
Results 42 A.2. KINDS OF EMPLOYMENT 92
C.4. Commissions 43 A.3. Job contracting 99
C.5. Deductions From Wages 43 B. DISMISSAL FROM EMPLOYMENT 104
C.6. Non-Diminution Of Benefits 44 B.1. Just Causes 107
C.7. Facilities vs Supplements 44 B.2. Authorized Causes 113
C.8. Wage Distortion/Rectification 45 B.3 Other Causes 118
C.9. Divisor to Determine Daily Rate 46 B.4 Due Process 120
D. Rest Days 47 C. Reliefs for Illegal Dismissal 123
D.1. Weekly Rest Day 47 C.1. Reinstatement 123
D.2. Emergency Rest Day Work 47 C.2. Backwages 125
E. Holiday Pay/Premium Pay 47 D. Preventive Suspension 126
E.1. Coverage 48 D.1.Duration 126
E.2. Teachers, Piece Workers, D.2. Preventive Suspension As a Protective
Seafarers, Seasonal Workers, Etc. 51 Measure v. Suspension As Penalty 127
F. Leaves 53 E. Constructive Dismissal 127
F.1. Service Incentive Leave Pay 53 V. Management Prerogative 127
F.2. Maternity Leave 54 A. Discipline 127

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B. Transfer Of Employees 128 B.5.D. Check-Off, Union Dues,

C. Productivity Standard 128 Agency Fees 186
D. Grant of Bonus 129 B.6 Unfair Labor Practice in
E. Change of Working Hours 129 collective bargaining 186
F. Rules on Marriage Between B.6.A. Failure Or Refusal to
Employees of Competitor-Employers 129 Bargain 187
G. Post-Employment Ban 129 B.6.B. Evading the Mandatory Subjects
VI. Social Welfare Legislation 130 of Bargaining 187
A. SSS Law [RA 8282] 130 B.6.C. Bargaining in Bad Faith 188
A.1. Coverage 130 B.6.D. Gross Violations of the CBA 188
A.2. Exclusions from Coverage 130 B.7 Unfair Labor Practice (ULP) 188
A.3. Benefits 131 B.7.A. Nature of ULP 189
A.4. Beneficiaries 133 B.7.B. ULP of Employers 189
B. GSIS Law [RA 8291] 134 B.7.C. ULP of Labor Organizations 191
B.1. Coverage 134 C. Right to Peaceful Concerted
B.2. Exclusions From Coverage 134 Activities 192
B.3. Benefits 134 C.1. Forms of concerted activities 192
C. Limited Portability Law [RA 7699] 140 C.2 Who may declare a strike
C.1 Coverage 140 or lockout? 194
C.2. Process 140 C.3 Requisites for a valid strike 195
D. Employees Compensation C.4 Requisites for a valid lockout 197
Coverage and When Compensable 140 C.5 Requisites for lawful picketing 199
C.6 Assumption of jurisdiction by the
DOLE Secretary or Certification of the
LABOR RELATIONS 141 labor dispute to the NLRC for
compulsory arbitration 200
VII. Labor Relations 142 C.7 Nature of assumption order
A. Right to Self-Organization 142 or certification order 200
A.1. Who may Unionize for Purposes C.8 Effect of defiance of assumption
of Collective Bargaining? 143 or certification orders 201
A.2. Bargaining unit 147 C.9 Illegal strike 201
A.2.A. Test to determine i. Liability of union officers 203
the constituency of an ii. Liability of ordinary workers 204
appropriate bargaining unit 148 iii. Liability of employer 204
A.2.B. SEBA certification 150 iv. Waiver of illegality of strike 204
A.2.C. Consent election 151 C.10 Injunctions 204
A.2.D. Run-off election 152 i. Requisites for labor injunctions 205
A.2.E. Certification election 152 ii. Innocent bystander rule 205
A.2.F. Re-run election 165 VIII. Procedure and Jurisdiction 206
A.2.G. Special assessments 168 A. Labor Arbiter 206
A.2.H. Agency fees 169 A.1 Jurisdiction 206
A.2.I. Union chartering/ affiliation 169 A.2 Procedure 207
B. Right to Collective Bargaining 172 A.3. Nature of the proceeding 208
B.1 General Concepts 172 A.4 Requirements to perfect appeal
B.2 Duty to Bargain Collectively 173 to NLRC 208
B.3 Bargaining Procedure 174 A.5 Reinstatement pending appeal 208
B.4 CBA 176 B. National Labor Relations Commission
B.5. Union Security 183 (NLRC) 208
B.5.A. Union Security Clauses 183 B.1 Jurisdiction 208
B.5.B. Types Of Union Security B.2 Effect of NLRC reversal of Labor
Clause 184 Arbiters order of reinstatement 209
B.5.C. Enforcement Of Union B.3 Remedies 209
Security Clause 185 B.4 Certified cases 209

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C. Bureau of Labor Relations

Med-Arbiters 211
D. National Conciliation and
Mediation Board 211
D.1 Nature of proceedings 211
D.2 Conciliation vs. Mediation 211
D.3 Preventive mediation 212
E. DOLE Regional Directors 212
F. DOLE Secretary 213
F.1 Visitorial and enforcement powers 213
F.2 Power to suspend/effects
of termination 213
F.3 Assumption of jurisdiction 213
F.4 Appellate jurisdiction 213
F.5 Voluntary arbitration powers 214
G. Grievance Machinery and
Voluntary Arbitration 214
G.1 Subject matter of grievance 214
G.2 Voluntary Arbitrator 214
H. Court of Appeals 215
I. Supreme Court 216
J. Prescription of Actions 216

Procedure for Union Registration 219

Summary of Union Registration 220
Labor Dispute Case Flow 222

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LABOR LAW
LABOR STANDARDS

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I. Fundamental
Principle and Policies
A. CONSTITUTIONAL PROVISIONS
A.1 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.
General Definition of Social Justice
Social justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
social and economic forces by the State so
that justice in its rational and objectively
secular conception may at least be
approximated. [Calalang vs. Williams, G.R. No.
47800 (1940)]
W elfare State
The welfare state concept is found in the
constitutional clause on the promotion of
social justice to ensure the well-being and
economic security of all the people, and in the
pledge of protection to labor with specific
authority to regulate the relations between
landowners and tenants and between labor
and capital. [Alalayan vs. National Power
Corporation, G.R. No. L-24396 (1968)]
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
LABOR STANDARDS LABOR LAW
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.
Limits of Social Justice
Social justice should be used only to correct
an injustice. It must be founded on the
recognition of the necessity of
interdependence among diverse units of a
society, and of the protection that should be
equally and evenly extended to all groups as
a combined force in our social and economic
life. As partners in nation-building, labor and
management need each other to foster
productivity and economic growth; hence, the
need to weigh and balance the rights and
welfare of both the employee and employer.
[Agabon vs. NLRC, G.R. No. 158693 (2004)]
The policy of social justice is not intended to
countenance wrongdoing simply because it is
committed by the underprivileged. At best it
may mitigate the penalty but it certainly will
not condone the offense. Compassion for the
poor is an imperative of every humane society
but only when the recipient is not a rascal
claiming an undeserved privilege. Social
justice cannot be permitted to be a refuge of
scoundrels any more than can equity be an
impediment to the punishment of the guilty.
Those who invoke social justice may do so
only if their hands are clean and their motives
blameless and not simply because they
happen to be poor. This great policy of our
Constitution is not meant for the protection of
those who have proved they are not worthy of
it, like the workers who have tainted the
cause of labor with the blemishes of their
own character. [Tirazona vs. Philippine EDS
Techno-Service Inc., G.R. No. 169712 (2009)]
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Laissez Faire
The Constitution is primarily a document of
social justice, and although it has recognized
the importance of the private sector, it has
not embraced fully the concept of laissez-
faire or relied on pure market forces to govern
the economy. [Employees Confederation of the
Philippines vs. NWPC, G.R. No. 96169 (1991)]
Balancing of Interests
It is high time that employer and employee
cease to view each other as adversaries and
instead recognize that theirs is a symbiotic
relationship, wherein they must rely on each
other to ensure the success of the business.
When they consider only their own self-
interests, and when they act only with their
own benefit in mind, both parties suffer from
short-sightedness, failing to realize that they
both have a stake in the business. The
employer wants the business to succeed,
considering the investment that has been
made. The employee in turn, also wants the
business to succeed, as continued
employment means a living, and the chance
to better ones lot in life. It is clear then that
they both have the same goal, even if the
benefit that results may be greater for one
party than the other. If this becomes a source
of conflict, there are various, more amicable
means of settling disputes and of balancing
interests that do not add fuel to the fire, and
instead open avenues for understanding and
cooperation between the employer and the
employee. [Toyota Motor Phils. Corp Workers
Association (TMPCWA) v. NLRC, G.R. No.
158786 (2007)]
While labor laws should be construed
liberally in favor of labor, we must be able to
balance this with the equally important right
of the [employer] to due process [Gagui v.
Dejero, G.R. No. 196036 (2013)
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A.2 Article III, Secs 1, 4, 7, 8, 10, 16,
18(2)
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.
Due Process
Under the Labor Code, as amended, the
requirements for the lawful dismissal of an
employee by his employer are two-fold: the
substantive and the procedural. Not only
must the dismissal be for a valid or
authorized cause as provided by law, but the
rudimentary requirements of due
process, basic to which are that an
opportunity to be heard and to defend
oneself must be observed before an
employee may be dismissed [Metro Eye
Security v. Salsona, G.R. No. 167367 (2007)]
To constitute valid dismissal from
employment, two requisites must concur: (1)
the dismissal must be for a just or authorized
cause; and (2) the employee must be afforded
an opportunity to be heard and to defend
himself. [Jeffrey Nacague vs. Sulpicio Lines,
Inc., G.R. No. 172589 (2010)]
6
Labor as Property Right
Ones employment is a property right, and
the wrongful interference therewith is an
actionable wrong. The right is considered to
be property within the protection of the
constitutional guarantee of due process of
law. [Texon Manufacturing v. Millena, G.R. No.
141380 (2004)]
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.
The Right to Assemble
6
The right of peaceable assembly is a right
cognate to those of free speech and free
press and is equally fundamental. [de Jonge
vs. Oregon (1937)]
UP LAW BOC LABOR STANDARDS
Wearing armbands and putting up placards
to express ones views without violating the
rights of third parties, are legal per se and
even constitutionally protected. [Bascon v CA,
G.R. No. 144899 (2004)]
Section 7. The right of the people to
information on matters of public concern
shall be recognized. Access to official records,
and to documents and papers pertaining to
official acts, transactions, or decisions, as
well as to government research data used as
basis for policy development, shall be
afforded the citizen, subject to such
limitations as may be provided by law.
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.
The Right to Form Associations
The right to form associations shall not be
impaired except through a valid exercise of
police power. [Bernas, The 1987 Philippine
Constitution: a Comprehensive Reviewer]
Section 10. No law impairing the obligation of
contracts shall be passed.
Non-impairment of Contracts
A law which changes the terms of a legal
contract between parties, either in the time or
mode or performance, or imposes new
conditions, or dispenses with those expressed,
or authorizes for its satisfaction something
different from that provided in its terms, is a
law which impairs the obligation of a contract
and is null and void. [Clemens vs. Nolting
(1922)]
Vis--vis the freedom of contract
The prohibition to impair the obligation of
contracts is not absolute and unqualified. In
spite of the constitutional prohibition and the
fact that both parties are of full age and
competent to contract, it does not necessarily
deprive the State of the power to interfere
where the parties do not stand upon an
equality, or where the public health
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demands that one party to the contract shall
be protected against himself. [Leyte Land
Transportation Co. vs. Leyte Farmers &
Workers Union, G.R. No. L-1377 (1948)]
Section 16. All persons shall have the right to
a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative
bodies.
Section 18 (2). No involuntary servitude in any
form shall exist except as a punishment for a
crime whereof the party shall have been duly
convicted.
A.3 Article 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.
The State shall promote the principle of
shared responsibility between workers and
employers and the preferential use of
voluntary modes in settling disputes,
UP LAW BOC
including conciliation, and shall enforce their
mutual compliance therewith to foster
industrial peace.
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.
Participation in Decision-Making
Process
Verily, a line must be drawn between
management prerogatives regarding
business operations per se and those which
affect the rights of the employees. In treating
the latter, management should see to it that
its employees are at least properly informed
of its decisions or modes action. Indeed,
industrial peace cannot be achieved if the
employees are denied their just participation
in the discussion of matters affecting their
rights. [Phil. Airlines Inc. vs. NLRC, G.R. No.
85985 (1993)]
Managem ent and the Constitution:
Managem ent Function/Prerogative
The law in protecting the rights of the
employees authorizes neither oppression nor
self-destruction of the employer. It should be
made clear that when the law tilts the scale
of justice in favor of labor, it is but a
recognition of the inherent economic
inequality between labor and management.
Never should the scale be so tilted if the
result is an injustice to the employer.
[Panuncillo v CAP, G.R. No. 161305 (2007)]
This Court held that the employers right to
conduct the affairs of his business according
to its own discretion and judgment, is well-
recognized. An employer has a free reign and
enjoys wide latitude of discretion to regulate
all aspects of employment. This is a
management prerogative, where the free will
of management to conduct its own affairs to
achieve its purpose takes form. [Torreda vs.
Toshiba, G.R. No. 165960 (2007)]
Under the doctrine of management
prerogative, every employer has the inherent
right to regulate, according to his own
LABOR STANDARDS LABOR LAW
discretion and judgment, all aspects of
employment, including hiring, work
assignments, working methods, the time,
place and manner of work, work supervision,
transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees.
The only limitations to the exercise of this
prerogative are those imposed by labor laws
and the principles of equity and substantial
justice. [Peckson v Robinsons Supermarket
Corporation, G.R. No. 198534, (2013)]
The exercise of management prerogative is
valid provided it is not performed in a
malicious, harsh, oppressive, vindictive or
wanton manner or out of malice or spite.
[Magdadaro v. PNB, G.R. No. 166198 (2009)]
Limits to Management Prerogative
(1) Good faith - 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., G.R. No. 184885 (2012)]
(2) W ithout grave abuse of discretion
- But, like other rights, there are limits
thereto. The managerial prerogative to
transfer personnel must be exercised without
grave abuse of discretion, bearing in mind the
basic elements of justice and fair play. Having
the right should not be confused with the
manner in which the right is exercised. [Tinio
vs. CA, G.R. No. 171764 (2007)]
(3) Law In one case, a pharmaceutical
company defended its termination of rank
and file employees during a bargaining
deadlock, as an exercise of management
prerogative. This was after the Labor
Secretary had assumed jurisdiction over the
dispute and enjoined the parties from any
acts which might exacerbate the situation.
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The Court disagreed with the companys
defense, stating that the privilege is not
absolute but subject to limitations imposed
by law. In this case, it is limited by Sec.
236(g), which gives the Secretary the power
to assume jurisdiction and resolve labor
disputes involving industries indispensable to
national interest.
The companys management prerogatives are
not being unjustly curtailed but duly
tempered by the limitations set by law, taking
into account its special character and the
particular circumstances in the case at bench.
[Metrolab Industries, Inc. v. Roldan-Confesor,
G.R. No. 108855 (2013)]
(4) Collective Bargaining The CBA
provisions agreed upon by the Company and
the Union delimit the free exercise of
management prerogative. The parties in a
CBA may establish such stipulations, clauses,
terms and conditions as they may deem
convenient provided these are not contrary to
law, morals, good customs, public order or
public policy. Where the CBA is clear and
unambiguous, it becomes the law between
the parties and compliance therewith is
mandated by the express policy of the law.
[Goya v. Goya, Inc., Employees Union-FFW,
G.R. No. 170054 (2013)]
(5) Equity and/or Substantial Justice
The Court recognized the inherent right of the
employer to discipline its employees but it
should still ensure that the employer
exercises the prerogative to discipline
humanely and considerately, and that the
sanction imposed is commensurate to the
offense involved and to the degree of the
infraction. The discipline exacted by the
employer should further consider the
employees length of service and the number
of infractions during his employment.
[Dongon v. Rapid Movers and Forwarders Co.,
Inc., G.R. No. 163431 (2013)]
Assum ption of jurisdiction by the
Secretary of Labor
This Court declared that it recognizes the
exercise of management prerogatives and it
often declines to interfere with the legitimate
business decisions of the employer
However, as expressed in PAL vs. NLRC, the
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privilege is not absolute, but subject to
exceptions. One of these exceptions is when
the Secretary of Labor assumes jurisdiction
over labor disputes involving industries
indispensable to the national interest under
Article 263(g) of the Labor Code. [University
of Immaculate Concepcion Inc. vs. Sec. of
Labor, G.R. No. 151379 (2005)]
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.
B. Civil Code
B.1 Article 19
Article 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.
B.2 Article 1700
Article 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.
B.3. Article 1702
Article 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.
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Contracts
Under the Civil Code, contracts of labor are
explicitly subject to the police power of the
state because they are not ordinary contracts
but are impressed with public interest.
Inasmuch as in this particular instance the
contract in question would have been
deemed in violation of pertinent labor laws,
the provisions of said laws would prevail over
the terms of the contract, and private
respondent would still be entitled to overtime
pay. [PAL Employees Savings and Loan Assn.,
Inc. vs. NLRC, G.R. No. 105963 (1996)]
Indeed, a contract of employment is
impressed with public interest. For this
reason, provisions of applicable statutes are
deemed written into the contract. Hence, the
parties are not at liberty to insulate
themselves and their relationships from the
impact of labor laws and regulations by
simply contracting with each other. Moreover,
in case of doubt, the terms of a contract
should be construed in favor of labor.
[Innodata Philippines, Inc. vs. Quejada-Lopez,
G.R. No. 162839 (2006)]
Liberal Construction
Of the laws
Article 4 of the Labor Code mandates that all
doubts in the implementation and
interpretation of the provisions thereof shall
be resolved in favor of labor. Consistent
with the States avowed policy to afford
protection to labor, as Article 3 of the Labor
Code and Section 3, Article XIII of the 1987
Constitution have enunciated, particularly in
relation to the workers security of tenure, the
Court held that [t]o be lawful, the cause for
termination must be a serious and grave
malfeasance to justify the deprivation of a
means of livelihood. This is merely in keeping
with the spirit of our Constitution and laws
which lean over backwards in favor of the
working class, and mandate that every doubt
must be resolved in their favor. Moreover,
the penalty imposed on the erring employee
ought to be proportionate to the offense,
taking into account its nature and
surrounding circumstances. [Hocheng
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Philippines Corporation v. Farrales, G.R. No.
211497 (2015)]
Of labor contracts
While the terms and conditions of a CBA
constitute the law between the parties, it is
not however, an ordinary contract to which is
applied the principles of law governing
ordinary contracts. A CBA, as a labor contract
within the contemplation of Article 1700 of
the Civil Code of the Philippines which
governs the relations between labor and
capital, is not merely contractual in nature
but impressed with public interest, thus, it
must yield to the common good. As such, it
must be construed liberally rather than
narrowly and technically, and the courts must
place a practical and realistic construction
upon it, giving due consideration to the
context in which it is negotiated and purpose
which it is intended to serve. [Cirtek
Employees Labor Union-FFW v Cirtek
Electronics, G.R. No. 190515 (2010)]
In general
When there is doubt between the evidence
submitted by the employer and that
submitted by the employee, the scales of
justice must be tilted in favor of the employee.
This is consistent with the rule that an
employers cause could only succeed on the
strength of its own evidence and not on the
weakness of the employees evidence.
[Misamis Oriental II Electric Service
Cooperative vs. Virgilio Cagalawan, G.R. No.
175170 (2012)]
Fair treatm ent
The right of an employer to dismiss an
employee differs from and should not be 7
confused with the manner in which such right
is exercised. It must not be oppressive and
abusive since it affects one's person and
property. [FASAP v. PAL, G.R. No. 178083
(2008)]
Mutual obligation
The employer's obligation to give his workers
just compensation and treatment carries with
UP LAW BOC LABOR STANDARDS
it the corollary right to expect from the
workers adequate work, diligence and good
conduct. [Judy Philippines, Inc. v NLRC, G.R.
No. 111934, (1998)]
Compliance with law
It is also important to emphasize that the
return-to-work order not so much confers a
right as it imposes a duty; and while as a right
it may be waived, it must be discharged as a
duty even against the worker's will.
[Sarmiento v. Tuico, G.R. No. 75271 (1988)]
Employee's compliance and obedience
to employer's orders
The lack of a written or formal designation
should not be an excuse to disclaim any
responsibility for any damage suffered by the
employer due to his negligence. The measure
of the responsibility of an employee is that if
he performed his assigned task efficiently and
according to the usual standards, then he
may not be held personally liable for any
damage arising therefrom. Failing in this, the
employee must suffer the consequences of
his negligence if not lack of due care in the
performance of his duties. [PCIB v. Jacinto,
G.R. No. 92742 (1991)]
C. Labor Code (Books I, II, III, V, VI,
and VII are covered in this reviewer.
This section discusses the policy and
miscellaneous provisions)
C.1 Article 3
Article 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 self-organization,
collective bargaining, security of tenure, and
just and humane conditions of work.
C.2 Article 4
Article 4. Construction in favor of labor. All
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LABOR LAW
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
Liberality in Application of Rules
Article 227 (previously Article 221). Technical
rules not binding and prior resort to amicable
settlement. In any proceeding before the
Commission or any of the Labor Arbiters, the
rules of evidence prevailing in courts of law or
equity shall not be controlling and it is the
spirit and intention of this Code that the
Commission and its members and the Labor
Arbiters shall use every and all reasonable
means to ascertain the facts in each case
speedily and objectively and without regard
to technicalities of law or procedure, all in the
interest of due process. xxx
We stress at this point that it is the spirit and
intention of labor legislation that the NLRC
and the labor arbiters shall use every
reasonable means to ascertain the facts in
each case speedily and objectively, without
regard to technicalities of law or procedure,
provided due process is duly observed. The
application of technical rules of procedure in
labor cases may be relaxed to serve the
demands of substantial justice. [Manila
Electric Co. vs. Gala, G.R. No. 191288 (2012)]
It is settled that subsequent and substantial
compliance may call for the relaxation of the
rules of procedureThe Court has time and
again relaxed the rigid application of the
rules to offer full opportunity for parties to
ventilate their causes and defenses in order
to promote rather than frustrate the ends of
justice. [Ma. Ligaya Santos vs. Litton Mills, G.R.
No. 170646 (2011)]
C.3 Article 172 (Previously Article 166)
Article 166. Policy. - The State shall promote
and develop a tax-exempt employees
compensation program whereby employees
and their dependents, in the event of work-
connected disability or death, may promptly
secure adequate income benefit and medical
related benefits.
UP LAW BOC LABOR STANDARDS
W orkm ens Com pensation Program
This is the general and comprehensive term
applied to those laws providing for
compensation for loss resulting from the
injury, disablement, or death of workmen
through industrial accident, casualty, or
disease. [Azucena, The Labor Code with
Comments and Cases]
C.4 Article 218 (Previously Article 211)
Article 218. 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;
(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
(g) To ensure the participation of workers
in decision and policy-making
processes affecting their rights, duties
and welfare.
B. 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
PAGE 9 OF 222
LABOR LAW
otherwise provided under this Code.
C.5 Article 219 (Previously Article 212)
Article 219.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 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
UP LAW BOC LABOR STANDARDS
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-and-file
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 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.
PAGE 10 OF 222
LABOR LAW
(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.
C.6 Article 267 (Previously Article
255)
Article 267. 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.
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
UP LAW BOC LABOR STANDARDS
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.
C.7 Article 292 (Previously Article
277)
Article 292.Miscellaneous provisions.
(a) 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.
(b) 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 employer. The Secretary of the
Department of 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
PAGE 11 OF 222
LABOR LAW
serious labor dispute or is in implementation
of a mass lay-off.
(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.
(d) 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.
(e) 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.
(f) 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 (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
UP LAW BOC LABOR STANDARDS
Voluntary Arbitration Program.
(g) The Ministry shall help promote and
gradually develop, with the agreement of
labor organizations and employers, labor-
management 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.
(h) 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.
(i) 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 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.
PAGE 12 OF 222
LABOR LAW
II. Recruitment and
Placement
Worker refers to any member of the labor
force, whether employed or unemployed
[Art.13 (a), LC]
Overseas Filipino W orker is a person
who is to be engaged, is engaged or has been
engaged in a remunerated activity in a state
of which he or she is not a citizen or on board
a vessel navigating the foreign seas other
than a government ship used for military or
non-commercial purposes or on an
installation located offshore or on the high
seas; to be used interchangeably with
migrant worker. [Sec. 2 (a), RA 8042, as
amended]
Private Employment Agency means
any person or entity engaged in recruitment
and placement of workers for a fee which is
charged, directly or indirectly, from the
workers or employers or both [Sec 13 (c), LC]
Private Recruitment Entity means any
person or association engaged in the
recruitment and placement of workers,
locally or overseas, without charging, directly
or indirectly, any fee from the workers or
employees [Sec 13 (e), LC]
Policy of Close Government
Regulation
RA 9422 or the Act to Strengthen the
Regulatory Functions of the Philippine
Overseas Employment Administration of
2007 expressly repealed Sections 29 and 30
of RA 8042 which provided for the
deregulation of recruitment activities.
A. RECRUITMENT OF LOCAL AND
MIGRANT WORKERS
Policy of Selective Deployment
The State shall allow the deployment of
overseas Filipino workers only in countries
where the rights of Filipino migrant workers
are protected. The government recognizes
any of the following as a guarantee on the
part of the receiving country for the
UP LAW BOC LABOR STANDARDS LABOR LAW

protection of the rights of overseas Filipino Private employment agency (PEA) v.

workers: Private recruitment entity (PRE)
(a) It has existing labor and social laws Private Private
protecting the rights of workers, including Employment Recruitment
migrant workers; Agency Entity
(b) It is a signatory to and/or a ratifier of Definition Any person or Any person or
multilateral conventions, declarations or entity association
resolutions relating to the protection of engaged in engaged in
workers, including migrant workers; and recruitment the
(c) It has concluded a bilateral agreement or and recruitment
arrangement with the government on the placement of and
protection of the rights of overseas workers for a placement of
Filipino Workers: Provided, That the fee which workers,
receiving country is taking positive, is charged, locally or
concrete measures to protect the rights of directly or overseas,
migrant workers in furtherance of any of indirectly, without
the guarantees under subparagraphs (a), from the charging,
(b) and (c) hereof. [Sec. 3, RA 8042, as workers or directly or
amended] employers or indirectly,
both any fee
Requirement License Authority
A.1. ILLEGAL RECRUITMENT
[Sec. 5, R.A. No. 10022]
Entities disqualified from being
i. License and Authority issued a license
License is a document issued by the (1) Travel agencies and sales agencies of
Department of Labor and Employment airline companies. [Art. 26]
(DOLE) authorizing a person or entity to
operate a private employment agency, while (2) Officers or members of the Board of any
an authority is a document issued by the corporation or members in partnership
DOLE authorizing a person or association to engaged in the business of a travel
engage in recruitment and placement agency.
activities as a private recruitment agency. [Art. (3) Corporations and partnerships, when any
13(d) and (f), LC] of its officers, members of the board or
partners, is also an officer, member of the
board of partner of a corporation or
License Authority partnership engaged in the business of a
Authorize an entity to Authorize an entity to travel agency.
operate as a private operate as a private (4) Persons, partnerships or corporations
employment agency recruitment entity which have derogatory records.
When a license is Does not entitle a (5) Any official or employee of the DOLE,
given, one is also private recruitment POEA, OWWA, DFA and other
authorized to collect entity to collect fees. government agencies directly involved in
fees the implementation of 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]

PAGE 13 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

Non-transferability of license or Based on POEA Rules the following are the

authority substantial capital requirements:
(1) No license or authority shall be used (1) Single proprietorships or partnerships
directly or indirectly by any person other with minimum capitalization of
than the one in whose favor it was issued P2,000,000.
or at any place other than that stated in
(2) Corporations with minimum paid-up
the license or authority,
capital of P2,000,000.
(2) Nor may such license or authority be
transferred, conveyed, or assigned to any
other person or entity. ii. Essential Elements of Illegal
Recruitment
Any transfer of business address,
appointment or designation of any agent or Recruitment and placement" refers to
representative including the establishment of any act of:
additional offices anywhere shall be subject
(a) Canvassing,
to the prior approval of the Department of
Labor. [Art. 29, LC] (b) Enlisting,
See: POEA Rules Part II, Rule II, Sec. 7, 8, 9 (c) Contracting,
(d) Transporting,
Enforceability of the license (e) Utilizing, or
Licensed agencies are prohibited from (f) Hiring procuring workers,
conducting any recruitment activities of any And also includes
form outside of the address stated in the
license, acknowledged branch or extension (a) Referrals,
office, without securing prior authority from (b) Contract services,
the POEA. [People vs. Buli-e, G.R. No. 123146
(2003)] (c) Promising, or
(d) Advertising for employment, locally or
abroad, whether for profit or not
Duration of Validity
Provided, That any person or entity which, in
4 years [POEA Rules of 2002] any manner, offers or promises for a fee
employment to two or more persons shall be
deemed engaged in recruitment and
Citizenship requirement placement. [Art. 13 (b), LC]
(1) Only Filipino citizens or Any of the acts mentioned above constitutes
(2) Corporations, partnerships or entities at recruitment and placement.
least seventy-five percent (75%) of the The proviso provides for a presumption that a
authorized and voting capital stock of person or entity so described engages in
which is owned and controlled by Filipino recruitment and placement [People v. Panis,
citizens shall be permitted to participate G.R. No. 58674 (1988)]
in the recruitment and placement of
workers, locally or overseas. [Art. 27, LC]
See: POEA Rules, Part II, Rule I, Sec. 1(a) W hat constitutes recruitment?
The number of persons dealt with is not an
essential ingredient of the act of recruitment
Capitalization requirement and placement of workers. Any of the acts
All applicants for authority to hire or renewal mentioned in Article 13(b) will constitute
of license to recruit are required to have such recruitment and placement even if only one
substantial capitalization as determined by prospective worker is involved. The proviso
the Secretary of Labor. [Art. 28, LC] merely lays down a rule of evidence that
PAGE 14 OF 222
UP LAW BOC LABOR STANDARDS
where a fee is collected in consideration of a
promise or offer of employment to two or
more prospective workers, the individual or
entity dealing with them shall be presumed
to be engaged in the act of recruitment and
placement. [People v. Panis]
Acts of referral
The act of referral, which is included in
recruitment, is "the act of passing along or
forwarding of an applicant for employment
after an initial interview of a selected
applicant for employment to a selected
employer, placement officer or bureau."
[Rodolfo vs. People, G.R. No. 146964 (2006)]
Promising employment
Promising employment as factory workers
and receiving money allegedly for processing
papers without authorization or license is
engaging into unlawful recruitment and
placement activities. The absence of the
necessary license or authority renders all of
accused-appellants recruitment activities
criminal. [People vs. Saulo, G.R. No. 125903
(2000)]
iii. Simple Illegal Recruitment
ILLEGAL RECRUITMENT FOR LOCAL
W ORKERS [Governed by the Labor Code]
Simple Illegal Recruitment (local)
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]
Profit or lack thereof is immaterial
The act of recruitment may be "for profit or
not." Notably, it is the lack of the necessary
license or authority, not the fact of payment
that renders the recruitment activity of LCL
unlawful. [C.F. Sharp vs. Espanol, G.R. No.
155903 (2007)]
PAGE 15 OF 222
LABOR LAW
Accused m ust give the im pression of
ability to send complainant abroad
It is well-settled that to prove illegal
recruitment, it must be shown that [the
accused] gave complainants the distinct
impression that she had the power or ability
to send complainants abroad for work such
that the latter were convinced to part with
their money in order to be employed. [People
v. Ochoa, G.R. No. 173792 (2011)]
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 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,
UP LAW BOC LABOR STANDARDS LABOR LAW

separation from jobs, departures and Second type:

such other matters or information as may
(1) Person charged commits any of the
be required by the Secretary of Labor.
enumerated acts under Sec. 6 of R.A.
(i) To substitute or alter employment 8042, as amended by, R.A. 10022.
contracts approved and verified by the
(2) It is immaterial whether he is a holder or
Department of Labor from the time of
not of any license or authority
actual signing thereof by the parties up to
and including the periods of expiration of
the same without the approval of the
Illegal recruitm ent shall mean any act of
Secretary of Labor;
canvassing, enlisting, contracting,
(j) To become an officer or member of the transporting, utilizing, hiring, or procuring
Board of any corporation engaged in workers and includes referring, contract
travel agency or to be engaged directly or services, promising or advertising for
indirectly in the management of a travel employment abroad, whether for profit or not,
agency; and when undertaken by non-licensee or non-
holder of authority contemplated under
(k) To withhold or deny travel documents
Article 13(f) of Presidential Decree No. 442, as
from applicant workers before departure
amended, otherwise known as the Labor
for monetary or financial considerations
Code of the Philippines; Provided, That any
other than those authorized under this
such non-licensee or non-holder who, in any
Code and its implementing rules and
manner, offers or promises for a fee
regulations. [Art. 34, LC, PERT/CPM
employment abroad to two or more persons
Manpower Exponent Co. v. Vinuya, G.R.
shall be deemed so engaged. [Sec. 6, RA
No. 197528 (2012)]
8042 as amended]

Contract Substitution amounts to

Other prohibited acts
Illegal Recruitm ent
It shall likewise include the following acts,
The reduced salaries and employment period
whether committed by any person, whether a
in the new employment contract contradicted
non-licensee, non-holder, licensee or holder
the POEA-approved employment contract. By
of authority:
this act of contract substitution, respondents
committed a prohibited practice and (a) To charge or accept directly or
engaged in illegal recruitment as defined in indirectly any amount greater than
Art. 34(i), LC. [PERT/CPM Manpower that specified in the schedule of
Exponent Co. v. Vinuya, G.R. No. 197528 allowable fees prescribed by the
(2012)] Secretary of Labor and Employment, or to
make a worker pay or acknowledge
any amount greater than that
ILLEGAL RECRUITMENT FOR actually received by him as a loan or
MIGRANT WORKERS [GOVERNED BY R.A. advance;
8042, AS AMENDED BY, R.A. 10022]
(b) To furnish or publish any false notice or
Simple Illegal Recruitment information or document in relation
to recruitment or employment;
First type:
(c) To give any false notice, testim ony,
(1) Person charged undertakes any
information or document or commit
recruitment activity as defined in Art.13
any act of misrepresentation for the
(b) of the Labor Code; and
purpose of securing a license or
(2) Said person does not have a license or authority under the Labor Code, or for
authority to do so. 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,
PAGE 16 OF 222
UP LAW BOC LABOR STANDARDS
work different from the actual overseas
work, or work with a different employer
whether registered or not with the POEA;
(d) To induce or attem pt 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 attem pt 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
docum ents from applicant workers
before departure for monetary or
financial considerations, or for any
other reasons, other than those
PAGE 17 OF 222
LABOR LAW
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 reim burse expenses
incurred by the worker in connection with
his documentation and processing for
purposes of deployment, in cases where
the deployment does not actually
take place without the worker's
fault. Illegal recruitment when
committed by a syndicate or in large
scale shall be considered 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
UP LAW BOC
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
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
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
Law Applicability
Labor Code Local Workers
RA 8042 as Migrant Workers
amended by RA
10022
iv. Illegal recruitment in large scale
Illegal recruitm ent 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, G.R. No. 187730
(2010)]
LABOR STANDARDS LABOR LAW
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]
Migrant W orkers Act (MW A) expands
the definition of illegal recruitment
by The amendments to the Labor Code
introduced by Republic Act No. 8042,
otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, broadened the
concept of illegal recruitment and provided
stiffer penalties, especially for those that
constitute economic sabotage. [People v.
Ocden, G.R. No. 173198 (2011)]
Acts Punishable Who can be punished
Art. 13(b) Non-licensee
Art. 34 Non-licensee
Art. 13(b) Labor Code Non-licensee
Enumerated prohibited Licensee/
acts in Section 6
Non-licensee
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.
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UP LAW BOC LABOR STANDARDS LABOR LAW

Three or more complainants must be intent of the accused is not necessary for
in a single case conviction, while estafa is malum in se where
the criminal intent of the accused is crucial
When the Labor Code speaks of illegal
for conviction. Conviction for offenses under
recruitment "committed against three (3) or
the Labor Code does not bar conviction for
more persons individually or as a group," it
offenses punishable by other laws.
must be understood as referring to the
Conversely, conviction for estafa under par.
number of complainants in each case who are
2(a) of Art. 315 of the Revised Penal Code
complainants therein, otherwise,
does not bar a conviction for illegal
prosecutions for single crimes of illegal
recruitment under the Labor Code. It follows
recruitment can be cumulated to make out a
that one's acquittal of the crime of estafa will
case of large scale illegal recruitment.
not necessarily result in his acquittal of the
In other words, a conviction for large scale crime of illegal recruitment in large scale, and
illegal recruitment must be based on a vice versa. [People v. Ochoa (2011); People v.
finding in each case of illegal recruitment of Ocden (2011)]
three or more persons whether individually or
as a group. [People vs. Reyes, G.R. No.
105204 (1995)] vii. Liabilities
a. Local Recruitment Agency
v. Illegal recruitment as economic Illegal recruitm ent involving local
sabotage workers [Art. 39, LC]
Offense involving Econom ic Sabotage Act Penalty
(Large-Scale or by a Syndicate) Licensee or holder Imprisonment: 2 - 5
Illegal recruitment is considered economic of authority yrs.
sabotage when the commission thereof is violating or causing OR
attended by the ff. qualifying circumstances: another to violate Fine: P10k P50k
Title I, Book I, LC OR
(1) By a syndicate - if carried out by a Both
group of 3 or more persons conspiring Violating or Imprisonment: 4 - 8
and confederating with one another; causing another to yrs. OR
(2) In large scale - if committed against 3 violate Title I, Book Fine: P20k P100k
or more persons individually or as a group. I, LC OR
[Art. 38(b), LC] Both
Illegal recruitment Life imprisonment
constituting AND
See iv. Illegal recruitment in large scale for economic sabotage Fine: P100k
requisites and discussion
If the offender is a corporation, partnership,
association or entity, the penalty shall be
vi. Illegal recruitment vs. estafa imposed upon the officer or officers of the
One convicted for illegal recruitm ent corporation, partnership, association or entity
may still be convicted of estafa responsible for violation.

In People v. Cortez the Court explained that:
In this jurisdiction, it is settled that a person
who commits illegal recruitment may be
charged and convicted separately of illegal
recruitment under the Labor Code and estafa
under par. 2(a) of Art. 315 of the Revised
Penal Code. The offense of illegal recruitment
is malum prohibitum where the criminal
If such officer is an alien, he 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 authority and all the perm its and
privileges granted to such person or entity
under this Title, and the forfeiture of the

PAGE 19 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

cash and surety bonds in favor of the (2) Private employment agencies are
Overseas Employment Development Board or held jointly and severally liable 11
the National Seamen Board, as the case may with the foreign-based employer
be, both of which are authorized to use the for any violation of the recruitment
same exclusively to promote their objectives. agreement or contract of employment.
This joint and solidary liability imposed by
Illegal recruitm ent involving m igrant
law against recruitment agencies and
workers [SEC. 7, RA 8042 AS AMENDED BY
foreign employers is meant to assure the
RA 10022]
aggrieved worker of immediate and
sufficient payment of what is due him
[Becmen Service Exporter vs. Sps.
Act Penalty
Cuaresma, G.R. 182978-79, (2009]
Prohibited Imprisonment: 6 yrs. and 1
(3) If the recruitm ent/placem ent
Act/s day 12 yrs.
agency is a juridical being, the
AND
corporate officers and directors
Fine: P500k P1M
and partners as the case m ay be,
Illegal Imprisonment: 12 yrs. and 1 shall themselves be jointly and
recruitment day 20 yrs. solidarily liable with the corporation
AND or partnership for the aforesaid claims
Fine: P1M P2M and damages. [Becmen Service Exporter
Illegal Life imprisonment vs. Sps. Cuaresma, G.R. 182978-79,
recruitment AND (2009]
constituting Fine: P2M P5M
economic (4) Foreign em ployer shall assum e
sabotage Maxim um penalty if: joint and solidary liability with the
1. Illegally recruited person employer for all claims and liabilities
below 18 years old which may arise in connection with the
OR implementation of the contract, including
2. Offense committed but not limited to payment of wages,
without license/authority death and disability compensation and
repatriation
If the offender is an alien, he or she shall, in
addition to the penalties herein prescribed, Common Rules on Illegal Recruitment
be deported without further proceed- (Local or Overseas)
ings.
a. Venue
In every case, conviction shall cause and carry
the automatic revocation of the license A criminal action arising from illegal
or registration of the recruitment/ recruitment shall be filed with the RTC of the
manning agency, lending institutions, province or city:
training school or medical clinic. (1) where the offense was committed or
(2) where the offended party actually
Common Rules on Liability resides at the time of the
commission of the offense. [Sec. 9, R.A.
(1) Employees of a company or 8042 (this part was not amended by R.A.
corporation engaged in illegal 10022)].
recruitment may be held liable as
principal, together with his employer, if it Prescriptive Periods
is shown that he actively and consciously (1) Simple Illegal Recruitment 5 years
participated in illegal recruitment.
[People vs. Sagayaga, G.R. 143726 (2) Illegal Recruitment involving Economic
(2004)] Sabotage 20 years [Sec. 12, R.A. 8042

PAGE 20 OF 222
UP LAW BOC LABOR STANDARDS
(this part was not amended by R.A,
10022)].
b. Foreign Employer
Foreign em ployer shall assum e joint
and solidary liability with the em ployer
for all claims and liabilities which may arise in
connection with the implementation of the
contract, including but not limited to
payment of wages, death and disability
compensation and repatriation
Theory of imputed knowledge
This is a doctrine in agency which states that
the principal is chargeable with and bound by
the knowledge of or notice to his agent
received while the agent was acting as such.
Simply put, notice to the agent is notice
to the principal.
Since the local employment agency is
considered the agent of the foreign employer,
the principal, knowledge of the former of
existing labor and social legislation in the
Philippines is binding on the latter.
Consequently, notice to the former of any
violation thereof is notice to the latter.
However, notice to the principal is not notice
to the agent. The SC held in Sunace
International Management Services, Inc. vs.
NLRC [G.R. 161757 (2006)] that the theory of
imputed knowledge ascribes the knowledge
of the agent to the principal, not the other
way around. The knowledge of the
principal-foreign employer cannot, therefore,
be imputed to its agent.
c. Solidary Liability
Solidary Liability of Agent and
Principal
The written application for a license to
operate a private employment or manning
agency shall be submitted with, among
others, a verified undertaking stating that
the applicant:
(1) Shall assume full and complete
responsibility for:
PAGE 21 OF 222
LABOR LAW
all claims and liabilities which may
arise in connection with the use of
license;
all acts of its officials, employees and
representatives done in connection with
recruitment and placement;
(2) Shall assume joint and solidary
liability with the employer for all claims and
liabilities which may arise in connection with
the implementation of the contract, including
but not limited to payment of wages, death
and disability compensation and repatriation;
(3) Shall guarantee compliance with the
existing labor and social legislations of the
Philippines and of the country of employment
of recruited workers [POEA Rules, Book II,
Rule II, Sec. 1 (f) (2-5)]
Purpose of Solidary Liability
The fact that the manning agency and its
principal have already terminated their
agency agreement does not relieve the
former of its liability. The agency agreement
with the principal even if ended as between
them, still extends up to and until the
expiration of, the employment contracts of
the employees recruited and employed
pursuant to the said recruitment agreement.
Otherwise, this will render nugatory the very
purpose for which the law governing the
employment of workers for foreign jobs
abroad was enacted, that is, to assure
aggrieved workers of im mediate and
sufficient payment of what is due
them. [OSM Shipping Phil, Inc. v. NLRC
(2003)]
viii. Pre-termination of contract of
migrant worker
In case of termination of overseas
employment,
without just, valid or
authorized cause as defined by
law or contract, or
any unauthorized deductions
from the migrant worker's salary
UP LAW BOC LABOR STANDARDS
...shall entitle the worker to full
reimbursement of:
(1) his placement fee and the deductions
made with interest at twelve percent
(12%) per annum,
and;
(2) 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*] [Sec. 10, R.A.
8042, as amended by R.A. 10022]
Rule before Serrano (1995-2009): 3-
month salary rule applied
The employment contract involved in the
instant case covers a two-year period but the
overseas contract worker actually worked for
only 26 days prior to his illegal dismissal.
Thus, the three months salary rule applies
[Flourish Maritime Shipping v. Almanzor, G.R.
No. 177948 (2008)]
Rule after Serrano: invalidated the 3-
month salary cap clause
The SC there held that said clause is
unconstitutional for being an invalid
classification, in violation of the equal
protection clause. [Serrano v. Gallant
Maritime Services, Inc., G.R. No. 167614
(2009)]
In the case of Yap vs. Thenamaris Ships
Management and Intermare Maritime
Agencies, Inc. [G.R. No. 179532 (May 30,
2011)], the SC affirmed the Serrano ruling, but
did not apply the Operative Fact doctrine: As
an exception to the general rule, the doctrine
applies only as a matter of equity and fair
play.
NB: In 2010, a year after Serrano, RA 10022,
in amending RA 8042, reincorporated the
nullified 3-month salary cap clause.
However, the SC did not allow this and
again struck the revived clause as
unconstitutional in the 2014 case of
Sameer Overseas Placement Agency vs.
Cabiles [G.R. No. 170139, (August 05, 2014)].
There, the SC said that: when a law or a
PAGE 22 OF 222
LABOR LAW
provision of law is null because it is
inconsistent with the Constitution, the nullity
cannot be cured by reincorporation or
reenactment of the same or a similar law or
provision. A law or provision of law that was
already declared unconstitutional remains as
such unless circumstances have so changed
as to warrant a reverse conclusion.
Hence, the case of Serrano holds as
binding precedent, even after the
passage of RA 10022.
A.2. 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]
B. Regulations and enforcement
B.1. 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:
violation of rules and regulations issued by
the Department of Labor, the Overseas
Employment Development Board, and the
National Seamen Board
UP LAW BOC LABOR STANDARDS
violation of the provisions of this and other
applicable laws, General Orders and
Letters of Instructions. [Art. 35, LC]
Acts prohibited under Article 34 are grounds
for suspension or cancellation of license.
Note that these acts likewise constitute
illegal recruitment under R.A. 8042 as
amended by R.A. 10022.
W ho can suspend or cancel the
license?
(1) DOLE Secretary
(2) POEA Administrator
The power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with
the POEA and the Secretary of Labor. [People
v. Diaz, G.R. 112175 (1996)]
B.2. Regulatory and Visitorial powers
of the DOLE secretary
Regulatory & rule-making 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.
Note: In the old case of Salazar vs. Achacoso
[G.R. No. 81510 (1990)], it was declared that
Art. 38 of the LC is unconstitutional and that
the Secretary of Labor and Employment
cannot issue a warrant of arrest.
PAGE 23 OF 222
LABOR LAW
B.3. Remittance of Foreign Exchange
Earnings
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]
Am ount required to be rem itted
[Executive Order No. 857]
The amount of ones salary required to be
remitted depends on the type or nature
of work perform ed 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 basic
salary
(2) Workers for Filipino contractors and
construction companies 70%
(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.
UP LAW BOC LABOR STANDARDS
B.4. Prohibited Activities
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 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
PAGE 24 OF 222
LABOR LAW
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)
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;
(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;
UP LAW BOC LABOR STANDARDS
(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
the deployment does not actually take
place without the worker's fault. Illegal
recruitment when committed by a
PAGE 25 OF 222
LABOR LAW
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;
UP LAW BOC LABOR STANDARDS
(6) For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the
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)
PAGE 26 OF 222
LABOR LAW
III. Labor Standards
A. COVERAGE
[Art. 82, Labor Code]
General rule: Shall apply to employees in
all establishments and undertakings whether
for profit or not. [Art. 82, LC]
Exceptions (those NOT covered by Art.
82):
(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, RA 10361]
(6) Workers who are paid by result as
determined by DOLE regulation [Art. 82]
A.1. 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).
However, not all GOCCs are governed by the
Civil Service Rules; only those created by
original charter are governed by the Civil
Service rules:
Following Sec. 2(i) Art. IX-B of 1987 Phil.
Constitution, the test in determining whether
a government owned corporation is subject to
the Labor Code or the Civil Service law is
finding out what created it if its created by a
special charter, then, Civil Service Law applies,
if it is created by the General Corporation Law,
then the Labor Code applies. [PNOC Energy
Development Corp. v. NLRC (1991)]
UP LAW BOC LABOR STANDARDS
A.2. MANAGERIAL EMPLOYEES
Two definitions of managerial
employees in the Labor Code:
[Art. 82, LC] 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. 212 (m), LC] 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.
The definition in Art. 82 covers more people
than that in Article 212 (m) as Article 82 also
includes managerial staff. In effect,
managerial employees in Article 82 includes
supervisors, but Article 212(m) does not.
It follows that under Book V, supervisors are
allowed to form, join or assist a labor union.
Supervisors are not, however, entitled to the
benefits under Book III Articles 83 through 96,
being part of the exemption of managerial
employees as defined in Article 82. [Azucena]
Characteristics of managerial
employees
[Book 3, Rule 1, Sec. 2(b), IRR]
Managerial employees are exempted from
the coverage of Book III Articles 83 through
96 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.
PAGE 27 OF 222
LABOR LAW
(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 as they
are considered managerial employees
as well
[Book 3, Rule 1, Sec. 2(c), IRR]
Officers or members of a managerial staff are
also exempted if they perform the following
duties and responsibilities:
(1) Their primary duty consists of the
performance of work directly related to
management policies of their
employer;
(2) Customarily and regularly exercise
discretion and independent judgment;
(3) (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% 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.
UP LAW BOC LABOR STANDARDS
A.3. 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]
Legal Test: Control & Supervision of
employer
Although the fishermen perform non-
agricultural work away from petitioners
business offices, the fact remains that
throughout the duration of their work they
are under the effective control and supervision
of petitioner through the vessels patron or
master. Hence, the fishermen are not field
personnel. [Mercidar Fishing Corporation v.
NLRC (1998)]
In order to determine whether an employee is
a field employee, it is also necessary to
ascertain if actual hours of work in the field
can be determined with reasonable certainty
by the employer. In so doing, an inquiry must
be made as to whether or not the employees
time and performance are constantly
supervised by the employer. [Far East
Agricultural Supply v. Lebatique (2007)]
A.4. 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.
A.5. DOMESTIC HELPERS
[Art. 141, LC.] "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
PAGE 28 OF 222
LABOR LAW
family drivers.
Note: The Kasambahay Law (RA 10361) has
redefined domestic worker or
kasambahay:
[RA 10361 Art. 1, Sec. 4 (d).] 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 but
shall exclude any person who performs
domestic work only occasionally or
sporadically and not on an occupational
basis.
Exclusivity of function required
Note that the definition contemplates a
domestic helper who is employed in the
employers home to minister exclusively to
the personal comfort and enjoyment of the
employers family. [Azucena]
Thus, it has been held that the following
personnel are not domestic employees:
(1) House personnel hired by a ranking
company official but paid by the company
itself to maintain a staff house provided
for the official. [Cadiz v. Philippine Sinter
Corp, NLRC Case No. 7-1729, cited by
Azucena]
(2) A family cook, who is later assigned to
work as a watcher and cleaner of the
employers business establishment,
becomes an industrial worker entitled to
receive the wages and benefits flowing
from such status. [Villa v. Zaragosa and
Associates, OP Decision No. 0183, cited by
Azucena]
A.6. PERSONS IN PERSONAL SERVICE OF
ANOTHER
[Book 3, Rule 1, Sec. 2 (d), IRR]
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
UP LAW BOC LABOR STANDARDS
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.
A.7. WORKERS PAID BY RESULT
[Book 3, Rule 1, Sec. 2 (e), IRR.]
Workers who are paid by results, including
those who are paid on piece work, takay,
pakiao or task basis, and other nontime
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.
Workers under piece-rate employment have
no fixed salaries and their compensation is
computed on the basis of accomplished tasks.
That their work output might have been
affected by the change in their specific work
assignments does not necessarily imply that
any resulting reduction in pay is tantamount
to constructive dismissal. It is the prerogative
of the management to change their
assignments or to transfer them. [Best Wear
Garments v. De Lemos and Ocubillo (2012)]
B. HOURS OF WORK
B.1. COVERAGE/EXCLUSIONS
See previous section (A. Coverage) which deals
with the general rules of coverage and
exclusions for the applicability of the
Conditions of Employment provisions in Book
III of the Labor Code.
B.2. 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]
Note: Article 83 of the Labor Code only set a
maximum of number of hours as "normal
hours of work" but did not prohibit work of
PAGE 29 OF 222
LABOR LAW
less than eight hours [Legend Hotel v. Realuyo,
G.R. 153511 (2012)]
EXCEPTIONS to 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) 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. 83, LC]
Medical secretaries are also considered clinic
personnel. [Azucena]
Compensable Hours of W ork (Art. 84,
LC)
Hours worked shall include:
(1) All time during which an employee is
required to be on duty or to be at a
prescribed workplace; AND
(2) All time during which an employee is
suffered or permitted to work.
General principles in determining if
time is considered as hours worked
[Book III, Rule 1, Sec. 4, IRR]
(1) All hours are hours worked which the
employee is required to give his employer,
regardless of whether or not such hours
UP LAW BOC LABOR STANDARDS LABOR LAW

are spent in productive labor or involve On call

physical or mental exertion.
Compensable work time, if employee is:
(2) An employee need not leave the premises
(1) Required to remain on call in the
of the work place in order that his rest
employers premises or so close thereto
period shall not be counted, it being
enough that he stops working, may rest (2) That he cannot use the time effectively
completely and may leave his work place and gainfully for his own purpose shall
to go elsewhere, whether within or be considered as working while on call.
outside the premises of his work place.
(3) If the work performed was necessary, or it
Book III, Rule 1, Sec. 5(b), IRR. An employee
benefited the employer, or the employee
who is not required to leave word at his home
could not abandon his work at the end of
or with company officials where he may be
his normal working hours because he had
reached is NOT working while on call.
no replacement, all time spent for such
work shall be considered as hours worked,
if the work was with the knowledge of his
Inactive due to work interruptions
employer or immediate supervisor.
The time during which an employee is
(4) The time during which an employee is
inactive by reason of interruptions in his work
inactive by reason of interruptions in his
beyond his control shall be considered
work beyond his control shall be
working time either:
considered working time either:
(1) If the imminence of the resumption of
(a) If the imminence of the resumption of
work requires the employee's presence
work requires the employees
at the place of work OR
presence at the place of work, or
(2) If the interval is too brief to be utilized
(b) If the interval is too brief to be utilized
effectively and gainfully in the
effectively and gainfully in the
employee's own interest. [Book III, Rule
employees own interest.
1, Sec. 4(d), IRR]

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.
[Book III, Rule 1, Sec. 7, par. 2, IRR]
[Book 3, Rule 1, Sec. 4 (b), 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.
W ork 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:
a) the employees can leave their
workplace or go elsewhere whether
within or without the work premises;
OR
b) 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

PAGE 30 OF 222
UP LAW BOC LABOR STANDARDS
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 (d), IRR]
Necessary W ork 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 considered as hours worked if the
work was with the knowledge of his employer
or immediate supervisor. [Book III, Rule 1, Sec.
4(c), IRR]
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 or required by
the employer are considered hours
worked.
(2) Attendance in CBA negotiations or
grievance meeting is compensable hours
worked.
PAGE 31 OF 222
LABOR LAW
(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 tim e
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)]
A laborer need not leave the premises of the
factory, shop or boat in order that his period
of rest shall not be counted, it being enough
that he "cease to work", may rest completely
and leave or may leave at his will the spot
where he actually stays while working, to go
somewhere else, whether within or outside
the premises of said factory, shop or boat. If
these requisites are complied with, the period
of such rest shall not be counted. [Luzon
Stevedoring Co. v. Luzon Marine Department
Union (1957)]
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
home-to-work travel which is NOT
considered hours worked, 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
spent by an employee in travel from
jobsite to jobsite during the workday,
must be counted as hours worked. Where
UP LAW BOC LABOR STANDARDS
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.
Semestral Break of Private School
Teachers
Regular full-time teachers are entitled to
salary during semestral breaks. These
semestral breaks are in the nature of work
interruptions beyond the employees control.
As such, these breaks cannot be considered
as absences within the meaning of the law for
which deductions may be made from monthly
allowances. [University of the Pangasinan
Faculty Union v. University of Pangasinan
(1984)]
W ork Hours of Seamen
Citing the 1957 ruling of Luzon Stevedoring
Co., Inc. vs Luzon Marine Department Union,
et al [G.R. 9265(1957)], the SC reiterated in
the more recent case of Cagampan, et al. vs
NLRC [G.R. 85122-24 (March 22, 1991)], that
seamen are required to stay on board of
their vessels by the very nature of their duties,
and it is for this reason that, in addition to
their regular compensation, they are given
free living quarters to be on board. It could
not have been the purpose of the law to
require their employers to pay them overtime
pay even when they are not actually working.
The correct criterion in determining whether
or not sailors are entitled to overtime pay is
not, therefore, whether they are on board and
cannot leave ship beyond the regular eight
working number of hours, but whether they
actually rendered service in excess of said
number of hours.
PAGE 32 OF 222
LABOR LAW
Proof of Hours worked
Entitlement to overtime pay must first be
established by proof that said overtime work
was actually performed, before an employee
may avail of said benefit. [Lagatic v. NLRC,
G.R. 121004 (1998)]
Burden of Proof: When an employer
alleges that his employee works less than the
normal hours of employment as provided for
in the law, he bears the burden of proving his
allegation with clear and satisfactory
evidence. [Prangan v. NLRC, et. al., G.R. No.
126529, (1998)]
FLEXIBLE W ORK ARRANGEMENTS
[DOLE Advisory No. 02, Series of 2004]
These are alternative arrangements or
schedules other than the standard work
hours, workdays, and workweek. Their
effectivity and implementation shall be
temporary in nature.
Prior to implementation, the employer shall
notify the Department through the Regional
Office which has jurisdiction over the
workplace, of the adoption of any of the
flexible work arrangements.
Under the following work arrangements, the
employers and employees are encouraged to
explore alternative schemes under any
agreement and company policy or practice to
cushion and mitigate the effect of the loss of
income of the employees.
Reduction of W orkdays
The normal workdays per week are reduced
but this arrangement should not last for more
than 6 months.
Rotation of W orkers
The employees are rotated or alternately
provided work within the workweek
UP LAW BOC LABOR STANDARDS
Forced Leave
Employees are required to go on leave for
several days or weeks utilizing their leave
credits of there are any.
Broken-time Schedule
The works schedule is not continuous but the
work hours within the day or week remain.
Flexi-holidays
The employees agree to avail the holidays at
some other days provided there is no
diminution of existing benefits as a result of
such arrangement.
Compressed W ork W eek (CW W )
[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 CW W
(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. This agreement may be
expressed through collective bargaining
or other legitimate workplace
mechanisms of participation such as
labor management councils, employee
assemblies or referenda.
(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
PAGE 33 OF 222
LABOR LAW
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]
Effects of CW W
(1) Unless there is a more favorable practice
existing in the firm, work beyond eight
hours will not be compensable by
overtime premium provided the total
number of hours worked per day shall not
exceed twelve (12) hours. In any case, any
work performed beyond 12 hours a day or
48 hours a week shall be subject to
overtime premium.
(2) Consistent with Art. 85 of the LC,
employees under a CWW scheme are
entitled to meal periods of not less than
60 minutes. There shall be no
impairment of the right of the employees
to rest days as well as to holiday pay, rest
day pay or leaves in accordance with law
or applicable collective bargaining
agreement or company practice.
(3) Adoption of the CWW scheme shall in no
case result in diminution of existing
benefits. Reversion to the normal eight-
hour workday shall not constitute a
diminution of benefits.
Rationale
Although the right to overtime pay cannot be
waived as per Cruz v. Yee Sing (1959), D.O. No.
21 sanctions the waiver of overtime pay in
consideration of the benefits that the
employees will derive from the adoption of a
compressed workweek scheme, thus:
The compressed workweek scheme was
originally conceived for establishments
wishing to save on energy costs, promote
greater work efficiency and lower the rate of
employee absenteeism, among others.
Workers favor the scheme considering that it
would mean savings on the increasing cost of
UP LAW BOC LABOR STANDARDS
transportation fares for at least one (1) day a
week; savings on meal and snack expenses;
longer weekends, or an additional 52 off-days
a year, that can be devoted to rest, leisure,
family responsibilities, studies and other
personal matters, and that it will spare them
for at least another day in a week from certain
inconveniences that are the normal incidents
of employment, such as commuting to and
from the workplace, travel time spent,
exposure to dust and motor vehicle fumes,
dressing up for work, etc. Thus, under this
scheme, the generally observed workweek of
six (6) days is shortened to five (5) days but
prolonging the working hours from Monday
to Friday without the employer being obliged
for pay overtime premium compensation for
work performed in excess of eight (8) hours
on weekdays, in exchange for the benefits
above cited that will accrue to the employees.
[Bisig Manggagawa sa Tryco v. NLRC, et al.
(2008)]
B.3. 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)
Exceptions:
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:
(1) Where the work is non-manual work in
nature or does not involve strenuous
physical exertion;
(2) Where the establishment regularly
operates not less than sixteen (16)
hours a day;
(3) 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;
OR
PAGE 34 OF 222
LABOR LAW
(4) Where the work is necessary to prevent
serious loss of perishable goods [Book
3, Rule 1, Sec. 7 par 1, IRR]
Employees are not prohibited from going out
of the premises as long as they return to their
posts on time. Nowhere in the law may it be
inferred that employees must take their
meals within the company premises.
[Philippine Airlines v. NLRC (1999)]
SYNTHESIS OF THE RULES
General Rule: Meal periods are NOT
compensable.
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 are deemed
compensable when the employee is on
continuous shift. [National Development
Co. v. CIR, G.R. No. L-15422, (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 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]
Conditions for shortened m eal breaks
upon em ployees request.
(1) The employees voluntarily agree in
writing to a shortened meal period of 30
minutes and are willing to waive the
UP LAW BOC LABOR STANDARDS
overtime pay for such shortened meal
period;
(2) There will be no diminution whatsoever in
the salary and other fringe benefits of the
employees existing before the effectivity
of the shortened meal period;
(3) The work of the employees does not
involve strenuous physical exertion and
they are provided with adequate coffee
breaks in the morning and afternoon.
(4) The value of the benefits derived by the
employees from the proposed work
arrangement is equal to or
commensurate with the compensation
due them for the shortened meal period
as well as the overtime pay for 30
minutes as determined by the employees
concerned;
(5) The overtime pay of the employees will
become due and demandable if ever they
are permitted or made beyond 4:30pm;
and
(6) The effectivity of the proposed working
time arrangement shall be of temporary
duration as determined by the Secretary
of Labor.
B.4. WAITING TIME
[Book III, Rule I Sec. 5(a), IRR]
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 3, Rule 1, Sec. 5(b), 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.
Legal test: Whether waiting time
constitutes working time depends upon the
circumstances of each particular case. The
facts may show that the employer was
engaged or was waiting to be engaged. The
PAGE 35 OF 222
LABOR LAW
controlling factor is whether waiting time
spent in idleness is so spent predominantly
for the employers benefit or for the
employees. [Azucena, citing Armour v.
Wantock]
B.5. OVERTIME WORK, OVERTIME PAY
Overtime compensation is additional pay for
service or work rendered or performed in
excess of eight hours a day by employees or
laborers covered by the Eight-hour Labor Law.
[National Shipyard and Steel Corp. v. CIR
(1961)]
Rationale
There can be no other reason than that he is
made to work longer than what is
commensurate with his agreed compensation
for the statutorily fixed or voluntary agreed
hours of labor he is supposed to do. [PNB v.
PEMA (1982)]
Overtim e on ordinary working day
Art. 87, LC. 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.
Overtim e work on holiday or rest day
Art. 87, LC. 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.
Computation of additional
compensation
Art. 90, LC. For purposes of computing
overtime and other additional remuneration
as required by this Chapter the "regular
wage" of an employee shall include the cash
wage only without deduction on account of
facilities provided by the employer.
UP LAW BOC LABOR STANDARDS
Base of Computation: Regular wage
means regular base pay; it excludes money
received in different concepts such as
Christmas bonus and other fringe benefits.
[Bisig ng Manggagawa ng Philippine Refining
Co. v. Philippine Refining Co , G.R. L-27761
(1981)]
BUT when the overtime work was performed
on the employees rest day or on special days
or regular holidays (Art. 93 and 94), the
premium pay, must be included in the
computation of the overtime pay.
[See: p. 19 of Handbook on Workers
Statutory Monetary Benefits, issued by the
Bureau of Working Conditions, 2006]
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 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.
Overtim e pay does not preclude night
differential pay
PAGE 36 OF 222
LABOR LAW
When the tour of duty of a laborer falls at
nighttime [between 10:00pm and 6:00am],
the receipt of overtime pay will not preclude
the right to night differential pay. The latter is
payment for work done during the night while
the other is payment for the excess of the
regular eight-hour work. [Naric v. Naric
Workers Union (1959)]
SYNTHESIS OF RULES
(1) An employer cannot compel an employee
to work overtime
Exception: Emergency overtime
work as provided for in Art. 89
(2) Additional compensation is demandable
only if the employer had knowledge and
consented to the overtime work rendered
by the employee.
Exception: Express approval by a
superior NOT a requisite to make
overtime compensable:
(a) If the work performed is necessary,
or that it benefited the company;
or
(b) That the employee could not
abandon his work at the end of
his eight-hour work because there
was no substitute ready to take
his place. [Manila Railroad Co. v.
CIR, G.R. L-4614 (1952)]
Note: However, the Court has also
ruled that a claim for overtime pay is
NOT justified in the absence of a
written authority to render overtime
after office hours during Sundays and
holidays. [Global Incorporated v.
Atienza, G.R. L-51612-13 (1986)]
(3) Compensation for work rendered in
excess of the 8 normal working hours in
a day.
(a) For ordinary days, additional 25%
of the basic hourly rate.
(b) For rest day/special day/holiday,
additional 30% of the basic
hourly rate.
(4) A given day is considered an ordinary
day, unless it is a rest day.
UP LAW BOC LABOR STANDARDS
(5) Undertim e does NOT offset
overtim e. 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]
No W aiver of Overtime Pay
The right to overtime pay cannot be waived.
The Labor Code (Art. 87) requires that an
employee be paid all overtime compensation
notwithstanding any agreement to work for a
lesser wage. Consequently, such an
agreement or "waiver" will not prevent an
employee from recovering the difference
between the wages paid the employee and
the overtime compensation he or she is
entitled to receive. [Cruz v. Yee Sing, G.R. L-
12046 (1959)]
Exception: When the waiver of overtime pay
is in consideration of benefits and privileges
which may be more than what will accrue to
them in overtime pay, the waiver MAY be
permitted. [Meralco Workers Union v.
MERALCO, G.R. L-11876 (1959)]
Composite or Package Pay NOT per se
illegal
Composite or package pay or all-inclusive
salary is an arrangement where the
employees salary includes the overtime pay.
In other words, the overtime pay is built-in.
Two conditions for validity of such
arrangement:
(1) There is a clear written agreement
knowingly and freely entered by the
employee; and
(2) The mathematical result shows that the
agreed legal wage rate and the overtime
pay, computed separately, are equal to or
higher than the separate amounts legally
due. [Damasco v. NLRC, G.R. 115755
(2000)]
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LABOR LAW
B.6. NIGHT WORK, NIGHT SHIFT
DIFFERENTIAL
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, LC as amended by RA
10151]
Any employed person whose work covers the
period from 10 oclock in the evening to 6
oclock the following morning, provided that
the worker performs no less than 7
consecutive hours of work. [Book III, Rule XV,
Sec. 2, IRR, through DO 119-12]
Health Assessm ent
At the workers request, they shall have the
right to undergo a health assessment without
charge and to receive advice on how to
reduce or avoid health problems associated
with their work:
(a) Before taking up an assignment as a
night worker;
(b) At regular intervals during such an
assignment;
(c) If they experience health problems during
such an assignment;
With the exception of a finding of unfitness
for night work, the findings of such
assessments shall be confidential and shall
NOT be used to their detriment, subject,
however, to applicable company policies. [Art.
155, LC as amended by RA 10151; Book III, Rule
XV, Sec. 3, IRR, through DO 119-12]
Mandatory Facilities
Mandatory facilities shall be made available
for workers performing night work, which
include the following:
(a) Suitable first-aid and emergency facilities
(b) Lactation station in required companies
pursuant to RA 10028
UP LAW BOC LABOR STANDARDS
(c) Separate toilet facilities for men &
women
(d) Facility for eating w/ potable drinking
water; AND
(e) Facilities for transportation and/or
properly ventilated temporary sleeping or
resting quarters, separate for male and
female workers, shall be provided except
where any of the ff. circumstances is
present:
i. There is an existing company
guideline, practice or policy, CBA,
or any similar agreement
providing for an equivalent or
superior benefit; or
ii. Start or end of the night work
does NOT fall within 12 mn - 5
am; or
iii. Workplace is located in an area
that is accessible 24 hours to
public transportation; or
iv. Number of employees does NOT
exceed a specified number as
may be provided for by the SOLE
in subsequent issuances [Art. 156,
LC as amended by RA 10151; Book
III, Rule XV, Sec. 4, IRR, through
DO 119-12]
Transfer
If night worker is unfit for night work due to
health reasons as certified by competent
physician, s/he shall be:
(1) Transferred in good faith to a job for
which they are fit to work whenever
practicable, which must be similar
and equivalent position;
(2) If transfer is not practicable, or
workers are unable to render night
work for a continuous period of not
less than 6 months upon certification
of a competent public health
authority, they shall be granted the
same benefits as other workers who
are unable to work due to illness.
(3) If workers are certified as temporarily
unfit to render night work for a period
of less than 6 months, they shall be
given the same protection against
PAGE 38 OF 222
LABOR LAW
dismissal or notice of dismissal as
other workers who are prevented
from working for health reasons. [Art.
157, LC as amended by RA 10151; Book
III, Rule XV, Sec. 5, IRR, through DO
119-12]
W omen Night W orkers
Employers shall ensure that measures shall
be taken to ensure that an alternative to
night work for pregnant and nursing
employees who would otherwise be called
upon to perform such work. Such measures
may include:
(1) Transfer to day work As far as
practicable, pregnant or nursing
employees shall be assigned to day work,
before and after childbirth, for a period of
at least sixteen (16) weeks, which shall be
divided between the time before and after
childbirth;
Medical certificate issued by competent
physician (OB/Gyne/Pedia) is necessary
for the grant of:
(a) additional periods of assignment to
day work during pregnancy or after
childbirth, provided that such shall
not be more than 4 weeks or for a
longer period as may be agreed upon
by employer and worker;
(b) extension of maternity leave; and
(c) clearance to render night work.
(2) Provision of social security benefits - in
accordance with provisions of Act No
8282 (Social Security Act of 1997) and
other existing company policy or
collective bargaining agreement.
(3) Extension of maternity leave where
transfer to day work is not possible, but
requires recommendation by competent
physician; without pay or using earned
leave credits, if any [Art. 158, LC, as
amended by RA 10151; Book III, Rule XV,
Sec. 6, IRR, through DO 119-12]
UP LAW BOC LABOR STANDARDS
Protection against dismissal and loss
of benefits attached to em ploym ent
status, seniority, and access to
promotion
Where no alternative work can be provided to
a woman employee who is not in a position to
render night work, she shall be allowed to go
on leave or on extended maternity leave,
using her earned leave credits.
A woman employee shall NOT be dismissed
for reasons of pregnancy, childbirth and
childcare responsibilities as defined under
this Rule. She shall NOT lose the benefits
regarding her employment status, seniority,
and access to promotion which may attach to
her regular night work position. [Book III, Rule
XV, Sec. 8, IRR, through DO 119-12]
Night shift differential [Art. 86, LC]
The additional compensation of 10% of an
employees regular wage for each hour of
work performed between 10pm and 6am.
Coverage [Book 3, Rule 2, Sec. 1, IRR]
All employees, except:
(1) Those of the government and any of its
political subdivisions, including
government-owned and/or controlled
corporations;
(2) Those of retail and service establishments
regularly employing not more than five
(5) workers;
(3) Domestic helpers and persons in the
personal service of another;
(4) Managerial employees as defined in Book
Three of this Code;
(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.
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LABOR LAW
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.
W ork 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.
B.7. 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.
B.8. CONTRACT FOR PIECE OF WORK
[Art. 1467, CC.] 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 order, and
not for the general market, it is a contract for
a piece of work.
UP LAW BOC LABOR STANDARDS LABOR LAW

C. 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), LC]
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." [Sugue v.
Triumph International (2009)]
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.
[Sugue v Triumph International, supra]
Coverage/Exclusions
Wage includes the fair and reasonable value
of facilities furnished by the employer to the
employee [Art. 97(f)] while allowances are
excluded from the basic salary or wage
computation. [Cebu Institute of Technology v
Ople (1987)]
Applicability
The Labor Code Title on wages shall not
apply to the following [Art. 98 and Book 3,
Rule VII, Sec 3, IRR]:
(1) Farm tenancy or leasehold;
(2) Household or domestic helpers,
including family drivers and other
persons in the personal service of
another;
(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;
Note: Workers in registered barangay micro
business enterprise are only exempted from
the Minimum Wage Law, not from the Title
on Wages [RA 9178].
C.1. WAGE VS. SALARY
Wages and salary are in essence synonymous.
[Songco v. NLRC (1990)]
There are slight differences:

Equal W ork for Equal Pay Principle Wage Salary

Employees working in the Philippines, if they Paid for skilled or Paid to white collar
are performing similar functions and unskilled manual workers and denote a
responsibilities under similar working labor higher grade of
conditions should be paid equally. If an employment
employer accords employees the same Not subject to Not exempt from
position and rank, the presumption is that execution, execution,
these employees perform equal work. garnishment or garnishment or
[International School Alliance of Educators v. attachment except for attachment [Gaa vs.
Hon. Quisumbing (2000)] debts related to CA, 1985]

PAGE 40 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

necessities [Art. 1708] (3) Establishments adversely affected by

natural calamities. [Sec. 8, Wage Order
No. 19, 2014]
C.2. MINIMUM WAGE
See also: DOLE Bureau of Working
Conditions Handbook on Workers Statutory Basis
Monetary Benefits and Wage Order No. NCR- The basis of the minimum wage rates
20. prescribed by law shall be the normal
Definition working hours, which shall not exceed 8
hours a day. [Sec 7, IRR of RA 6727]
Statutory minimum wage is the lowest wage
rate fixed by law that an ER can pay his
workers. [IRR, RA 6727, (o)] Freedom to bargain
Despite the minimum wage order, employees
Coverage are not prevented from bargaining for higher
wages with their employers.
General Rule: The wage increases
prescribed under Wage Orders apply to all Note: Daily minimum wage in NCR
applicable from June 2, 2016 is now P491
private sector workers and employees
receiving the daily minimum wage rates or [Wage Order No. NCR-19]
those receiving up to a certain daily wage
ceiling, where applicable, regardless of their
Factors/Criteria in determ ining
position, designation, or status, and
regional minimum wages:
irrespective of the method by which their
wages are paid. (1) Demand for living wages;
Exceptions: (2) Wage adjustment the consumer price
index;
(1) Domestic Helpers/kasambahay [RA
10361] (3) Cost of living and changes or increases
therein;
(2) Workers of registered barangay micro
business enterprise with Certificates of (4) The needs of workers and their families;
Authority issued by the Office of the
(5) The need to induce industries to invest in
Municipal or City Treasurer. [RA 9178]
the countryside;
(3) Learners [RA 602]
(6) Improvements in standards of living;
(4) Apprentices [RA 602]
(7) Prevailing wage levels;
(8) Fair return of the capital invested and
Exemptions upon Approval capacity to pay of employers;
Upon application with and as determined by (9) Effects in employment generation and
the Regional Tripartite Wages and family income; and
Productivity Board, based on documentation
(10) Equitable distribution of income and
and other requirements in accordance with
wealth along the imperatives of economic
applicable rules and regulations issued by the
and social development. [Art. 124, LC]
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;

PAGE 41 OF 222
UP LAW BOC LABOR STANDARDS
Procedure for W age Fixing by
Regional Board (Art. 123, LC)
(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
Frequency: Wage orders issued may
not be disturbed for 12 months from
effective date; this serves as a bar for
petitions for wage hikes as well
Except: when Congress passes a
new law affecting wages or other
supervening circumstances
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
Note: 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)
C.3. MINIMUM WAGE OF WORKERS PAID
BY RESULTS
C.3.I. W ORKERS PAID BY RESULTS
All workers paid by result, including those
who are paid on piece-work, takay, pakyaw or
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, LC]
The wage rates of workers who are paid by
results shall continue to be established in
accordance with Art. 101 of the LC, as
amended, and its IRR. This will be done:
PAGE 42 OF 222
LABOR LAW
(1) Preferably through time and motion
studies.
(2) Consultation with representatives of
ERs and workers organizations in a
tripartite conference called by the
DOLE Sec.
Request for the conduct of time and motion
studies, to determine whether the non-time
employees in an enterprise are being paid fair
and reasonable wage rates, may be filed with
the proper Regional Office.
Where the output rates established by the
employer do not conform to the standards set
under the foregoing methods for establishing
output rates, the employee shall be entitled
to the difference between the amount he/she
is entitled to receive and the amount paid by
the employer.
C.3.II MINIMUM W AGE 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
incentive-rate 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]
C.3.III. MINIMUM W AGE OF PERSONS
W ITH DISABILITY
A qualified disabled employee shall be
subject to the same terms and conditions of
employment and 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]
UP LAW BOC LABOR STANDARDS LABOR LAW

C.4. COMMISSIONS (3) In cases where the employer is authorized

by law or regulations issued by the
Commissions have been defined as the
Secretary of Labor and Employment (Art.
recompense, compensation or reward of an
113, LC), such as:
agent, salesman, executor, trustee, receiver,
factor, broker or bailee, when the same is (a) Employee debt to employer is due
calculated as a percentage on the amount of and demandable (Art. 1706, CC);
his transactions or on the profit to the
(b) Attachment or execution in cases of
principal. [Philippine Duplicators, Inc. v. NLRC
debts incurred for necessities: food,
(1993)]
shelter, clothing, medical
attendance (Art. 1708, CC);
Commissions as part of minimum (c) Withholding tax;
wage
(d) Deductions of a legally established
The Court held that the definition of wage cooperative;
under Art. 97 (f) of the LC explicitly includes
(e) Payment to 3rd parties upon written
commissions as part of wages. While
authority by employee;
commissions are, indeed, incentives or forms
of encouragement to inspire employees to (f) Deductions for loss or damage;
put a little more industry on the jobs
(g) SSS, PhilHealth, Pag-IBIG
particularly assigned to them, still these
premiums;
commissions are direct remunerations for
services rendered. (h) Deduction for value meals and other
facilities.
Likewise, there is no law mandating that
commissions be paid only after the minimum It shall be unlawful to make any deduction
wage has been paid to the employee. Verily, from the wages of any employee for the
the establishment of a minimum wage only benefit of the employer as consideration of a
sets a floor below which an employees promise of employment or retention in
remuneration cannot fall, not that employment. [Art. 117, LC] or to retaliate
commissions are excluded from wages in against the employee who filed a complaint.
determining compliance with the minimum [Art. 118, LC]
wage law. [Iran v. NLRC (1998)]
With Employees
Without Employees
consent
consent
in Writing
C.5. DEDUCTIONS FROM WAGES
(1) SSS Payments (1) Workers
General Rule: No employer, in his own (2) PHILHEALTH insurance
behalf or in behalf of any person, shall make payments acquired by the
any deduction from the wages of his (3) Contributions to employer
employees. (Art. 113, LC) PAG-IBIG Fund (2) Union dues,
Exceptions: (4) Value of meals where the right to
and other check-off is
(1) In cases where the worker is insured with facilities recognized by the
his consent by the employer, and the (5) Payments to third employer
deduction is to recompense the employer persons with (provided in the
for the amount paid by him as premium employees CBA)
on the insurance; consent (3) Debts of the
(6) Deduction of employee to the
(2) For union dues, in cases where the right absences employer that
of the worker or his union to check-off has (7) Union dues, have become due
been recognized by the employer or where check-off is and demandable
authorized in writing by the individual not provided in
worker concerned; and the CBA.

PAGE 43 OF 222
UP LAW BOC LABOR STANDARDS
Prohibition seeks to protect the employee
against unwarranted practices that would
diminish his compensation without his
knowledge and consent. [Radio
Communication of the Phil., Inc. v. Sec. of
Labor (1989)]
Note: Persons earning minimum wage are
exempted from income tax
That minimum wage earners as defined in
Section 22(HH) of this Code shall be exempt
from the payment of income tax on their
taxable income: Provided, further, That the
holiday pay, overtime pay, night shift
differential pay and hazard pay received by
such minimum wage earners shall likewise be
exempt from income tax. [RA 9504, Sec. 2
redefining sec. 24(A) of RA 8424]
C.6. 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 No. 6727, June 9, 1989]
Requisites
If the following are met, then the employer
cannot remove or reduce benefits [Vergara Jr.
v Coca-Cola Bottlers Phils]:
(1) Ripened company policy: Benefit is
founded on a policy which has
ripened into a practice over a long
period
(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. [Globe Mackay Cable
vs. NLRC, 1988]
(4) The diminution or discontinuance is
done unilaterally by the employer.
W hen not applicable: At least one of the
requisites is absent.
PAGE 44 OF 222
LABOR LAW
(1) Mistake in the application of the law
[Globe Mackay Cable v. NLRC, June 29,
1988]
(2) Negotiated benefits [Azucena]
(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.
C.7. FACILITIES VS SUPPLEMENTS
The distinction between facilities and
supplement is relevant because the former is
wage-deductible while the latter is not.
Simply put, a wage includes facilities. [Art. 97,
LC)
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 is.
Criterion: In determining whether a
privilege is a facility, the criterion is not so
much its kind but its PURPOSE [Millares v
NLRC & PICOP, 1999]
Facilities are items of expense necessary for
the laborers and his familys existence and
subsistence. [States Marine Corp. v. Cebu
Seamen's Assoc., Inc., 1963]
UP LAW BOC LABOR STANDARDS LABOR LAW

Comparison between Facilities and distinctions embodied in such wage structure

Supplements based on skills, length of service, or other
logical bases of differentiation [Art. 124, LC]

Facilities Supplements
4 Elements of wage distortion
What it is
(a) Existing hierarchy of positions with
Articles or Extra remuneration or corresponding salary rates;
services/items of special benefits /
expense articles or services / (b) A significant change in the salary rate
tools of the trade of a lower pay class without a
concomitant increase in the salary rate
Who Benefits of a higher one;
For the benefit of the For the benefit or (c) The elimination of the distinction
employee and his convenience of the between the two levels; and
family; for their employer
existence and (d) The existence of the distortion in the
subsistence same region of the country. [Prubankers
Assn. v. Prudential Bank and Co. (1999)]
Deductible from Wage
YES - Part of wage so NO - Independent of
it is deductible the Wage so not How to Resolve [LC Art. 124]
deductible
Organized Establishm ent
(1) Employer and the union shall negotiate
Requirements for deducting value of to correct the distortions.
facilities
(2) Disputes shall be resolved through the
Mere availment is not sufficient to allow grievance procedure.
deductions from employees wages. Before
the value of facilities can be deducted from (3) If still unresolved, voluntary arbitration.
the employees wages, the following Grievance Procedure (under the CBA) if
requisites must all be attendant: unresolved, VOLUNTARY arbitration
(1) Proof must be shown that such
facilities are customarily furnished by
the trade; Unorganized Establishment
(2) The provision of deductible facilities (1) ERs and Employees shall endeavor to
must be voluntarily accepted in correct such distortions.
writing by the employee; and (2) Disputes shall be settled through the
(3) Facilities must be charged at National Conciliation and Mediation
reasonable value. Board.
[SLL International Cable Specialists v. NLRC, (3) If still unresolved after 10 calendar days
2011] of conciliation, it shall be referred to the
appropriate branch of the NLRC
compulsory arbitration
C.8. WAGE DISTORTION/RECTIFICATION Both the employer and employee
A situation where an increase in prescribed cannot use economic weapons.
wage rates results in the elimination or severe (4) Employer cannot declare a lock-out;
contraction of intentional quantitative Employee cannot declare a strike
differences in wage or salary rates between because the law has provided for a
and among employee groups in an procedure for settling
establishment as to effectively obliterate the

PAGE 45 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

(5) The salary or wage differential does not the employer has no right to deduct the
need to be maintained. [National proportionate amount corresponding to the
Federation of Labor v. NLRC, 1994] days when no work was done. The monthly
compensation is evidently intended precisely
National Conciliation and Mediation Board
to avoid computations and adjustments
if unresolved, COMPULSORY arbitration by
resulting from the contingencies just
the NLRC
mentioned which are routinely made in the
case of workers paid on daily basis.
(Wellington Investment Inc. v. Trajano, 1995)
CBA vis--vis W age Orders CBA
creditability
In determining an employees regular wage, For daily-paid EEs
the pertinent stipulations in the CBA are
Daily-paid employees are those who are paid
controlling, provided the result is not less
on the days actually worked and on unworked
than the statutory requirement (Philippine
regular holidays.
National Bank vs. PEMA, 1982)
(1) For those who are required to work every
Note: The manner of resolving wage
day including Sundays or rest days,
distortion is largely based on the applicable
special days and regular holidays:
wage order. The current one for NCR, WO 20,
refers to the procedure in Art. 124 of the 394.1 days/year
Labor Code
296 days ordinary working
20 days 10 regular holidays x 200%
C.9. DIVISOR TO DETERMINE DAILY RATE
52 rest days x 130 %
Suggested formula for computing the
67.60 days 7 special days x 130%
Estimated Equivalent Monthly Rate (EEMR)
EEMR = (Applicable Daily Rate (ADR)
x days/year) 12 9.1 days
(2) For those who do not work and are not
considered paid on Sundays or rest days:
For m onthly-paid EEs
313 days/year
Monthly-paid employees are those who are
paid every day of the month, including 296 days ordinary working
unworked rest days, special days, and regular
12 days regular holidays
holidays.
5 days special days (if considered
365 days/year
paid; if actually worked, this
296 days ordinary working days is equivalent to 6.5 days)
52 days rest days (3) For those who do not work and are not
considered paid on Saturdays and
10 days regular holidays
Sundays or rest days:
7 days special days
278 days/year
Note: This monthly salary shall serve as
261 days ordinary working days
compensation "for all days in the month
whether worked or not," and "irrespective of 10 days regular holidays
the number of working days therein." In the
7 days special days (if considered
event of the declaration of any special holiday,
paid; if actually worked, this
or any fortuitous cause precluding work on
is equivalent to 6.5 days)
any particular day or days the employee is
entitled to the salary for the entire month and [Sec. 6, Rules Implementing RA 6727, 1989]

PAGE 46 OF 222
UP LAW BOC LABOR STANDARDS
D. REST DAYS
D.1. 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 twenty-four (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)]
D.2. EMERGENCY REST DAY WORK
The employer may require his employees to
work on any day:
(1) 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 and property, or
imminent danger to public safety;
(2) In cases of urgent work to be performed
on the machinery, equipment, or
installation, to avoid serious loss which
the employer would otherwise suffer;
(3) In the event of abnormal pressure of
work due to special circumstances,
where the employer cannot ordinarily
be expected to resort to other
measures;
(4) To prevent loss or damage to
perishable goods;
(5) 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
PAGE 47 OF 222
LABOR LAW
(6) Under other circumstances analogous
or similar to the foregoing as
determined by the Secretary of Labor
and Employment. [Art. 92, LC]
Synthesis of the Rules
(1) Rest day of not less than 24 consecutive
hours after 6 consecutive days of work.
(2) No work, no pay principle applies
(3) If an employee works on his designated
rest day, he is entitled to a premium pay.
(4) Premium pay is additional 30% of the
basic pay.
(5) Employer selects the rest day of his
employees
(6) However, employer must consider the
religious reasons for the choice of a rest
day.
(7) When the choice of the employee as to
his rest day based on religious grounds
will inevitably result in serious prejudice
or obstruction to the operations and the
employer cannot normally be expected
to resort to other measures, the
employer may so schedule the weekly
rest day of his choice for at least two
days in a month. [IRR, Book Three, Rule
III, Sec. 4]
E. 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.
Note: Art. 94 (c), LC was superseded by E.O.
203, which was subsequently amended by RA
9177, 9256, 9492, and Proclamation No. 459.
The current state of the law is discussed
below.
UP LAW BOC LABOR STANDARDS
E.1. COVERAGE
General Rule: All employees
Exceptions:
(1) Those of the government and any of
the political subdivision, including
government-owned 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 and officers or
members of the managerial staff 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;
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. [RA 6727/The
Wage Rationalization Act, IRR]
PAGE 48 OF 222
LABOR LAW
Regular holidays
Proclamation No. 1105 signed by President
Aquino on August 20, 2015, provides for the
observance of the regular holidays and
special (non-working) days for the year 2016
on the following dates:
(1) New years Day Jan. 1
(2) Maundy Thursday Mar. 24
(3) Good Friday Mar. 25
(4) Araw ng Kagitingan Apr. 9
(5) Labor Day May 1
(6) Independence Day June 12
(7) National Heroes Day Aug. 31
(8) Bonifacio Day Nov. 30
(9) Christmas Day Dec. 25
(10) Rizal Day Dec. 30
(11) Id-ul-Fitr 1st day of 10th lunar month of
Shawwal
(12) Id-ul Adha 10th day of the 12th lunar
month of Dhul-Hijja
Special (Non-W orking Days)
(1) Chinese New Year Feb. 8
(2) EDSA Revolution Anniv Feb. 25
(3) Black Saturday Mar. 26
(4) National and Local Elections May 9
(5) Ninoy Aquino Day Aug. 21
(6) All Saints Day Nov. 1
(7) Additional special (Non-working) days
(a) Jan. 2
(b) Oct. 31
(c) Dec. 24
(d) Dec. 31
UP LAW BOC LABOR STANDARDS LABOR LAW

P.D. 1083 (Code of Muslim Personal Laws) General Rule: An employer may require an
employee to work on any holiday but such
SEE: Arts. 169-173
employee shall be paid a compensation
Specifically for the Muslim Areas, P.D. 1083, equivalent to twice his regular rate. [Art.
in its Book V, Title, recognizes five (5) Muslim 94(b)]
Holidays, namely:
(1) Amun Jadid (New Year) which falls on the
According to the LC, IRR and Memo:
first (1st) day of the lunar month of
Muharram; Work on any regular
(2) Mauli-un-Nabi (Birthday of the Prophet holiday, not exceeding Computation
Muhammad) which falls on the twelfth 8 hours
(12th) day of the third (3rd) lunar month Work on any regular 200% of regular daily
of Rabi-ul-Awwal; holiday, if it exceeds 8 wage (for the 1st 8
hours/overtime hours)
(3) Lailatul Isra Wal Mi Rai (Nocturnal
+ 30% of hourly rate
Journey and Ascencion of the Prophet
on said day
Muhammand) which falls on the twenty-
seventh (27th) day of the seventh (7th) Work on any regular 200% of regular daily
lunar month of Rajab; holiday which falls on wage + 30% of such
the scheduled rest amount
(4) Id-ul-Fitr (Hari Raja Pausa) which falls on
day, not exceeding 8
the first (1st) day of the tenth (10th) lunar
hours
month of Shawwal commemorating the
end of the fasting season; and Work on any regular Regular holiday-on-
holiday which falls on rest day rate (200% of
(5) Id-ul-Adha (Hari Raha Haji) which falls on scheduled rest day, if regular daily wage
the tenth (10th) day of the twelfth (12th) it exceeds 8 plus 30% of such
lunar month of Dhul-Hijja. hours/overtime amount) + 30% of
hourly rate on said
day.
Note: Id-ul-Fitr (Eidl Fitr) and Id-ul-Adha
(Eidl Adha) have been added to the list of Work on special Regular daily wage +
national legal holidays. holiday not exceeding 30% thereof
8 hours
Work on special Regular daily wage +
Note: There should be no distinction holiday 50% thereof
between Muslims & non-Muslims as regards
to the payment of benefits for Muslim
holidays. Wages & other emoluments granted According to DOLE Mem o Circular 1-
bylaw to the workingman are determined on 04, a special holiday/special day
the basis of the criteria laid down by laws & includes the National Special Days, and
not on workers faith. Art. 3(3), PD 1083 states declared special days such as Special Non-
that nothing herein shall be construed to working Holiday, Special Public Holiday and
operate to the prejudice of a non-Muslim. Special National Holiday. Such days are
[San Miguel Corp vs. CA (2002)] entitled to the rates prescribed above. These
days are not the same as a special working
holiday.
Holiday pay com putation (Art. 94 Labor
Code, Book III, Rule IV of IRR, RA 9424 and
DOLE Memorandum Circular 1 Series of A special working holiday is considered
2004) an ordinary working day, so there is no
premium pay.

PAGE 49 OF 222
UP LAW BOC LABOR STANDARDS
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.
(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:
(a) 296 days ordinary days
(b) 52 days rest days
PAGE 50 OF 222
LABOR LAW
(c) 10 days regular holidays
(d) 7 days special holidays
Note: For 2016, there are 12 regular
holidays and 10 special holidays. (See
previous enumeration of holidays )
(2) As a general rule, for a company with a
6-day 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.
Where the employer had a standing practice
of using 286 days as a divisor and following
the correct computation and taking into
account that one of the holidays always falls
on a Sunday, therefore increasing the divisor
to 287, but increase would in some
instances prejudice the employees, in
violation of the proscription against non-
diminution of benefits under Sec. 100 of the
labor code, the 287 divisor should only be
used for computations which would be
advantageous to the employer (i.e. deduction
for absences) and not for computations which
would diminish the existing benefits of the
employees (i.e., overtime pay, holiday pay
and leave conversions).[Trans Asia Phils. v.
NLRC (1999)]
Sundays
(1) When a holiday falls on a Sunday, the
following Monday will not be considered
a holiday unless a proclamation says so.
(2) Furthermore as stated in the Wellington
case (see below), a legal holiday falling
on a Sunday does not create a legal
obligation to pay extra, aside from the
usual holiday pay, to monthly-paid
employees. [Azucena citing Letter of
Instruction No. 1087]
UP LAW BOC LABOR STANDARDS
No provision of law requires any employer to
make adjustments in the monthly salary rate
set by him to take account of legal holidays
falling on Sundays in a given year, otherwise
to reckon a year at more than 365 days.
[Wellington Investment and Manufacturing
Corporation vs. Trajano (1995)]
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 non-working day or rest day. [Book III,
Rule IV, Sec 6 (c), IRR]
Example:
If a holiday falls on Monday, and Sunday is a
non-working day in the establishment or is
the scheduled rest day of the employee, the
employee shall be entitled to holiday pay if he
worked on Saturday (which is the day
immediately preceding Sunday, the non-
working day or rest day).
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. [Book III, Rule IV, Sec
6(a), IRR]
Note:
(1) If an employee is on leave of absence
with pay on the day immediately
preceding a regular holiday, he is entitled
to holiday pay.
(2) If an employee is on leave of absence
without pay on the day immediately
preceding a regular holiday, he is not
PAGE 51 OF 222
LABOR LAW
entitled to holiday pay unless he works on
such regular holiday.
In case of tem porary cessation of work
(1) 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 holidays falling
within the periods shall be compensated
in accordance with this Rule.
(2) 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. [Book III, Rule IV, Sec 7, IRR]
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.
E.2. TEACHERS, PIECE WORKERS,
SEAFARERS, SEASONAL WORKERS, ETC.
(1) 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;
(2) 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.
UP LAW BOC LABOR STANDARDS
(3) Seasonal workers may not be paid the
required holiday pay during off-season
when they are not at work
(4) Workers who have no regular working
days shall be entitled to the benefits
provided in this Rule. [Book III, Rule IV,
Sec. 8, IRR]
Holiday Pay of Hourly-Paid Faculty
Mem bers
(1) They are not entitled to payment of
holiday pay because they are paid only
for work actually done. Since regular
(3) the extended days.
(4) Similarly, when classes are called off or
shortened on account of typhoons,
floods, rallies, and the like, these
faculty members must likewise be paid,
whether or not extensions are ordered.
[Jose Rizal College v. NLRC, (1987)]
Piece workers
Philosophy underlying the exclusion of piece
workers from the 8-hour law is that said
workers 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 off-
season 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.
PAGE 52 OF 222
LABOR LAW
holidays are known to both the school
and faculty members as no class day;
certainly the latter do not expect
payment for said unworked holidays.
(2) They are entitled to their hourly rate on
days declared as special holidays.
When a special public holiday is
declared, the faculty member paid by
the hour is deprived of expected
income, and it does not matter that the
school calendar is extended in view of
the days or hours lost, for their income
that could be earned from other
sources is lost during
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, 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 certainty.
UP LAW BOC LABOR STANDARDS LABOR LAW

Premium pay rates [DOLE Memorandum F. LEAVES

Circular 1, Series of 2004]
F.1. SERVICE INCENTIVE LEAVE PAY
When Work Performed Premium Pay

On scheduled rest day 30% of regular Coverage

wage
On Sunday ONLY IF this is 30% of regular
the ESTABLISHED rest wage
day
On Sunday and holidays, 30% of regular
when no regular work and wage
rest days
On any special 30% of regular
holiday/special day wage
On any special holiday 50% of regular
/special day falling on wage
scheduled rest day
On a regular holiday 230% of regular
falling on a rest day wage
Rate Adjustments
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), LC.] The employer and his employees
or their representatives are not prevented
from entering into any agreement with terms
more favorable to the employees. [Book III,
Rule II, Sec. 9, IRR.]
The laws and regulations should not be used
to diminish any benefit granted to the
employees under existing laws agreements
and voluntary employer practices. [Ibid]
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,
IRR].
Every employee who has rendered at least
one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
[Art. 95(a), LC.]
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, IRR]
Piece-rate employees are entitled to service
incentive leave pay. The Court looked at
several factors which led them to conclude
that petitioners, although compensated on a
per piece basis, were regular employees of.
[Labor Congress of the Phils., v. NLRC (1998)]
Teachers of private school on contract basis
are entitled to service incentive leave. [Cebu
Institute of Technology v. Ople (1987)]
The law grants annual SIL of five days to
domestic workers but their SIL shall not be

PAGE 53 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

converted to cash or carried over to F.2. MATERNITY LEAVE

succeeding years. [R.A. No. 10361, Sec. 5]
[Sec. 14-A of RA 1161 (Social Security Law) as
amended by RA 7322 and RA 8282]
Meaning of 1 year of service
"At least one year service" shall mean service Coverage
for not less than 12 months, whether
Every pregnant woman in the private sector,
continuous or broken, reckoned from the date
whether married or unmarried, is entitled to
the employee started working, including
the maternity leave benefits.
authorized absences and paid regular
holidays unless the working days in the This is applicable to both childbirth and
establishment as a matter of practice or miscarriage.
policy, or that provided in the employment
contract is less than 12 months, in which case
said period shall be considered as one year. Requisites
[Book III, Rule V, Sec. 3, IRR.] (1) Employment: A female employee
employed at the time of delivery,
miscarriage or abortion
Arbitration or Adm inistrative Action
(2) Contribution: who has paid at least 3
The grant of benefit IN EXCESS of that
monthly contributions in the 12-month
provided herein shall not be made a subject
period immediately preceding the
of arbitration or any court or administrative
semester of her childbirth, or miscarriage.
action. [Art. 95 (c), LC]
(3) Notice: employee notified employer of her
The cause of action of an entitled employee
pregnancy and the probable date of her
to claim his service incentive leave pay
childbirth, which notice shall be
accrues from the moment the employer
transmitted to the SSS in accordance
refuses to remunerate its monetary
with the rules and regulations it may
equivalent if the employee did not make use
provide.
of said leave credits but instead chose to avail
of its commutation (into money). Accordingly,
if the employee wishes to accumulate his Benefit received
leave credits and opts for its commutation
upon his resignation or separation from A daily maternity benefit equivalent to 100%
employment, his cause of action to claim the of her average daily salary credit for:
whole amount of his accumulated service (1) 60 days for normal delivery
incentive leave shall arise when the employer
fails to pay such amount at the time of his (2) 78 days for caesarean delivery
resignation or separation from employment. Note: This benefit shall NOT be included in
[Auto Bus Transport vs. NLRC (2005)] 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.
Commutable nature of benefit
The service incentive leave shall be
commutable to its money equivalent if not Only 4 m aternity leaves available
used or exhausted at the end of the year. The maternity benefits provided under the
[Book 3, Rule 5, Sec. 5] Social Security Law shall be paid only for the
first four (4) deliveries or miscarriages

PAGE 54 OF 222
UP LAW BOC LABOR STANDARDS
SSS pays for the maternity leave
The employer advances the benefit to the
employee but the SSS shall immediately
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.
F.3. 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]
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LABOR LAW
Benefit
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]
It shall apply to the first 4 deliveries of the
employees lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together. [Sec. 1, IRR,
RA 8187] 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.
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.
UP LAW BOC LABOR STANDARDS
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 adjust the existing benefit to
cover the difference. [Sec. 9, IRR, RA 8187]
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]
F.4. 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;
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LABOR LAW
(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
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
UP LAW BOC LABOR STANDARDS
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]
Availm ent
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 W ork 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 W ork
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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LABOR LAW
F.5. 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.
Definition of Terms
Violence against wom en and their
children refers to any act or a series of
acts committed by any person against a
woman who is his wife, former wife, or
against a woman with whom the person has
or had a sexual or dating relationship, or with
whom he has a common child, or against her
child whether legitimate or illegitimate,
within or without the family abode, which
result in or is likely to result in physical,
sexual, psychological harm or suffering, or
economic abuse including threats of such
acts, battery, assault, coercion, harassment
or arbitrary deprivation of liberty.
VAWC includes, but is not limited to, the
following acts:
(1) Physical Violence" refers to acts that
include bodily or physical harm;
(2) "Sexual violence" refers to an act which is
sexual in nature, committed against a
woman or her child. It includes, but is not
limited to:
(a) Rape, sexual harassment, acts of
lasciviousness, treating a woman or
her child as a sex object, making
demeaning and sexually suggestive
remarks, physically attacking the
sexual parts of the victim's body,
forcing her/him to watch obscene
publications and indecent shows or
forcing the woman or her child to do
indecent acts and/or make films
thereof, forcing the wife and
UP LAW BOC LABOR STANDARDS
mistress/lover to live in the conjugal
home or sleep together in the same
room with the abuser;
(b) Acts causing or attempting to cause
the victim to engage in any sexual
activity by force, threat of force,
physical or other harm or threat of
physical or other harm or coercion;
(c) Prostituting the woman or child.
(3) "Psychological violence" refers to acts or
omissions causing or likely to cause
mental or emotional suffering of the
victim such as but not limited to
intimidation, harassment, stalking,
damage to property, public ridicule or
humiliation, repeated verbal abuse and
mental infidelity. It includes causing or
allowing the victim to witness the
physical, sexual or psychological abuse of
a member of the family to which the
victim belongs, or to witness pornography
in any form or to witness abusive injury to
pets or to unlawful or unwanted
deprivation of the right to custody and/or
visitation of common children.
(4) "Economic abuse" refers to acts that
make or attempt to make a woman
financially dependent which includes, but
is not limited to the following:
(a) Withdrawal of financial support or
preventing the victim from engaging
in any legitimate profession,
occupation, business or activity,
except in cases wherein the other
spouse/partner objects on valid,
serious and moral grounds as defined
in Article 73 of the Family Code;
(b) Deprivation or threat of deprivation of
financial resources and the right to
the use and enjoyment of the
conjugal, community or property
owned in common;
(c) Destroying household property;
(d) Controlling the victims' own money or
properties or solely controlling the
conjugal money or properties. [Sec.3,
RA 9262]
PAGE 58 OF 222
LABOR LAW
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. [Sec. 45, RA 9262]
Requirement
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.
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 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]
UP LAW BOC LABOR STANDARDS
F.6. 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 W omen
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]
Basic Requirement
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 disorders or is in the position to
PAGE 59 OF 222
LABOR LAW
determine the period of recuperation of the
woman employee. [Sec. 1, DO 112, as
amended]
Conditions for Entitlement
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.
UP LAW BOC LABOR STANDARDS
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]
Availm ent
The special leave shall be granted to the
qualified employee after she has undergone
surgery. [Sec. 5, DO 112, as amended]
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]
PAGE 60 OF 222
LABOR LAW
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
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
this law. 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 Paym ent
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 non-
convertible to cash unless otherwise provided
by a CBA. [Sec. 12, DO 112, as amended]
UP LAW BOC LABOR STANDARDS
G. SERVICE CHARGES
Coverage
Employers [Sec 1, Rule VI, Book 3, IRR]
This rule shall apply only to establishments
which collect service charges such as:
(1) Hotels, restaurants, lodging houses,
night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling
houses;
(2) Similar enterprises including those
entities operating primarily as private
subsidiaries of the Government
Employees [Sec 2, Rule VI, Book 3, IRR]
Shall apply to ALL em ployees of covered
employers
(1) Regardless of their positions,
designations, or employment status, and
(2) Irrespective of the method by which their
wages are paid.
Exceptions
Managerial em ployees 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. [Sec 2, Rule VI, Book 3, IRR]
Distribution
Service charges are distributed in accordance
with the following percentage of sharing:
Eighty-five percent (85%) for the
employees to be distributed equally
among them;
Fifteen percent (15%) for the disposition
of management to answer for losses and
breakages and, at the discretion of the
management for 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
PAGE 61 OF 222
LABOR LAW
month at intervals not exceeding 16 days.
[Sec 4, Rule VI, Book 3, IRR]
Notes:
The P2,000.00 salary ceiling for
entitlement thereto is no longer
applicable.
[The employees] right to their shares in
the service charges collected by [the
employer] is distinct and separate from
their right to ECOLA; gratification by the
[employer] of one does not result in the
satisfaction of the other. [Philippine
Hoteliers, Inc., Dusit Hotel-Nikko v.
NUWHRAIN-APL-IUF-Dusit Hotel Nikko
Chapter, G.R. No. 181972 (2009)]
Integration
In case service charge is abolished, the shares
of covered employees shall be considered
integrated in their wages. [Art 96, LC]
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 the charges. [Sec. 5, Rule VI,
Book 3, IRR]
In Relation to Collective Bargaining
Agreem ents and Em ployer-Employee
Agreem ents
Nothing in the Rules shall prevent the
employer and employee from entering into
any agreement with terms more favorable
to the employees than those granted
therein, or be used to diminish any benefit
granted to the employees under existing
laws, agreement AND voluntary employer
practice. [Sec. 6, Rule VI, Book 3, IRR]
The rule is without prejudice to existing,
future collective bargaining agreements.
[Sec. 7, Rule VI, Book 3, IRR]
UP LAW BOC LABOR STANDARDS
Synthesis of the Rules
Service charges must be pooled;
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 the same manner as the services
charges. [DOLE Handbook on Workers
Statutory Monetary Benefits, 2014ed.]
The amount collected is divided between
the company (15%) and employees
(85%);
It shall be given twice a month with
intervals of not more than 16 days;
If discontinued, removed, or stopped, the
average share of the employees of their
service charge or tips shall be integrated
with their basic wage.
H. THIRTEENTH (13TH) MONTH PAY
AND OTHER BONUSES
[PD 851 (The 13th-Month Pay Law) and the
Revised Guidelines on the Implementation of
the 13th Month Pay Law]
Rationale
To further protect the level of real wages
from the ravage of world-wide inflation;
There had been no increase in the legal
minimum wage rates since 1970;
The Christmas season is an opportune
time for society to show its concern for
the plight of the working masses so they
may properly celebrate Christmas and
New Year.
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
PAGE 62 OF 222
LABOR LAW
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; and
(3) 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 piece-rate basis,
in which case their employer shall grant
them 13th month pay).
Notes:
Equivalent includes:
(1) Christmas bonus, mid-year bonus,
cash bonuses
(2) and other payments amounting to not
less than 1/12 of the basic salary
(3) but shall NOT INCLUDE cash and
stock dividends, cost of living
allowances and all other allowances
regularly enjoyed by the employee as
well a non-monetary benefits.
W orkers paid on a piece-rate basis -
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.
Minim um Am ount
1/12 of the total basic salary earned by an
employee within a calendar year
UP LAW BOC LABOR STANDARDS
BASE AMOUNT,
General Rule: 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.
Exception: From 1975 to 1981, [the
employer] had freely, voluntarily and
continuously included in the computation of
its employees' thirteenth month pay, the
payments for sick, vacation and maternity
leaves, premiums for work done on rest days
and special holidays, and pay for regular
holidays. The considerable length of time the
questioned items had been included by [the
employer] indicates a unilateral and
voluntary act on its part, sufficient in itself to
negate any claim of mistake.
A company practice favorable to the
employees had indeed been established and
the payments made pursuant thereto,
ripened into benefits enjoyed by them. And
any benefit and supplement being enjoyed by
the employees cannot be reduced,
diminished, discontinued or eliminated by the
employer. [Davao Fruits Corp. v. ALU, G.R. No.
85073 (1993)]
Time of payment
General Rule: paid not later than Dec 24
of each year.
PAGE 63 OF 222
LABOR LAW
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)
(2) Fixed or Guaranteed W age:
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)
Overload pay is NOT included in the
computation for 13th month pay; overload is
not overtime as it is additional work done
within the normal shift [Letran Calamba
Faculty vs NLRC, G.R. No. 156225 (2008)]
UP LAW BOC LABOR STANDARDS
(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) Terminated Employees: The payment
of the 13th month pay may be demanded
by the employee upon the cessation of
employer-employee relationship.
[Archilles Manufacturing Corp. vs NLRC,
1995]
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, G.R. No.
110068 (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, G.R. No.
72616-17 (1989)]
(3) W age 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]
(4) 14 th Month Pay is not m andated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
Decree.[Kamaya Point Hotel vs NLRC, G.R.
No. 75289 (1989)]
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LABOR LAW
(5) Non-inclusion in regular wage: The
mandated 13th month pay need not be
credited as part of regular wage of
employees for purposes of determining
overtime and premium pays, fringe
benefits insurance fund, Social Security,
Medicare and private retirement plans.
[Revised Rules]
Commissions vis--vis 13 th month pay
The Rule on Productivity Bonuses. The
so-called commissions paid to or received
by medical representatives of Boie-Takada
Chemicals or by the rank-and-file employees
of Philippine Fuji Xerox Co., were excluded
from the term basic salary because these
were paid to the medical representatives and
rank-and-file employees as productivity
bonuses. These have no clear direct or
necessary relation to the amount of work
actually done by each individual employee.
More generally, a bonus is an amount
granted and paid ex gratia to an employee. If
an employer cannot be compelled to pay a
productivity bonus to its employees, it should
follow that such productivity bonus, when
given, should not be deemed to fall within
the basic salary of employees when the
time comes to compute their 13th month pay
[Boie-Takeda vs de la Serna, G.R. No. 92174
and G.R. No. L-102552, (1993)]
The decision in Boie-Takeda and the doctrine
enunciated in this case in fact co-exist with
the other. The two cases present quite
different factual situations (although the
same word commissions was used or
invoked) the legal characterizations of which
must accordingly differ.
In the instant case, there is no question that
the sales commission earned by the
salesmen who make or close a sale of
duplicating machines constitute part of the
compensation or remuneration paid to
salesmen for serving as salesmen, and hence
as part of the wage or salary of petitioners
salesmen. It appears that petitioner pays its
salesmen a small fixed or guaranteed wage;
the greater part of the salesmens wages or
salaries being composed of the sales or
incentive commissions earned on actual
sales closed by them. The sales
UP LAW BOC LABOR STANDARDS LABOR LAW

commissions were an integral part of the
basic salary structure. They are not overtime
payments, or profit sharing payments or any
other fringe benefit. [Phil. Duplicators vs
NLRC (1995)]
imposed on the employer who is already
paying his employees a 13th month pay or its
equivalent. [Iran v. NLRC, G.R. No. 121927
(1998)]

An employer who pays less than 1/12th of the

CBA vis--vis 13 th month pay
The Presidential Decree is specific and
mandatory. However, if the employers
actually grant such for the 13th month pay in
the monetary benefits provided for in the CBA,
they could be exempted from the operation of
the decree. To be exempted, there must be
actual payment. [Marcopper Mining Corp. vs.
Ople (1981)]
Effect of Deficiency in 13 th
month pay
The intent of P.D. No. 851 is the granting of
additional income in the form of 13th month
pay to employees not as yet receiving the
same and not that a double burden should be
employees basic salary as their 13th month
pay is only required to pay the difference.
[Revised Rules]
I. SEPARATION PAY
[(Art. 289 & 290, LC, DOLE Handbook on
Workers Statutory Monetary Benefits, 2014)
Separation pay is defined as the amount that
an employee receives at the time of his
severance from the service and is designed
to provide the employee with the
wherewithal during the period that he is
looking for another employment. [A Prime
Security Services vs NLRC (1993)

Coverage
General Rule:
Cause for Termination Entitlement
Art. 288 Termination by Employer None
(a) Serious misconduct or willful
disobedience of lawful orders
(b) Gross and habitual neglect of duties
(c) Fraud or willful breach of trust
(d) Commission of a crime against employer
or immediate member of his family or
representative
(e) Analogous causes
Art. 289 Installation of labor saving devices or Equivalent to at least 1 month pay or 1 month pay
redundancy for every year of service, whichever is higher
Art. 289 Retrenchment to prevent losses or Equivalent to at least 1 month pay or 1/2 month
closure or cessations of operations of pay for every year of service*, whichever is higher
establishments or undertaking not due to serious
business losses or financial reverses
Art. 290 Disease when continued employment is Equivalent to at least 1 month pay or 1/2 month
prohibited by law or is prejudicial to his health or pay for every year of service*, whichever is higher
health of co-employees
Art. 291 Termination by employee whether with or None
without just cause
*A fraction of at least 6 months shall be considered 1 whole year

PAGE 65 OF 222
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Exceptions: Considerations of equity as in
the cases of Filipro, Inc. v. NLRC, Metro Drug
Corp. v. NLRC, Engineering Equipment, Inc. v.
NLRC, San Miguel Corp v. NLRC. [PLDT vs
NLRC (1988)]
An employee who voluntarily resigns is not
entitled to separation pay unless stipulated
in the employment contract, or the
collective bargaining agreement, or is
sanctioned by established practice or
policy of the employer. [Phimco Industries
vs NLRC (1997); Hinatuan Mining Corp vs
NLRC (1997) cited in JPL Marketing
Promotions v. CA (2005)]
Am ount
One-Half (1/2) Month Pay per Year of
Service
An employee 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 to his/her
health or to the health of his/her co-
employees
In no case will an employee 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 employee 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,
LABOR STANDARDS LABOR LAW
if his/her separation from service is due to
any of the following:
(1) Installation by employer of labor-saving
devices;
(2) Redundancy, as when the position of the
employee has been found to be excessive
or unnecessary in the operation of the
enterprise;
(3) Impossible reinstatement of the
employee to his/her former position or to
a substantially equivalent position for
reasons not attributable to the fault of
the employer, as when the reinstatement
ordered by a competent authority cannot
be implemented due to closure of
cessation of operations of the
establishment/employer, 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)]
Notice of Termination
The employer may terminate the
employment of any employee due to the
above-mentioned authorized causes by
serving a written notice on the employee and
the DOLE through its regional office having
jurisdiction over the place of business at
least 1 month before the intended date
thereof.
Basis of Separation Pay
The computation of separation pay of an
employee 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 employee has been receiving.
[Planters Products, Inc. vs NLRC (1989)]
PAGE 66 OF 222
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J. RETIREMENT PAY
[RA 7641 - The Retirement Pay Law]
Definition
Retirement - the result of a bilateral act of
the parties, a voluntary agreement between
the employer and the employee whereby the
latter, after reaching a certain age agrees to
sever his or her employment with the
former ... an employer is free to impose a
retirement age less than 65 for as long as it
has the employees consent having
terminated petitioner solely on the basis of a
provision of a retirement plan which was not
freely assented to by her, respondent was
guilty of illegal dismissal [Jaculbe vs Silliman
University, G.R. No. 156934 (2007)]
Retroactive Effect
The Court imposed two (2) essential
requisites in order that R.A. 7641 may be
given retroactive effect:
(1) the claimant for retirement benefits was
still in the employ of the employer at the
time the statute took effect; and
(2) the claimant had complied with the
requirements for eligibility for such
retirement benefits under the statute.
[Universal Robina Sugar Milling Corp. vs
Caballeda, G.R. No. 156644 (2008)]
J.1. ELIGIBILITY
General Rule: 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]
Exceptions:
(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]
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LABOR LAW
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.
The reason for the first situation is to prevent
the absurd situation where an employee, who
is otherwise deserving, is denied retirement
benefits by the nefarious scheme of
employers in not providing for retirement
benefits for their employees. The reason for
the second situation is expressed in the Latin
maxim pacta private juri public derogare non
possunt. Private contracts cannot derogate
from the public law. [Oxales vs Unilab, G.R.
No. 152991 2008]
Age of retirem ent
In the absence of a retirement plan or
agreement providing for retirement benefits
of employees in the establishment, an
employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65)
years which is hereby declared the
compulsory retirement age (and have served
the establishment for at least 5 years). [Sec. 1,
IRR, RA 7641]
Optional retirem ent 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]
Note: For surface mine workers, the
optional retirement age is 50, while the
UP LAW BOC
mandatory retirement age is now 60. [Sec. 2,
RA 10757]
J.2. 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.
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; Reyes v NLRC, 2007]
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 pay under RA 7641 vis--
vis retirement benefits under SSS and
GSIS laws
RA 7641 mandates payment of retirement
benefits. All private sector employees
regardless of their position, designation or
status and irrespective of the method by
which their wages are paid are entitled to
retirement benefits upon compulsory
retirement at the age of sixty-five (65) or
upon optional retirement at sixty (60) or more
but not 65. The minimum retirement pay due
covered employees shall be equivalent to
one-half month salary for every year of
service, a fraction of at least six (6) months
being considered as one whole year. The
benefits under this law are other than those
granted by the SSS or the GSIS.
LABOR STANDARDS LABOR LAW
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.
J.3. RETIREMENT BENEFITS OF WORKERS
WHO ARE PAID BY RESULTS
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). 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.
J.4. RETIREMENT BENEFIT OF PART-TIME
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.
PAGE 68 OF 222
UP LAW BOC
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.]
J.5. TAXABILITY
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 shall be
exempt from all taxes and shall not be liable
to attachment, garnishment, levy or seizure
by or under any legal or equitable process
whatsoever 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: Provided, That the retiring
official or employee has been in the service
for at least ten (10) years and is not less than
fifty years of age at the time of his retirement:
Provided, further, That the benefits granted
under this Act shall be availed of by an official
or employee only once; Provided, finally, 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.
As used in this Act, the term "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.[Sec. 1, RA
LABOR STANDARDS LABOR LAW
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 [Intercontinental Broadcasting
Corp. v Amorilla, 2006]
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
(a) That the retiring official or employee has
been in the service of the same employer
for at least ten (10) years and is not less
than fifty years of age at the time of his
retirement;
(b) That the retirement benefits shall be
availed of by an official or employee only
once; and,
(c) 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
PAGE 69 OF 222
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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.
K. WOMEN WORKERS
1987 Constitution Art. II, Sec. 14.The State
recognizes the role of women in nation-
building, and shall ensure the fundamental
equality before the law of women and men.
1987 Constitution. Art. XIII, Sec. 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.
Omnibus Rules Bk III Rule XII Sec 1. General
Statement on Coverage. This Rule shall
apply to all employers, whether operating for
profit or not, including educational, religious
and charitable institutions, except to the
Government and to government-owned or
controlled corporations and to employers of
household helpers and persons in their
personal service insofar as such workers are
concerned.
K.1. PROVISIONS AGAINST
DISCRIMINATION
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,
LABOR STANDARDS LABOR LAW
training opportunities, study and
scholarship grants solely on account of
their sexes. [Art.133, Labor Code]
K.2. STIPULATION AGAINST MARRIAGE
It shall be unlawful for an employer to:
(1) require as a condition of employment or
continuation of employment that a
woman employee shall not get married,
or
(2) stipulate expressly or tacitly that upon
getting married a woman employee shall
be deemed resigned or separated or
(3) actually dismiss, discharge, discriminate
or otherwise prejudice a woman
employee merely by reason of her
marriage. [Art. 134, Labor Code] [Duncan
Assoc of Detailman PTGWO v Glaxo
Wellcome, 2004]
Bona fide occupational qualification
exception
When the employer can prove that the
reasonable demands of the business require
a distinction based on marital status and
there is no better available or acceptable
policy which would better accomplish the
business purpose, an ER may discriminate
against an EE based in the identity of the EEs
spouse. [Star Paper Corp. vs. Simbol, 2006]
The Court sustained the validity of employer
policy prohibiting an employee from having a
personal or marital relationship with an
employee of a competitor. The prohibition
was reasonable under the circumstances
because relationships of such nature might
compromise the interests of the company.
[Duncan Association of Detailmen vs. Glaxo
Wellcome, 2004]
K.3. PROHIBITED ACTS
[Art. 135 (previously Article 137)]
Note: Nightwork/ Exception (Art 130-
131) No more nightwork prohibition under
R.A. 10151 (An Act Allowing the Employment
of Night Workers, thereby Repealing Articles
130 and 131 of PD 442, as amended,
PAGE 70 OF 222
UP LAW BOC LABOR STANDARDS
otherwise known as the Labor Code of the
Philippines)
Art. 154. RA 10151. Coverage. - This chapter
shall apply to all persons, who shall be
employed or permitted or suffered to work at
night, except those employed in agriculture,
stock raising, fishing, maritime transport and
inland navigation, during a period of not less
than seven (7) consecutive hours, including
the interval from midnight to five o'clock in
the morning, to be determined by the
Secretary of Labor and Employment, after
consulting the workers' representatives/labor
organizations and employers.
Night worker means any employed person
whose work requires performance of a
substantial number of hours of night work
which exceeds a specified limit. This limit
shall be fixed by the Secretary of Labor after
consulting the workers' representatives/labor
organizations and employers.
W omen Night W orkers. - Measures shall
be taken to ensure that an alternative to
night work is available to women workers
who would otherwise be called upon to
perform such work:
(a) Before and after childbirth, for a period of
at least sixteen (16) weeks, which shall be
divided between the time before and after
childbirth;
(b) For additional periods, in respect of winch
a medical certificate IS produced stating
that said additional periods are necessary
for the health of the mother or child:
(1) During pregnancy;
(2) During a specified time beyond the
period, after childbirth is fixed
pursuant to subparagraph (a)
above, the length of which shall be
determined by the DOLE after
consulting the labor organizations
and employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed or
given notice of dismissal, except for just or
PAGE 71 OF 222
LABOR LAW
authorized causes provided for in this
Code that are not connected with
pregnancy, childbirth and childcare
responsibilities.
(ii) A woman worker shall not lose the
benefits regarding her status, seniority,
and access to promotion which may attach
to her regular night work position.
Pregnant women and nursing mothers may
be allowed to work at night only if a
competent physician, other than the
company physician, shall certify their fitness
to render night work, and specify, in the case
of pregnant employees, the period of the
pregnancy that they can safely work. The
measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security
benefits or an extension of maternity leave.
The measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security
benefits or an extension of maternity leave.
The provisions of this article shall not leave
the effect of reducing the protection and
benefits connected with maternity leave
under existing laws.[Article 158, RA 10151]
Discrimination [Art 133, RA 9710]
See previous section
Stipulation against marriage [Art 134]
See previous section
Discharge to prevent enjoym ent 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
UP LAW BOC LABOR STANDARDS
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 testim ony
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 W omen 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]
K.4. ANTI-SEXUAL HARASSMENT
[RA 7877 - Anti-Sexual Harassment Act of
1995]
Form s of Sexual Harassm ent
(1) Em ployment or Work Related
(a) The sexual favor is made as a condition
(i) in the hiring or in the employment,
re-employment 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;
PAGE 72 OF 222
LABOR LAW
(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]
UP LAW BOC
Role of the employer or Head of Office
Sec. 4, RA 7877. The Employer or Head of
Office shall have the duty:
(1) to prevent the commission of such acts
and
(2) to lay down the procedure for the
resolution, settlement or prosecution of
committed acts.
Sec. 5, 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.
Independent Action for Dam ages
Sec. 6, RA 7877. The victim of work, education
or training-related sexual harassment can
institute a separate and independent action
for damages and other affirmative relief.
Sanctions
Criminal: imprisonment of 1 month to mos. Or
fine of P10k to P20k or both
Prescription of such action is in 3 years.
Termination
As a managerial employee, petitioner is
bound by more exacting work ethics. When
such moral perversity is perpetuated against
his subordinate, he provides a justifiable
ground for his dismissal for lack of trust and
confidence. It is the right, nay the duty of
every employer to protect its employees from
oversexed superiors. [Sec. 7, RA 7877] [Libres
vs NLRC, 1999]
The gravamen of the offense in sexual
harassment is not the violation of the
employee's sexuality but the abuse of power
by the employer. Any employee, male or
female, may rightfully cry "foul" provided the
claim is well substantiated. Strictly speaking,
there is no time period within which he or she
is expected to complain through the proper
channels. The time to do so may vary
LABOR STANDARDS LABOR LAW
depending upon the needs, circumstances,
and more importantly, the emotional
threshold of the employee.
Not many women are made of the stuff that
can endure the agony and trauma of a public,
even corporate, scandal. If petitioner-
corporation had not issued the third
memorandum that terminated the services of
private respondent, we could only speculate
how much longer she would keep her silence.
Perhaps, to private respondent's mind, for as
long as she could outwit her employer's ploys
she would continue on her job and consider
them as mere occupational hazards. [Phil.
Aelous Automotive United Corp. vs NLRC,
2000]
L. 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
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. [Art II,
Sec. 13 of the 1987 Constitution]
General Rule: Children below 15 shall NOT
be employed
Employment of Children
Children below fifteen (15) years of age shall
not be employed except:
(1) When a child works directly under the sole
responsibility of his/her parents or legal
guardian and where only members of
his/her family are employed: Provided,
however, That his/her employment
neither endangers his/her life, safety,
health, and morals, nor impairs his/her
normal development: Provided, further,
That the parent or legal guardian shall
PAGE 73 OF 222
UP LAW BOC LABOR STANDARDS
provide the said child with the prescribed
primary and/or secondary education; or
(2) Where a child's employment or
participation in public entertainment or
information through cinema, theater,
radio, television or other forms of media
is essential: Provided, That the
employment contract is concluded by the
child's parents or legal guardian, with the
express agreement of the child concerned,
if possible, and the approval of the
Department of Labor and
Employment: Provided, further, That the
following requirements in all instances
are strictly complied with:
(a) The employer shall ensure the
protection, health, safety, morals and
normal development of the child;
(b) The employer shall institute measures
to prevent the child's exploitation or
discrimination taking into account the
system and level of remuneration,
and the duration and arrangement of
working time; and
(c) The employer shall formulate and
implement, subject to the approval
and supervision of competent
authorities, a continuing program for
training and skills acquisition of the
child.
In the above-exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging such child,
a work permit from the Department of Labor
and Employment which shall ensure
observance of the above requirements.
For purposes of this Article, the term "child"
shall apply to all persons under eighteen (18)
years of age.[Sec 2, RA 9231]
Children - refers to any person under 18
years of age or those over but are unable to
fully take care of themselves or protect
themselves from abuse, neglect, cruelty,
exploitation or discrimination because of a
physical or mental disability or condition.
[Sec. 2, RA 7610]
Child labor - refers to any work or economic
activity performed by a child that subjects
PAGE 74 OF 222
LABOR LAW
him/her to any form of exploitation or is
harmful to his/her health and safety or
physical, mental or psychosocial
development.
Working child - refers to any child engaged
as follows:
(1) when the child is below eighteen (18)
years of age, in work or economic activity
that is not child labor as defined in the
immediately preceding subparagraph;
and
(2) when the child is below fifteen (15) years
of age, in work where he/she is directly
under the responsibility of his/her
parents or legal guardian and where only
members of the childs family are
employed; or in public entertainment or
information. [Sec. 3, DO 65-04]
Exceptions
(1) Child works directly under the sole
responsibility of his parents or legal
guardian and where only members of the
employers family are employed,
provided:
(a) his employment does NOT endanger
his life, safety, health and morals,
(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 [Sec.
12 of RA 7610 as amended by RA 7658]:
(a) employment does NOT involve ads or
commercials promoting alcohol,
tobacco and its by-products or
violence [Sec. 14, 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
UP LAW BOC LABOR STANDARDS
(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 to 18
Employment is allowed even without permit
but restricted to non-hazardous 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;
(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
PAGE 75 OF 222
LABOR LAW
W orst Forms of Child Labor
(1) All forms of slavery, as defined under the
"Anti-trafficking in Persons Act of 2003",
or practices similar to slavery such as sale
and trafficking of children, debt bondage
and serfdom and forced or compulsory
labor, including recruitment of children
for use in armed conflict; or
(2) The use, procuring, offering or exposing
of a child for prostitution, for the
production of pornography or for
pornographic performances; or
(3) The use, procuring or offering of a child
for illegal or illicit activities, including the
production and trafficking of dangerous
drugs and volatile substances prohibited
under existing laws; or
(4) Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the
health, safety or morals of children, such
that it:
(a) Debases, degrades or demeans the
intrinsic worth and dignity of a child
as a human being; or
(b) Exposes the child to physical,
emotional or sexual abuse, or is
found to be highly stressful
psychologically or may prejudice
morals; or
(c) Is performed underground,
underwater or at dangerous heights;
or
(d) Involves the use of dangerous
machinery, equipment and tools such
as power-driven or explosive power-
actuated tools; or
(e) Exposes the child to physical danger
such as, but not limited to the
dangerous feats of balancing,
physical strength or contortion, or
which requires the manual transport
of heavy loads; or
(f) Is performed in an unhealthy
environment exposing the child to
hazardous working conditions,
elements, substances, co-agents or
processes involving ionizing,
radiation, fire, flammable substances,
noxious components and the like, or
UP LAW BOC LABOR STANDARDS LABOR LAW

to extreme temperatures, noise Rights and Privileges

levels, or vibrations; or
(a) Minim um wage
(g) Is performed under particularly
The minimum wage of domestic workers
difficult conditions; or
shall not be less than the following:
(h) Exposes the child to biological agents
i. P2,500 a month for those employed
such as bacteria, fungi, viruses,
in NCR
protozoans, nematodes and other
parasites; or ii. P2,000 a month for those employed
in chartered cities and first class
(i) Involves the manufacture or handling
municipalities
of explosives and other pyrotechnic
products. iii. P1,500 a month for those employed
in other municipalities
Within one year from the effectivity of the Act,
W orking Hours of a Child
and periodically thereafter, the Regional
Quantity Tripartite and Productivity Wage Boards shall
review, and if proper, determine and adjust
Age Bracket Daily Max Weekly Max
Below 15 y 4 hrs 20 hrs
the minimum wage rates of domestic workers.
15 to below 18 8hrs. 40 hrs [Sec. 24, RA 10361]
SECTION 1. Subparagraphs (1), (2) and (3), Article
143 of Presidential Decree No. 442, as amended,
Night work prohibition
otherwise known as the "Labor Code of the
Age Bracket Prohibited Hours Philippines" are hereby amended to read as
Below 15 y 8 pm to 6 am (10 hrs.) follows:
15 to below 18 10 pm to 6 am (8 hrs.) ART. 143. Minimum wage. (a) Househelpers
shall be paid the following minimum wage rates;
M. EMPLOYMENT OF HOUSEHELPERS (1) Eight hundred pesos (P800.00) a
Relevant Law: RA 10361 (Batas month for househelpers in Manila,
Kasambahay or Domestic Workers Act) Quezon, Pasay and Caloocan cities and
municipalities of Makati, San Juan,
Note: RA 10361 has expressly repealed Mandaluyong, Muntinlupa, Navotas,
Chapter III, Employment of Househelpers, Malabon, Paraaque, Las Pias, Pasig,
Title III of Book III of the Labor Code Marikina, Valenzuela, Taguig and
Pateros in Metro Manila and in highly
urbanized cities;
Domestic work - This refers to work (6) Six hundred fifty pesos (P650.00) a
performed in or for a household or month for those in other chartered
households. [Sec 4(C). RA 10361] cities and first class municipalities; and
(7) Five hundred fifty pesos (P550.00) a
month for those in other municipalities;
Domestic worker or Kasam bahay - Provided, that the employees shall
Refers to any person engaged in domestic review the employment contracts of
work within an employment relationship such their househelpers every three (3) years
as, but not limited to, the following: general with the end in view of improving the
househelp, nursemaid or yaya, cook, terms and conditions thereof. Provided,
gardener, or laundry person. [Sec 4(D). RA further, that those househelpers who
are receiving at least One thousand
10361] pesos (P1,000.00) shall be covered by
The term domestic worker or kasambahay the Social Security System (SSS) and
excludes any person who performs domestic be entitled to all the benefits provided
work only occasionally or sporadically and thereunder."
not on an occupational basis. [Sec.4(D), RA
10361]
(b) Standard of Treatment
PAGE 76 OF 222
UP LAW BOC LABOR STANDARDS
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]
(c) 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]
(d) 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]
(e) Access to Outside Com m unication
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]
(f) 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]
(g) 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.
PAGE 77 OF 222
LABOR LAW
(h) 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:
(1) Medical certificate or a health certificate
issued by a local government health
officer;
(2) Barangay and police clearance;
(3) National Bureau of Investigation (NBI)
clearance; and
(4) 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 and 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 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]
UP LAW BOC LABOR STANDARDS
Employment Age of Domestic
W orkers: 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 dom estic worker
The domestic worker may terminate the
employment relationship at any time before
the expiration of the employment contract for
any of the following causes:
(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
An employer may terminate the services of
the domestic worker at any time before the
expiration of the contract, for any of the
following causes:
PAGE 78 OF 222
LABOR LAW
(a) Misconduct or willful disobedience by
the domestic worker of the lawful
order of the 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
(a) any unpaid salary due not exceeding the
equivalent 15 days work shall be forfeited
AND
(b) 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.
UP LAW BOC
Notice to end the working relationship
If the duration of the domestic service is
determined either in stipulation or by
nature of the service, the employer or
domestic worker may give notice to end
working relationship five (5) days before
intended termination of the service.
The domestic worker and the employer may
mutually agree upon written notice to pre-
terminate the contract of employment to end
the employment relationship. [Sec. 32, RA
10361]
N. EMPLOYMENT OF HOMEWORKERS
Note: DO 5, DOLE (February 4, 1992), is now
Rule XIV, Book III of the IRR.
Industrial hom ework
(1) Is a system of production under which
work for an employer or contractor is
carried out by a homeworker at his/her
home. Materials may or may not be
furnished by the employer or contractor.
(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 Hom eworker - a worker who is
engaged in industrial homework
Employer means any natural or artificial
person who
(1) Acts as a contractor or subcontractor
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 employers 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]
Note: Sec 2(d), Rule XIV, Book III is
substantially similar to the above.
LABOR STANDARDS LABOR LAW
Rights and benefits accorded
homeworkers
not
the (1) Right to form, join or assist organizations
the [Sec 3, Rule XIV, Book III, IRR]
the
(2) Right to acquire legal personality and the
the
rights and privileges granted by law to
legitimate labor organizations upon
issuance of the certification of
registration [Sec 4, Rule XIV, Book III,
IRR]
(3) Immediate payment upon employers
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]
Liability of Employer
(1) Employer may require homeworker to
redo work improperly executed without
additional pay [Sec 9a, Rule XIV, Book III,
IRR]
(2) Employer 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, employer is jointly and
severally liable with the former to the
homeworker for his/her wage [Sec 11,
Rule XIV, Book III, IRR]
(4) Employer 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]
PAGE 79 OF 222
UP LAW BOC LABOR STANDARDS
Prohibited Homework
(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]
Deductions
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]
O. APPRENTICES AND LEARNERS
Relevant Law: RA 7796 (Technical
Education and Skills Development Act of
1994 or TESDA Act of 1994)
Statement of objectives. - This Title aims: (1)
To help meet the demand of the economy for
trained manpower; (2) To establish a national
apprenticeship program through the
participation of employers, workers and
government and non-government agencies;
and (3) To establish apprenticeship standards
for the protection of apprentices. [Art 57, RA
7796]
O.1. APPRENTICES
Note: 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
PAGE 80 OF 222
LABOR LAW
occupation.
(k) Apprentice" is a person undergoing
training for an approved apprenticeable
occupation during an apprenticeship
agreement. [Art 58(b) Labor Code; Sec 4
(k), RA 7796]
(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]
The act of filing the proposed apprenticeship
program with the DOLE is a preliminary step
towards its final approval, and does not
instantaneously give rise to an employer-
apprentice relationship. It must be duly
approved by the Minister of Labor and
Employment. Hence, since the apprenticeship
agreement between petitioner and
respondent has no force and effect,
respondent's assertion that he was hired not
as an apprentice but as a delivery boy
deserves credence. [Nitto Enterprises vs.
NLRC, G.R. No. 114337, (1995)]
Conditions under which children
below 15 may be employed
Children below fifteen (15) years of age shall
not be employed except:
(1) When a child works directly under the
sole responsibility of his parents or legal
guardian and where only members of the
employer's family are employed:
Provided, however, That his employment
neither endangers his life, safety, health
and morals, nor impairs his normal
development: Provided, further, That the
parent or legal guardian shall provide the
said minor child with the prescribed
primary and/or secondary education; or
(2) Where a child's employment or
participation in public entertainment or
information through cinema, theater,
UP LAW BOC LABOR STANDARDS
radio or television is essential: Provided,
The employment contract is concluded by
the child's parents or legal guardian, with
the express agreement of the child
concerned, if possible, and approval of
the Department of Labor and
Employment: and Provided, That the
following requirements in all instances
are strictly complied with:
(a) The employer shall ensure the
protection, health, safety, morals and
normal development of the child;
(b) The employer institute measures to
prevent the child's exploitation or
discrimination taking into account the
system and level of remuneration and
the duration and arrangement of
working time; and
(c) The employer shall formulate and
implement, subject to the approval
and supervision of competent
authorities, a continuing program for
training and skills acquisition of the
child.
In the above exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging child, a
work permit from the Department of Labor
and Employment which shall ensure
observance of the above requirements.
The Department of Labor and Employment
shall promulgate rules and regulations
necessary for the effective implementation of
this Section. [RA 7160, Sec. 12 as amended by
RA 7658, Sec. 1]
Qualifications of apprentice
(a) Be at least 14 years of age;
(b) Possess vocational aptitude and capacity
for appropriate tests; and
(c) Possess the ability to comprehend and
follow oral and written instructions.
Trade and industry associations may
recommend to the Secretary of Labor
appropriate educational requirements for
different occupations. [Art. 59, LC]
PAGE 81 OF 222
LABOR LAW
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;
(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
Allowed em ploym ent
Apprenticeable Occupation is an
occupation officially endorsed by a tripartite
body and approved to be apprenticeable by
the authority. [Sec. 4, RA 7796]
Employment of Apprentices
W hen 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, Labor Code]
Terms and conditions
Apprenticeship agreements, including the
wage rates of apprentices, shall conform to
the rules issued by the Secretary of Labor and
Employment.
The period of apprenticeship shall not
exceed six months.
Apprenticeship agreements providing for
wage rates below the legal minimum wage,
which in no case shall start below 75 percent
of the applicable minimum wage, may be
entered into only in accordance with
apprenticeship programs duly approved by
the Secretary of Labor and Employment. [Art.
61, Labor Code as amended by E.O. 111-1986]
The Secretary of Labor and Employment may
authorize the hiring of apprentices without
compensation whose training on the job is
UP LAW BOC LABOR STANDARDS
required by the school or training program
curriculum or as requisite for graduation or
board examination. [Art. 72, Labor Code]
The wages of apprentices and learners shall
in no case be less than seventy-five percent
(75%) of the applicable minimum wage rates.
[Sec. 7, Wage Order No. NCR-19]
Enforcement
Investigation of violation of apprenticeship
agreement. - Upon complaint of any
interested person or upon its own initiative,
the appropriate agency of the Department of
Labor and Employment or its authorized
representative shall investigate any violation
of an apprenticeship agreement pursuant to
such rules and regulations as may be
prescribed by the Secretary of Labor and
Employment. [Art. 65, LC]
Appeal to the Secretary of Labor and
Employment. - The decision of the authorized
agency of the Department of Labor and
Employment may be appealed by any
aggrieved person to the Secretary of Labor
and Employment within five (5) days from
receipt of the decision. The decision of the
Secretary of Labor and Employment shall be
final and executory. [Art.66, LC]
Exhaustion of administrative remedies. No
person shall institute any action for the
enforcement of any apprenticeship
agreement or damages for breach of any
such agreement, unless he has exhausted all
available administrative remedies. [Art. 67,
LC]
Incentives for em ployers
An additional deduction from taxable income
of one-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices
shall be granted to the person or enterprise
organizing an apprenticeship program:
Provided, That such program is duly
recognized by the Department of Labor and
Employment: Provided, further, That such
deduction shall not exceed ten (10%) percent
of direct labor wage: and Provided, finally,
That the person or enterprise who wishes to
avail himself or itself of this incentive should
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LABOR LAW
pay his apprentices the minimum wage. [Art.
71, LC]
Requisites of the deduction:
a. Apprenticeship program must be duly
approved by the DOLE;
b. Deduction shall NOT exceed 10% of direct
labor wage;
c. Employer must pay his apprentices the
minimum wage.
Summary of Rules:
(1) The apprentice must be paid not less
than 75% of the prescribed minimum
salary [Art. 61, LC];
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, 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]
W orking scholars there is no employer-
employee 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
UP LAW BOC LABOR STANDARDS
be reasonable and necessary to finish their
chosen courses under such agreement. [Sec.
14, Rule X, IRR]
O.2. LEARNERS
Learners - persons hired as trainees in semi-
skilled and other industrial occupations
which are non-apprenticeable and which may
be learned through practical training on the
job in a relatively short period of time which
shall not exceed three (3) months [Art 73,
Labor Code, Sec 4(n), RA 7796]
W hen 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, Labor
Code]
Terms and conditions of employment
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
seventy-five percent (75%) of the
applicable minimum wage; and
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LABOR LAW
(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.
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]
Summary of Rules
(1) The duration of learnership shall not
exceed 3 months [Art. 73, LC];
(2) If the learnership of 3 months is
completed, the employer may be
compelled to continue with the services
of the learner as a regular employee;
There is a commitment from the
employer to employ the learners if they so
desire, as regular employees upon
completion of the learnership;
(3) If the learner is dismissed from service
without just and valid cause and without
due process after 2 months of service, he
will be deemed as regular employee; [Art.
75(d)] and
(4) The wages or salary rates of the learners
which shall begin at not less than 75% of
the applicable minimum wage. [Art.
75(c)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Distinctions between Learnership and Apprenticeship

Apprenticeship
Highly technical industries
Practical training supplemented by related theoretical
instruction
Apprenticeable occupations approved by the SOLE
Written apprentice agreement ratified by
appropriate committees
More than 3 months, shall not exceed 6 months
1. The person is at least 15 years of age, provided those
who are at least 15 years of age but less than 18 may
be eligible for apprenticeship only in non-hazardous
occupation;
2. The person is physically fit for the occupation in
which he desires to be trained;
3. The person possesses vocational aptitude and
capacity for the particular occupation as established
through appropriate tests; and
4. The person is able to comprehend and follow oral
and written instructions.
Wage rate shall begin at not less than 75% of the
minimum wage
No compensation if SOLE authorizes, as OJT is
required by the school
Deductibility of of training costs incurred, provided:
Program is duly recognized by DOLE
Deduction shall not exceed 10% of direct labor wage
Payment of minimum wage to apprenticeship
Learnership
Semi-skilled industrial occupations
Practical training whether or not such practical
training is supplemented by theoretical instructions
Non-apprenticeable occupations
the
Learnership agreement
Shall not exceed 3 months
1. When no experienced workers are available;
2. The employment of learners is necessary to prevent
curtailment of employment opportunities; and
3. The employment does not create unfair competition
in terms of labor costs or impair or lower working
standards.
Wage rate shall begin at not less than 75% of the
minimum wage
Learners in piecework shall be paid in full for the work
done
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 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.

PAGE 84 OF 222
UP LAW BOC
P. 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]
Im pairment 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]
Declaration of Policy. The grant of the
rights and privileges for disabled persons
shall be guided by the following principles:
(a) Disabled persons are part of the
Philippine society, thus the Senate shall
give full support to the improvement of
the total well-being of disabled persons
and their integration into the mainstream
of society. Toward this end, the State
shall adopt policies ensuring the
rehabilitation, self-development and self-
reliance of disabled persons. It shall
develop their skills and potentials to
enable them to compete favorably for
available opportunities.
LABOR STANDARDS LABOR LAW
(b) Disabled persons have the same rights as
other people to take their proper place in
society. They should be able to live freely
and as independently as possible. This
must be the concern of everyone the
family, community and all government
and non-government organizations.
Disabled persons rights must never be
perceived as welfare services by the
Government.
(c) The rehabilitation of the disabled persons
shall be the concern of the Government in
order to foster their capability to attain a
more meaningful, productive and
satisfying life. To reach out to a greater
number of disabled persons, the
rehabilitation services and benefits shall
be expanded beyond the traditional
urban-based centers to community based
programs, that will ensure full
participation of different sectors as
supported by national and local
government agencies
(d) The State also recognizes the role of the
private sector in promoting the welfare of
disabled persons and shall encourage
partnership in programs that address
their needs and concerns
(e) To facilitate integration of disabled
persons into the mainstream of society,
the State shall advocate for and
encourage respect for disabled persons.
The State shall exert all efforts to remove
all social, cultural, economic,
environmental and attitudinal barriers
that are prejudicial to disabled persons.
[Sec 2, RA 7277]
Coverage. This Act shall covers all disabled
persons and, to the extend herein provided,
departments, offices and agencies of the
National Government or non-government
organization involved in the attainment of the
objectives of this Act. [Sec 2, RA 7277]
PAGE 85 OF 222
UP LAW BOC LABOR STANDARDS
Rights of disabled workers
(1) Equal opportunity for employment
No disabled person shall be denied access to
opportunities for suitable employment. A
qualified disabled EE shall be subject to the
same terms and conditions of employment
and the same compensation, privileges,
benefits, fringe benefits, incentives or
allowances as a qualified able-bodied person.
[Sec. 5 (par. 1), RA 7277]
(2) Reserved contractual positions
5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and
other government agencies, offices or
corporations engaged in social development
shall be reserved for disabled persons. [Sec 5
(par. 2), RA 7277]
(3) Sheltered employment
Sheltered Employment refers to the
provision of productive work for disabled
persons through workshop providing special
facilities, income producing projects or
homework schemes with a view to given them
the opportunity to earn a living thus enabling
them to acquire a working capacity required
in open industry. [Sec 4(i), RA 7277]
If suitable employment for disabled persons
cannot be found through open employment,
the State shall endeavor to provide it by
means of sheltered employment.
In the placement of disabled persons in
sheltered employment, it shall accord due
regard to the individual qualities, vocational
goals and inclinations to ensure a good
working atmosphere and efficient production.
[Sec 6, RA 7277]
Apprenticeship Opportunities.
Disabled persons shall be eligible as
apprentices or learners: Provided, that their
handicap is NOT as much as to effectively
impede the performance of job operations in
the particular occupation for which they are
hired; provided, further, That after the lapse
of the period of apprenticeship, if found
satisfactory in the job performance, they shall
be eligible for employment. [Art. 81 LC; Sec.
PAGE 86 OF 222
LABOR LAW
7, RA 7277] [Bernardo v NLRC & FEBTC, 1999]
(4) Full m inim um wage
All qualified handicapped workers shall
receive the full amount of the minimum wage
rate prescribed herein. [Sec 7, Wage Order
No. NCR-19]
In this light, the Magna Carta for Disabled
Persons mandates that a qualified disabled
EE should be given the same terms and
conditions of employment as a qualified able-
bodied person. Since the Magna Carta
accords them the rights of qualified able-
bodied persons, they are thus covered by
Article 280 of the Labor Code. In the present
case, the handicap of petitioners (deaf-
mutes) is NOT a hindrance to their work. The
eloquent proof of this statement is the
repeated renewal of their employment
contracts. [Bernardo v. NLRC, G.R. No. 122917
(1999)]
Discounts and other privileges
Persons with disability shall be entitled to the
following:
(a) At least 20% discount from all
establishments relative to the utilization
of all services in hotels and similar
lodging establishments; restaurants and
recreation centers for the exclusive use or
enjoyment of persons with disability;
(b) A minimum of 20% discount on
admission fees charged by theaters,
cinema houses, concert halls, circuses,
carnivals and other places of culture,
leisure and amusement for the exclusive
use or enjoyment of persons with
disability;
(c) At least 20% discount for the purchase of
medicines in all drugstores for the
exclusive use or enjoyment of persons
with disability;
(d) At least 20% discount on medical and
dental services including diagnostic and
laboratory fees such as, but not limited
to, x-rays, computerized tomography
scans and blood tests, in all government
facilities, subject to guidelines to be
UP LAW BOC LABOR STANDARDS
issued by the DOH in coordination with
the PHILHEALTH.
(e) At least 20% discount on medical and
dental services including diagnostic and
laboratory fees and professional fees of
attending doctors in all private hospitals
and medical facilities, in accordance with
the rules and regulations to be issued by
the DOH, in coordination with
PHILHEALTH;
(f) At least 20% discount on fare for
domestic air and sea travel for the
exclusive use or enjoyment of persons
with disability;
(g) At least 20% discount in public railways,
skyways, and bus fare for the exclusive
use and enjoyment of persons with
disability.
(h) Educational assistance to persons with
disability, for them to pursue primary,
secondary, tertiary, post tertiary, as well
as vocational or technical education, in
both public and private schools, through
the provision of scholarships, grants,
financial aids, subsidies and other
incentives to qualified persons with
disability, including support for books,
learning materials and uniform allowance
to the extent feasible; Provided, That
persons with disability shall meet
minimum admission requirements;
(i) To the extent practicable and feasible,
the continuance of the same benefits and
privileges given by the GSIS, SSS, and
PAG-IBIG, as the case may be, as are
enjoyed by those in actual service;
(j) To the extent possible, the government
may grant special discounts in special
programs for persons with disability on
purchase of basic commodities, subject to
guidelines to be issued for the purpose by
the DTI and the DA; and
(k) Provision of express lanes for persons
with disability in all commercial and
government establishments; in the
absence thereof, priority shall be given to
them. [Sec 32, RA 7277, as amended by
RA 9442]
PAGE 87 OF 222
LABOR LAW
Conditions for entitlement
(1) Persons with disability who are Filipino
citizens upon submission of any of the
following as proof of his/her entitlement
thereto:
(a) An identification card issued by the
city or municipal mayor or the
barangay captain of the place where
the persons with disability reside;
(b) The passport of the persons with
disability concerned; or
(c) Transportation discount fare ID issued
by the National Council for the Welfare
of Disabled Persons (NCWDP).
(2) The privileges may not be claimed if the
persons with disability claim a higher
discount as may be granted by the
commercial establishment and/or under
other existing laws or in combination with
other discount program/s. [Sec 32, RA
7277, as amended by RA 9442]
Other Provisions Against
Discrimination
(1) Discrimination of Em ploym ent
No entity, whether public or private shall
discriminate against a qualified disabled
person by reason of disability in regard to job
application procedures, the hiring,
promotion, or discharge of employees
compensation, job training and other terms,
conditions and privileges of employment. The
following constitute acts of discrimination:
(a) Limiting, segregating or classifying a
disabled job applicant in such a
manner that adversely affects his work
opportunities
(b) Using qualification standards,
employment tests or other selection
criteria that screen out or tend to
screen out a disabled person unless
such standards, tests or other
selection criteria are shown to be
related for the position in question and
are consistent with business necessity;
(c) Utilizing standards, criteria, or
methods of administration that:
UP LAW BOC
(i) have the effect of discrimination
on the basis of disability; or
(ii) perpetuate the discrimination
of others who are the subject to
common administrative control.
(d) Providing less compensation, such as
salary, wage or other forms of
remuneration and fringe benefits, to
qualified disabled employee, by
reason of his disability, than the
amount to which a non-disabled
person performing the same work is
entitled;
(e) Favoring a non-disabled employee
over a qualified disabled employee
with respect to promotion, training
opportunities, study and scholarship
grants, solely on account of the latter's
disability;
(f) Re-assigning or transferring a
disabled employee to a job or position
he cannot perform by reason of his
disability;
(g) Dismissing or terminating the services
of a disabled employee by reason of
his disability unless the employer can
prove that he impairs the satisfactory
performance of the work involved to
the prejudice of the business entity;
Provided, however, That the employer
first sought to provide reasonable
accommodations for the disabled
persons;
(h) Failing to select or administer in the
most effective manner employment
tests which accurately reflect the
skills, aptitude or other factor of the
disabled applicant or employee that
such test purports to measure, rather
than the impaired sensory, manual or
speaking skills of such applicant or
employee, if any; and
(i) Excluding disabled persons from
membership in labor unions or similar
organizations. [Sec. 32, RA 7277 as
amended by RA 9442]
(2) Employment Entrance Examination
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
LABOR STANDARDS LABOR LAW
(a) all entering employees are subjected
to such an examination regardless of
disability;
(b) Information obtained during the
medical condition or history of the
applicant is collected and maintained
on separate forms and in separate
medical files and is treated as a
confidential medical record; Provided,
however, That:
(i) supervisors and managers may
be informed regarding
necessary restrictions on the
work or duties of the employees
and necessary
accommodations:
(ii) first aid and safety personnel
may be informed, when
appropriate, if the disability
might require emergency
treatment;
(iii) government officials
investigating compliance with
this Act shall be provided
relevant information on
request; and
(iv) the results of such examination
are used only in accordance
with this Act. [Sec. 35, RA 7277
as amended by RA 9442]
(3) Prohibition on Verbal, Non-Verbal
Ridicule and Vilification Against
Persons with Disability
(a) No individual, group or community
shall execute any of these acts of
ridicule against persons with disability
in any time and place which could
intimidate or result in loss of self-
esteem of the latter. [Sec. 40, RA
7277, as amended by RA 9442]
(c) Any individual, group or community is
hereby prohibited from vilifying any
person with disability which could
result into loss of self-esteem of the
latter. [Sec. 42, RA 7277, as amended
by RA 9442]
Public Ridicule - The act of making fun of
or contemptuous imitating or making
mockery of persons with disability whether in
writing, or in words, or in action due to their
PAGE 88 OF 222
UP LAW BOC
impairments. [Sec. 33, RA 7277, as amended
by RA 9442]
Vilification includes:
(1) The utterance of slanderous and abusive
statements against a person with
disability; and/or,
(2) An activity in public which incites hatred
towards, serious contempt for, or severe
ridicule of persons with disability. [Sec.
41, RA 7277, as amended by RA 9442]
Tax Incentives for Employers/
Establishments
(1) For em ploym ent of disabled
persons - additional deduction, from
their gross income, equivalent to 25% of
the total amount paid as salaries and
wages to disabled persons
(a) Private entities
(b) Employ disabled persons either as
regular EEs, apprentice or learner
(c) Provided such entities present proof
as certified by the DOLE and the DOH
[Sec. 8[b], RA 7277]
(2) For construction of disabled-
friendly facilities - additional
deduction from their net taxable income,
equivalent to 50% of the direct costs of
the improvements or modifications
(a) Private entities
(b) That improve or modify their physical
facilities in order to provide
reasonable accommodation for
disabled persons
(c) Does NOT apply to improvements or
modifications or facilities required
under BP 344. [Sec. 8 (c), RA 7277]
(3) For establishm ents giving
discounts may claim such discounts
as tax deductions based on the net cost of
the goods sold or services rendered
(a) The cost of the discount shall be
allowed as deduction from gross
income for the same taxable year that
the discount is granted
LABOR STANDARDS LABOR LAW
(d) The total amount of the claimed tax
deduction net of VAT if applicable,
shall be included in their gross sales
receipts for tax purposes and shall be
subject to proper documentation and
to the provisions of the National
Internal Revenue Code, as amended.
[Sec. 32, RA 7277, as amended by RA
9442]
Enforcement
Enforcement by the Secretary of Justice
(a) Denial of Right
Duty to Investigate. The Secretary of
Justice shall investigate alleged
violations of this Act, and shall undertake
periodic reviews of compliance of covered
entities under this Act.
(b) Potential Violations
The Secretary of Justice may commence a
legal action in any appropriate court if the
Secretary has reasonable cause to believe
that
(1) any person or group of persons is
engaged in a pattern of practice of
discrimination under this Act; or
(2) any person or group of persons has
been discriminated against under
this Act and such discrimination
raises and issue of general public
importance. [Sec 44, RA 7277]
Authority of Court. The court may grant
any equitable relief that such court considers
to be appropriate, including, to the extent
required by this Act:
(a) granting temporary, preliminary or
permanent relief;
(b) providing an auxiliary aid or service,
modification of policy, practice or
procedure, or alternative method; and
(c) making facilities readily accessible to
and usable by individuals with
disabilities. [Sec 45, RA 7277]
PAGE 89 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

Penal Clause
IV. Termination of
(a) Any person who violates any provision of
this Act shall suffer the following
penalties:
Employment
(i) for the first violation, a fine of not
less than Fifty thousand pesos (P A. EMPLOYER-EMPLOYEE
50,000.00) but not exceeding One RELATIONSHIP
hundred thousand pesos
(P100,000.00) or imprisonment of
not less than six (6) months but not Art. 97, LC: As used in this Title:
more than two (2) years, or both at (a) "Person" means an individual,
the discretion of the court; and partnership, association, corporation,
(ii) for any subsequent violation, a fine business trust, legal representatives, or any
of not less than One hundred organized group of persons.
thousand pesos (P100,000.00) but (b) "Employer" includes any person acting
not exceeding Two hundred directly or indirectly in the interest of an
thousand pesos (P 200,000.00) or employer in relation to an employee and shall
imprisonment for less than two (2) include the government and all its branches,
years but not more than six (6) years, subdivisions and instrumentalities, all
or both at the discretion of the court. government-owned or controlled
(b) Any person who abuses the privileges corporations and institutions, as well as
granted herein shall be punished with nonprofit private institutions, or
imprisonment of not less than six (6) organizations.
months or a fine of not less than Five (c) "Employee" includes any individual
thousand pesos (P 5,000.00) but not employed by an employer.
more than Fifty thousand pesos (P
50,000.00), or both, at the discretion of
the court. Art. 173, LC. As used in this Title, unless the
(c) If the violator is a corporation, context indicates otherwise:
organization or any similar entity, the (f) "Employer" means any person, natural or
officials thereof directly involved shall be juridical, employing the services of the
liable therefor. (d). If the violator is an employee.
alien or a foreigner, he shall be deported
immediately after service of sentence (g) "Employee" means any person
without further deportation proceedings. compulsorily covered by the GSIS under
[Sec 46, RA 7277] Commonwealth Act Numbered One hundred
eighty-six, as amended, including the
members of the Armed Forces of the
Philippines, and any person employed as
casual, emergency, temporary, substitute or
contractual, or any person compulsorily
covered by the SSS under Republic Act
Numbered Eleven hundred sixty-one, as
amended.
(h) "Person" means any individual,
partnership, firm, association, trust,
corporation or legal representative thereof.

Art. 219, LC: Definitions.

(e) "Employer" includes any person acting in
PAGE 90 OF 222
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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
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.
The existence or absence of ER-EE
relationship is a question of law and a
question of fact, each in its defined sense.
The existence of an employer-employee
relation is a question of law and being such, it
cannot be made the subject of agreement
[Tabas et.al. v. California Manufacturing Co.,
et. al., G.R. No. 80680, (1989)]. The
characterization of the law prevails over that
in the contract. In this sense, the existence of
an EE-ER relationship is a matter of law.
The existence of an employer-employee
relationship is ultimately a question of fact
[SSS v. CA and Ayalde, G.R. No. 100388,
(2000)]. The conclusion that an EE-ER
relationship depends upon the facts of each
case. In this sense, it is a question of fact.
A.1. FOUR-FOLD TEST
TEST OF EMPLOYER-EMPLOYEE
RELATIONSHIP
(a) Selection and engagement of the
employee;
(b) Payment of wages;
(c) Power of dismissal; and
(d) 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, (1987)]
PAGE 91 OF 222
LABOR LAW
The most important element is the
employers control of the employees conduct,
not only as to the result of the work to be
done, but also as to the means and methods
to accomplish it. [Lirio v. Genovia, G.R. No.
169757, (2011)].
The control test calls merely for the
existence of the right to control and not the
actual exercise of the right. [Zanotte Shoes
v. NLRC, G.R. No. 100665, (1995)].
Not every form of control will have the effect
of establishing ER-EE relationship. The line
should be drawn between:
(1) Rules that merely serve as guidelines
towards the achievement of mutually
desired results without dictating the
means or methods to be employed in
attaining it. These aim only to promote
the result. In such case, NO EE-ER
relationship exists.
(2) Rules that control or fix the methodology
and bind or restrict the party hired to the
use of such means. These address both
the result and the means used to achieve
it and hence, EE-ER relationship exists.
[Insular Life Assurance Co, LTD v. NLRC,
G.R. No. 84484, (1989)].
Economic Dependence Test
Two-tiered approach.
(1) First Tier: Control Test (refer to the Four-
Fold Test)
(2) Second Tier: The underlying economic
realities of the activity or relationship.
[Sevilla v. Court of Appeals, G.R. Nos. L-
41182-3, (1988)].
The economic realities prevailing within the
activity or between the parties are examined,
taking into consideration the totality of
circumstances surrounding the true nature of
the relationship between the parties.
The benchmark of economic reality in
analyzing possible employment relationships
for purposes of applying the Labor Code
ought to be the economic dependence of the
worker on his employer.
The standard of economic dependence is
whether the worker is dependent on the
alleged employer for his continued
UP LAW BOC
employment in that line of business. [Orozco
v. CA, G.R. No. 155207, (2008)].
Evidence of employee status
No particular form of evidence is required to
prove the existence of an employer-employee
relationship. Any competent and relevant
evidence to prove the relationship may be
admitted. For, if only documentary evidence
would be required to show that relationship,
no scheming employer would ever be brought
before the bar of justice, as no employer
would wish to come out with any trace of the
illegality he has authored considering that it
should take much weightier proof to
invalidate a written instrument. [Tenazas, et
al., v. R. Villegas Taxi Transport, G.R. No.
192998, (2014)].
The onus probandi rests on the employer to
prove that its dismissal was for a valid cause.
However, before a case for illegal dismissal
can prosper, an employer-employee
relationship must first be established. It is
incumbent upon the employee to prove the
employer-employee relationship by
substantial evidence. [Javier v. Fly Ace
Corporation, G.R. No. 192558, (2012)].
A.2. KINDS OF EMPLOYMENT
i. Probationary
Art. 296 [281], LC: 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
work after a probationary period shall be
considered a regular employee.
Book VI, Rule 1, Sec. 6(d), IRR: 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
LABOR STANDARDS LABOR LAW
employee at the time of engagement, he
shall be deemed a regular employee.
Definition
A probationary employee is one who is
made to go on a trial period by an employer
during which the employer determines
whether or not he is qualified for permanent
employment, based on reasonable standards
made known to him at the time of
engagement. [Robinsons Galleria et al. v.
Ranchez, G.R. No. 177937, (2011)]
Duration [Art. 296(281)]
General Rule: Probationary employment
shall not exceed six (6) months from the date
the employee started working.
Exceptions:
(1) When it is covered by an apprenticeship
agreement stipulating a longer period
(Art. 296[281], LC);
(2) When the parties to the employment
contract agree otherwise, such as when
established by company policy or
required by the nature of the work
performed by the employee [San Miguel
Corp, v. del Rosario, G.R. Nos. 168194 &
168603, (2005), citing Buiser v. Leogardo,
G.R. No. L-63316, (1984)]; or
(3) When it involves the 3 year probationary
period of teachers [Mercado v. AMA
Computer College, G.R. No. 183572,
(2010)]
Purposes
(1) Observance Period for employer to
determine if employee is qualified and for
employee to demonstrate to the ER his
skills
(2) Restrictive - As long as the termination
was made before the expiration of the six-
month probationary period, the employer
has a right to sever the employer-
employee relationship
Indeed, the employer has the right or is at
liberty to choose as to who will be hired and
who will be declined. It is within the exercise
PAGE 92 OF 222
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of this right to select his employees that the
employer may set or fix a probationary period
within which the latter may test and observe
the conduct of the former before hiring him
permanently. [Grand Motor Parts Corp. v.
MOLE, G.R. No. L-58958, (1984)]
Standards to qualify as a regular
employee
Requirements:
(a) The employer must communicate the
regularization standards to the
probationary employee; and
(b) The employer must make such
communication at the time of the
probationary employees engagement.
If the employer fails to comply with either, the
employee is deemed as a regular and not a
probationary employee.
An employer is deemed to have made known
the standards that would qualify a
probationary employee to be a regular
employee when it has exerted reasonable
efforts to apprise the employee of what he is
expected to do or accomplish during the trial
period of probation. This goes without saying
that the employee is sufficiently made aware
of his probationary status as well as the
length of time of the probation.
The exception to the foregoing is when the
job is self-descriptive in nature, for instance,
in the case of maids, cooks, drivers, or
messengers. [Abbott Laboratories Phil. et al. v.
Alcaraz, G.R. No. 192571, (2013)]
In all cases of probationary employment, the
employer shall make known to the employee
the standards under which he will qualify as a
regular employee at the time of his
engagement. Where no standards are made
known to the employee at that time, he shall
be deemed a regular employee. Conversely,
an employer is deemed to substantially
comply with the rule on notification of
standards if he apprises the employee that he
will be subjected to a performance evaluation
on a particular date after his hiring. [Alcira v.
NLRC, G.R. No. 149859, (2004)]
LABOR STANDARDS LABOR LAW
Regular status after probation
When the bank renewed the contract after
the lapse of the six-month probationary
period, the employees thereby became
regular employees. No employer is allowed to
determine indefinitely the fitness of its
employees. [Bernardo v. NLRC, G.R. No.
122917, (1999)]
Double probation
There is no basis for subjecting an employee
to a new probationary or temporary
employment where he had already become a
regular employee when he was absorbed by a
sister company. [A Prime Security Services, Inc.
v. NLRC, G.R. No. 107023, (2000)]
Absorbed em ployees not probationary
The private respondents could not be
considered probationary employees because
they were already well-trained in their
respective functions. As stressed by the
Solicitor General, while private respondents
were still with the CCAS they were already
clerks. Respondent Gelig had been a clerk for
CCAS for more than ten (10) years, while
respondent Quijano had slightly less than ten
(10) years of service. They were, therefore, not
novices in their jobs but experienced workers.
[Cebu Stevedoring Co., Inc. v. Regional Director,
G.R. No. L-54285, (1988)]
Private school teachers
Questions respecting a private school
teachers entitlement to security of tenure are
governed by the Manual of Regulations for
Private Schools and not the Labor Code.
[Aklan College v. Guarino, G.R. No. 152949,
(2007)]
The legal requisites, therefore, for acquisition
by a teacher of permanent employment, of
security of tenure are:
(a) A full time teacher;
(b) Must have rendered three consecutive
years of service; and
(c) Service must have been satisfactory. [La
Salette of Santiago v. NLRC, G.R. No.
82918, (1991)]
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UP LAW BOC LABOR STANDARDS
Mere completion of the three-year probation,
even with an above-average performance,
does not guarantee that the employee will
automatically acquire a permanent
employment status. The probationer can only
qualify upon fulfillment of the reasonable
standards set for permanent employment as
a member of the teaching personnel.
[Herrera-Manaois v. St. Scholasticas College,
G.R. No. 188914,(2013)]
These standards should be made known to
the teachers on probationary status at the
start of their probationary period, or at the
very least under the circumstances of the
present case, at the start of the semester or
the trimester during which the probationary
standards are to be applied. Of critical
importance in invoking a failure to meet the
probationary standards, is that the school
should show as a matter of due process
how these standards have been applied.
[Colegio del Santisimo Rosario v. Rojo, G.R. No.
170388, (2013)]
Termination
A probationary employee enjoys only a
temporary employment status. This means
that he is terminable at any time, permanent
employment not having been attained in the
meantime. The employer could well decide
he no longer needed the probationary
employees services or his performance fell
short of expectations, etc. As long as the
termination was made before the termination
of the six-month probationary period, the
employer was well within his rights to sever
the employer-employee relationship. A
contrary interpretation would defect the clear
meaning of the term probationary. [De la
Cruz, Jr. v. NLRC, G.R. No. 145417. (2003)]
A probationary employee can only be
terminated for:
(1) Just causes;
(2) Authorized causes; or
(3) 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.
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LABOR LAW
[Robinsons Galleria et al. v Ranchez, G.R.
No. 177937, Jan. 19, (2011)]
The probationary employee is entitled to
substantial and procedural due process
before termination.
Limits to termination
(1) It must be exercised in accordance with
the specific requirements of the contract
(2) If a particular time is prescribed, the
termination must be within such time and
if formal notice is required, then that form
must be used;
(3) The employers dissatisfaction must be
real and in good faith, not feigned so as
to circumvent the contract or the law;
(4) There must be no unlawful discrimination
in the dismissal. [Manila Hotel
Corporation v. NLRC, G.R. No. 53453,
(1986)]
In order to invoke failure to meet the
probationary standards as a justification for
dismissal, the employer must show how these
standards have been applied to the subject
employee. [Univac Development, Inc. v.
Soriano, G.R. No. 182072, (2013)].
ii. Regular
Art. 295 (previously Art 280), LC: The
provisions of written agreement to the
contrary notwithstanding and regardless of
the oral agreement of the parties, an
employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of
the employer, except where the employment
has been fixed for a specific project or
undertaking the completion or termination of
which has been determined at the time of the
engagement of the employee or where the
work or service to be performed is seasonal in
nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual
if it is not covered by the preceding
paragraph: Provided, That any employee who
UP LAW BOC LABOR STANDARDS
has rendered at least one year of service,
whether such service is continuous or broken,
shall be considered a regular employee with
respect to the activity in which he is employed
and his employment shall continue while
such activity exists.
Art. 296 [281], Last sentence, LC: An employee
who is allowed to work after a probationary
period shall be considered a regular
employee.
Regular employment is not synonymous with
permanent employment, because there is no
such thing as a permanent employment. Any
employee may be terminated for just cause.
A regular employee is one who is engaged
to perform activities which are necessary and
desirable in the usual business or trade of the
employer as against those which are
undertaken for a specific project or are
seasonal.
Art 295 provides two kinds of regular
employees:
(1) Those engaged to perform activities
which are necessary or desirable in
the usual business or trade of the
employer; and
(2) casual employees who have rendered
at least 1 year of service, whether
continuous or broken, with respect to the
activity in which they are employed.
[Romares v. NLRC, G.R. No. 122327.
(1998)]
Primary standard to determine
regular employment: reasonable
connection rule
The primary standard to determine a regular
employment is the reasonable connection
between the particular activity performed by
the employee in relation to the business or
trade of the employer. The test is whether the
former is usually necessary or desirable in the
usual business or trade of the employer. If the
employee has been performing the job for at
least one year, even if the performance is not
continuous or merely intermittent, the law
deems the repeated and continuing need for
PAGE 95 OF 222
LABOR LAW
its performance as sufficient evidence of the
necessity, if not indispensability of that
activity to the business of the employer.
Hence, the employment is also considered
regular, but only with respect to such activity
and while such activity exists. [Forever
Richons Trading Corp. v. Molina, G.R. No.
206061, (2013)]
W hen applicable
Art. 295 is not the yardstick for determining
the existence of an employment relationship
because it merely distinguishes between two
kinds of employees, i.e., regular employees
and casual employees, for purposes of
determining the right of an employee to
certain benefits, to join or form a union, or to
security of tenure; it does not apply where the
existence of an employment relationship is in
dispute. [Atok Big Wedge Co., Inc. v. Gison,
G.R. No. 169510, (2011)]
Hiring for an extended period
Where the employment of project employees
is extended long after the supposed project
has been finished, the employees are
removed from the scope of project employees
and considered regular employees. [Audion
Electric Co., Inc. v. NLRC, G.R. No. 106648,
(1999)]
While length of time may not be a controlling
test for project employment, it can be a
strong factor in determining whether the
employee was hired for a specific undertaking
or in fact tasked to perform functions which
are vital, necessary and indispensable to the
usual business or trade of the employer.
[Tomas Lao Const. v. NLRC, G.R. No. 116781.
(1997)]
Repeated renewal of contract
While the Court has recognized the validity of
contractual stipulations as to the duration of
employment, this cannot apply where the
contract-to-contract arrangement was but an
artifice to prevent her from acquiring security
of tenure and to frustrate constitutional
decrees. [Beta Electric Corp. v. NLRC, G.R. No.
86408, (1990)]
UP LAW BOC LABOR STANDARDS
Length of tim e involved
Length of time is not controlling, merely
serves as a badge of regular employment.
[Maraguinot v. NLRC, G.R. No. 120969.
(1998)]
iii. Project employment
Art. 295 (previously Art 280), 1st par, LC: The
provisions of written agreement to the
contrary notwithstanding and regardless of
the oral agreement of the parties, an
employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of
the employer, except where the employment
has been fixed for a specific project or
undertaking the completion or termination of
which has been determined at the time of the
engagement of the employee or where the
work or service to be performed is seasonal in
nature and the employment is for the
duration of the season.
A project employee is one who is hired for
carrying out a separate job, distinct from the
other undertakings of the company, the scope
and duration of which has been determined
and made known to the employees at the
time of employment. [Hanjin Heavy Industries
& Const. Co. v. Ibaez, G.R. No. 170181,
(2008)]
Whether or not the project has a direct
relation to the business of the employer is not
important, BUT:
(1) Employee 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
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LABOR LAW
Rationale for project employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing except waiting until
another project is begun, if at all. In effect,
these stand-by workers would be enjoying the
status of privileged retainers, collecting
payment for work not done, to be disbursed
by the employer from profits not earned. [De
Ocampo, Jr. v. NLRC, G.R. No. 81077, (1990)]
Two Kinds of Project Employee
(1) For a particular job or undertaking that is
WITHIN the regular or usual business of
the employer company, but which is
distinct and separate, and identifiable as
such, from the other undertakings of the
company (i.e. construction)
(2) For a particular job or undertaking that is
NOT within the regular business of the
corporation. Such a job or undertaking
must also be identifiably separate and
distinct from the ordinary or regular
business operations of the employer [Villa
v. NLRC, G.R. No. 117043, (1988)]
Test of project employment
The litmus test to determine whether an
individual is a project employee lies in setting
a fixed period of employment involving a
specific undertaking the completion or
termination of which has been determined at
the time of the particular employee's
engagement.
The decisive factor in the term employment is
the day certain agreed upon by the parties for
the commencement and termination of their
employment relationship, a day certain being
understood to be that which must necessarily
come, although it may not be known when.
[Caasi v. Kanlungan Centre Foundation, Inc.,
G.R. No. 199769, (2013)]
The repeated and successive rehiring of
project employees do not qualify them as
regular employees, as length of service is not
the controlling determinant of the
employment tenure of a project employee,
but whether the employment has been fixed
UP LAW BOC
for a specific project or undertaking, its
completion has been determined at the time
of the engagement of the employee. [William
Uy Construction Corp. v. Trinidad, G.R. No.
183250, (2010)]
Indicators of project em ployment
(1) The duration of the specific/identified
undertaking for which the worker is
engaged is reasonably determinable;
(2) Such duration, as well as the specific
work/service to be performed, is defined
in an employment;
(3) agreement and is made clear to the
employee at the time of the hiring;
(4) The work/service to be performed by the
employee is in connection with the
particular project/undertaking for which
he is engaged;
(5) The employee, while not employed and
awaiting engagement, is free to offer his
services to any other employer;
(6) The termination of his employment in the
particular project/undertaking is reported
to the DOLE Regional Office having
jurisdiction over the workplace following
the date of his separation from work,
using the prescribed form on employees
terminations /dismissals/suspensions;
(7) An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies. [Samson v.
NLRC, G.R. No. 11366, (1996)].
Length of time not applicable
construction industry
Generally, length of service provides a fair
yardstick for determining when an employee
initially hired on a temporary basis becomes a
permanent one, entitled to the security and
benefits of regularization. But this standard
will not be fair, if applied to the construction
industry, simply because construction firms
cannot guarantee work and funding for its
payrolls beyond the life of each project. And
getting projects is not a matter of
LABOR STANDARDS LABOR LAW
course. [William Uy Construction Corp. v.
Trinidad, G.R. No. 183250, (2010)]
See also: Policy Instructions No. 20 of 1997
and D.O. 19 of 1993
W ork pool employee
A project employee 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 employee
was continuously rehired is not
controlling, but merely serves as a badge
of regular employment.
A work pool may exist although the workers
in the pool do not receive salaries and are
free to seek other employment during
temporary breaks in the business, provided,
that the worker shall be available when
called to report for a project. Although
primarily applicable to regular seasonal
workers, this set-up can likewise be applied
to project workers insofar as the effect of
temporary cessation of work is concerned.
[Maraguinot v. NLRC, G.R. No. 120969.
(1998)]
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 indefinite period. If they are employed in a
in
particular project, the completion of the
project or any phase thereof will not mean
severance of the employer-employee
relationship. [J. & D.O. Aguilar Corp. v. NLRC,
G.R. No. 116352, (1997)]
Rule on reportorial requirement
A report of termination to the nearest public
employment office every time their
employment was terminated due to
completion of each construction
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project. Failure of the employer to file
termination reports after every project
completion proves that the employees are not
project employees. [Pasos v. Philippine
National Construction Corp., G.R. No. 192394,
(2013)]
Repeated renewal of contract
When an employer renews a contract of
employment after the lapse of the six-month
probationary period, the employee thereby
becomes a regular employee. No employer is
allowed to determine indefinitely the fitness
of its employees. [Malicdem v. Marulas
Industrial Corp., G.R. No. 204406, (2014)]
iv. Seasonal
Seasonal employees are those whose
work or services to be performed are seasonal
in nature, employment is for the duration of
the season.
There is no continuing need for the worker.
Regular Seasonal Employees After
One Season
Seasonal workers who are called to work
from time to time and are temporarily laid off
during off-season are not separated from
service in said period, but are merely
considered on leave until reemployed
The nature of their relationship . . . is such
that during off season they are temporarily
laid off but during summer season they are
re-employed, or when their services may be
needed. They are not strictly speaking
separated from the service but are merely
considered as on leave of absence without
pay until they are re-employed. [Philippine
Tobacco Flue-Curing &Redrying Corp. v. NLRC,
G.R. No. 127395, (1998)]
v. Casual
Art. 295 [previously Art 280], 2nd par. LC: An
employment shall be deemed to be casual if
it is not covered by the preceding paragraph:
Provided, That any employee who has
rendered at least one year of service, whether
such service is continuous or broken, shall be
considered a regular employee with respect
LABOR STANDARDS LABOR LAW
to the activity in which he is employed and his
employment shall continue while such
activity exists.
Book VI, Rule 1, Sec. 5 (b), IRR: Casual
employment. There is casual employment
where an employee is engaged to perform a
job, work or service which is merely incidental
to the business of the employer, and such job,
work or service is for a definite period made
known to the employee at the time of
engagement: Provided, That any employee
who has rendered at least one year of service,
whether such service is continuous or not,
shall be considered a regular employee with
respect to the activity in which he is employed
and his employment shall continue while
such activity exists.
A casual employee is engaged to perform
a job, work or service which is merely
incidental to the business of the employer,
and such job, work or service is for a definite
period made known to the employee at the
time of engagement.
Someone who is not a regular, project or
seasonal employee.
Requirements to become regular
employee:
(1) One (1) year service, continuous or broken
with respect to activity employed
(2) Employment shall continue while such
activity exists
Nature of work
What determines regularity or casualness is
not the employment contract, written or
otherwise, but the nature of the job. If the job
is usually necessary or desirable to the main
business of the employer, then employment
is regular. [A. M. Oreta and Co., Inc. v. NLRC,
G.R. No. 74004, (1989)]
One-year service
As held in Philippine Bank of Communications
v. NLRC, a temporary or casual employee,
under Article 281 of the Labor Code, becomes
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regular after service of one year, unless he
has been contracted for a specific project.
[Tabas v. California Marketing Co., Inc., G.R.
No. L-80680, (1989)].
vi. Fixed-Term
Art. 295 [280] has no application to instances
where a fixed period of employment was
agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper
pressure being brought to bear upon the
employee and absent any other
circumstances vitiating his consent, or where
it satisfactorily appears that the employer
and employee dealt with each other on more
or less equal terms with no moral dominance
whatever being exercised by the former over
the latter. [Brent School v. Zamora, G.R. No.
L-48494, (1990)]
Conditions for the validity of fixed
contract agreement between employer
and employee
(1) Fixed period of employment was
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.
Project employment and Fixed-term
employment distinguished
A project employee is assigned to carry out a
specific project or undertaking, the duration
and scope of which were specified at the time
the employee is engaged for the project
The duration of a fixed-term employment
agreed upon by the parties may be any day
certain, which is understood to be "that which
must necessarily come although it may not
be known when." The decisive determinant in
fixed-term employment is not the activity that
the employee is called upon to perform but
the day certain agreed upon by the parties for
the commencement and termination of the
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employment relationship. [GMA Network, Inc.
v. Pabriga, G.R. No. 176419, (2013)]
No implied renewal of employment
contract
It is a settled rule that seafarers are
considered contractual employees. Their
employment is governed by the contracts
they sign everytime they are rehired and their
employment is terminated when the contract
expires. Their employment is contractually
fixed for a certain period of time. Thus, when
a contract ends, the employment is deemed
automatically terminated, there being no
mutually-agreed renewal or extension of the
expired contract. [Unica v. Anscor Swire Ship
Management Corp., G.R. No. 184318, (2014)]
As long as the Brent School v. Zamora
guidelines are satisfied, the court will
recognize the validity of the fixed-term
contract, especially if they were informed of
that their engagement was for a specific
period. The Brent doctrine is only applicable
in a few special cases wherein the employer
and employee are on more or less in equal
footing in entering into the contract [Fuji
Television Network Inc v. Espiritu, G.R. No.
204944-45, (2014)].
A.3. JOB CONTRACTING
I. Articles 106 109
Art. 106, LC: 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
UP LAW BOC LABOR STANDARDS
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.
Art. 107, LC: Indirect employer. The provisions
of the immediately preceding article shall
likewise 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.
Art. 108, LC: 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.
Art. 109, LC: 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.
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II. D.O. No. 18-A-11: Rules
Im plem enting Articles 106 to 109 of
the LC, as amended
Coverage
This shall apply to:
(1) all parties of contracting and
subcontracting arrangements where ER-
EE relationships exist
(2) cooperatives engaging in contracting or
subcontracting arrangements
Contractors and subcontractors referred to in
these rules are prohibited from engaging in
recruitment and placement activities as
defined in Art. 13(b) of the LC whether for
local or overseas employment.
Contracting or subcontracting refers to
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.
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.
Cabo refers to a person 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.
UP LAW BOC LABOR STANDARDS LABOR LAW

Legitimate contracting or Effect of termination of employment

subcontracting [Sec. 13, D.O. 18-A-11]
Contracting or subcontracting shall be Cause Effect
legitimate if all the following circumstances Prior to the Governed by Art. 284
occur: expiration of the 292 of LC
(1) The contractor must be registered in Service
accordance with these rules and carries a Agreement
distinct and independent business Prior to The right of the contractor
(2) The contractor undertakes to perform the expiration of the employee to unpaid wages
job, work or service on its own Service and other unpaid benefits
responsibility, according to its own Agreement and including unremitted legal
manner and method, and free from not due to mandatory contributions,
control and direction of the principal in all authorized e.g., SSS, PhilHealth, Pag-
matters connected with the performance causes ibig, ECC, shall be borne by
of the work except as to the results the party at fault, without
thereof; prejudice to the solidary
liability of the parties to
(3) The contractor has substantial capital the Service Agreement.
and/or investment; and
Due to expiration Employee may opt for
(4) The Service Agreement ensures of Service payment of separation
compliance with all the rights and Agreement, or benefits as may be
benefits under Labor laws. from the provided by law or the
completion of Service Agreement,
the phase of the without prejudice to
Rights of contractors employees job, work or his/her entitlement to the
All contractors employees, whether deployed service for which completion bonuses or
or assigned as reliever, seasonal, week-ender, the employee is other emoluments,
temporary, or promo jobbers, shall be engaged including retirement
entitled to all the rights and privileges as benefits whenever
provided for in the LC, as amended. applicable

Prohibition against labor-only

Security of tenure of contractors
contracting
employees
Labor-only contracting, a prohibited act,
It is understood that all contractors
is an arrangement where the contractor or
employees enjoy security of tenure regardless
subcontractor merely recruits, supplies or
of whether the contract of employment is co-
places workers to perform a job, work or
terminus with the service agreement, or for a
service for a principal. [Polyfoam-RGC
specific job, work, or service, or phase thereof.
International Corp. v. Concepcion, G.R. No.
172349, (2012)]

ELEMENTS OF LABOR-ONLY
CONTRACTING:
(a)
(1) The contractor does not have substantial
capital or investments in the form of tools,
equipment, machineries, work premises,
among others, and

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UP LAW BOC LABOR STANDARDS LABOR LAW

(2) The employees recruited and places are wages and social or welfare
performing activities which are usually benefits; or a quitclaim releasing
necessary or desirable to the operation of the principal, contractor or from
the company, or directly related to the any liability as to payment of
main business of the principal within a future claims.
definite or predetermined period,
(d) Contracting out of a job, work or
regardless of whether such job, work or
service through an in-house agency.
service is to be performed or completed
within or outside the premises of the (e) Contracting out of a job, work or
principal; or service that is necessary or desirable
or directly related to the business or
(b) The contractor does not exercise the right
operation of the principal by reason of
to control the performance of the work of the
a strike or lockout whether actual or
employee.
imminent.
Substantial capital refers to paid-up
(f) Contracting out of a job, work or
capital stocks/shares of at least P3,000,000
service being performed by union
in the case of corporations, partnerships and
members when such will interfere
cooperatives; in case of single proprietorship,
with, restrain or coerce employees in
a net worth of at least P3,000,000.
the exercise of their rights to self-
organization as provided in Art.
248(c) of the LC, as amended.
Other prohibitions
(g) Repeated hiring of EEs under an
(1) Contracting out of jobs, works or services
employment contract of short
when not done in good faith and not
duration or under a Service
justified by the exigencies of the business
Agreement of short duration with the
such as the following:
same or different contractors, which
(a) Contracting out of jobs, works or circumvents the LC provisions on
services when the same results in the Security of Tenure.
termination or reduction of regular
(h) Requiring EEs under a subcontracting
EEs and reduction of work hours or
arrangement to sign a contract fixing
reduction or splitting of the
the period of employment to a term
bargaining unit.
shorter than the term of the Service
(b) Contracting out of work with a Cabo Agreement, unless the contract is
divisible into phases for which
(c) Taking undue advantage of the
substantially different skills are
economic situation or lack of
required and this is made known to
bargaining strength of the
the EE at the time of the
contractors EEs, or undermining their
engagements.
security of tenure or basic rights, or
circumventing the provisions of (i) Refusal to provide a copy of the
regular employment in any of the Service Agreement and the
following instances: employment contracts between the
contractor and the EEs deployed to
(i) Requiring them to perform
work in the bargaining unit of the
functions which are currently
principals certified bargaining agent
being performed by the regular
to the sole and exclusive bargaining
employees of the principal; and
agents.
(ii) requiring them to sign, as a
(j) Engaging or maintaining by the
precondition to employment or
principal of subcontracted EEs in
continued employment, an
excess of those provided in the
antedated resignation letter; a
applicable CBA or as set by the
blank payroll; a waiver of labor
Industry Tripartite Council.
standards including minimum

PAGE 102 OF 222

UP LAW BOC
(2) Contracting out of jobs, works, or services
analogous to the above when not done in
good faith and not justified by the
exigencies of the business. [Sec. 7, D.O.
18-A-11]
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.
Accordingly, the registration system
governing contracting arrangements and
implemented by the Regional Offices of the
DOLE is hereby established, with the Bureau
of Working Conditions (BWC) as the central
registry. [Sec. 14, D.O. 18-A-11]
Solidary Liability of Indirect/Direct
Employer
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
work performed under employment contract.
The principal shall be deemed a direct
employer of the contractors employee in
cases where there is a finding by a competent
authority of labor-only contracting, or
commission of prohibited activities provided
in Section 7 or a violation of either Sections 8
or 9.
iii. Department Circular No. 01-12
Applicability of D.O. 18-A-11 to BPO
DO 18-A speaks of a trilateral relationship
that characterizes the covered
contracting/sub-contracting arrangement.
Thus, vendor-vendee relationship for entire
business processes covered by the applicable
provisions of the Civil Code on Contracts is
excluded.
LABOR STANDARDS LABOR LAW
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 of D.O. 18-A-11 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 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.
iv. Effects of labor-only contracting
Employees become regular employees
Where an entity is declared to be a labor-only
contractor, the employees supplied by said
contractor to the principal employer become
regular employees of the latter. Having
gained regular status, the employees are
entitled to security of tenure and can only be
dismissed for just or authorized causes and
after they had been afforded due process.
[Norkis Trading v. Buenavista, G.R. No. 182018.
(2012)]
PAGE 103 OF 222
UP LAW BOC LABOR STANDARDS
Contractor solidarily liable with
principal
A finding by competent authority of labor-
only contracting shall render the principal
jointly and severally liable with the contractor
to the latter's employees, in the same manner
and extent that the principal is liable to
employees directly hired by him/her, as
provided in Article 106 of the Labor Code, as
amended.
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 employer of the
employees of the contractor or subcontractor,
pursuant to Article 109 of the Labor Code, as
amended. (Sec. 27, D.O 18-A-11)
v. Trilateral relationship in job
contracting
Principal rights and interests from the coercive acts of
Contractor's
Contractor er-ee
Employee Coverage
There are three parties involved:
(1) Principal refers to any employer,
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.
(2) Contractor refers to 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.
PAGE 104 OF 222
LABOR LAW
(3) 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 employees 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.
Relationships that exist in a legitimate
contracting or subcontracting:
(1) An employer-employee relationship
between the contractor and the
employees it engaged to perform the
specific job, work or service being
contracted; and
(2) A contractual relationship between the
principal and the contractor as governed
by the provisions of the Civil Code. [Sec. 5,
par. 1, D.O. 18-A-11]
The law recognizes and resolves this situation
in favor of employees in order to protect their
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work. [McMer Corp., Inc. v.
NLRC, G.R. No. 193421, (2014)]
B. DISMISSAL FROM EMPLOYMENT
General rule: All establishments [Art. 293,
LC] [previously Art 278]
Exception: Government, and its political
subdivisions, including GOCCs without
original charter. [Book VI, Rule 1, Sec. 1. IRR]
Security of Tenure
Art. 294 (previously Art 279), LC: Security of
Tenure. In case of regular employment, the
employer shall not terminate the services of
an employee except for a just cause or when
authorized by this Tile. An employee who is
unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and to
UP LAW BOC
his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
Nature of Right/Rationale
It is a constitutionally protected right (Art. XIII
Sec. 3, 1987 Constitution); it cannot be
blotted out by an employment contract.
Termination of employment is not anymore a
mere cessation or severance of contractual
relationship but an economic phenomenon
affecting members of the family. This is the
reason why under the broad principles of
social justice the dismissal of employees is
adequately protected by the laws of the state.
[Alhambra Industries, Inc. v. NLRC, G.R. No.
106771 (1994)]
Managem ent Prerogatives and
Security of Tenure
An employer may not be compelled to
continue in its employ a person whose
continuance in the service would patently be
inimical to its interests. [Baguio Central
University v. Gallente, G.R. No. 188267 (2013)]
In dismissal cases, the Court must consider a
balancing between the employees tenurial
rights and the employers management
prerogative. [Imasen Phil. Manufacturing Corp.
v. Alcon & Papa, GR 194884 (2014)]
Management prerogative must be exercised
in good faith and with due regard to the
rights of the workers in the spirit of fairness
and with justice in mind. [Philbag Industrial
Manufacturing Corp. v. Philbag Workers
Union-Lakas at Gabay ng Manggagawang
Nagkakaisa, G.R. No. 182486 (2012)]
Requisites for the validity of
management prerogative affecting
security of tenure
(a) Exercised in good faith for the
advancement of the Employer's
interest, and
(b) Not for the purpose of defeating or
circumventing the rights of the
Employees under special laws or
LABOR STANDARDS LABOR LAW
under valid agreements. [San Miguel
Brewery Sales Force Union v. Ople, G.R.
No. 53515 (1989)]
Guide in disposition of labor disputes
Bare and vague allegations as to the manner
of service and the circumstances surrounding
the same would not suffice. A mere copy of
the notice of termination allegedly sent by
respondent to petitioner, without proof of
receipt, or in the very least, actual service
thereof upon petitioner, does not constitute
substantial evidence.
There may be cases where the circumstances
warrant favoring labor over the interests of
management but never should the scale be
so tilted if the result is an injustice to the
employer. Justitia nemini neganda est
(Justice is to be denied to none). [Mansion
Printing Center v. Bitara, Jr., GR 168120.
(2012)]
Procedural vis--vis substantive
issues
In labor cases, substantive issues must be
addressed more than anything else, and so,
the Court may forego the matter of
procedural infirmities. [Ang v. San Joaquin, Jr.,
G.R. No. 185549 (2013)]
Employers Burden of Proof
Art. 292 (b), 3rd sentence: The burden of
proving the termination was for a valid or
authorized cause shall rest on the employer.
It is the employers burden to prove that the
dismissal was for a just or authorized cause.
[Temic Automotive (Phils.), Inc. v. Cantos, G.R.
No. 200729 (2014)]
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss an employee.
The unflinching rule in illegal dismissal cases
is that the employer bears the burden of
proof. [Garza v. Coca-Cola Bottlers Philippines,
Inc., G.R. No. 180972 (2014)]
PAGE 105 OF 222
UP LAW BOC LABOR STANDARDS
In illegal dismissal cases, the burden of proof
is upon the employer to show that the
employee's termination from service is for a
just and valid cause. The employer's case
succeeds or fails on the strength of its
evidence and not the weakness of that
adduced by the employee, in keeping with the
principle that the scales of justice should be
tilted in favor of the latter in case of doubt in
the evidence presented by them. [Functional,
Inc. v. Granfil, G.R. No. 176377 (2011)]
Employee must first establish the fact
of dism issal
Before the employer must bear the burden of
proving that the dismissal was legal, the
employee must first establish by substantial
evidence the fact of his dismissal from service.
If there is no dismissal, then there can be no
question as to the legality or illegality thereof.
[MZR Industries v. Colambot, G.R. No. 179001
(2013)]
In an illegal dismissal case, the onus
probandi rests on the employer to prove that
its dismissal of an employee was for a valid
cause. However, before a case for illegal
dismissal can prosper, an employer-
employee relationship must first be
established by the employee [Javier v. Fly Ace
Corp., G.R. No. 192558 (2012)]
Measure of Penalty
Not every case of insubordination or willful
disobedience by an employee reasonably
deserves the penalty of dismissal. The
penalty to be imposed on an erring employee
must be commensurate with the gravity of his
offense. [Joel Montallana v. La Consolacion
College Manila, G.R. No. 208890 (2014)]
While an employer enjoys a wide latitude of
discretion in the promulgation of policies,
rules and regulations on work-related
activities of the employees, those directives,
however, must always be fair and reasonable,
and the corresponding penalties, when
prescribed, must be commensurate to the
offense involved and to the degree of the
infraction. [Moreno v. San Sebastian College-
Recoletos, G.R. No. 175283 (2008)]
PAGE 106 OF 222
LABOR LAW
Termination of Employment by Employee
Resignation
Art. 300 (previously Art. 285), LC: Termination by
Employee. (a) An employee may terminate
without just cause the employer-employee
relationship by serving a written notice on the
employer at least one (1) month in advance. The
employer upon whom no such notice was
served may hold the employee liable for
damages
(b) An employee may put an end to the
relationship without serving any notice on the
employer for any of the following requirements:
1. Serious insult by the employer or his
representative on the honor and person of
the employee;
2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.
General rule: Written notice to resign
submitted one (1) month in advance
Exception: No notice required for any of the
following:
(1) Serious insult by the employer or his
representative on the honor and
person of the employee;
(2) Inhuman and unbearable treatment
accorded the employee by the
employer or his representative;
(3) Commission of a crime or offense by
the employer or his representative
against the person of the employee or
any of the immediate members of his
family; and
(4) Other causes analogous to any of the
foregoing.
Resignation is the voluntary act of an
employee who finds himself in a situation
where he believes that personal reasons
UP LAW BOC LABOR STANDARDS
cannot be sacrificed in favor of the exigency
of the service, such that he has no other
choice but to disassociate himself from his
employment. [Cervantes v. PAL Maritime
Corp., G.R. No. 175209, (2013)]
To constitute a resignation, it must be
unconditional and with the intent to operate
as such. There must be an intention to
relinquish a portion of the term of office
accompanied by an act of relinquishment.
[Azcor Manufacturing Inc. v. NLRC, G.R. No.
117963, (1999)]
Well-entrenched is the rule that resignation
is inconsistent with the filing of a complaint
for illegal dismissal. [Blue Angel Manpower
and Security Services Inc. v Court of Appeals,
G.R. No. 161196 (2008)]
The rule requiring an employee to stay or
complete the 30-day period prior to the
effectivity of his resignation becomes
discretionary on the part of management as
an employee who intends to resign may be
allowed a shorter period before his
resignation becomes effective. [Hechanova
Bugay Vilchez Lawyers v. Matorre, G.R. No.
198261 (2013)]
Forced Resignation
Mere allegations of threat or force do not
constitute evidence to support a finding of
forced resignation. In order for intimidation to
vitiate consent, the following requisites must
concur: (1) that the intimidation caused the
consent to be given; (2) that the threatened
act be unjust or unlawful; (3) that the threat
be real or serious, there being evident
disproportion between the evil and the
resistance which all men can offer, leading to
the choice of doing the act which is forced on
the person to do as the lesser evil; and (4)
that it produces a well-grounded fear from
the fact that the person from whom it comes
has the necessary means or ability to inflict
the threatened injury to his person or
property. [Ma. Socorro Mandapat v. Add Force
Personnel, G.R. No. 180285 (2010)]
PAGE 107 OF 222
LABOR LAW
Performance of Military or Civic Duty
Art. 301, LC: When Employment Not Deemed
Terminated: The bona fide suspension of the
operation of a business or undertaking for a
period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic
duty shall not terminate employment. In all
such cases the employer shall reinstate the
employee to his former position without loss of
seniority rights if he indicates his desire to
resume his work not later than one (1) month
from the resumption of operations of his
employer or from his relief from the military or
civic duty
Omnibus Rules, Book VI, Rule 1, Sec. 12.
Suspension of relationship. The employer-
employee relationship shall be deemed
suspended in case of suspension of operation of
the business or undertaking of the employer for
a period not exceeding six (6) months, unless
the suspension is for the purpose of defeating
the rights of the employees under the Code,
and in case of mandatory fulfillment by the
employee of a military or civic duty. The
payment of wages of the employee as well as
the grant of other benefits and privileges while
he is on a military or civic duty shall be subject
to special laws and decrees and to the
applicable individual or collective bargaining
agreement and voluntary employer practice or
policy.
B.1. JUST CAUSES
Art. 297 (Previously Art 282), LC: Termination
by Employer. An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful
disobedience by the employee of the
lawful orders of his employer or
representative in connection with his
work;
(b) Gross and habitual neglect by the
employee of his duties;
(c) Fraud or willful breach by the employee of
the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the
employee against the person of his
employer or any immediate member of
UP LAW BOC LABOR STANDARDS
his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
Basis
As a measure of self-protection against acts
inimical to its interest, a company has the
right to dismiss its erring employees. An
employer cannot be compelled to continue
employing an employee guilty of acts inimical
to the employer's interest, justifying loss of
confidence in him. [Yabut v. Meralco, G.R. No.
190436 (2012)]
Employers right to dismiss vis--vis
employees right to security of tenure
The managerial prerogative to transfer
personnel must be exercised without grave
abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the
right should not be confused with the manner
in which that right is exercised. Thus, it
cannot be used as a subterfuge by the
employer to rid himself of an undesirable
worker. In particular, the employer must be
able to show that the transfer is not
unreasonable, inconvenient or prejudicial to
the employee; nor does it involve a demotion
in rank or a diminution of his salaries,
privileges and other benefits.
Nowhere in the law providing for the just and
authorized causes of termination of
employment is there any direct or indirect
reference to filing a legitimate complaint for
money claims against the employer as a valid
ground for termination
The right of employers to shape their own
work force is recognize; however, this
management prerogative must not curtail the
basic right of employees to security of tenure.
There must be a valid and lawful reason for
terminating the employment of a worker.
Otherwise, it is illegal and would be dealt
with by the courts accordingly. [Alert Security
and Investigation Agency, Inc. v. Pasawilan,
G.R. No. 182397 (2011)]
PAGE 108 OF 222
LABOR LAW
Serious Misconduct
Elements:
a) There must be misconduct;
b) The misconduct must be of such
grave and aggravated character;
c) It must relate to the performance of
the employees duties; and
d) There must be showing that the
employee becomes unfit to continue
working for the employer. [Sec. 5.2.
(a), DO 147-15]
Misconduct refers to the improper or wrong
conduct that transgresses some established
and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and
implies wrongful intent and not mere error in
judgment. But misconduct or improper
behavior, to be a just cause for termination of
employment, must: (a) be serious; (b) relate
to the performance of the employees duties;
and (c) show that the employee has become
unfit to continue working for the employer.
[Northwest Airlines, Inc, v. Del Rosario, G.R.
No. 157633 (2014)]
Accusatory and inflammatory language used
by an employee to the employer or superior
can be a ground for dismissal or termination.
[Nissan Motors Phils. Inc. v. Angelo, G.R. No.
164181 (2011)]
Willful Disobedience
Elements:
a) There must be disobedience or
insubordination;
b) The disobedience or insubordination
must be willful or intentional
characterized by a wrongful and
perverse attitude;
c) The order violated must be
reasonable, lawful, and made known
to the employee [Mirant Philippines
Corp v. Sario, G.R. No. 197598 (2012)];
and
e) The order must pertain to the duties
which he has been engaged to
discharge. [Sec. 5.2. (b), DO 147-15]
UP LAW BOC
For willful disobedience to be a valid cause
for dismissal, these two elements must
concur: (1) the employees assailed conduct
must have been willful, that is, characterized
by a wrongful and perverse attitude; and (2)
the order violated must have been
reasonable, lawful, made known to the
employee, and must pertain to the duties
which he had been engaged to discharge.
[The Coffee Bean and Tea Leaf Philippines, Inc.
and Chu v Arenas, G.R. No. 208908 (2015)]
Gross and Habitual Neglect of Duties
Elements:
(a) There must be neglect of duty; and
(b) The negligence must be both gross and
habitual in character. [Sec. 5.2. (c), DO
147-15]
Gross negligence has been defined as the
want or absence of or failure to exercise slight
care or diligence, or the entire absence of
care. It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them. In order to constitute just cause
for an EEs dismissal due to negligence, it
must not only be gross, but also habitual. A
single or an isolated act that cannot be
categorized as habitual, hence, not a just
cause for their dismissal. [National Bookstore
v. CA, G.R. No. 146741 (2002)]
Gross negligence connotes want of care in
the performance of ones duties, while
habitual neglect implies repeated failure to
perform ones duties for a period of time,
depending on the circumstances.
Estoppel by toleration of management:
breach of rules and regulations which are
tolerated by management cannot serve basis
as termination. The rule only applies when
the violation is not tantamount to fraud or
commission of illegal activities. One cannot
evade liability based on obedience to the
corporate chain of command. [PNB v. Padao,
G.R. No. 180849, 187143 (2011)]
On the principle of respondeat superior or
command responsibility alone, a managerial
employee may be held liable for negligence in
the performance of her managerial duties.
[Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887
(2011)]
LABOR STANDARDS LABOR LAW
Gross Negligence includes gross inefficiency
Article 290 of the Labor Code provides that
one of the just causes for terminating an
employment is the employee's gross and
habitual neglect of his duties. This cause
includes gross inefficiency, negligence and
carelessness [Century Iron Works, Inc. v.
Baas, G.R. No. 184116 (2013)]
Loss of Trust and Confidence
The loss of trust and confidence must be
based on willful breach of the trust reposed in
the employee by his employer. Such breach is
willful if it is done intentionally, knowingly,
and purposely, without justifiable excuse, as
distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
And, in order to constitute a just cause for
dismissal, the act complained of must be
work-related and shows that the employee
concerned is unfit to continue working for the
employer. In addition, loss of confidence as a
just cause for termination of employment is
premised on the fact that the employee
concerned holds a position of responsibility,
trust and confidence or that the employee
concerned is entrusted with confidence with
respect to delicate matters, such as handling
or case and protection of the property and
assets of the employer. The betrayal of this
trust is the essence of the offense for which
an employee is penalized. [Villanueva, Jr. v.
NLRC, G.R. No. 176893 (2012)]
The loss of trust and confidence must be
based not on ordinary breach by the
employee of the trust reposed in him by the
employer, but, in the language of Article 282
(c) of the Labor Code, on willful breach. A
breach is willful if it is done intentionally,
knowingly and purposely, without justifiable
excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial
grounds and not on the employer's
arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally
remain at the mercy of the employer.
[Johansen World Group Corp. v. Gonzales III,
G.R. No. 198733 (2012)]
PAGE 109 OF 222
UP LAW BOC LABOR STANDARDS
Elements of fraud or willful breach of
trust:
(a) There must be an act, omission, or
concealment;
(b) The act, omission or concealment
involves a breach of legal duty, trust, or
confidence justly reposed;
(c) It must be committed against the
employer or his/her representative; and
(d) It must be in connection with the
employees work. [Sec. 5.2. (d), DO 147-
15]
Elements of loss of confidence
(a) There must be an act, omission or
concealment;
(b) The act, omission or concealment justifies
the loss of trust and confidence of the
employer to the employee;
(c) The employee concerned must be holding
a position of trust and confidence;
(d) The loss of trust and confidence should
not be simulated;
(e) It should not be used as a subterfuge for
causes which are improper, illegal or
unqualified; and
(f) It must be genuine and not a mere
afterthought to justify an earlier action
taken in bad faith. [Sec. 5.2. (e), DO 147-
15]
Guidelines for the application of the
doctrine of loss of confidence
(1) Loss of confidence should not be
simulated;
(2) It should not be used as a subterfuge for
causes which are improper, illegal or
unjustified;
(3) It may not be arbitrarily asserted in the
face of overwhelming evidence to the
contrary; and
(4) It must be genuine, not a mere
afterthought to justify earlier action taken
in bad faith [Nokom v. NLRC, G.R. No.
140043 (2000)]
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LABOR LAW
Requisites for dismissal on the ground of
loss of trust and confidence
(1) The Employee concerned is one
holding a position of trust and
confidence.
(2) There must be an act that would
justify the loss of trust and
confidence.
(3) The loss of trust and confidence must
be based on a willful breach of trust
and founded on clearly established
facts. [Wesleyan Universtity
Philippines vs. Reyes, G.R. No. 208321
(2014)]
Loss of trust and confidence to be a valid
cause for dismissal must be based on a willful
breach of trust and founded on clearly
established facts. The basis for the dismissal
must be clearly and convincingly established
but proof beyond reasonable doubt is not
necessary. [Prudential Guarantee and
Assurance Employee Labor Union v. NLRC,
G.R. No. 185335 (2012)]
Positions of trust and confidence
(1) Managerial employees - those vested
with the powers or prerogatives to lay down
management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees or effectively
recommend such managerial actions.
(2) Fiduciary Rank and file - those who in the
normal and routine exercise of their
functions, regularly handle significant
amounts of money or property. Examples are
cashiers, auditors, property custodians, etc.
[Prudential Guarantee and Assurance
Employee Labor Union v. NLRC, G.R. No.
185335 (2012)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Betrayal by a long-time employee

Managerial Fiduciary rank-and-file Length of service is not a bargaining chip that

can simply be stacked against the employer.
Mere existence of a Proof of involvement After all, an employer-employee relationship
basis for the belief of in the alleged events is symbiotic where both parties benefit from
employees guilt in question required; mutual loyalty and dedicated service. If an
[Grand Asian Shipping mere uncorroborated employer had treated his employee well, has
Lines, Inc. v. Galvez, assertions and accorded him fairness and adequate
G.R. No. 178184 accusations compensation as determined by law, it is only
(2014)] are not enough fair to expect a long-time employee to return
[Etcuban, Jr. v. such fairness with at least some respect and
Sulpicio Lines, Inc., honesty. Thus, it may be said that betrayal by
G.R. No. 148410 a long-time employee is more insulting and
(2005)] odious for a fair employer. [Moya v. First Solid
Rubber Industries, Inc., G.R. No. 184011
Employment for a (2013)]
long time is counted
against the employee
[Salvador v. Philippine Commission of a crime
Mining Service Corp.,
G.R. No. 148766 Elements:
(2003)] (e) There must be an act or omission
punishable/prohibited by law; and
Managerial Employees: Reason for the Rule (f) The act or omission was committed by
the employee against the person of the
The employer has broader discretion in employer, any immediate member of
dismissing managerial employees on the his/her family, or his/her duly authorized
ground of loss of trust and confidence than representative. [Sec. 5.2. (f), DO 147-15]
those occupying ordinary ranks. While plain
accusations are not sufficient to justify the Commission of a crime or offense by the
dismissal of rank and file employees, the employee against the person of his employer
mere existence of a basis for believing that or any immediate member of his family or his
managerial employees have breached the duly authorized representatives [Art. 297(d),
trust reposed on them by their employer LC]
would suffice to justify their dismissal. [Grand The employer may validly dismiss for loss of
Asian Shipping Lines, Inc. v. Galvez, G.R. No. trust and confidence an employee who
178184 (2014)] commits an act of fraud prejudicial to the
interest of the employer. Neither a criminal
prosecution nor a conviction beyond
Acquittal in Criminal Case arising from reasonable doubt for the crime is a requisite
Misconduct for the validity of the dismissal. [Concepcion v
Notwithstanding petitioners acquittal in the Minex Import Corporation/Minerama
criminal case for qualified theft, the company Corporation, G.R. No. 153569 (2012)]
had adequately established the basis for the
companys loss of confidence as a just cause
to terminate. As opposed to the "proof Analogous Causes
beyond reasonable doubt" standard of Elements:
evidence required in criminal cases, labor
suits require only substantial evidence to (a) There must be an act or omission similar
prove the validity of the dismissal [Paulino v. to those specified just causes; and
NLRC, G.R. No. 176184 (2012)] (b) The act or omission must be voluntary
and/or willful on the part of the
employees
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No act or omission shall be considered as
analogous cause unless expressly
specified in the company rules and
regulations or policies. [Sec. 5.2. (g), DO
147-15]
One is analogous to another if it is
susceptible of comparison with the latter
either in general or in some specific detail; or
has a close relationship with the latter.
Other Causes
(1) Abandonment
(2) Courtesy Resignation
(3) Change of Ownership
(4) Habitual Absenteeism/Tardiness
(5) Past Offenses
(6) Habitual Infractions
(7) Immorality
(8) Conviction/Commission of a Crime
Abandonment
Abandonment is a just cause for dismissal
under Art. 297(b), LC. It is the deliberate and
unjustified refusal of an employee to resume
his employment. It is a form of neglect of
duty. Two factors should be present: (1)
Failure to report for work or absence without
valid or justifiable reason, (2) Clear intention
to sever ER-EE relationship. The burden to
prove whether the employee abandoned his
or her work rests on the employer. [Protective
Maximum Security, Inc vs. Celso E. Fuentes,
G.R. No. 169303 (2015)]
Elements:
(a) Failure to report for work or absence
without valid or justifiable reason,
and
(b) A clear intention to sever the
employer-employee relationship, with
the second element as the more
determinative factor and being
manifested by some overt acts.
Absence must be accompanied by overt acts
unerringly pointing to the fact that the
employee simply does not want to work
anymore. It has been ruled that the employer
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LABOR LAW
has the burden of proof to show a deliberate
and unjustified refusal of the employee to
resume his employment without any
intention of returning. [Tan Brothers Corp. of
Basilan City v. Escudero, G.R. No. 188711
(2013)]
Courtesy Resignation
Resignation per se means voluntary
relinquishment of a position or office. Adding
the word "courtesy" did not change the
essence of resignation. [Batongbacal v.
Associated Bank, G.R. No. 72977 (1988)]
Change of Ownership
A mere change in the equity composition of a
corporation is neither a just nor an authorized
cause that would legally permit the dismissal
of the corporation's employees en masse.
[SME Bank, Inc. v. De Guzman, G.R. No.
184517, 186641 (2013)]
Habitual Absenteeism/ Tardiness
Habitual tardiness is a form of neglect of
duty. Lack of initiative, diligence, and
discipline to come to work on time everyday
exhibit the employee's deportment towards
work. Habitual and excessive tardiness is
inimical to the general productivity and
business of the employer. This is especially
true when the tardiness and/or absenteeism
occurred frequently and repeatedly within an
extensive period of time. [R.B. Michael Press v.
Galit, G.R. No. 153510 (2008)]
However, there are cases when absenteeism
is not sufficient to justify termination. In the
case of, Cavite Apparel v Michelle Marquez, GR
No. 172044, (2013), the SC held: Michelle
might have been guilty of violating company
rules on leaves of absence and employee
discipline, still we find the penalty of
dismissal imposed on her unjustified under
the circumstances. As earlier mentioned,
Michelle had been in Cavite Apparels employ
for six years, with no derogatory record other
than the four absences without official leave
in question, not to mention that she had
already been penalized for the first three
absences, the most serious penalty being a
UP LAW BOC LABOR STANDARDS LABOR LAW

six-day suspension for her third absence on grounds for termination of employment and
April 27, 2000. said act raised concerns to the cooperative as
the Board received numerous complaints and
petitions from the cooperative members
Past Offenses themselves asking for the removal of
Bandiola because of his immoral conduct,
Previous offense may be used as valid
hence, immorality (extramarital affair)
justification for dismissal from work only if
justified terminating the employment by the
the infractions are related to the subsequent
employer [Alilem Credit Cooperative vs.
offense upon which the basis of termination is
Bandiola, Jr., G.R. No. 173489 (2013)]
decreed. [Century Canning Corporation v.
Ramil, G.R. No. 171630 (2010)]
Pregnancy Out of Wedlock
Habitual Infractions Accordingly, when the law speaks of immoral
or, necessarily, disgraceful conduct, it
A series of irregularities when put together
pertains to public and secular morality; it
may constitute serious misconduct, which
refers to those conducts which are proscribed
under Article 297 of the Labor Code, as
because they are detrimental to conditions
amended, is a just cause for dismissal [Gustilo
upon which depend the existence and
v. Wyeth Phil. Inc., G.R. No. 149629 (2004)]
progress of human society. To stress, pre-
marital sexual relations between two
Totality of infractions doctrine consenting adults who have no impediment
to marry each other, and, consequently,
The totality of infractions or the number of conceiving a child out of wedlock, gauged
violations committed during the period of from a purely public and secular view of
employment shall be considered in morality, does not amount to a disgraceful or
determining the penalty to be imposed upon immoral conduct under Section 94(e) of the
an erring employee. Fitness for continued 1992 MRPS. [Cheryl Leus v. St. Scholastica
employment cannot be compartmentalized College Westgrove, G.R. No. 187226 (2015)]
into tight little cubicles of aspects of
character, conduct and ability separate and
independent of each other. While it may be Conviction/Commission of a Crime
true that petitioner was penalized for his
The charge of drug abuse within the
previous infractions, this does not and should
companys premises and during work hours
not mean that his employment record would
constitutes serious misconduct which is one
be wiped clean of his infractions. After all, the
of the just causes for termination. [Bughaw,
record of an employee is a relevant
Jr. v. Treasure Island Industrial, G.R. No. 173151
consideration in determining the penalty that
(2008)]
should be meted out since an employee's
past misconduct and present behavior must
be taken together in determining the proper
B.2. AUTHORIZED CAUSES
imposable penalty. [Merin v. NLRC, G.R. No.
171790 (2008)] [Art. 298, LC] (previously Art. 283),
(1) Installation of labor saving device
Immorality (2) Retrenchment to prevent losses
DECS Order No. 92 provides that disgraceful (3) Redundancy
or immoral conduct can be used as a basis for
(4) Closure of Business
termination of employment [Santos, Jr. v.
NLRC, G.R. No. 115795 (1998)]
The act of engaging in extramarital affairs
was specifically provided for by the
cooperatives Personnel Policy as one of the
PAGE 113 OF 222
UP LAW BOC LABOR STANDARDS
Due to labor-saving Due to retrenchment,
devices or redundancy closure, or suspension
of operations
1-month pay, or at 1 month pay, or at
least 1 month pay for least month pay for
every year of service, every year of service,
whichever is higher. whichever is higher.
A fraction of at least six months shall be
considered as one year.
Basis
Employment is the lifeblood upon which the
worker and his family owe their
survival. [Flight Attendants and Stewards
Ass'n of the Philippines v. PAL, Inc., G.R. No.
178083 (2009)]
There are five business-related causes for
termination:
1. Installation of labor-saving devices
2. Retrenchment
3. Redundancy
4.Closure of business
5.Temporary/bona fide suspension of
operations
Installation of Labor-Saving Device
This refers to the installation of machinery to
effect economy and efficiency in the
employers method of production [Edge
Apparel, Inc. v. NLRC, G.R. No. 121314 (1998)]
Elements of a valid termination based on
installation of labor-saving devices
(a) There must be introduction of machinery,
equipment or other devices;
(b) The introduction must be done in good
faith;
(c) The purpose for such introduction must
be valid such as to save on cost, enhance
efficiency and other justifiable economic
reasons;
PAGE 114 OF 222
LABOR LAW
(d) There is no other option available to the
employer than the introduction of
machinery, equipment or device and the
consequent termination of employment
of those affected thereby; and
(e) There must be fair and reasonable criteria
in selecting employees to be terminated.
[Sec. 5.4. (a), DO 147-15]
Requirements for termination due to
installation of labor-saving device
(1) The employer exercises its prerogative to
install the labor-saving device in good
faith for the advancement of its interest
and not to defeat or circumvent the
employees right to security of tenure;
(2) The employer served a written notice
both to the employees and to the DOLE
at least 30 days prior to the intended
date of termination; and
(3) The employer pays the employees
separation pay equivalent to one-month
pay or at least one-half (1/2) month pay
for every year of service, whichever is
higher, a fraction of at least six months
being considered as one whole year
(Samson, 2004)
Retrenchment
Elements of a valid retrenchment:
(1) The retrenchment is reasonably
necessary and likely to prevent
business
(2) The losses, if already incurred, are not
merely de minimis, but substantial,
serious, actual and real, or if only
expected, are reasonably imminent as
perceived objectively and in good
faith by the employer;
(3) The expected or actual losses must
be proved by sufficient and
convincing evidence;
(4) The retrenchment must be in good
faith for the advancement of its
interest and not to defeat or
circumvent the employees right to
security of tenure; and
(5) There must be fair and reasonable
criteria in ascertaining who would be
UP LAW BOC LABOR STANDARDS
dismissed and who would be retained
among the employees, such as
status, efficiency, seniority, physical
fitness, age, and financial hardship
for certain workers. [Sec. 5.2. (c), DO
147-15]
(6) That the employer served written
notice both to the employees and to
the Department of Labor and
Employment at least one month prior
to the intended date of retrenchment;
(7) That the employer pays the
retrenched employees separation pay
equivalent to 1 month pay or at least
12 month pay for every year of
service, whichever is higher;
The employer bears the burden of proving the
existence of the imminence of substantial
losses with clear and satisfactory evidence
that there are legitimate business reasons
justifying a retrenchment. [Mount Carmel
College Employees Union (MCCEU), et al vs.
Mount Carmel College, Inc. G.R. No. 187621,
(2014)]
The Court recognizes two kinds of losses
which can justify retrenchment incurred
losses which are substantial, serious, actual
and real, and expected losses which are
reasonably imminent. [Sanoh Fulton Phils.
Inc. v. Bernardo & Tagohoy, G.R. No. 187214
(2013)]
Redundancy
Redundancy exists when the service
capability of the workforce is in excess of
what is reasonably needed to meet the
demands of the business enterprise. A
position is redundant when it is superfluous,
and superfluity of a position or positions
could be the result of a number of factors,
such as the overhiring of workers, a decrease
in the volume of business or the dropping of a
particular line or service previously
manufactured or undertaken by the
enterprise. [Morales v. Metrobank, G.R. No.
182475 (2012)]
PAGE 115 OF 222
LABOR LAW
Elements of redundancy:
(a) There must be superfluous positions
or services of employees;
(b) The positions or services are in excess
of what is reasonably demanded by
the actual requirements of the
enterprise to operate in an
economical and efficient manner;
(c) There must be good faith in
abolishing redundant positions;
(d) There must be fair and reasonable
criteria in selecting the employees to
be terminated; and
(e) There must be an adequate proof of
redundancy such as but not limited to
the new staffing patter, feasibility
studies/proposal, on the viability of
the newly created positions, job
description and the approval by the
management of the restructuring.
[Sec. 5.4. (c), DO 147-15]
For the implementation of a redundancy
program to be valid, however, the employer
must comply with the following requisites:
(a) Written notice served on both the
employees and the DOLE at least one
month prior to the intended date of
termination of employment;
(b) Payment of separation pay equivalent
to at least one month pay for every
year of service;
(c) Good faith in abolishing the
redundant positions; and
(d) Fair and reasonable criteria in
ascertaining what positions are to be
declared redundant and accordingly
abolished. [Morales v. Metrobank,
G.R. No. 182475 (2012)]
To exhibit its good faith and that there was a
fair and reasonable criteria in ascertaining
redundant positions, a company claiming to
be over manned must produce adequate
proof of the same. Such proof includes but is
not limited to the new staffing pattern,
feasibility studies/proposals on the viability
of the newly created positions, job description
and the approval by the management of the
restructuring. [General Milling Corporation v
Violeta L. Viajar, G.R. No. 181738 (2013)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Closure of Business employer. [Manila Polo Club Employees'

Union v. Manila Polo Club, Inc., G.R. No.
ELEMENTS OF A VALID CLOSURE OR
172846 (2013)]
CESSATION OF OPERATION
(a) There must be a decision to close or cease
operation of the enterprise by the Closure of Department
management;
The closure of a department or division of a
(b) The decision was made in good faith; and company constitutes retrenchment by, and
not closure of, the company itself. [Waterfront
(c) There is no other option available to the
Cebu City Hotel v. Jimenez, G.R. No. 174214,
employer except to close or cease
June 13, 2012]
operations. [Sec. 5.4. (d), DO 147-15]

Corporate acquisitions
Guidelines in Closure
Asset Sales Stock Sales
(1) Closure or cessation of operations of
establishment or undertaking may either Sale
be partial or total
Corporate entity sells all In stock sales, the
(2) Closure or cessation of operations of or substantially all of its individual or corporate
establishment or undertaking may or may assets to another entity. shareholders sell a
not be due to serious business losses or controlling block of
financial service reverses. However, in stock to new or existing
both instances, proof must be shown shareholders.
that:
Obligation of Seller
(a) it was done in good faith to
advance the employer's interest Seller in good faith is A shift in the
and not for the purpose of authorized to dismiss composition of its
the affected employees, shareholders will not
defeating or circumventing the
but is liable for the affect its existence and
rights of employees under the law payment of separation continuity.
or a valid agreement; and pay under the law. Notwithstanding the
(b) Written notice on the affected stock sale, the
corporation continues to
employees and the DOLE is
be the employer of its
served at least one month before people and continues to
the intended date of termination be liable for the
of employment. payment of their just
(3) The employer can lawfully close shop claims.
even if not due to serious business losses Obligation of Buyer
or financial reverses but separation pay,
which is equivalent to at least one month The buyer in good faith, The corporation or its
pay as provided for by Article 289 of the on the other hand, is not new majority
Labor Code, as amended, must be given obliged to absorb the shareholders are not
to all the affected employees. employees affected by entitled to lawfully
the sale, nor is it liable dismiss corporate
(4) If the closure or cessation of operations of for the payment of their employees absent a
establishment or undertaking is due to claims. The most that it just or authorized
serious business losses or financial may do, for reasons of cause.
reverses, the employer must prove such public policy and social [SME Bank, Inc. v. De
allegation in order to avoid the payment justice, is to give Guzman, G.R. No.
preference to the 184517, 186641, (2013)]
of separation pay. Otherwise, the affected
qualified separated
employees are entitled to separation pay. personnel of the selling
(5) The burden of proving compliance with firm.
all the above-stated falls upon the
PAGE 116 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

Procedural steps required Retrenchment Redundancy Closure

At least 1 month before the intended date of
termination, Employer is to serve written Employee is Employee is In case of
notice to: entitled to entitled to closure of
separation separation business not
(1) Affected employees;
pay of 1 pay of 1 due to serious
(2) DOLE (Art. 298, LC) month pay or month pay business
1/2 month pay or 1/2 losses, the
per year of month pay employer pays
Criteria in selecting employees for service, per year of the employees
dismissal: whichever is service, terminated
Fair and reasonable criteria in ascertaining higher whichever is separation pay
who will be affected: higher of 1 month pay
or 1/2 month
(1) Preferred status (e.g. temporary, casual pay per year of
or regular Employees), service,
(2) Efficiency, whichever is
higher
(3) Physical fitness,
(4) Age,
Temporary Closure / Bona fide suspension
(5) Financial hardship, or
of Operations
(6) Seniority. [Asian Alcohol Corp. v. NLRC,
G.R. No. 131108 (1999)] Art. 301, LC: When Employment Not Deemed
Terminated: The bona fide suspension of the
operation of a business or undertaking for a
period not exceeding six (6) months, or the
Retrenchment Redundancy Closure
fulfillment by the employee of a military or
civic duty shall not terminate employment.
Reduction of The service The reversal of In all such cases the employer shall
personnel of an the fortune of reinstate the employee to his former
usually due to Employee is the employer position without loss of seniority rights if he
poor financial in excess of whereby there indicates his desire to resume his work not
returns so as what is is a complete later than one (1) month from the
to cut down required by cessation of resumption of operations of his employer or
on costs of an business from his relief from the military or civic duty
operations in enterprise operations
terms of and/or actual
salaries and locking-up of
wages the doors of the Under Art. 301 of the Labor Code, a bona
establishment, fide suspension of business operations for not
usually due to more than six (6) months does not terminate
financial losses employment. After six (6) months, the
employee may be recalled to work or be
permanently laid off. In this case, more than
Resorted to To save Aims to six (6) months have elapsed from the time the
primarily to production prevent further
Club ceased to operate. Hence, respondents'
avoid or costs financial drain termination became permanent. [SKM Art
minimize upon the
Craft Corp. v. Bauca, G.R. Nos. 171282, 183484
business Employer (2013)]
losses
An employer may validly suspend operations
for at most 6 months. Not accepting the
workers back to work after the 6-month
period is equivalent to termination, which
PAGE 117 OF 222
UP LAW BOC
should be for cause and with proper
procedure. [Manila Mining Corp v Amor, GR
No 182800 (2015)]
Floating Status
A floating status requires the dire exigency of
the employers bona fide suspension of
operation, business or undertaking. It takes
place when (a) the security agencys clients
decide not to renew their contracts with the
agency and (b) also in instances where
contracts for security services stipulate that
the client may request the agency for the
replacement of the guards assigned to it. In
the latter case, the employer should prove
that there are no posts available to which the
employee temporarily out of work can be
assigned. [Peak Ventures Corp v. Nestor
Villareal, G.R. No. 184618 (2014)]
B.3 OTHER CAUSES
(1) Disease incurable in 6 months [Art. 299,
LC]
(2) Enforcement of union security clause in
the CBA
(3) Dismissal of union officers for the conduct
of an illegal strike [Art. 279 (a), LC]
(4) Dismissal of union members for
participating in the commission of illegal
acts [Art. 279 (a), LC]
(5) Termination in conformity with existing
statute/ qualification requirements
i. Disease
Art. 299, LC: Disease as Ground for
Termination: An employer may terminate the
services of an employee who has been found
to be suffering from any disease and whose
continued employment is prohibited by law or
is prejudicial to his health as well as to the
health of his co-employees: Provided, That he
is paid separation pay equivalent to at least
one (1) month salary or to one-half (1/2)
month salary for every year of service,
whichever is greater, a fraction of at least six
(6) months being considered as one (1) whole
year.
LABOR STANDARDS LABOR LAW
Section 8, Rule I, Book VI of the Omnibus Rules
Implementing the Labor Code
Disease as a ground for dismissal. Where
the employee suffers from a disease and his
continued employment is prohibited by law or
prejudicial to his health or to the health of his
coemployees, the employer shall not
terminate his employment unless there is a
certification by competent public health
authority that the disease is of such nature of
at such a stage that it cannot be cured within
a period of six (6) months even with proper
medical treatment. If the disease or ailment
can be cured within the period, the employee
shall not terminate the employee but shall
ask the employee to take a leave of absence.
The employer shall reinstate such employee
to his former position immediately upon the
restoration of his normal health.
Requisites
(1) The employee must be suffering from a
disease which cannot be cured within six
months, even with proper medical
treatment;
(2) His continued employment is prohibited
by law or prejudicial to his health or to
the health of his co-employees; and
(3) A certification to that effect must be
issued by a competent public health
authority. [Crayons Processing, Inc. v.
Pula, G.R. No. 167727 (2007), Sec. 5.2. (f),
DO 147-15]
The burden falls upon the employer to
establish these requisites, and in the absence
of such certification, the dismissal must
necessarily be declared illegal.
It is only where there is a prior certification
from a competent public authority that the
disease afflicting the employee sought to be
dismissed is of such nature or at such stage
that it cannot be cured within six (6) months
even with proper medical treatment that the
latter could be validly terminated from his job
[Crayons Processing, Inc. v. Pula, G.R. No.
167727 (2007)]
PAGE 118 OF 222
UP LAW BOC
ii. Enforcement of Union Security Clause in
CBA
Union security is a generic term, which is
applied to and comprehends:
Closed shop an enterprise in which, by
agreement between the employer and his
employees or their representatives, no person
may be employed in any or certain agreed
departments of the enterprise unless he or
she is, becomes, and, for the duration of the
agreement, remains a member in good
standing of a union entirely comprised of or
of which the employees in interest are a part.
Union shop when all new regular
employees are required to join the union
within a certain period as a condition for their
continued employment.
Law authorizes the enforcement of union
security clauses, provided such enforcement
is not characterized by arbitrariness, and
always with due process.
(1) Substantive whether the termination of
employment was based on the provisions of
the Labor Code or in accordance with the
prevailing jurisprudence;
In terminating the employment of an
employee by enforcing the Union Security
Clause, the employer needs only to determine
and prove that:
(a) The union security clause is applicable;
(b) The union is requesting for the
enforcement of the union security
provision in the CBA; and
(c) There is sufficient evidence to support the
union's decision to expel the employee
from the union or company.
(2) Procedural the manner in which the
dismissal was effected.
(a) The first written notice to be served on
the employees should contain the specific
causes or grounds for termination against
them, and a directive that the employees
are given the opportunity to submit their
written explanation within a reasonable
period.
(b) The requirement of a hearing is complied
with as long as there was an opportunity
LABOR STANDARDS LABOR LAW
to be heard, and not necessarily that an
actual hearing was conducted.
(c) After determining that termination of
employment is justified, the employers
shall serve the employees a written notice
of termination indicating that: (1) all
circumstances involving the charge
against the employees have been
considered; and (2) grounds have been
established to justify the severance of
their employment. [Inguillo v. First Phil
Scales, G.R. No. 165407 (2009)]
iii. Dismissal of union officers for the
conduct of an illegal strike / dismissal of
union members for participating in the
commission of illegal acts
Art. 279, a, 3rd par., 2nd sen., LC: 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.
iv. Termination in conformity with existing
statute / Qualification requirements
While the right of workers to security of
tenure is guaranteed by the Constitution, its
exercise may be reasonably regulated
pursuant to the police power of the State to
safeguard health, morals, peace, education,
order, safety, and the general welfare of the
people. Consequently, persons who desire to
engage in the learned professions requiring
scientific or technical knowledge may be
required to take an examination as a
prerequisite to engaging in their chosen
careers. [St. Lukess Medical Center Employees
Ass'n-AFW v. NLRC, G.R. No. 162053 (2007)]
PAGE 119 OF 222
UP LAW BOC
B.4 DUE PROCESS
Art. 292 (b), LC: 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 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
employer.
Requisites for Valid Dismissal
(1) Substantive due process: The dismissal
must be for any of the causes provided for
in Article 297 299 of the Labor Code;
and
(2) Procedural due process: The employee
must be afforded an opportunity to be
heard and defend himself. [Fujitsu
Computer Products Corporation of the
Phil. v. Court of Appeals, G.R. No. 158232
(2005)]
Employer may not substitute the required
prior notice & opportunity to be heard with
the mere payment of 30 days' salary. [PNB v.
Cabansag, G.R. No. 157010 (2005)]
Right to Counsel
The right to counsel, a very basic requirement
of substantive due process, has to be
observed. Indeed, the rights to counsel and to
LABOR STANDARDS LABOR LAW
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, G.R. No. 90786 (1991)]
Burden of Proof
In illegal dismissal cases, the onus of proving
that the employee was not dismissed or, if
dismissed, that the dismissal was not illegal,
rests on the employer, failure to discharge
which would mean that the dismissal is not
justified and, therefore, illegal. [Macasero v.
Southern Industrial Gases Philippines, G.R. No.
178524 (2009)]
Degree of Proof
In labor cases, as in other administrative
proceedings, substantial evidence is required
and it is such relevant evidence as a
reasonable mind might accept as adequate
to support a conclusion. [Andrada v. Agemar
Manning Agency, Inc., G.R. No. 194758
(2012)]
Substantial evidence is necessary for an
employer to effectuate any dismissal.
Uncorroborated assertions and accusations
by the employer do not suffice; otherwise the
constitutional guaranty of security of tenure
of the employee would be jeopardized. [Kulas
Ideas & Creations, et. al. v. Alcoseba & Arao
Arao, GR 180123 (2010)]
i. Twin-notice requirement
The employer has the burden of proving that
a dismissed worker has been served two
notices:
(1) First written notice: served on the
employee specifying the ground or
grounds for termination, and giving said
employee reasonable opportunity within
which to explain his side.
(2) Second written notice: served upon the
employee, indicating that upon due
consideration of all the circumstances,
grounds have been established to justify
his termination.
PAGE 120 OF 222
UP LAW BOC LABOR STANDARDS
(1) Contain the specific causes or
grounds for termination against
them, and
(2) Contain a directive that the
employees are given the
opportunity to submit their
written explanation within a
reasonable period or every kind
of assistance that management
must accord to the employees to
enable them to prepare
adequately for their defense.
This should be construed as a
period of at least five (5)
First
Notice calendar days from receipt of the
notice
(3) Contain a detailed narration of
the facts and circumstances that
will serve as basis for the charge
against the employees.
(4) Specifically mention which
company rules, if any, are
violated and/or which among the
grounds under Art. 288 is being
charged against the
employees. [United Tourist
Promotions v. Kemplin, G.R. No.
205453 (2014)]
(1) Indicate all circumstances
involving the charge against the
employees considered; and
Second
(2) Indicate grounds established to
Notice justify the severance of their
employment [United Tourist
Promotions v. Kemplin, G.R. No.
205453 (2014)]
An employee may be dismissed only if the
grounds mentioned in the pre-dismissal
notice were the ones cited for the termination
of employment. [Erector Advertising Sign
Group, Inc. v. Cloma, G.R. No. 167218, (2010)]
PAGE 121 OF 222
LABOR LAW
ii. Hearing; meaning of opportunity to be
heard
In employee dismissal cases, the essence of
due process is simply an opportunity to be
heard; it is the denial of this opportunity that
constitutes violation of due process of law.
[Technol Eight Philippines Corporation v.
NLRC, G.R. No. 187605 (2010)]
While a formal hearing or conference is ideal,
it is not an absolute, mandatory or exclusive
avenue of due process. [Perez v. PT&T, G.R.
No. 152048 (2009)]
Guiding principles in hearing requirement
(1) "Ample opportunity to be heard" means
any meaningful opportunity (verbal or
written) given to the employee to answer
the charges against him and submit
evidence in support of his defense,
whether in a hearing, conference or some
other fair, just and reasonable way.
(2) A formal hearing or conference becomes
mandatory only when requested by the
employee in writing or substantial
evidentiary disputes exist or a company
rule or practice requires it, or when
similar circumstances justify it.
(3) The "ample opportunity to be heard"
standard in the Labor Code prevails over
the "hearing or conference" requirement
in the implementing rules and
regulations. [Perez v. PT&T, G.R. No.
152048 (2009)]
Use of Position Paper
It is the labor arbiter who is authorized to
determine whether or not there is a necessity
for conducting formal hearings in cases
brought before them for adjudication even
after the submission of the parties of their
position papers or memoranda. A formal
trial-type hearing is not at all times and in all
instances essential to due process. It is
enough that the parties are given a fair and
reasonable opportunity to explain their
respective sides of the controversy and to
present supporting evidence on which a fair
decision can be based. [Seastar Marine
UP LAW BOC LABOR STANDARDS
Services Inc. v. Bul-an, Jr., G.R. No. 142609
(2004)]
Decision/Award
It is a requirement of due process that the
parties to a litigation be informed of how it
was decided, with an explanation of the
factual and legal reasons that led to the
conclusions of the court. The court cannot
simply say that judgment is rendered in favor
of X and against Y and just leave it at that
without any justification whatsoever for its
action. The losing party is entitled to know
why he lost, so he may appeal to a higher
court, if permitted, should he believe that the
decision should be reversed. A decision that
does not clearly and distinctly state the facts
and the law on which it is based leaves the
parties in the dark as to how it was reached
and is especially prejudicial to the losing
party, who is unable to pinpoint the possible
errors of the court for review by a higher
tribunal. [ABD Overseas Manpower
Corporation vs. NLRC, G.R. No. 117056 (1998)]
CONSEQUENCES FOR NON-COMPLIANCE OF PROCEDURAL DUE PROCESS
Validity
Situation
Dismissal
Just or Authorized Cause Valid
+ Due Process
No Just or Authorized Cause Invalid
+ Due Process
No Just or Authorized Cause Invalid
+ No Due Process
Just or Authorized Cause Valid
+ No Due Process
PAGE 122 OF 222
LABOR LAW
PROCEDURE TO BE OBSERVED IN
TERMINATION CASES
JUST CAUSE
Notice specifying the grounds for which
dismissal is sought
Hearing or opportunity to be heard
Notice of the decision to dismiss
AUTHORIZED CAUSE
Notice to:
(1) Employee, and
(2) DOLE at least 1 month prior to the
effectivity of the separation
Requisites
(1) Notice not needed when Employee
consented to the retrenchment or
voluntarily applied for one. [International
Hardware, Inc. v. NLRC, G.R. No. 80770,
(1989)]
(2) Notice must be individual, not collective
[Shoppers Gain Supermart v. NLRC, G.R.
No. 110731 (1996)]
(3) Voluntary arbitration satisfies notice
requirement for authorized causes
[Revidad v. NLRC, G.R. No. 111105 (1995
of
Liability of ER
No liability.
Separation pay only in authorized cause
Reinstatement or separation pay.
If reinstatement not possible, + full backwages
Reinstatement or separation pay.
If reinstatement not possible, + full backwages
Liable for damages due to procedural infirmity.
Separation pay if for authorized cause
UP LAW BOC LABOR STANDARDS
C. RELIEFS FOR ILLEGAL DISMISSAL
Art. 294, LC: Security of Tenure. In case of
regular employment, the employer shall not
terminate the services of an employee except
for a just cause or when authorized by this
Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement
without loss of seniority rights and other
privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their
monetary equivalent computed from the time
his compensation was withheld from him up to
the time of his actual reinstatement.
C.1. REINSTATEMENT
Reinstatement means restoration to a state
or condition from which one had been
removed or separated. The person reinstated
assumes the position he had occupied prior
to his dismissal. [Asian Terminals, Inc. v.
Villanueva, G.R. No. 143219 (2006)]
General Rule: Reinstatement and backwages
Exceptions:
(1) Separation pay
(2) Closure of business [Retuya v. Hon.
Dumarpa, G.R. No. 148848 (2003)]
(3) Economic business conditions [Union of
Supervisors v. Secretary of Labor, G.R. No.
L-39889 (1981)]
(4) Employees unsuitability [Divine Word
High School v. NLRC, G.R. No. 72207
(1986)]
(5) Employees retirement/ overage [New
Philippine Skylanders, Inc. v. Dakila, G.R.
No. 199547 (2012)]
(6) Antipathy and antagonism [Wensha Spa
Center v. Yung, G.R. No. 185122 (2010)]
(7) Job with a totally different nature [DUP
Sound Phils. v. CA, G.R. No. 168317 (2011)]
(8) Long passage of time
(9) Inimical to the employer's interest
(10) When supervening facts have transpired
which make execution on that score
unjust or inequitable or, to an increasing
extent [Emeritus Security & Maintenance
PAGE 123 OF 222
LABOR LAW
Systems, Inc. v. Dailig, G.R. No. 204761
(2014)]
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, CC]
i. Reinstatement pending appeal
Art. 229, par. 3 LC: In any event, the decision of
the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, pending appeal.
The employee shall either be admitted back to
work under the same terms and conditions
prevailing prior to his dismissal or separation
or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond
by the employer shall not stay the execution for
reinstatement provided herein.
Two options given to employers:
1) Actually reinstate the dismissed
employees or,
2) Constructively reinstate them in the
payroll.
Either way, this must be done immediately
upon the filing of their appeal, without need
of any executory writ.
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. The Labor Arbiter's order of
reinstatement is immediately executory and
the employer has to either re-admit them to
work under the same terms and conditions
prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing
to exercise the options in the alternative,
employer must pay the employee's salaries
[Magana v. Medicard Philippines, Inc., G.R.
No. 174833 (2010)]
UP LAW BOC
No refund doctrine
An employee cannot be compelled to
reimburse the salaries and wages he received
during the pendency of his appeal,
notwithstanding the reversal by the NLRC of
the LA's order of reinstatement. [College of
the Immaculate Conception v. NLRC, G.R. No.
167563 (2010)]
Note, however: Rule XI, Sec. 14 of the 2011
NLRC Rules of Procedure provide for
restitution of amounts paid pursuant to
execution of awards during pendency of the
appeal. However, it expressly disallows
restitution of wages paid due to
reinstatement pending appeal.
Section 14. Effect of Reversal of Executed
Judgment. Where the executed judgment is
totally or partially reversed or annulled by the
Court of Appeals or the Supreme Court, the
Labor Arbiter shall, on motion, issue such
orders of restitution of the executed award,
except wages paid during reinstatement
pending appeal.
ii. Separation pay in lieu of reinstatement
Kinds of separation pay (SP)
(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
Instances when the award of separation
pay, in lieu of reinstatement to an illegally
dismissed employee, is proper:
(1) When reinstatement is no longer
possible, in cases where the dismissed
employee's position is no longer
available;
(2) The continued relationship between the
employer and the employee is no longer
viable due to the strained relations
between them; and
LABOR STANDARDS LABOR LAW
(3) When the dismissed employee opted not
to be reinstated, or the payment of
separation benefits would be for the best
interest of the parties involved. [Book VI,
Rule 1, Section 4 (b), Rule I, IRR]
Separation Pay and Reinstatement,
Exclusive Remedies
The payment of separation pay and
reinstatement are exclusive remedies. The
payment of separation pay replaces the legal
consequences of reinstatement to an
employee who was illegally dismissed. [Bani
Rural Bank, Inc. v. De Guzman, G.R. No.
170904 (2013)]
Doctrine of Strained Relations
Where reinstatement is not feasible,
expedient or practical, as where
reinstatement would only exacerbate the
tension and strained relations between the
parties or where the relationship between the
employer and employee has been unduly
strained by reason of their irreconcilable
differences, particularly where the illegally
dismissed employee held a managerial or key
position in the company, it would be more
prudent to order payment of separation pay
instead of reinstatement. [Quijano v. Mercury
Drug Corp., G.R. No. 126561 (1998)]
Computation
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
[Planters Products, Inc. v. NLRC, G.R. No.
78524, 78739 (1989)]; allowances include
transportation and emergency living
allowances [Santos v. NLRC, G.R. No. 76721
(1987)]
Inasmuch as the words "wages", "pay" and
"salary" have the same meaning, and
commission is included in the definition of
"wage", the logical conclusion, therefore, is,
in the computation of the separation pay of
petitioners, their salary base should include
also their earned sales commissions. [Songco
v. NLRC, G.R. Nos. 50999-51000 (1990)]
PAGE 124 OF 222
UP LAW BOC
A dismissed employee who has accepted
separation pay is not necessarily estopped
from challenging the validity of his or her
dismissal. Neither does it relieve the
employer of legal obligations. [Anino v. NLRC,
G.R. No. 123226 (1998)]
C.2. BACKWAGES
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. [St. Theresa's School of Novaliches
Foundation v. NLRC, G.R. No. 122955 (1998)]
Backwages and reinstatement are two reliefs
that should be given to an illegally dismissed
employee. They are separate and distinct
from each other. An illegally dismissed
employee is entitled to (1) either
reinstatement, if viable, or separation pay if
reinstatement is no longer viable, and (2)
backwages. Payment of backwages is
specifically designed to restore an employee's
income that was lost because of his unjust
dismissal. [Aurora Land Projects Corp. v.
NLRC, G.R. No. 114733 (1997)]
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 Projects Corp. v.
NLRC, supra]
i. Computation of backwages
Full backwages means exactly
that, i.e., without deducting from backwages
the earnings derived elsewhere by the
concerned employee during the period of his
illegal dismissal. [Bustamante v. NLRC, G.R.
No. 111651 (1996)]
Awards including salary differentials are not
allowed [Insular Life Assurance Co. v. NLRC,
1987]
LABOR STANDARDS LABOR LAW
The period of delay in instituting this ULP
charge with claim for reinstatement and
backwages, although within the prescriptive
period, should be deducted from the liability
of the employer to him for back wages.
[Mercury Drug Co. Inc. v. CIR, G.R. No. L-23357
(1974)]
The salary base properly used should be the
basic salary rate at the time of dismissal plus
the regular allowances; allowances include:
Emergency cost of living allowances (ECOLA),
transportation allowances, 13th month pay.
[Paramount Vinyl Product Corp. v. NLRC
(1990)]
Also included are vacation leaves, service
incentive leaves, and sick leaves
The effects of extraordinary inflation are not
to be applied without an official declaration
thereof by competent authorities. [Lantion v.
NLRC, G.R. No. 82028 (1990)]
ii. Limited backwages
General rule: An illegally dismissed
employee is entitled to full backwages.
Exceptions
(1) The Court awarded limited backwages
where the employee was illegally
dismissed but the employer was found to
be in good faith. [San Miguel Corporation
v. Javate, Jr., G.R. No. L-54244 (1992)]
(2) Delay of the EE in filing the case for
illegal dismissal [Mercury Drug Co., Inc. v.
CIR, supra]
Rationale
Feati University Club vs. Feati University (1974)
adopted a consensus policy of pegging the
amount of backwages to their total
equivalent for three years (depending on the
circumstances) without deduction or
qualification. The rationale for the policy was
stated in the following words:
As has been noted, this formula of awarding
reasonable net backwages without deduction
or qualification relieves the employees from
proving or disproving their earnings during
their lay-off and the employers from
PAGE 125 OF 222
UP LAW BOC LABOR STANDARDS LABOR LAW

submitting counterproofs, and obviates the unconscionable settlements of their

twin evils of Idleness on the part of the backwages award in order to satisfy their dire
employee who would "with folded arms, need. [See La Campana Food Products, Inc. vs.
remain inactive in the expectation that a CIR, (1969) and Kaisahan ng Mga
windfall would come to him" [Itogon Suyoc Manggagawa vs. La Campana Food Products,
Mines, Inc. vs. Sangilo-Itogon Workers Union Inc., (1970)].
(1968), as cited in Diwa ng Pagkakaisa vs.
Note that according to Nacar v Gallery
Filtex International Corp. (1972)]
Frames, when the judgment of the court
and attrition and protracted delay in
awarding a sum of money becomes final and
satisfying such award on the part of
executory, the rate of legal interest . shall
unscrupulous employers who have seized
be 6% per annum from such finality until its
upon the further proceedings to determine
satisfaction, this interim period being
the actual earnings of the wrongfully
deemed to be by then an equivalent to a
dismissed or laid-off employees to hold
forbearance of credit. [Nacar v Gallery Frames,
unduly extended hearings for each and every
G.R. No. 189871, (2013)]
employee awarded backwages and thereby
render practically nugatory such award and
compel the employees to agree to

Indemnity of Employer

Doctrine in Validity of
Period Liability of ER
effect Dismissal

Prior 1989 Pre-Wenphil Illegal Reinstatement + Backwages

Feb. 1989 1999 Wenphil Valid Dismiss now, indemnity pay later
Jan. 2000 Oct. Serrano Ineffectual Full backwages up to reinstatement/finality of
2004 decision
Nov. 2004 Agabon Valid Nominal damages
present

D. PREVENTIVE SUSPENSION serious and imminent threat to the life or

Preventive suspension 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. However, when it is determined that
there is no sufficient basis to justify an
employee's preventive suspension, the latter
is entitled to the payment of salaries during
the time of preventive
suspension. [Gatbonton v. NLRC, G.R. No.
146779 (2006)]
Preventive suspension is justified where the
employee's continued employment poses a
PAGE 126 OF 222
property of the employer or of the employee's
co-workers. Without this kind of threat,
preventive suspension is not proper. [Artificio
v. NLRC, G.R. No. 172988 (2010)]
D.1.DURATION
No preventive suspension shall last longer
than thirty (30) days.
Upon the expiry of such period, the employer
shall thereafter
(1) reinstate the worker in his former or in a
substantially equivalent position or
(2) the employer may extend the period of
suspension provided that during the
period of extension, he pays the wages
UP LAW BOC LABOR STANDARDS
and other benefits due to the worker.
[Sec. 9, Rule XXIII, Book V, IRR]
D.2. PREVENTIVE SUSPENSION AS A
PROTECTIVE MEASURE V. SUSPENSION
AS PENALTY
Preventive suspension is not a penalty in
itself. It is merely a measure of precaution so
that the employee who is charged may be
separated, for obvious reasons, from the
scene of his alleged misfeasance while the
same is being investigated. While [preventive
suspension] may be imposed on a respondent
during the investigation of the charges
against him, [suspension] is the penalty
which may only be meted upon him at the
termination of the investigation or the final
disposition of the case. [PAL v. NLRC, G.R.
No. 114307 (1998)
E. CONSTRUCTIVE DISMISSAL
Constructive dismissal is cessation of work
because continued employment is rendered
impossible, unreasonable or unlikely; when
there is a demotion in rank or diminution in
pay or both; or when a clear discrimination,
insensibility, or disdain by an employer
becomes unbearable to the employee.
The test of constructive dismissal is whether a
reasonable person in the employees position
would have felt compelled to give up his
position under the circumstances. t is an act
amounting to dismissal but made to appear
as if it were not. Constructive dismissal is,
therefore, a dismissal in disguise. As such,
the law recognizes and resolves this situation
in favor of employees in order to protect their
rights and interests from the coercive acts of
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work. [McMer Corp., Inc. v.
NLRC, G.R. No. 193421 (2014)]
PAGE 127 OF 222
LABOR LAW
V. Management
Prerogative
The employers right to conduct the affairs of
his business, according to its own discretion
and judgment, is well-recognized. An
employer has a free reign and enjoys wide
latitude of discretion to regulate all aspects
of employment. This is a management
prerogative, where the free will of
management to conduct its own affairs to
achieve its purpose takes form. [Torreda vs.
Toshiba, G.R. No. 165960 (2007)]
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 them
Even 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., G.R. No. 184885 (2012)]
A. DISCIPLINE
Management has the prerogative to
discipline its employees and to impose
appropriate penalties on erring workers
pursuant to company rules and regulations.
[Jose P. Artificio vs. NLRC, G.R. No. 172988
(2010)]
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. The only criterion to guide
the exercise of its management prerogative is
that the policies, rules and regulations on
work-related activities of the employees must
always be fair and reasonable and the
corresponding penalties, when prescribed,
commensurate to the offense involved and to
UP LAW BOC LABOR STANDARDS
the degree of the infraction. [Consolidated
Food Corporation vs. NRLC, G.R. No. 118647
(1999)] [St. Michaels Institute vs. Santos, G.R.
No. 145280 (2001)]
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee for
just and valid cause, pertains in the first place
to the employer, as well as the authority to
determine the existence of said cause in
accordance with the norms of due process.
[Makati Haberdashery, Inc. vs. NLRC, G.R.
Nos. 83380-81 (1989)]
Although the right of employers to shape
their own work force,is recognized, this
management prerogative must not curtail the
basic right of employees to security of tenure.
[Alert Security & Investigation Agency, Inc. vs.
Saidali Pasawilan, et. al., G.R. No. 182397
(2011)]
B. TRANSFER OF EMPLOYEES
An employees right to security of tenure does
not give him such a vested right in his
position as would deprive the company of its
prerogative to change his assignment or
transfer him where he will be most useful.
The Employer has the right to transfer or
assign Employees from one area of operation
to another, or one office to another or in
pursuit of its legitimate business interest,
Provided there is no demotion in rank or
diminution of salary, benefits and other
privileges and not motivated by
discrimination or made in bad faith, or
effected as a form of punishment or demotion
without sufficient cause. [Westin Phil. Plaza
Hotel vs. NLRC, G.R. No. 121621 (1999)]
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges, the employee may not complain
that it amounts to a constructive dismissal.
[Bisig ng Manggagawa sa TRYCO v. NLRC,
G.R. No. 151309 (2008)]
It is management prerogative for employers
to transfer employees on just and valid
grounds such as genuine business necessity.
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LABOR LAW
[William Barroga vs. Data Center College of the
Philippines, G.R. No. 174158 (2011)]
Re-assignments made by management
pending investigation of irregularities
allegedly committed by an employee fall
within the ambit of management prerogative.
The purpose of reassignments is no different
from that of preventive suspension which
management could validly impose as a
disciplinary measure for the protection of the
company's property pending investigation of
any alleged malfeasance or misfeasance
committed by the employee. [Ruiz s.v Wendel
Osaka Realty Corp., G.R. No. 189082 (2012)]
In cases of a transfer of an employee, the rule
is settled that the employer is charged with
the burden of proving that its conduct and
action are for valid and legitimate grounds
such as genuine business necessity and that
the transfer is not unreasonable,
inconvenient or prejudicial to the employee. If
the employer cannot overcome this burden of
proof, the employees transfer shall be
tantamount to unlawful constructive
dismissal. [Jonathan Morales v. Harbor Centre
Port Terminal Inc., G.R. No. 174208 (2012)]
C. 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, G.R. No. L-64048
(1986)]
In the consolidated cases of Leonardo vs.
NLRC [G. R. No. 125303 (2000)] and Fuerte
vs. Aquino [G. R. No. 126937 (2000)], the
employer claimed that the employee was
demoted pursuant to a company policy
intended to foster competition among its
employees. Under this scheme, its employees
are required to comply with a monthly sales
quota. Should a supervisor such as the
employee fail to meet his quota for several
consecutive months, he will be demoted,
whereupon his supervisors allowance will be
withdrawn and be given to the individual who
takes his place. When the employee
concerned succeeds in meeting the quota
UP LAW BOC
again, he is re-appointed supervisor and his
allowance is restored. The Supreme Court
held that this arrangement is an allowable
exercise of company rights since an employer
is entitled to impose productivity standards
for its workers. In fact, non-compliance may
be visited with a penalty even more severe
than demotion.
D. GRANT OF BONUS
A bonus is "a gratuity or act of liberality of the
giver which the recipient has no right to
demand as a matter of right" [Aragon vs.
Cebu Portland Cement Co., 61 O.G. 4597]. "It is
something given in addition to what is
ordinarily received by or strictly due the
recipient." The granting of a bonus is
basically a management prerogative which
cannot be forced upon the employer "who
may not be obliged to assume the onerous
burden of granting bonuses or other benefits
aside from the employee's basic salaries or
wages" xxx [Kamaya Point Hotel vs. National
Labor Relations Commission, Federation of
Free Workers and Nemia Quiambao, G.R. No.
75289, (1989)]. [Traders Royal Bank vs. NLRC,
G.R. No. 120592 (1990)]
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, G.R.
No. 177705 (2009)]
E. CHANGE OF WORKING HOURS
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 Darby Pilipinas
Inc. v. NLRC, G.R. No. 119205 (1998)]
LABOR STANDARDS LABOR LAW
F. RULES ON MARRIAGE BETWEEN
EMPLOYEES OF COMPETITOR-
EMPLOYERS
In the recent case of Duncan Association of
Detailman-PTGWO and Pedro Tecson v. Glaxo
Wellcome Philippines, Inc., we passed on the
validity of the policy of a pharmaceutical
company prohibiting its employees from
marrying employees of any competitor
company. We held that Glaxo has a right to
guard its trade secrets, manufacturing
formulas, marketing strategies and other
confidential programs and information from
competitors. We considered the prohibition
against personal or marital relationships with
employees of competitor companies upon
Glaxos employees reasonable under the
circumstances because relationships of that
nature might compromise the interests of
Glaxo. In laying down the assailed company
policy, we recognized that Glaxo only aims to
protect its interests against the possibility
that a competitor company will gain access to
its secrets and procedures. [Star Paper Corp.
vs. Simbol, G.R. No. 164774 (2006)]
G. 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 vs. Solidbank, G.R. No. 163269
(2006)]
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VI. Social Welfare
Legislation
A. SSS LAW [RA 8282]
A.1. COVERAGE
[1997, 2000, 2008, 2009 Bar Question]
i. Compulsory [Sec. 9 [a]; Sec. 9-A]
(1) Employees not over 60 years including
domestic helpers with at least P1,000
monthly pay; and
(2) Self-employed as may be determined by
the Commission, but not limited to:
a) Self-employed professionals
b) Partners and single proprietors of
businesses
c) Actors and actresses, directors,
scriptwriters, and news
correspondents who do not fall
within the definition of the term
employee under Section 8 [d]
d) Professional athletes, coaches,
trainers and jockeys
e) Individual farmers and fishermen
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.
Premium payments or contributions shall be
shouldered by the employer. However, if the
domestic worker is receiving a wage of Five
thousand pesos [P5,000.00] and above per
month, the domestic worker shall pay the
proportionate share in the premium
payments or contributions, as provided by
law.
The domestic worker shall be entitled to all
other benefits under existing laws. [Sec. 30,
Kasambahay Law [RA 10361]]
LABOR STANDARDS LABOR LAW
ii. Voluntary [Sec. 9]
(1) Spouses who devote full time to
managing household and family affairs,
unless they are also engaged in other
vocation or employment [which is subject
of compulsory coverage];
(2) OFWs recruited by foreign-based
employers;
(3) Employees [previously under compulsory
coverage] already separated from
employment or those self-employed [also
under compulsory coverage] 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.
A.2. EXCLUSIONS FROM COVERAGE [SEC.
8 [J]]
(1) Employment purely casual and not for
the purpose of occupation or business of
the employer.
(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;
(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.
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A.3. BENEFITS
i. Monthly pension [Sec.12]
Computation of monthly pension
The monthly pension shall be the highest of
the following amounts:
(1) P300 + [20% x [average monthly credit]]
+ [2% x [average monthly credit] x [# of
cash credited years of service in excess of
10 years]];
(2) 40% x [average monthly credit];
(3) P1,000; provided, that the monthly
pension shall in no case be paid for an
aggregate amount of less than 60
months.
Note: Notwithstanding the abovementioned,
minimum pension is P1,200 for members
with at least 10 years credit service, P2,400
for those with 20 years.
ii. Dependents pension [Sec. 12-A]
(1) Paid on account of members
I. death,
II. retiring, or
III. permanent total disability;
(2) Paid to each child conceived on or prior to
contingency, but not exceeding 5,
beginning with the youngest and
preferring the legitimate;
(3) Amount is either P250 or 10% of the
monthly pension as computed above,
whichever is higher.
iii. Retirement benefits [Sec. 12-B]
Eligibility requirements
(1) 120 monthly contributions;
(2) Age
I. 65 years old; or
II. a member who has reached 60
years may also avail if he is
already separated from
employment or has ceased to be
self-employed.
LABOR STANDARDS LABOR LAW
Benefit entitlement to monthly pension
from retirement until death.
The monthly pension shall be suspended
upon the reemployment or resumption of
self-employment of a retired member who is
less than sixty-five [65] years old.
In Case of Death of Member
(1) His/her primary beneficiaries as of the
date of his/her retirement shall be
entitled to receive the monthly pension;
or
(2) If he/she has no primary beneficiaries
AND he/she dies within sixty [60] months
from the start of his/her monthly
pension, his/her secondary beneficiaries
shall be entitled to a lump sum benefit
equivalent to the total monthly pensions
corresponding to the balance of the five-
year guaranteed period, excluding the
dependents pension.
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 Sum Eligibility
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.
iv. Permanent disability benefits [Sec. 13-A]
Eligibility requirement
(1) 36 monthly contributions prior to the
semester of disability; same as death
benefit; the only difference is that the
pension is paid directly to the member.
(2) In case the permanently disabled
member dies, it would be given the same
treatment as a retiree dying.
(3) For permanent partial disability, the
pension is not lifetime. [e.g. loss of thumb
PAGE 131 OF 222
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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.
(4) 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]
Lump Sum Alternative
A member is entitled to a lump sum benefit
equivalent to the monthly pension times the
number of monthly contributions paid to the
SSS or twelve [12] times the monthly pension,
whichever is higher.
Lump Sum Eligibility
A member who has not paid at least 36
monthly contributions
Note: A member who [1] has received a lump
sum benefit; and [2] is reemployed or has
resumed self-employment not earlier than
one [1] year from the date of his disability
shall again be subject to compulsory
coverage and shall be considered a new
member.
In Case of Death of Member
(1) His primary beneficiaries as of the date of
disability shall be entitled to receive the
monthly pension; OR
(2) If he has no primary beneficiaries and he
dies within sixty [60] months from the
start of his monthly pension, his
secondary beneficiaries shall be entitled
to a lump sum benefit equivalent to the
total monthly pensions corresponding to
the balance of the five-year guaranteed
period excluding the dependents
pension.
LABOR STANDARDS LABOR LAW
v. Death benefits [Sec. 13]
Eligibility requirement
36 monthly contributions prior to the
semester of death.
Benefit monthly pension to primary or a
lump sum benefit equivalent to thirty-six [36]
times the monthly pension secondary
beneficiaries.
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]
vi. Funeral benefits [13-B]
P12,000 in cash or in kind, upon death of
member
vii. 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
viii. 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 have been used up;
(5) Maximum of 120 days per 1 calendar year
[i.e maximum permissible for the same
PAGE 132 OF 222
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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.
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]
Note: One hundred percent [100%] of the
daily benefits provided in the preceding
paragraph shall be reimbursed by the SSS to
said employer upon receipt of satisfactory
proof of such payment and legality thereof if
the following conditions are met:
(1) The employer notified the SSS of the
confinement within five calendar days
after receipt of the notification from the
employee member
(2) If the notification to the SSS is made by
the employer beyond five calendar days
after receipt of the notification from the
employee member, he shall be
reimbursed only for each day of
confinement starting from the tenth
calendar day immediately preceding the
date of notification to the SSS.
(3) SSS shall reimburse the employer or pay
the unemployed member only for
confinement within the one-year period
immediately preceding the date the claim
for benefit or reimbursement is received
by the SSS, except confinement in a
hospital in which case the claim for
benefit or reimbursement must be filed
within one [1] year from the last day of
confinement.
PAGE 133 OF 222
LABOR LAW
ix. Maternity leave benefits [Sec. 14-A]
Eligibility Requirements [2000, 2005,
2007, 2010 Bar Question]
(1) A female member
(2) Paid at least three [3] monthly
contributions in the twelve-month period
immediately preceding the semester of
her childbirth or miscarriage
(3) She shall have notified her 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;
Process
The full payment shall be advanced by the
employer within thirty [30] days from the
filing of the maternity leave application;
Coverage
The maternity benefits provided under this
section shall be paid only for the first four [4]
deliveries or miscarriages;
Employers Reimbursement
That the SSS shall immediately reimburse
the employer of one hundred percent [100%]
of the amount of maternity benefits advanced
to the employee by the employer upon receipt
of satisfactory proof of such payment and
legality thereof.
Note: All of these benefits are tax-exempt.
A.4. BENEFICIARIES
1. PRIMARY
(1) Dependent spouse until remarriage
[see above];
(2) 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%.
UP LAW BOC
2. SECONDARY
Shall only receive when the primary
beneficiaries are absent
Dependent parents
3. OTHERS shall only receive when the
primary and secondary beneficiaries are
absent
Any other person designated by
member as his/her secondary
beneficiary.
B. GSIS [RA 8291]
B.1. COVERAGE
All public sector employees below the
compulsory retirement age of 65, irrespective
of employment status. [Sec. 3]
B.2. EXCLUSIONS FROM COVERAGE [SEC.
3]
(1) AFP and PNP;
(2) Members of the Judiciary and
Constitutional Commissions who are
covered ONLY by life insurance as they
have separate retirement schemes;
(3) Contractual employees with no employer-
employee relationship with the agency
they serve.
B.3. BENEFITS
Computation of Service [Sec. 10]
From date of original appointment/election,
including periods of service at different times
under one or more employers, those
performed overseas under the authority of
the Republic of the Philippines, and those
that may be prescribed by the GSIS in
coordination with the Civil Service
Commission.
In case of reinstatement in the service of an
employer and subsequent retirement or
separation which is compensable under this
Act, all service credited for retirement,
resignation or separation for which
corresponding benefits have been awarded
LABOR STANDARDS LABOR LAW
under this Act or other laws shall be excluded
in the computation of service
Note: The GSIS may prescribe rules for the
inclusion of part time and other services with
compensation.
B.3.1. MONTHLY PENSION [SEC. 9]
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].
Provided, 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.
B.3.2. RETIREMENT BENEFITS [SEC. 13]
Eligibility requirements [Sec. 13-A]
(1) At least 15 years of service;
(2) At least 60 years of age; and
(3) 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. [Sec. 13]
Benefit [Sec. 13]: Choice between
(a) 60 x [basic monthly pension] lump sum
payment [Sec. 2] 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
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Note: Subject to periodic adjustment [Sec. 14]
B.3.3. PERMANENT DISABILITY BENEFITS
Disabilities Deemed Total and Permanent
[Sec. 16]
(a) Complete loss of sight of both eyes;
(b) Loss of 2 limbs at or above the ankle or
wrist
(c) Permanent complete paralysis of 2 limbs
(d) Brain injury resulting in incurable
imbecility or insanity
(e) Such other cases as may be determined
by the GSIS
Disabilities Deemed Partial and Permanent
[Sec. 17]
(a) Complete and permanent loss of the use
of:
(i) Any finger
(ii) Any toe
(iii) One arm
(iv) One hand
(v) One foot
(vi) One leg
(vii) One or both ears
(viii) Hearing of one or both ears
(ix) Sight of one eye
(b) Such other cases as may be determined
by the GSIS
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; [Sec. 15]
(2) Employee is:
(a) 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
LABOR STANDARDS LABOR LAW
disability or has paid a total of at
least 180 monthly contributions prior
to disability; and
(c) Member is not enjoying old-age
retirement benefit. [Sec. 16]
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. [Sec. 16]
Partial Disability
Paid according to GSIS prescribed schedule
(this is similar to the scheme used by SSS);
member availing of permanent partial
disability must satisfy condition regarding the
disability not being due to his own fault and
either regarding employment status and
services rendered. (See Eligibility
requirements for Permanent Total Disability)
B.3.4. DEATH BENEFITS [SEC. 21]
When member dies, the primary beneficiaries
are entitled to only one of the following:
(1) Survivorship pension
(a) If he was in the service when he died;
or
(b) 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
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(c) Even if separated from the service, he Eligibility requirements and other
has paid 180 monthly contributions conditions:
prior to death.
(1) Employee must be:
(2) Survivorship pension plus cash payment
(a) in service at the time of disability; or
of 100% ave. monthly compensation for
every year of service (pension plus total (b) if separated, he has rendered at least
contributions made) 3 years of service and paid at least 6
monthly contributions in the 12
(a) If he was in the service when he died;
month period immediately prior to
and
disability;
(b) With 3 years of service.
(2) All sick leave credits including CBA sick
(3) Cash payment equivalent to 100% ave. leaves for the current year has been used
monthly compensation for each year of up; and
service he paid contributions or P12,000
(3) Maximum of 120 days per 1 calendar year
whichever is higher
(so maximum permissible for the same
(a) With 3 years of service; and sickness and confinement is 240 days for
2 consecutive years).
(b) He has failed to qualify in the prior 2
schemes.
Benefit
B.3.5. FUNERAL BENEFITS [SEC. 23] 75% of the current daily compensation for
every day or fraction thereof of disability or
The amount shall be fixed by GSIS rules and
P70 whichever is higher.
regulations
Who are entitled:
B.3.8. SEPARATION BENEFITS [SEC. 11]
(1) Active member;
Eligibility requirements
(2) Member separated from service but still
entitled to funeral benefit; (1) 60 years of age, or separation from
service with at least 3 years but not over
(3) Pensioner;
15 years served
(4) Retiree who at the time of retirement was
(2) Below 60 years of age, but at least 15
of pensionable age but opted to retire
years of service rendered.
under RA 1616.
Benefit
(1) For 60 years of age or separated from
B.3.6. LOAN
service with 3 to 15 years of service: cash
GSIS website provides for this. The following payment of 100% of ave. monthly
are the loans provided online: compensation for each year of service
(total amount of all contributions paid) or
(1) Consolidated Loan
P12,000 whichever is higher.
(2) Policy Loan
(2) Below 60 years of age and at least 15
(3) Emergency Loan years of service: cash payment
(4) Pension Loan equivalent to 18 x [monthly pension] at
the time of resignation or separation plus
an old-age pension benefit equal to basic
B.3.7. TEMPORARY DISABILITY BENEFITS monthly pension.
[SEC. 18]
Similar to sickness.

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B.3.9. UNEMPLOYMENT BENEFITS [SEC. B.3.11. LIFE INSURANCE BENEFITS [SEC.

12] 24]
Eligibility requirements Note: Judiciary and Constitutional
Commissions are entitled to life insurance
(1) Employee separated from service due to
only.
abolition of his office or position; and
B.4. Beneficiaries
(2) Employee has been paying integrated
contributions for at least 1 year prior to B.4.1. Primary
separation.
(1) Dependent spouse until remarriage;
Benefit
(2) Dependent children (legitimate,
Monthly cash payments of 50% of average legitimated, legally adopted, and
monthly compensation for a duration which is illegitimate) but RA 8291 does not
proportional to years rendered, ranging from distinguish share of legitimate and
2 months to 6 months. illegitimate children.

B.3.10. SURVIVORSHIP BENEFITS [SEC. 20] B.4.2. SECONDARY

Beneficiaries are entitled to the following: Shall only receive when the primary
(1) Basic survivorship pension which is 50% beneficiaries are absent:
of basic monthly pension; (see Death (1) Dependent parents
Benefits) and
(2) Legitimate descendants, subject to the
(2) Dependent childrens pension not restrictions on dependent children.
exceeding 50% of the basic monthly
pension.

SSS
Enabling law RA 1161 as amended by RA 8282:
Social Security Act of 1997
Employer any person, natural or juridical,
domestic or 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 em ployer under the GSIS. A self-
employed person shall be both employer and
Definition of employee at the same time.
Terms
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
GSIS
RA 8291 amending PD 1146
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 receiving
compensation while in service of an
employer whether by election or
appointment, irrespective of status of
appointment; baranggay officials; and
sangguniang officials

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SSS GSIS
Self-employed any person whose income is Note: No counterpart for self-
not derived from employment, including, but employed.
not limited to:
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.
Dependents: Same, except that a child here is below
Legal spouse entitled by law to receive 18
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
Primary distinguish share of legitimate and
Dependent spouse until remarriage illegitimate children
[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 Compensation basic pay received
for employment, including living allowance, excluding per diems, bonuses, overtime,
as well as the cash value of any remuneration honoraria, allowances and other
paid in any medium other than cash except emoluments not integrated into the
that portion already above the max salary basic pay under existing laws.
credit under Sec. 18 of the Act.
Compulsory Public sector employees below the
Employers as defined above; compulsory retirement age of 65.
Employees not over 60 years including
Coverage Exceptions:
household helpers with at least P1,000
monthly pay; and (1) AFP and PNP;
Self-employed. (2) Members of the Judiciary and
PAGE 138 OF 222
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SSS GSIS
Constitutional Commissions who
Voluntary are covered only by life insurance as
Spouses who devote full time to they have separate retirement
managing household and family affairs; schemes;
OFWs recruited by foreign-based (3) Contractual employees with no
employers; employee-employer relationship
Employees already separated from with the agency they serve.
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.
Employer: 1st day of operation
Effective Date
Employee: 1st day at work
of Coverage
Self-employed: upon registration with SSS
(1) Monthly pension (1) Monthly pension
(2) Dependents pension (2) Retirement benefits
(3) Retirement benefits (3) Permanent disability benefits
(4) Permanent disability benefits (4) Death Benefits
(5) Death benefits (5) Funeral benefits
(6) Funeral benefits (6) Loan GSIS website provides for
(7) Loan Social Security Commission this
Resolution No. 669. Moreover, several (7) Temporary disability benefits
SSS-issued circulars such as Circular No. [similar to sickness]
Summary of
21-P and No. 52 pertain to the treatment (8) Separation benefits
Benefits
of salary loans, sometimes providing for (9) Unemployment benefits Sec 11
more flexible payment terms or (10) Survivorship benefits
condonation for delinquent payers; (11) Life insurance benefits
Santiago v. CA and SSS, GR # L-39949
[1984] resolved an issue involving the Note: Judiciary and Constitutional
treatment of salary loan repayments; SSS Commissions are entitled to life
website also shows loans insurance only.
(8) Sickness benefits
(9) Maternity leave benefits
Effects of (1) Employers contribution, and Continued membership for the
separation (2) Employees obligation to pay contribution unemployed member; and entitlement
from both cease at the end of the month of to whatever benefits he has qualified to
employment separation; in the event of any compensable
(3) Employee shall be credited with all contingency.
contributions paid on his behalf and
entitled to all benefits set forth by law.
Social Security Commission CA [Rule 43; GSIS CA [Rule 43] SC [Rule 45];
Dispute
questions of law and fact] SC [Rule 45; appeal does not stay execution.
Settlement
questions of law only]
Prescriptive 20 years 4 years
Period
PAGE 139 OF 222
UP LAW BOC
C. LIMITED PORTABILITY LAW [RA
7699]
C.1 COVERAGE [SEC. 3]
(1) Workers who transfer employment from
one sector to another; or
(2) Those employed in both sectors (public
and private).
C.2. 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. 2(e)].
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. [Sec. 3]
D. EMPLOYEES COMPENSATION
COVERAGE AND WHEN
COMPENSABLE
This refers to the Amended Rules on
Employees Compensation, implementing
Title II, Book IV of the Labor Code.
D.1 COVERAGE [SEC. 2, RULE I]
(1) Every employer shall be covered.
(2) Every employee not over sixty (60) years
of age shall be covered.
LABOR STANDARDS LABOR LAW
(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.
(4) An employee who is coverable by both
the GSIS and SSS shall be compulsorily
covered by both Systems.
(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, Rule I]
D.2. EFFECTIVITY [SEC. 6, RULE I]
Coverage of employees shall take effect on
the first day of employment.
D.3. WHEN COMPENSABLE
Grounds [Sec. 1, Rule III]
(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 [Sec. 1, Rule IV]
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
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LABOR LAW
LABOR RELATIONS

PAGE 141 OF 222

UP LAW BOC LABOR RELATIONS
VII. Labor Relations
A. RIGHT TO SELF-ORGANIZATION
Basis of Right
(1) 1987 Constitution
Sec. 8, Art. III. 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.
Sec.3, Art. XIII. 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 self-
organization, collective bargaining and
negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. [...]
(2) Labor Code
Art. 253. 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. 254. Employees of government
corporations established under the
corporation code shall have the right to
organize and to bargain collectively with their
respective employers.
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LABOR LAW
Right to Self-Organization:
Fundam ental Right
A
Self-organization is a fundamental right
guaranteed by the Philippine Constitution
and the Labor Code. Employees have the
right to form, join or assist labor
organizations for the purpose of collective
bargaining or for their mutual aid and
protection. [UST Faculty Union v. Bitonio, G.R.
No. 131235 (1999)]
Infringem ent of the right to self-
organization
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 (Art.
257)
Scope of right to self-organization
(1) Right to form, join and assist labor
organizations of their own choosing for
the purpose of collective bargaining
through representatives (Art. 257);
(2) Right to engage in lawful concerted
activities for the same purpose or for their
mutual aid and protection (Art. 257)
(3) Subsumed in the right to join, affiliate
with, or assist any union is the right NOT
to join, affiliate with, or assist any union;
or to leave a union and join another one.
[Heritage Hotel Manila v. PIGLAS-
Heritage, G.R. No. 177024 (2009)]
(4) The right to form or join a labor
organization necessarily includes the
right to refuse or refrain from exercising
said right. It is self-evident that just as no
one should be denied the exercise of a
right granted by law, so also, no one
should be compelled to exercise such a
conferred right. The fact that a person
has opted to acquire membership in a
labor union does not preclude his
subsequently opting to renounce such
membership. [Reyes v. Trajano, G.R. No.
84433 (1992)]
(5) The right of the employees to self-
organization is a compelling reason why
their withdrawal from the cooperative
UP LAW BOC LABOR RELATIONS
must be allowed. As pointed out by the
union, the resignation of the member-
employees is an expression of their
preference for union membership over
that of membership in the cooperative.
[Central Negros Electric Cooperative v.
SOLE, G.R. No. 94045 (1991)]
(6) Their freedom to organize would be
rendered nugatory if they could not
choose their own leaders to speak on
their behalf and to bargain for them.
[Pan-American World Airways, Inc v. Pan-
American Employees Association, G.R. No.
L-25094 (1969)]
(7) Recognition of the tenets of the sect ...
should not infringe on the basic right of
self-organization granted by the
constitution to workers, regardless of
religious affiliation. [Kapatiran sa Meat
and Canning Division v. Calleja, G.R. No.
82914 (1988)]
A.1. WHO MAY UNIONIZE FOR PURPOSES
OF COLLECTIVE BARGAINING?
(1) All employees
(2) Government employees of corporations
created under the Corporation Code
(3) Supervisory Employees
(4) Aliens with valid working permits
(5) Security personnel
(1) All Employees
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. (Presumes
an employer-employee relationship)
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. 253]
Any employee, whether employed for a
definite period or not, shall, beginning on his
PAGE 143 OF 222
LABOR LAW
first day of service, be considered as an
employee for purposes of membership in any
labor union. [Art. 292(c)]
Employee includes [] any individual whose
work has ceased as a result of or in
connection with any current labor dispute or
because of any unfair labor practice if he has
not obtained any other substantially
equivalent and regular employment. [Book V,
Rule I, Sec. 1(f)]
Employees of non-profit organizations are
now permitted to form, organize or join labor
unions of their choice for purposes of
collective [FEU-Dr. Nicanor Reyes Medical
Foundation Inc. v. Trajano, G.R. No. 76273
(1992)]
(2) Em ployees of Governm ent
Corporations Created under the
Corporation Code
The right to self-organization shall not be
denied to government employees. [Sec. 2(5),
Art. IX-B, Constitution]
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers
All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law. [Art. 254]
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, labor-management committees,
work councils and other forms of workers
participation schemes to achieve the same
objectives. [EO 180 2 (1987)]
(3) Supervisory 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. [Art. 219 (m)]
Supervisory Employee refers to an employee
who, in the interest of the employer,
UP LAW BOC LABOR RELATIONS LABOR LAW

effectively recommends managerial actions a. As certified by DFA; OR

and the exercise of such authority is not
b. Ratified either ILO Convention No. 8
routinary or clerical but requires the use of
and ILO Convention No. 98 [Book V,
independent judgment. [Book V, Rule I,
Rule II, Sec. 2]
Section 1[xx])
Supervisory employees shall not be eligible
for membership in a labor organization of the (5) Security Guards
rank-and-file employees but may join, assist
The security guards and other personnel
or form separate labor organizations of their
employed by the security service contractor
own. [Art. 255]
shall have the right:
Rationale
(1) To form, join, or assist in the formation
Supervisory employees, while in the of a labor organization of their own
performance of supervisory functions, choosing for purposes of collective
become the alter ego of the management in bargaining and
the making and the implementing of key
(2) To engage in concerned activities
decisions. It would be difficult to find unity or
which are not contrary to law including
mutuality of interests in a bargaining unit
the right to strike. [D.O. No. 14 Series of
consisting of a mixture of rank-and-file and
2001 Guidelines Governing the
supervisory employees. [Toyota Motor Phil.
Employment and Working Conditions
Corp. v. Toyota Motor Phil. Corp. Labor Union,
of Security Guards and Similar
G.R. No. 121084 (1997)]
Personnel in the Private Security
Effect of Mixed Membership or Industry)
Commingling
On Dec. 1986, President C. Aquino issued EO
The inclusion as union members of No. 111 which eliminated the provision which
employees outside the bargaining unit shall made security guards ineligible to join any
not be a ground for the cancellation of the labor organizations. In 1989, Congress
registration of the union. Said employees are passed RA 6715 which also did not impose
automatically deemed removed from the list limitations on the ability of security guards to
of membership of said union. (Art. 256) join labor organizations. Thus, security
guards may now freely join a labor
Note: The rank and file union and the
organization with the rank-and-file or the
supervisors union operating within the same
supervisory union, depending on their rank.
establishment may join the same federation
[Manila Electric Co. v. SOLE, G.R. No. 91902
or national union. [Art. 255]
(1991)]

(4) Aliens
I. W HO CANNOT FORM, JOIN OR
General rule: All aliens, natural or juridical, ASSIST LABOR ORGANIZATIONS
[] are strictly prohibited from engaging
(1) Managerial employees
directly or indirectly in all forms of trade
union activities. [Art. 284] (2) Confidential employees
Exception: Aliens may exercise the right to (3) Non-employees
self-organization and join or assist labor
(4) Member-employee of a cooperative
unions for purposes of collective bargaining,
provided the following requisites are fulfilled: (5) Employees of international organizations
1. With valid working permits issued by the (6) High-level government employees
DOLE; and (7) Members of the AFP, police officers,
2. They are nationals of a country which policemen, firemen and jail guards
grants the same or similar rights to
Filipino workers.

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UP LAW BOC
(1) Managerial Employees
A 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.
[Art. 219 (m)]
Managerial Employee is one who is vested
with powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, layoff, recall, discharge,
assign or discipline employees. [Book V, Rule
I, Sec. 1(xx)]
Managerial employees are not eligible to join,
assist or form any labor organization. []
[Art. 255]
Managerial functions refer to powers such as
to:
(1) Effectively recommend managerial
actions;
(2) Formulate or execute management
policies or decisions; or
(3) Hire, transfer suspend, lay-off, recall,
dismiss, assign or discipline employees.
(San Miguel Supervisors and Exempt
Union v Laguesma, 1997)
(2) Confidential employees
Nature of Access Test
A confidential employee is one who, by the
nature of his functions, assists or acts in a
confidential capacity, and who formulates,
determines and effectuates management
policies in the field of labor relations.
Requisites: The employee must:
(1) Assist or act in a confidential capacity,
AND
(2) To persons who formulate, determine, and
effectuate management policies in the field
of labor relations
Stated differently
(1) the confidential relationship must exist
between the employees and his
supervisor, and
(2) the supervisor must handle the prescribed
responsibilities relating to labor relations.
LABOR RELATIONS LABOR LAW
[San Miguel Supervisors and Exempt Union
v. Laguesma, G.R. No. 110399, (1997)]
Rationale of Exclusion of Confidential
Employees
By the very nature of their functions, they
assist and act in a confidential capacity to, or
have access to confidential matters of,
persons who exercise managerial functions in
the field of labor relations. (Thus there is a
fiduciary and confidential relationship between
manager and employer.) It is not far-fetched
that in the course of Collective Bargaining,
they might jeopardize that interest which
they are duty bound to protect. [Metrolab
Industries Inc. v. Roldan-Confessor, G.R. No.
108855 (1996)]
Employees should not be placed in a position
involving a potential conflict of interests.
Management should not be required to
handle labor relations matters through
employees who are represented by the union
with which the company is required to deal
and who in the normal performance of their
duties may obtain advance information of the
companys position with regard to contract
negotiations, the disposition of grievances, or
other labor relations matters. [San Miguel
Supervisors and Exempt Union v. Laguesma,
G.R. No. 110399, (1997)]
The disqualification of managerial and
confidential employees from joining a
bargaining unit for rank and file employees is
already well-entrenched in jurisprudence.
While Article 245 of the Labor Code limits the
ineligibility to join, form and assist any labor
organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason
of their positions or nature of work are
required to assist or act in a fiduciary manner
to managerial employees and hence, are
likewise privy to sensitive and highly
confidential records. [Standard Chartered
Bank Employees Union v SCB, G.R. No. 161933
(2008)]
PAGE 145 OF 222
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Function Test: Nom enclature is not Members of cooperatives are not eligible []
controlling even though they do not participate in the
actual management of the cooperative.
The mere fact that an employee is designated
Irrespective of their degree of participation,
manager does not ipso facto make him one.
they are still co-owners [Benguet Electric
Designation should be reconciled with the
Cooperative v. Ferrer-Calleja, G.R. No. 79025
actual job description of the employee. [Paper
(1989)]
Industries Corp. of the Philippines. v.
Laguesma, G. R. No.101738, 2000] Exception:
Employees who withdrew their membership
from the cooperative are entitled to form or
Confidential information: Must relate
join a labor union for the negotiations of a
to labor relations and not from a
Collective Bargaining Agreement. [CENECO v.
business standpoint
DOLE, G.R. No. 94045 (1991)]
An employee must assist or act in a
confidential capacity and obtain confidential
information relating to labor relations policies. (5) Employees of International
Exposure to internal business operations of Organizations
the company is not per se a ground for the
International organizations are endowed with
exclusion in the bargaining unit. [Tunay na
some degree of international legal
Pagkakaisa ng Manggagawa sa Asia Brewery
personality. They are granted jurisdictional
v. Asia Brewery, G.R. No. 162025, 2010]
immunity.
Immunity [] is granted to avoid interference
(3) Non-Employees by the host country in their internal workings.
The determination [by the executive branch]
Persons who are not employees of a company
has been held to be a political question
are not entitled to the constitutional right to
conclusive upon the Courts in order not to
join or form a labor organization for purposes
embarrass a political department of
of collective bargaining. The question of
Government. [Hence], a certification election
whether employer-employee relationship
cannot be conducted in an international
exists is a primordial consideration before
organization to which the Philippine
extending labor benefits under the
Government has granted immunity from local
workmen's compensation, social security,
jurisdiction. [International Catholic Migration
Medicare, termination pay and labor relations
Commission v. Calleja, G.R. No. 85750 (1990)]
law.[] [Singer Sewing Machine Co. v. Drilon,
G.R. No. 91307, 1991]
But they can still form labor union provided (6) High-level / Managerial
that they are employees of the contractor. A Government Employees
labor union can be established in the
High-level employees of the government
business of the contractor but not the
whose functions are normally considered as
principal employer. [Professor Battad]
policy-making or managerial or whose duties
are of a highly confidential nature shall not
be eligible to join the organization of rank-
(4) Employee-Mem ber of Cooperative
and-file government employees. [Sec. 3, E.O.
General Rule: 180]
Employees who at the same time are
members of an electric cooperative are not
(7) Members of the AFP, Policemen,
entitled to form or join unions for purposes of
Police Officers, Firemen and
collective bargaining agreement, for certainly
Jailguards
an owner cannot bargain with himself or his
co-owners. [Batangas-I Electric Cooperative Members of the AFP, Policemen, Police
Labor Union v. Romeo A. Young, G.R. No. Officers, Firemen and Jailguards are
62386, (1988)] expressly excluded by EO 180 4 from the
PAGE 146 OF 222
UP LAW BOC LABOR RELATIONS
coverage of the law which provides guidelines
for the exercise of the right to organize of
government employees.
A.2. BARGAINING UNIT
Definition
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. [Sec. 1(d), Rule I, Book V]
It is a group of employees of a given
employer comprised of all or less than all of
the entire body of employees, which the
collective interests of all the employees
indicate to be best suited to serve reciprocal
rights and duties of the parties consistent
with equity to the employer. [Belyca Corp. v.
Calleja, G.R. No. 77395 (1988) citing
Rothenberg]
Functions of an Appropriate
Bargaining Unit
(1) An ELECTORAL DISTRICT. It marks the
boundaries of those who may participate
in a certification election.
(2) An ECONOMIC UNIT. They are a group
of employees with community of interests.
(3) A SOVEREIGN BODY. It selects the sole
and exclusive bargaining agent.
Role of a bargaining unit
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 of such unit for the purpose of
collective bargaining. [Art. 267]
Right of individual or group of
employees to present grievances
An individual employee or group of employees
shall have the right at any time to present
grievances to their employer. Any provision of
law to the contrary notwithstanding, workers
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LABOR LAW
shall have the right, to participate in the
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. [Art. 267]
CBA Coverage
When there has been a factual determination
by the Labor Arbiter that the petitioners were
regular employees, said employees shall fall
within the coverage of the bargaining unit
and are therefore entitled to CBA benefits as
a matter of law and contract. [Farley Fulache,
et al. v. ABS-CBN, G.R. No. 183810, 2010]
Effect of Prior Agreement
[A prior agreement] as to the exclusion [of
workers] from the bargaining [] can never
bind subsequent federations and unions as
[employees were not privy to that
agreement]. And even if [they were privy], it
can never bind subsequent federations and
unions because it is a curtailment of the right
to selforganization guaranteed by the labor
laws [General Rubber & Footwear Corp. v.
BLR, G.R. No. 74262, (1987)]
Rationale
It is a curtailment of the right to self-
organization. During the freedom period, the
parties may not only renew the existing
collective bargaining agreement but may also
propose and discuss modifications or
amendments thereto. [DLSU v. DLSUEA, G.R.
No. 109002, (2000)]
Effect of Inclusion of Employees
Outside the Bargaining Unit or
Commingling
General Rule: It shall not be a ground for
the cancellation of the registration of the
union. Said employees are automatically
UP LAW BOC LABOR RELATIONS
deemed removed from the list of membership
of said union. [Art. 256]
Exception: Unless such mingling was brought
about by misrepresentation, false statement
or fraud under Article 247 (Grounds for
cancellation of Union Registration) of the
Labor Code. [SMCC-Super v. Charter
Chemical and Coating Corporation, G.R. No.
169717 (2011)]
Corporate Entities
General Rule: Two companies having
separate juridical personalities shall NOT be
treated as a single bargaining unit. [Diatagon
Labor Federation Local v. Ople, G.R. No. L-
44493-94 (1980)]
Exception: Pervasive Unitary Aspect
of Managem ent Doctrine
The cross-linking of the agencies command,
control, and communication systems indicate
their unitary corporate personality.
Accordingly, the veil of corporate fiction
should be lifted for the purpose of allowing
the employees of the three agencies to form a
single labor union. [Philippine Scouts Veterans
v. Torres, G.R. No. 92357 (1993)]
Principles in determining whether to
establish separate bargaining units
(1) The existence of a bona fide business
relationship between the 2 companies is
not proof of being a single corporate
entity, especially when the services
provided by the other company are merely
auxiliary.
(2) The fact that there are as many
bargaining units as there are companies
in a conglomeration of companies is a
positive proof that a corporation is
endowed with a legal personality
DISTINCTLY ITS OWN, independent and
separate from other corporations.
(3) Separate legitimate purposes militate
against treating one corporation as an
adjunct or alter ego of the other.
(4) The fact that the businesses are related,
that some of the employees are the same
persons working in the other company
and the physical plants, offices and
PAGE 148 OF 222
LABOR LAW
facilities are in the same compound are
NOT sufficient to justify piercing the
corporate veil. (Indophil Textile Mills
Workers Union v. Calica, 1992; Diatagon
Labor Federation v. Ople, 1980)
Spun-off corporations
The transformation of companies is a
management prerogative and business
judgment which the courts cannot look into
unless it is contrary to law, public policy or
morals. If, considering the spin-offs, the
companies would consequently have their
respective and distinctive concerns in terms
of nature of work, wages, hours of work and
other conditions of employment. The nature
of their products and scales of business may
require different skills, volumes of work, and
working conditions which must necessarily be
commensurate by different compensation
packages. (San Miguel Union v Confesor,
1996)
A.2.A. TEST TO DETERMINE THE
CONSTITUENCY OF AN APPROPRIATE
BARGAINING UNIT
4 Factors:
(1) Will of the Employees (Globe Doctrine)
(2) Affinity and unity of employees interest
(Substantial Mutual Interests Rule)
(3) Prior collective bargaining history
(4) Employment status [Democratic Labor
Association v. Cebu Stevedoring Co. Inc,
G.R. No. L-10321, (1958)] [UP v Ferrer-
Calleja, (1992)]
Note: Of these 4 factors, the court has
identified that it is the 2nd factor which has
emerged as the standard in determining the
proper constituency of a collective bargaining
unit.
Other factors:
(5) Geography and Location
(6) Policy of avoiding fragmentation of the
bargaining unit
UP LAW BOC LABOR RELATIONS
(1) Globe Doctrine
A practice designated as the "Globe
doctrine," 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, G.R. Nos. L-
16292-94 (1960)]
Rationale
Highly skilled or specialized technical workers
may choose to form their own bargaining unit
because they may be in better position to
bargain with the employer considering the
market value of their skills.
(2) Community or Mutuality of Interests
The basic test of an asserted bargaining
units ACCEPTABILITY is whether or not it is
fundamentally the combination which will
best assure to all employees the exercise of
their collective bargaining rights It
considers the desires of the employees as one
of the factors. [P v. Ferrer-Calleja, G.R. No.
96189, (1992)]
Rationale
There are greater chances of success for the
collective bargaining process. The bargaining
unit is designed to maintain the mutuality of
interest among the employees in such unit.
When the interest between groups has
changed over time, there is reason to
dissolve, change or expand a certain
bargaining unit.
(3) Prior Collective Bargaining History
The existence of a prior collective bargaining
history is neither decisive nor conclusive in the
determination of what constitutes an
appropriate bargaining unit. [National
Association of Free Trade Unions v. Mainit
Lumber Development Company Workers
Union, G.R. No. 79526, (1990)]
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LABOR LAW
(4) Employment status
Among the factors to be considered is the
employment status of the employees to be
affected[regular, casual, seasonal,
probationary etc] that is the positions and
categories of work to which they belong, and
the unity of employees' interest such as
substantial similarity of work and duties.
[Belyca Corp. v. Calleja, G.R. No. 77395 (1988)]
(5) Geography and Location
Geography and location only play a
significant role if:
(1) The separation between the camps and
the different kinds of work in each all
militate in favor of the system of
separate bargaining units;
(2) When the problems and interests of the
workers are peculiar in each camp or
department;
(3) The system of having one collective
bargaining unit in each camp has
operated satisfactorily in the past.
[Benguet Consolidated Inc. and Balatok
Mining Co. v. Bobok Lumberjack
Association, G.R. No. L-11029 (1958)]
(6) Policy of avoiding fragm entation
of the bargaining unit
It bears noting that the goal of the DOLE is
geared towards "a single employer wide unit
which is more to the broader and greater
benefit of the employees working force." The
philosophy is to avoid fragmentation of the
bargaining unit so as to strengthen the
employees bargaining power with the
management. To veer away from such goal
would be contrary, inimical and repugnant to
the objectives of a strong and dynamic
unionism. [Phil. Diamond Hotel and Resort Inc
v Manila Diamond Hotel and Employees
Union, GR No. 158075 (2006)]
Confidential employees lumped with
management
Since the confidential employees are very few
and are, by practice and tradition, identified
with management [ NLRC] has allowed
UP LAW BOC LABOR RELATIONS LABOR LAW

their inclusion in the bargaining unit of Certificate of Duly certified

supervisors who are likewise identified with by
Both
management. Creating fragmentary units
Registration President of certificates
would not serve the interest of industrial
requesting should be
peace. [] The Court is aware of the
union attached to
ineffectiveness of a small union with a scanty
the request
members as bargaining unit. The breaking up Creation of President of
of bargaining units into tiny units will greatly chartered the
impair their organizational value. [Filoil local federation of
Refinery Corp. v. Filoil Supervisory and the local
Confidential Employees Union, G.R. No. L-
26736 (1972)]
(3) Regional Director shall act on the
request
UNION REPRESENTATION
When: Within one (1) day from
Methods of Establishing Majority
submission of request
Status
1. Sole and Exclusive Bargaining Agent Action:
(SEBA) Certification o Determine whether request is
2. Consent Election compliant with the preceding
3. Run-Off Election section and if bargaining unit
4. Certification Election sought to be represented is
Note: D.O. 40-I-15 replaced Voluntary organized or not; and
Recognition with SEBA certification, as of
September 7, 2015. o Request a copy of the payroll
If Regional Director finds it deficient,
he/she shall advise the requesting
A.2.B. SEBA CERTIFICATION union or local to comply within ten
Procedure [Rule VII, Book V] (10) days from notice. Failure to
comply within the prescribed period
(1) File Request of SEBA Certification
shall be deemed withdrawal of the
Who: Any legitimate labor request.
organization
File where: Regional Office which IF: UNORGANIZED ESTABLISHMENT
issued its certificate of registration or
certificate of creation of chartered (A) W ith only 1 legitimate labor
local organization
(2) Indicate in the request: Regional Director shall call a conference
within five (5) working days for the
(a) Names and addresses of the SUBMISSION of:
requesting legitimate labor
organization; (a) Names of employees in the covered
bargaining unit who signify support
(b) Name and address of the company for certification; and these employees
where it operates; comprise at least majority of the
(c) Bargaining unit sought to be number of employees in the covered
represented; bargaining unit; and
(d) Approximate number of employees in (b) Certification under oath by president
the bargaining unit; and that all documents submitted are
true and correct based on personal
(e) Statement of the existence or non- knowledge
existence of other labor
organization/CBA.
PAGE 150 OF 222
UP LAW BOC
(B) W ith more than 1 legitimate labor
organization
Regional Director shall refer it to the election
officer for conduct of certificate election.
IF: ORGANIZED ESTABLISHMENT
Regional Director shall refer it to the
mediator-arbitrator for determination and
propriety of conducting a certification
election.
(4) Regional Director shall act on the
submission
Incomplete The request shall be referred
requirements to election officer for the
conduct of election pursuant
to Rule IX.
Complete Regional Director shall issue
requirements a certification as SEBA
(5) Regional Director shall post the
SEBA Certification
Period: Fifteen (15) consecutive days
Where: At least two (2) conspicuous
places in the establishment or
covered bargaining unit.
Effect of SEBA Certification
The certified union or local shall enjoy all the
rights and privileges of an exclusive
bargaining agent of all the employees in the
covered bargaining unit
SEE: VOLUNTARY RECOGNITION
Note: D.O. 40-I-15 replaced Voluntary
Recognition with SEBA certification. This
section is for comparison with SEBA
certification.
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
LABOR RELATIONS LABOR LAW
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.
The employer may voluntarily recognize the
representation status of a union in
unorganized establishments. However, in
cases where an establishment is already
organized, as when a petition for certification
election has already been filed by a union, if
the company voluntarily recognizes a
different union during such time, then the
companys voluntary recognition is void.
(SLECC v Sec. of Labor, 2009)
A.2.C. CONSENT ELECTION
"Consent Election" means the election
voluntarily agreed upon by the parties with or
without the intervention by DOLE (Book V,
Rule I, Sec. 1(h))
PAGE 151 OF 222
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Procedure
1. The parties may either
a. Voluntarily agree to hold an election;
or
b. A petition for certification election
had first been filed but due to
intercession of Med-Arbiter, the
contending unions agree to hold a
consent election
2. Mediator-Arbiter shall call for the
consent election, reflecting the parties
agreement and the call in the minutes of
the conference. (Book V, Rule VIII, Sec. 10)
3. Regional Director or authorized
representation will determine the election
officer by raffle in the presence of
representatives of the contending unions
if they so desire
4. First pre-election conference is scheduled
within ten (10) days from the date of the
agreement. Subsequent conferences may
be called to expedite and facilitate the
holding of the consent election.
A.2.D. RUN-OFF ELECTION
A "Run-Off election" refers to an election
between the labor unions receiving the two
(2) highest number of votes in a certification
election when the following requisites have
been complied with:
1. Valid election;
2. The election provides for three (3) or more
choices (No Union is considered one
choice Professor Battad);
3. None of the contending UNIONS received
a majority of the VALID VOTES cast;
4. No objections or challenges which if
sustained can materially alter the results;
and
5. The total number of votes for all
contending UNIONS is at least fifty (50%)
of the number of VOTES cast.
Illustration
The CBU has 100 members and 80 of which
voted. Union A= 30; Union B= 15; Union
C=15 and No Union= 20. There were no
invalid votes. Since none got the majority of
PAGE 152 OF 222
LABOR LAW
the 80 valid votes and the contending unions
obtained 60 votes (which exceeds of the
total), a run-off election is proper. The run-off
will be between the labor unions receiving
the two highest number of votes. The run-
off is NOT between two unions but between
two highest votes. Thus, the run-off will be
among Union A, B and C. (Azucena)
Procedure for Run-Off Election
Election officer shall motu proprio conduct a
run-off election within ten (10) days from the
close of the election proceedings between the
labor unions receiving the two highest
number of votes.
Same voters list used in the certification
election shall be used in the run-off election.
The labor union receiving the HIGHER
number of VALID VOTES cast shall be
certified as the winner.
Note: Please note the difference between
valid votes cast versus votes cast valid
votes excludes spoiled votes.
A.2.E. CERTIFICATION ELECTION
Definition
Certification Election" is the process of
determining, through secret ballot, the sole
and exclusive representative of the
employees in an appropriate bargaining unit,
for purposes of collective bargaining or
negotiation. [Sec. 1(h), Rule I, Book V]
Purpose
The purpose of a certification election is
precisely the ascertainment of the wishes of
the majority of the employees in the
appropriate bargaining unit: to be or not to
be represented by a labor organization, and
in the affirmative case, by which particular
labor organization. [Reyes v. Trajano, G.R. No.
84433 (1992)]
Nature of proceeding
It is the most effective and the most
democratic way of determining which labor
organization can truly represent the working
force in the appropriate bargaining unit of a
company [Samangang Manggawa sa
PERMEX v SOLE, G.R. No. 107792 (1998)]
UP LAW BOC LABOR RELATIONS
It is a fundamental postulate that the will of
the majority given expression in an honest
election with freedom on the part of the
voters to make their choice, is controlling.
[PLUM Federation of Industrial and Agrarian
Workers v. Noriel, G.R. No. L-48007 (1978)]
It is not litigation, but a mere investigation of
a non-adversary. The determination of the
proceeding does not entail the entry of
remedial orders or redress of rights, but
culmination solely in an official designation of
bargaining units and an affirmation of the
employees expressed choice of bargaining
agent. [Young Men Labor Union Stevedores v.
CIR, G.R. No. L-20307 (1965)]
Technical rules and objections should not
hamper the correct ascertainment of the
labor union that has the support or
confidence of the majority of the workers and
is thus entitled to represent them in their
dealings with management. [Port Workers
Union v. Laguesma, G.R. Nos. 94929-30,
(1992)]
Certification Election Union Election
To determine the To elect union
Exclusive Bargaining officers
Agent
All members of the Only union
appropriate bargaining members may
unit may vote. vote.
W ho may vote
All employees whether union members or
not, as long as they belong to the appropriate
bargaining unit can vote.
W ho may file a petition for
certification election [Sec. 1, Rule VIII,
Book V]
(1) Legitimate labor organization
(2) Local/chapter that has been issued a
charter certificate
(3) National union or federation in behalf of
its local/chapter (has issued a charter
certificate to its local/chapter)
PAGE 153 OF 222
LABOR LAW
(4) Employer (when requested to bargain
collectively and no existing CBA)
(1) Legitim ate Labor Organization
"Legitimate labor organization" means any
labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof. [Art. 219
(h)]
(2) Local/Chapter
A duly registered federation or national union
may directly create a local chapter by issuing
a charter certificate indicating the
establishment of the local chapter. The
chapter shall acquire legal personality only
for purposes of filing a petition for
certification election from the date it was
issued a charter certificate. [Art. 241]
(3) National Union/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)]
The national union/federation shall not be
required to disclose the names of the local
chapters officers and members. [Sec. 1, Rule
VIII, Book V]
(4) Employer
Requisites:
1. Employer is requested to bargain
collectively; AND
2. No existing registered CBA in the unit
(Art. 270)
Bystander rule
The employer shall not be considered a party
in the petition with a concomitant right to
oppose a petition for certification election.
UP LAW BOC LABOR RELATIONS LABOR LAW

The employers participation shall be limited Two or more petitions involving same
to: bargaining unit
(1) being notified or informed of petitions Automatically consolidated
Filed in one
of such nature with Med-Arbiter who first
Regional Office
acquired jurisdiction
(2) submitting the list of employees during
the pre-election conference should the Regional Office in which the
Med-arbiter act favorably on the petition was first filed shall
Filed in different
petition [Art. 271] exclude all others; Latter
Regional Offices
shall indorse the petition to
The principle of bystander shall be strictly the former for consolidation
observed throughout the conduct of
certification election. The employer shall not
harass, intimidate, threat, or coerce CERTIFICATION ELECTION IN AN
employees before, during and after elections. UNORGANIZED ESTABLISHMENT
[Sec. 1, Rule IX, Book V]
Unorganized Establishment
However, manifestation of facts that would
aid the mediator-arbiter in expeditiously It is an establishment where there is no
resolving the petition such as existence of bar certified bargaining agent. [Art. 269]
rule may be considered. [Sec. 1, Rule VIII, Procedure [Art. 269]
Book V]
(1) File a petition for certification election.
The employer is not a party to a certification
election, which is the sole or exclusive (2) Upon filing of the petition, the Med-
concern of the workers. The only instance Arbiter shall automatically conduct a
when the employer may be involved in that certification election.
process is when it is obliged to file a petition Filing of petition is by a legitim ate
for certification election on its workers labor organization
request to bargain collectively pursuant to
Art. 258. [Hercules Industries, Inc. v Sec. of It cannot be an unregistered labor
Labor, G.R. No. 96255 (1992)] organization. This is best read in relation to
Art. 242 which enumerates the rights granted
The employer is a total stranger in the to a legitimate labor organization and one of
process of certification election. The employer those rights is the right to be chosen as the
has no standing to file a motion to dismiss. exclusive bargaining representative. This is
[PT&T v Laguesma, G.R. No. 101730 (1993)] one way the law encourages union
A companys interference in the Certification registration.
Election creates a suspicion that it intends to
establish a company union. [Oriental Tin Can
Labor Union v. Secretary of Labor, G.R. No. CERTIFICATION ELECTION IN AN
116751 (1998)] ORGANIZED ESTABLISHMENT
Organized Establishm ent

Venue for filing the petition
File with the Regional office which issued the
petitioning unions certificate of registration
or creation of chartered local.
Refers to an enterprise where there exists a
recognized or certified sole and exclusive
bargaining agent. [Sec. 1(ll), Rule I, Book V]
Procedure [Art. 268]

At petitioners option, it may file the petition (1) File a verified petition questioning the
with the supporting documents online. [Sec. majority.
2, Rule VIII, Book V] (2) It must be filed within the 60-day period
before expiration of CBA (freedom period)

PAGE 154 OF 222

UP LAW BOC LABOR RELATIONS LABOR LAW

(3) Supported by written consent of at least be conducted. [Scout Albano Memorial

25% of ALL employees in the bargaining College v. Noriel, G.R. No. L-48347 (1978)]
unit (substantial support)
(4) Med-Arbiter shall automatically order an
Inapplicable to Motions for
election.
Intervention
The requisite written consent of at least 20%
W HEN PETITION MUST BE FILED (now 25%) of the workers in the bargaining
unit applies to certification election only, and
Freedom Period
not to motions for intervention. Nowhere in
This refers to the last 60 days in a Collective the legal provisions does it appear that a
Bargaining Agreement (CBA) when rival motion for intervention in a certification
union representation can be entertained election must be accompanied by a similar
during the existence of a CBA. It is during this written consent. Not even in the
particular period when the majority status of Implementing Rules of the Labor Code
the incumbent bargaining agent can be [PAFLU v. Calleja, G.R. No. 79347 (1989)]
challenged. [Tanduay Distillery Labor Union v.
NLRC, G.R. No. 75037(1987)]
Intervenors
Rationale of prohibition of filing
outside the freedom period 1. Incumbent bargaining agent as forced
intervenor;
To ensure industrial peace between the
employer and its employees during the 2. Legitimate labor union other than the
existence of the CBA. [Republic Planters Bank incumbent bargaining agent
Union v. Laguesma, G.R. No. 119675 (1996)]
Signing of authorization is merely
(1) Forced Intervenor: Incum bent
preparatory
bargaining agent
What is prohibited is the filing of the petition
The incumbent bargaining agent shall
for certification election outside the 60-day
automatically be one of the choices in the
freedom period. The signing of the
certification election as forced intervenor.
authorization to file was merely preparatory
[Sec. 7, Rule VIII, Book V]
to the filing of the Petition for Certification
Election, or an exercise of the right to self-
organization. [PICOP Resources Inc. v. Ricardo
(2) Legitimate labor union as an
Dequita, G.R. No. 172666 (2011)]
intervenor
Any legitimate labor union other than the
25% Substantial Support Rule incumbent bargaining agent operating within
the bargaining unit may file motion for
In organized establishments, the incumbent
intervention with the Med-Arbiter. [Sec. 8,
sole bargaining agent should not be easily
Rule VIII, Book V]
replaced for that would disturb industrial
peace. To justify the disturbance, it must
appear that at least a substantial number
W hen motion for intervention is filed
(25% requirement) seeks to have a new
[Sec. 8, Rule VIII, Book V]
exclusive bargaining unit.
Unorganized Any time prior to the
Establishment decision of the Med-Arbiter
Discretionary rule
Organized During the freedom period
If the petition does not comply with the establishment
substantial support requirement, the BLR
may exercise its discretion in determining
whether or not a certification election must
PAGE 155 OF 222
UP LAW BOC LABOR RELATIONS LABOR LAW

Effect of withdrawal of signatures After the filing of such petition is

The employees withdrawal from a labor considered to be involuntary and
union made does not affect the petition. [S.S.
Ventures International vs. S.S.
Before the filing of the petition for Ventures Labor Union, G.R. No.
certification election is presumed 161690 (2008)
voluntary,

Organized vs. Unorganized Establishm ent

Art. 268: Organized Art. 269: Unorganized
Sole and exclusive Existing, has one None
Bargaining agent
Petition filed Has to be a VERIFIED petition No need to be verified
No petition for Certification election EXCEPT Not applicable.
within 60 days before the expiration of the
No freedom period.
collective bargaining agreement (See Art. 264
& 265) Can file petition anytime.
Take note how SC interpreted the term
Freedom Period WITHIN.
What is the rationale of freedom period in
Organized establishments, why is there none in
unorganized establishments?
It has something to do with industrial peace

Must be duly supported by 25% of ALL THE NO substantial support rule.

MEMBERS OF THE APPROPRIATE
BARGAINING UNIT.
Rationale
Rationale
Substantial support rule
Intention of law is to bring in
Law wants to know the intention of the
the union, to implement
employees If they really want a Certification
policy behind Art. 218a.
election, since they already have a bargaining
agent.

PROCEDURE AFTER FILING OF 8. Pre-Election Conference

PETITION
9. Conduct of election
1. Raffling of case to mediator-arbiter
10. Challenging of votes and on the spot
2. Preliminary Conference and hearing questions
3. Conduct of hearings 11. Protesting
4. Determine if petition should be dismissed 12. Canvassing of votes
on grounds stated in Section 14
13. Nullification of Election Results
5. Order/Decision on the petition
14. Proclamation and Certification of the
6. Appealing the order/decision on the result of the election
petition
15. Appeal from Certification Election Orders
7. Raffling of the case to an Election Officer

PAGE 156 OF 222

UP LAW BOC LABOR RELATIONS LABOR LAW

(1) Raffle of case to mediator-arbiter (4) Determ ine if petition should be

dismissed based on grounds
Regional Director or his/her duly authorized
stated in Section 14.
representative shall immediately assign it to
a mediator-arbiter by raffle. The grounds to dismiss the petition are:
If the petitioner desires, the raffle shall be (a) Petitioning union or national
done in its presence. [Sec. 5, Rule VIII, Book V] union/federation is:
(i) Not listed in DOLEs registry of
legitimate labor unions; or
(2) Preliminary Conference
(ii) Registration certificate has been
Med-Arbiter shall conduct a preliminary
cancelled with finality
conference and hearing within ten (10) days
from receipt of the petition to determine the (b) Failure of a local/chapter or national
following: union/federation to submit a duly issued
charter certificate upon filing of the
(a) The bargaining unity to be represented;
petition for certification election
(b) Contending labor unions
(c) Contract Bar rule
(c) Possibility of a consent election
(d) One-Year Bar rule
(d) Existence of any of the bars to
(e) Negotiation and Deadlock Bar Rule
certification election under Section 3; and
(f) In an organized establishment, the failure
(e) Such other matters as may be relevant for
to submit the 25% signature requirement
the final disposition of the case [Sec. 9,
to support the filing of the petition.
Rule VIII, Book V]
(g) Non-appearance of the petitioner for two
Note: If contending unions agree to holding
(2) consecutive scheduled conferences
of consent election, in which case it shall be
before the mediator-arbiter despite due
called a consent election. [Sec. 10, Rule VIII,
notice; and
Book V]
(h) Absence of employer-employee
relationship between all the members of
(3) Med-Arbiter to conduct hearings the petitioning unit and the
establishment where the proposed
If contending unions fail to agree to a consent
bargaining unit is sought to be
election during preliminary conference, the
represented.
Med-Arbiter may conduct as many hearings
as he/she may deem necessary, but in no NOTE: See page 164 for the 4 Bars to
case shall the conduct exceed fifteen (15) Certification Election (One-year bar rule,
days from date of scheduled preliminary Negotiation bar rule, Deadlock bar rule,
conference/hearing, after which the petition Contract bar rule)
shall be considered submitted for decision.
Commingling is not a ground
Within the same 15-day period, the
Inclusion as union members of employees
contending labor unions may file such
outside the bargaining unit is not a ground
pleadings as they may deem necessary for
for cancellation of the registration of the
the immediate resolution of the petition.
union. Said employees are automatically
Extensions of time shall not be entertained.
deemed removed from the list of
[Sec. 11, Rule VIII, Book V]
membership. [Sec. 15, Rule VIII, Book V]

PAGE 157 OF 222

UP LAW BOC LABOR RELATIONS LABOR LAW

Posting of notice of Petition for (f) Directive to the employer and the
Certificate Election contending unions to submit within ten
(10) days from receipt of order:
This is the responsibility of the regional
direction and his/her authorized (i) The certified list of employees in the
representatives. [Sec. 7, Rule VIII, Book V] bargaining unit, or
(ii) Payrolls covering the members of the
bargaining unit for the last three (3)
(5) Order or decision on the petition
months prior to the issuance of the
Mediator-Arbiter shall issue a ruling granting order, where necessary
or denying the petition
W hen
(6) Appealing the order granting or
General rule: Within ten (10) days from denying the conduct of
last hearing certification election [Sec. 19-20,
Rule VIII, Book V]
Exception: In organized
establishments, grant of petition only Organized Dismissed
after lapse of the freedom period or denied
Appeal to
Granted
How Office of
Secretary
Personally to the parties Unorganized Dismissed
or denied
Copy furnished to the employer Granted Unappealable
The ruling for the conduct of a W hen filed
certification election shall state the Within ten (10) days from receipt.
following:
W here filed
(a) Name of employer or establishment;
Regional Office where the petition originated
(b) Description of the bargaining unit;
Form of appeal
(c) Statement that none of the grounds for
dismissal; stated in Section 14 exists; Verified under oath
(d) Names of the contending labor unions With memorandum of appeal specifically
which shall appear in the following order: stating the grounds relied upon by
(i) Petitioner unions in the order of the appellant
date of filing of their respective With the supporting arguments and
petitions evidence
(ii) The forced intervenor Effect of filing memorandum of
(iii) No union appeal

(e) If the local/chapter is one the contending
unions, a directive to personally submit to
the election officer its certificate of
creation at least five (5) working days
before the actual conduct of the
certification election. This is to afford an
individual employee-voter an informed
choice.
Stays the holding of any certification election.
[Sec. 23, Rule VIII, Book V]
Reply to Appeal
Reply by any party to the petition shall be
filed within ten (10) days from receipt and
filed directly with the office of the Secretary.
[Sec. 22, Rule VIII, Book V]

Non-submission of this requirement as W hen no appeal is filed

certified by election officer shall The decision shall be final and executory if no
disqualify the local/ chapter from appeal is filed within the ten (10) day period.
participating in the certification election [Sec. 21, Rule VIII, Book V]
PAGE 158 OF 222
UP LAW BOC LABOR RELATIONS
Decision of the Secretary
Period to decide: Fifteen (15) days from
receipt of entire records of petition to decide
the appeal.
Secretarys decision shall be final and
executory within ten (10) days from receipt by
parties. [Sec. 23, Rule VIII, Book V]
Note: No motion for reconsideration of
decision shall be entertained. [Sec. 23, Rule
VIII, Book V]
Im plem entation of decision
General Rule: Shall not be stayed
Exception: Restrained by appropriate court
[Sec. 24, Rule VIII, Book V]
(7) Raffling of the case to an Election
Officer
Regional Director shall cause the raffle of the
case to an Election Officer who shall have
control of:
(a) Pre-election conference; and
(b) Election proceedings
When: Within twenty-four (24) hours from
receipt of notice of final judgment granting
conduct of certification election [Sec. 2, Rule
IX, Book V]
(8) Pre-Election Conference
Notice of Pre-Election Conference
The election officer shall cause the issuance
of notice of pre-election conference to
contending unions
When: Within twenty-four (24) hours from
Election Officers receipt of assignment,
Schedule of pre-election conference
When: Within ten (10) days from receipt of
assignment
Employer to submit: [Sec. 3, Rule IX, Book
V]
(a) Certified list of employees in the
bargaining unit; or
PAGE 159 OF 222
LABOR LAW
(b) Payrolls covering the members of the
bargaining unit at the time of the
filing of petition (where necessary)
Failure of party to appear during pre-
election conference despite notice
[Sec. 4, Rule IX, Book V]
This shall be considered a waiver of right to:
(a) To be present; and
(b) To question or object to any of the
agreements reached in the pre-election
conference
Shall NOT deprive the non-appearing party of
the right to:
(a) Be furnished notices; and
(b) To attend subsequent pre-election
conferences
Minutes of pre-election conference
[Sec. 5, Rule IX, Book V]
Election officer shall keep the minutes of
matters raised and agreed upon.
Parties shall acknowledge the completeness
and correctness of entries in the minutes by
affixing their signatures.
When parties refuse to sign the minutes, the
election officer shall note such fact in the
minutes, including the reason for refusal to
sign the same.
In all cases, parties shall be furnished a copy
of the minutes.
QUALIFICATION OF VOTERS
Eligible Voter
Eligible voter refers to a voter belonging to
the appropriate bargaining unit that is the
subject of the petition for certification
election [Sec. 1(q), Rule VIII, Book V]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition shall be
eligible to vote. [Sec. 6, Rule IX, Book V]
All rank and file employees in the appropriate
bargaining unit, whether probationary or
permanent are entitled to vote. The Code
makes no distinction as to their employment
status. All they need to be eligible to support
the petition is to belong to a bargaining unit.
UP LAW BOC LABOR RELATIONS
[Airtime Specialists, Inc. v Ferrer-Calleja, G.R.
No. 80612-16 (1990)]
Rationale for Non-Distinction Policy
Collective bargaining covers all aspects of the
employment relation and the resultant CBA
binds all employees in the bargaining unit.
All rank and file employees, probationary or
permanent, have a substantial interest in the
selection of the bargaining representative.
[Airtime Specialists, Inc. v Ferrer-Calleja, G.R.
No. 80612-16 (1990)]
Dismissed employees [Sec. 6, Rule IX,
Book V]
General Rule: Dismissed employees who
contested legality of dismissal in a forum of
appropriate jurisdiction at the time of
issuance of order for conduct of a certificate
election
Exception: The dismissal was declared valid
in a final judgment at the time of the conduct
of the certification election.
Disagreement over voters list over
eligibility of voters [Sec. 6, Rule IX, Book
V]
All contested voters shall be allowed to vote
but their votes shall be segregated and
sealed in individual envelopes.
Voting List and Voters
The basis of determining voters may be
agreed upon by the parties (i.e. the use of
payroll). [Acoje Workers Union v NAMAWU,
G.R. No. L-18848 (1963)]
Non-participation in previous election
has no effect
Failure to take part in previous elections is no
bar to the right to participate in future
elections. No law, administrative rule or
precedent prescribes forfeiture of the right to
vote by reason of neglect to exercise the right
in past cases. [Reyes v. Trajano, G.R. No.
84433 (1992)]
NOTICE REQUIREMENT [Sec. 7, Rule IX,
Book V]
Posting of Notice
PAGE 160 OF 222
LABOR LAW
WHO: Election Officer and/or authorized
DOLE personnel shall cause the posting
WHAT: Notice of election
WHERE: 2 conspicuous places in company
premises
WHEN: At least ten (10) days before actual
election
Contents of Notice
(1) Date, time and venue/s of election
(preferably within the establishment);
(2) Names of all contending unions;
(3) Description of the bargaining unit
(4) List of eligible and challenged Voters.
Posting of list of employees
comprising the bargaining unit
Shall be done by the DOLE personnel
W hat cannot be waived by contending
unions or employer
(1) Posting of the notice of election
(2) Information required to be included
therein
(3) Duration of the posting
The election shall be set on a regular
business day. [IRR, Book V Rule IX Sec. 2]
The parties agreed to conduct the election on
a regular business day but a strike was held
on that day. The alleged strike and/or
picketing of some employees at the
companys premises which coincided with the
actual conduct of certification election might,
perhaps have affected the actual
performance of works by some employees,
but did not necessarily make said date an
irregular business day of the company. [Asian
Design and Manufacturing Corp. vs.
FerrerCalleja, G.R. No. L-77415 (1989)]
(9) Conduct of Election
Inspection to ensure secrecy and
sanctity of ballot [Sec. 8, Rule IX, Book V]
Who:
Election Officer;
Unions authorized representative;
and
UP LAW BOC LABOR RELATIONS LABOR LAW

Employer's authorized representative; (a) Name of union of his choice; or

and (b) no Union if he does not want to be
When: Before start of actual voting represented by any union
Shall inspect: Spoiled Ballots
Polling place; A ballot that is torn, defaced, or contains
marking which can lead another to clearly
Ballot boxes; and identify the voter who casts such vote [Sec.
Polling booths 1(ww), Rule I, Book V]

Prohibition on certain devices If a voter inadvertently spoils a ballot, he

shall return it to the Election Officer who
General Rule: No device that could record shall destroy it and give him another ballot.
or identify the voter or undermine the secrecy [Sec. 10, Rule IX, Book V]
and sanctity of ballot shall be allowed within
the premises Mem ber unintentionally om itted in
master list of voters may either be:
Exception: Devices brought in by the
election officer (a) May be allowed to vote if both parties
agree; OR
Effect of finding devices in the
premises (b) Allowed to vote but ballot is segregated

Confiscated by election officer and returned

to owner after conduct of certificate election. (10) Challenging of votes and on
Preparation of Ballots [Sec. 9, Rule IX, the spot questions [Sec. 11-12, Rule IX,
Book V] Book V]

Election Officer shall prepare the ballots in: Ballot of the voter who has been properly
challenged during the pre-election
(a) English; and conferences shall be:
(b) Filipino or local dialect (a) Placed in an envelope sealed by
Number of ballots should correspond to the Election Officer in the presence of:
number of voters in the bargaining unit plus a (i) the voter; and
reasonable number of extra ballots for
contingencies (ii) representatives of the contending
unions.
All ballots shall be signed at the back by:
(b) Election officer shall indicate on the
(a) Election Officer; and envelope the:
(b) An authorized representative each of (i) Voters name;
the contending unions
(ii) Union challenging the voter; and
Refusal or failure of party to sign
ballots (iii) Ground for the challenge

Party waives its right to do so and election (c) Sealed envelope shall be signed by:
officer shall enter the fact of refusal or failure (i) Election Officer; and
and the reason therefor in the records of the
case (ii) Representatives of the
contending unions
Casting of Votes [Sec. 10, Rule IX, Book V]
Election Officer shall:
Voter must put:
(a) Note all challenges in the minutes of the
(a) Cross (x) election proceedings; and
(b) Check () (b) Have custody of all envelopes containing
Where: Square opposite the the challenged votes
PAGE 161 OF 222
UP LAW BOC LABOR RELATIONS
Opening of envelopes and question of
eligibility
Shall be passed upon by the mediator-arbiter
only if the number of segregated votes will
materially alter the results of the election.
On-the-spot Questions
What the election officer shall rule on:
Any question relating to and raised during
the conduct of election
What the election officer SHALL NOT rule on:
Question of eligibility which shall be decided
by the Mediator-Arbiter
Failure of any party or em ployer or
representatives to appear
This is deemed a waiver to be present and to
question the conduct.
(11) Protesting [Sec. 13, Rule IX, Book V]
Who may file: Any party-in-interest
Ground: On the conduct or mechanics of
election
How to protest:
(1) Record the protest in the minutes of the
election proceedings; AND
(2) Formalize and perfect the protest
Within five (5) days after the close of the
election proceedings, formalize the
protest with specific grounds, arguments
before the Med-Arbiter.
Protests deemed dropped
Protests which are:
(1) Not recorded in the minutes; AND
(2) Formalized within the prescribed period
General Reservation to file protest prohibited
Protesting party shall specify the grounds for
protest.
Failure to formalize within 5- days cannot be
taken against the union.
The union misrepresented that they were
independent which caused the members to
disaffiliate and form a new union and their
protest was not filed within the 5-day period.
The failure to follow strictly the procedural
PAGE 162 OF 222
LABOR LAW
technicalities regarding the period for filing
their protest [within the 5-day period] should
not be taken against them. Mere
technicalities should not be allowed to prevail
over the welfare of the workers. What is
essential is that they be accorded an
opportunity to determine freely and
intelligently which labor organization shall
act on their behalf. [DHL-URFA-FFW v. BMP,
G.R. No. 152094 (2004)]
Note: [Sec. 1(p), Rule I, Book V]
Election Proceedings refer to the period
Included:
(a) Starting from the opening to the closing
of the polls
(b) Counting, tabulation and consolidation of
votes
Excluded:
(a) Period for the final determination of
the challenged votes
(b) Canvass
(12) Canvassing of Votes [Sec. 14, Rule IX,
Book V]
Election precincts shall open and close on the
date and time agreed upon during the pre-
election conference.
After precincts have closed, the opening and
canvass shall immediately proceed.
Election officer shall count and tabulate
the votes in the presence of the
representatives of the contending unions.
Upon completion of canvass, the election
officer shall give each representative a
copy of the minutes of the election
proceedings and results of the election.
Ballots and tally sheets shall be sealed in
an envelope and signed by the election
officer and the representatives of the
contending unions and transmitted to the
Med-Arbiter together with the minutes
and results of the election within twenty-
four (24) hours from the completion of the
canvass.
UP LAW BOC LABOR RELATIONS
Election conducted in more than one region
Consolidation of results shall be made within
fifteen (15) days from the conduct.
(13) Certification of the Collective
Bargaining Agent [Sec. 17, Rule IX, Book
V]
Double Majority Rule
1. There must be a valid election; and
Valid Election: At least majority of the
number of eligible voters have casted
their votes
2. The winning union must garner majority
of the VALID votes
Winning union certifies as SEBA if there is no
protest
The winning union shall be certified as the
SEBA within five (5) days from date of
election, provided that there is no protest
recorded in the minutes of the election.
When winning choice is local chapter without
certificate of creation
It must submit its DOLE issued certificate of
creation within five (5) days from the
conclusion of election
Note: Please note that valid votes
differ from mere votes as the former
excludes spoiled ballots.
Abstention: Refers to a blank or unfilled
vote validly cast by an eligible voter. It is not
considered as a negative vote. However, it
shall be considered a valid vote for purposes
of determining a valid election. [Sec. 1(a),
Rule I, Book V]
Spoiled Ballot: Refers to a ballot that is
torn, defaced, or contains markings which
can lead another to clearly identify the voter
who casts such vote. [Sec. 1(a), Rule I, Book V]
Failure of Election [Sec. 17, Rule IX, Book V]
The Election Officer shall declare a failure of
election in the minutes of the election
proceedings when:
(1) Number of votes cast is less than the
majority of the number of eligible voters;
AND
PAGE 163 OF 222
LABOR LAW
(2) There are no material challenged votes
Effect of Failure of Election [Sec. 19, Rule IX,
Book V]
Shall not bar the filing of a motion for the
immediate holding of another certification or
consent election within six (6) months from
date of declaration of failure of election.
Motion for another election after failure of
election [Sec. 20, Rule IX, Book V]
Within twenty-four (24) hours from receipt,
Election Officer shall:
Immediately schedule another
election within fifteen (15) days from
receipt of motion
Cause posting of notice of election
o At least ten (10) days prior to the
schedule date of election
o In two (2) most conspicuous
places in the establishment
Same guidelines and list of voters shall be
used.
(14) Certification of the Collective
Bargaining Agent [Sec. 21, Rule IX, Book
V]
The Med-Arbiter shall issue an order
proclaiming the results of the election and
certifying the union as the sole and exclusive
bargaining agent under any of the following
conditions:
(a) No protests were filed, or if one was filed,
it was not perfected within the five-day
period
(b) No challenge or eligibility issue was
raised, or if one was raised the resolution
will not materially change the results of
the elections.
Winning union shall have the rights,
privileges, and obligations of a duly certified
collective bargaining agent from the time the
certification is issued.
Majority of valid votes cast results in
no Union obtaining majority
UP LAW BOC LABOR RELATIONS LABOR LAW

Med-Arbiter shall declare such fact in the negotiations in good faith with the
order employer
(3) In accordance with Art. 261 of the Labor
Code (Book V, Rule VIII, Sec 3 [b])
(15) Appeal from Certification
Election Orders [Art. 272] (3) Deadlock bar rule
WHO APPEALS: Any party to an election No certification of election may be filed when:
WHAT IS APPEALED: Order or results of the (1) The incumbent or certified bargaining
election agent is a party;
APPEAL TO: Directly to SOLE (2) A bargaining deadlock had been:
GROUND: Rules and regulations established (a) submitted to conciliation or
by the SOLE for the conduct of election have arbitration or;
been violated.
(b) Had become the subject of a valid
notice of strike or lockout (Book V,
Rule VIII, Sec. 3 [c])
BARS TO CERTIFICATION ELECTION
A deadlock is defined as the counteraction
Petition for certification may be filed:
of things producing entire stoppage; a state
General Rule: Anytime of inaction or of neutralization caused by the
opposition of persons or of factions (as in
Exceptions:
government or voting body); standstill. The
(1) One-year bar rule word is synonymous with the word impasse
(2) Negotiation bar rule which presupposes reasonable effort at good
faith bargaining which, despite noble
(3) Deadlock bar rule intentions, does not conclude in agreement
(4) Contract bar rule between the parties [Divine World University v.
SOLE, G.R. No. 91915 (1992)]
NOTE: See Page 16 for the Grounds for
denying a Petition for Certification Election
(4) Contract Bar Rule

(1) One-year bar rule
No certification election may be held within 1
year from the time a valid certification,
consent or run-off election has been
conducted within the bargaining unit.
If the order of the Med-Arbiter certifying the
results of the election has been appealed, the
running of the one-year period shall be
suspended and the reckoning period is the
date when the decision becomes final and
executory. (Book V, Rule VIII, Sec 3 [a])
(2) Negotiation bar rule
No certification of election may be filed when:
(1) Within 1 year after the valid certification
election
(2) The duly certified union has
COMMENCED AND SUSTAINED
General Rule: BLR 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.
[Art. 238]
Exception:
(1) When the petition is filed during the
freedom period in Articles 264, 265, and
268.
(2) When the CBA is incomplete
(3) When the CBA is substandard
(4) When the CBA is prematurely renewed
(5) When the CBA is unregistered
No petition for certification election may be
filed after the lapse of the freedom period.
The old CBA is extended until a new one is
agreed upon by the parties. [Colegio de San

PAGE 164 OF 222

UP LAW BOC LABOR RELATIONS
Juan de Letran v. Association of employees,
G.R. No. 141471, (2000)]
Petition for cancellation of union
registration DOES NOT suspend or
prevent filing of certification election
A petition for cancellation of union
registration shall not:
(a) suspend the proceedings for certification
election; nor
(b) prevent the filing of a petition for
certification election. [Art. 246]
A certification election can be conducted
despite pendency of a petition to cancel the
union registration certificate. For the fact is
that at the time the union, whose registration
certificate is sought to be cancelled, filed its
petition for certification, it still had legal
personality to perform such act absent an
order directing its cancellation. [Association
of Court of Appeals Employees vs. Calleja, G.R.
No. 94716, (1991)]
PREJUDICIAL QUESTION
Prejudicial Question Rule
Labor claims cannot proceed
independently of:
A bankruptcy liquidation proceeding; and
SEC suspension order in a rehabilitation
case. The law is clear, upon the creation
of a management committee or the
appointment of a rehabilitation receiver,
all claims for actions shall be suspended
accordingly. No exception in favor of
labor claims is mentioned in the law.
Since the law makes no distinction or
exemptions, neither should this Court
Rationale
These claims would spawn needless
controversy, delays, and confusion. [Lingkod
Manggagawa sa Rubberworld, AdidasAnglo
PAGE 165 OF 222
LABOR LAW
vs. Rubberworld (Phils.), Inc., G.R. No. 153882
(2007)]
Complaint for unfair labor practice
may be considered a prejudicial
question
When it is charged that one or more labor
unions participating in the election are being
aided, or are controlled, by the company or
employer [company union] [United CMC
Textile Workers Union v. BLR, (1984)].
Rationale:
The certification election may lead to the
selection of an employerdominated or
company union as the employees bargaining
representative, and when the court finds that
said union is employerdominated in the
unfair labor practice case, the union selected
would be decertified and the whole election
proceedings would be rendered useless and
nugatory. [B.F. Goodrich Phils. Marikina v. B.F.
Goodrich Confidential and Salaried Employees
Union, G.R. No. L-34069-70, (1973)]
A.2.F. RE-RUN ELECTION
[Sec. 18, Rule IX, Book V]
Situation Contemplated
A certification, consent, or run-off election
results to a tie between two (2) choices.
Duty of Election Officer
(a) Notify parties of a re-run election
(b) Cause posting of notice within five (5)
days from said election.
W hen will re-run be conducted
Within ten (10) days after the posting of the
notice
Declared as winner and certified
Choice receiving the HIGHEST VOTES CAST.
UP LAW BOC LABOR RELATIONS LABOR LAW

Certification election Consent Election

Aimed at determining the sole and exclusive Merely to determine the issue of
bargaining agent of all employees in an majority representation of all the
appropriate bargaining unit for the purpose of workers in the appropriate collective
collective bargaining bargaining unit
Purpose
1st Level of Choice: Yes Union or No Union
2nd Level of Choice: If Yes Union wins,
WHICH union.
(UST Faculty Union v. Bitonio, 1999)
Ordered by the DOLE Voluntarily agreed upon by the
Conduct parties, with or without intervention
from DOLE

UNION-MEMBER RELATIONS whom the union thus refuses to admit to

Nature of Relationship
The nature of the relationship between the
union and its members is fiduciary in nature
which arises from the dependence of the
employee on the union, and from the
comprehensive power vested in it with
respect to the individual. The union is but the
agent of its members to secure fair and just
wages and good working conditions. [Heirs of
Cruz v. CIR, G.R. No. L-23331-32 (1969)]
membership, without any reasonable ground
therefor. Needless to say, if said unions may
be compelled to admit new members, who
have the requisite qualifications, with more
reason may the law and the courts exercise
the coercive power when the employee
involved is a long standing union member,
who, owing to provocations of union officers,
was impelled to tender his resignation, which
he forthwith withdrew or revoked. [Salunga v.
CIR, No. L22456 (1967)]

Adm ission and Discipline of Mem bers
No arbitrary or excessive initiation
fees or fines
No arbitrary or excessive initiation fees shall
be required of the members of a legitimate
labor organization nor shall arbitrary,
excessive or oppressive fine and forfeiture be
imposed. [Article 250(e)]
Prohibition on subversive activities or
membership
No labor organization shall knowingly admit
as members or continue in membership any
individual who:
(a) belongs to a subversive organization; or
(b) who is engaged directly or indirectly in
any subversive activity;
Unions cannot arbitrarily exclude
qualified applicants
Unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a
closedshop provision would not justify the
employer in discharging, or a union in
insisting upon the discharge of, an employee
PAGE 166 OF 222
Mem bers who seek destruction of
union lose right to remain as
members
Inherent in every labor union, or any
organization for that matter, is the right of
selfpreservation. When members of a labor
union, therefore, sow the seeds of dissension
and strife within the union; when they seek
the disintegration and destruction of the very
union to which they belong; they thereby
forfeit their rights to remain as members of
the union which they seek to destroy. [Villar v.
Inciong, No. L5028384 (1983)]
Election of Officers
Manner of election
Members shall directly elect their officers,
including those of the national union or
federation, to which they or their union is
affiliated, by secret ballot at intervals of five
(5) years. [Art. 250(c)]
Qualifications of officers
No requirements other than membership in
good standing. [Art. 250(c)]
UP LAW BOC
No person who has been convicted of a crime
involving moral turpitude shall be eligible for
election as a union officer or for appointment
to any position in the union. [Art. 250(f)]
Acts done in prior term is not a
ground to remove a public officer
The Court should never remove a public
officer for acts done prior to his present term
of office. To do otherwise would be to deprive
the people of their right to elect their officers.
When the people have elected a man to
office, it must be assumed that they did this
with knowledge of his life and character, and
that they disregarded or forgave his faults or
misconduct, if he had been guilty of any. It is
not for the court, by reason of such faults or
misconduct to practically overrule the will of
the people. [KMP v. Trajano, No. L62306
(1985)]
Submission of names not a membership. [Halili v. CIR, No. L24864
requirement to allow members to vote
Submission of the employees names with the
BLR as qualified members of the union is not
a condition sine qua non to enable said
members to vote in the election of unions
officers; Question of eligibility to vote may be
determined through the use of the applicable
payroll period and employees status.
[Tancinco v. Ferrer-Calleja No. L78131 (1988)]
Disqualification does not render those
who garner the 2 nd highest number of
votes as the winners
Disqualification of winning candidates will
not automatically result in the assumption of
office of those who garnered the second
highest number of votes. The mere fact that
they obtained the second highest number of
votes does not mean that they will thereby be
considered as the elected officers if the true
winners are disqualified. [Manalad v. Trajano,
G.R. Nos. 7277273 (1989)]
LABOR RELATIONS LABOR LAW
Major Policy Matters
Procedure of determining question of
major policy affecting the entire
membership of the organization [Art.
250(d)]
General Rule:
(1) Members shall determine by secret
ballot; AND
(2) After due deliberation
Exception: Board of directors of the
organization may make the decision in behalf
of the general membership if:
(1) Nature of the organization renders such
secret ballot impractical
(2) Force majeure renders such secret ballot
impractical
A retainers contract
A retainers contract of a union counsel is a
major policy matter affecting the entire
(1985)]
Union Dues
Union dues are payments to meet the unions
general and current obligations. The payment
must be regular, periodic, and uniform.
[Azucena]
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. 250 (h)]
Attorneys Fees
Payment of Attorneys fees cannot be
imposed in individual member
No attorneys fees, negotiation fees, or similar
charges of any kind arising from collective
bargaining agreement shall be imposed on
the individual member. [Art. 228(b)]
Proper charging of attorneys fees
(1) Charges against union funds; AND
(2) In an amount agreed upon
Any contract, agreement, or arrangement of
any sort to the contrary shall be void. [Art.
228(b)]
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UP LAW BOC LABOR RELATIONS
Different types of Attorneys Fees
Ordinary Extraordinary
Reasonable Indemnity for
compensation paid damages ordered by
to a lawyer for legal the court to be paid
services rendered by the losing party to
the winning party
Agreed upon by the Awarded by the
parties Court
Payable to the Payable to the client
lawyer
Not limited (freedom Limited by Art. 111 to
to contract) 10%
[Kaisahan at Kapatiran v. Maniwal Water, G.R.
No. 174179 (2011)]
There are two concepts of attorney's fees. In
the ordinary sense, attorney's fees represent
the reasonable compensation paid to a
lawyer by his client for the legal services
rendered to the latter. On the other hand, in
its extraordinary concept, attorney's fees may
be awarded by the court as indemnity for
damages to be paid by the losing party to the
prevailing party, such that, in any of the cases
provided by law where such award can be
made, e.g., those authorized in Article 2208
of the Civil Code, the amount is payable not
to the lawyer but to the client, unless they
have agreed that the award shall pertain to
the lawyer as additional compensation or as
part thereof. [Masmud v NLRC, G.R. No.
183385, (Feb 13, 2009)]
In Masmud, the contingency agreement
between lawyer and client consisting of 39%
of the monetary award was deemed not
unconscionable by the SC.
A.2.G. SPECIAL ASSESSMENTS
Special assessments are payments for a
special purpose, especially if required only for
a limited time. [Azucena]
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 (n)]
Other than for mandatory activities under the
Code, no special assessments, attorneys
fees, negotiation fees or any other
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LABOR LAW
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. [Art. 250 (o)]
Requisites for a Valid Special
Assessment
(1) Authorization by a written resolution
of the majority of ALL the members at
the general membership meeting
called for the purpose;
(2) Secretarys record of the minutes of
the meeting; AND
(3) Individual written authorization for
check off duly signed by the
employees concerned which indicates
the:
a. Amount
b. Purpose
c. Beneficiary of deduction
[Gabriel v. SOLE, G.R. No. 115949 (2000)]
Strict compliance for special
assessment
There must be strict and full compliance with
the requisites. Substantial compliance is not
enough. [Palacol v. Ferrer-Calleja, G.R. No.
85333 (1990)]
Mandatory Activity
Definition
A judicial process of settling dispute laid
down by the law. [Vengco v. Trajano, G.R. No.
74453 (1989)]
Placement of renegotiations for a CBA under
compulsory process does not make it a
mandatory activity. [Galvadores v. Trajano,
No. L70067 (1986)]
It dispenses with the requirement of
the individual written authorization
duly signed by the employee.
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
UP LAW BOC LABOR RELATIONS
individual written authorization duly signed
by the employee. The authorization should
specifically state the amount, purpose and
beneficiary of the deduction. [Art. 250(o)]
A.2.H. AGENCY FEES
An amount, equivalent to union dues, which a
non-union member pays to the union
because he benefits from the CBA negotiated
by the union. [Azucena]
Rationale for allowing agency fees
Avoiding unjust enrichment on the part of
non-union members who benefit from the
union's efforts without paying any fee
therefor, unlike the members of the
bargaining agent. [Holy Cross of Davao
College, Inc v. Hon. Joaquin, G.R. No. 110007
(1996)]
W hen Agency Fee assessed
If such non-union member accept the
benefits under the collective bargaining
agreement. [Art. 259(e)]
Measure of fee
A reasonable fee equivalent to the dues and
other fees paid by members. [Art. 259(e)]
Requirements:
(1) Non-member of SEBA
(2) Member of Collective Bargaining Unit
(3) Reasonable fee equivalent to the dues
and other fees paid by member
(4) Acceptance of CBA benefits
A.2.I. UNION CHARTERING/
AFFILIATION
DEFINITIONS
Affiliate
It is an independent union affiliated with a
federated, national union or a chartered local
which was subsequently granted
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)]
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LABOR LAW
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)]
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)]
Local Chapter (Chartered Local)
A labor organization in the private sector
operating at the enterprise level that
acquired legal personality through
registration with Regional Office.
A duly-registered federation or national
union may directly create a chartered local by
submitting 2 copies of the following:
(a) Charter certificate issued by the federation
or national union indicating the creation of
the local/chapter
(b) Names and addresses of the
local/chapters officers as well as that of
the principal office.
(c) The local/chapters constitution and by-
laws. If same with that of the federation or
national union, indicate this fact
accordingly.
NOTE: Under RA 9481 (2007), which
amended Art. 241 (then Art. 234-A), a
federation can create a local chapter by
simply issuing a charter certificate. A petition
for CE may then be filed with no other action
done. The other requirements for creating a
local chapter are needed only for that chapter
to enjoy the other rights of a legitimate labor
organization such as being certified as the
SEBA, engaging the employer in
negotiations, and others.
UP LAW BOC
The supporting requirements shall be
Certified under oath by:
o Secretary; or
o Treasurer
Attested by: Its president
[Sec. 1(j), Rule VIII, Book V in relation with
Sec. 2-E, Rule III, Book V]
Lesser requirements for Chartered locals
When an unregistered union becomes a
branch, local or chapter, some of the
requirements for registration are no longer
necessary or compulsory. Whereas an
applicant for registration of an independent
union is mandated to submit, among other
things, the number of employees and names
of all its members comprising at least 20% of
the employees in the bargaining unit where it
seeks to operate, the same is no longer
required of a branch, local or chapter. The
intent of the law in imposing less
requirements in the case of a branch or local
of a registered federation or national union is
to encourage the affiliation of a local union
with a federation or national union in order to
increase the local unions bargaining powers
respecting terms and conditions of labor.
[SMCEU-PTGWO v. SMPEU-PDMP, G.R. No.
171153 (2007)]
Trade Union Centers cannot create locals or
chapters
D.O No. 9 mentions only federations or
national unions. The solemn power and duty
of the Court to interpret and apply the law
does not include the power to correct by
reading into the law what is not written
therein.
National Union or Federation v. Trade Unions
National Union or Trade Unions
Federation
With at least ten (10) Composed of a
locals or chapters or group of registered
affiliates, each of national unions or
which must be a duly federations
certified or
recognized collective
bargaining agent
Can directly create Cannot
local or chapter
LABOR RELATIONS LABOR LAW
Note: D.O No. 9 defines trade union center
as any group of registered national unions or
federations organized for the mutual aid and
protection of its members; for assisting such
members in collective bargaining; or for
participating in the formulation of social and
employment policies, standards, and
programs, and is duly registered with the
DOLE in accordance with Rule III, Section 2 of
the Implementing Rules
PURPOSE OF AFFILIATION
To foster the free and voluntary organization
of a strong and united labor movement [Art.
218]
The sole essence of affiliation is to increase,
by collective action, the common bargaining
power of local unions for the effective
enhancement and protection of their
interests. Admittedly, there are times when
without succor and support local unions may
find it hard, unaided by other support groups,
to secure justice for themselves. [Philippine
Skylanders, Inc. v. NLRC, G.R. No. 127374,
(2002)]
NATURE OF RELATIONSHIP: AGENCY
The mother union, acting for and in behalf of
its affiliate, had the status of an agent while
the local union remained the basic unit of the
association, free to serve the common
interest of all its members subject only to the
restraints imposed by the constitution and
by-laws of the association. The same is true
even if the local is not a legitimate labor
organization. [Filipino Pipe and Foundry Corp
v. NLRC, G.R. No. 115180 (1998)]
EFFECT OF AFFILIATION
Inclusion of [the federation] in the
registration is merely to stress that they are
its affiliates at the time of registration. It does
not mean that said local unions cannot stand
on their own. Affiliation does not mean they
lost their own legal personality. [Adamson v
CIR, G.R. No. L-35120 (1984)]
Mere affiliation does not divest the local
union of its own personality, neither does it
give the mother federation the license to act
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independently of the local union. It only gives
rise to a contract of agency, where the former
acts in representation of the latter. Hence,
local unions are considered principals while
the federation is deemed to be merely their
agent. (Insular Hotel Employees Union NFL v
Waterfront Insular Hotel, GR No. 174040-41,
(Sept 22, 2010)]
SUPERVISOR AND RANK AND FILE
UNION AFFILIATION
Supervisory employees shall not be eligible
for membership in the collective bargaining
unit of the rank-and-file employees The
rank and file union and the supervisors union
operating within the same establishment
may join the same federation or national
union. [Art. 255]
General Rule: Supervisory employees and
rank and file CAN JOIN the same federation
or national union.
Before, if the rank-and-file employees are
directly under the authority of supervisory
employees AND the national federation is
actively involved in union activities in the
company, both employees CANNOT join the
same federation or union. HOWEVER, these
conditions have been rendered obsolete by
RA 9481, amending Art. 255 (then Art. 245)
to include: The rank and file union and the
supervisors' union operating within the same
establishment may join the same federation
or national union.
DISAFFILIATION
Nature of Right and Legality
Such a phenomenon is nothing new in the
Philippine labor movement. Nor is it open to
any legal objection. It is implicit in the
freedom of association explicitly ordained by
the Constitution. There is then the
incontrovertible right of any individual to join
an organization of his choice. That option
belongs to him. A workingman is not to be
denied that liberty. [PLAC v. BLR, No. L-
41288 (1977)]
We upheld the right of local unions to
separate from their mother federation on the
ground that as separate and voluntary
associations, local unions do not owe their
PAGE 171 OF 222
LABOR LAW
creation and existence to the national
federation to which they are affiliated but,
instead, to the will of their members. [Liberty
Cotton Mills Workers Union vs. Liberty Cotton
Mills, Inc, G.R. No. L-33987(1975)]
A local union, being a separate and voluntary
association, is free to serve the interests of all
its members including the freedom to
disaffiliate or declare its autonomy from the
federation which it belongs when
circumstances warrant, in accordance with
the constitutional guarantee of freedom of
association. Such disaffiliation cannot be
considered disloyalty. In the absence of
specific provisions in the federations
constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a
local may dissociate with its parent union.
[MSMG-UWP v. Ramos, (2000)]
Period of Disaffiliation
General rule: Anytime
Exception: Constitution allows disaffiliation
only during freedom period.
Exception to Exception: When there is a shift
of allegiance on the part of the majority of the
members of the union. [ANGLO v. Samana,
G.R. No. 118562 (1996)]
Effect of disaffiliation
On legal personality
A registered independent union retains its
legal personality while a chartered local loses
its legal personality unless it registers itself.
[Volkschel Labor Union v. BLR, No. L45824
(1985)]
No effect on CBA
A disaffiliation does not disturb the
enforceability and administration of a
collective agreement; it does not occasion a
change of administrators of the contract nor
even an amendment of the provisions
thereof. [Volkschel Labor Union v. BLR, No.
L45824 (1985)]
Obligation to pay union dues is coterminous
with membership
The obligation of an employee to pay union
dues is coterminous with his affiliation or
membership. The employees checkoff
authorization, even if declared irrevocable, is
good only as long as they remain members of
UP LAW BOC
the union concerned. A contract between an
employer and the parent organization as
bargaining agent for the employees is
terminated by the disaffiliation of the local of
which the employees are members. [Volkschel
Labor Union v. BLR, No. L45824 (1985)]
Power to represent principal severed
By the disaffiliation, the vinculum that
previously bound the two entities was
completely severed. The federation was
divested of any and all power to act in
representation of the union. Thus, any act
performed by the federation affecting the
interests and affairs of the union is rendered
without force and effect. [ANGLO v. Samana,
G.R. No. 118562 (1996)]
SUBSTITUTIONARY DOCTRINE
The substitutionary doctrine provides that
the employees cannot revoke the validly
executed collective bargaining contract with
their employer by the simple expedient of
changing their bargaining agent. And it is in
the light of this that the phrase said new
agent would have to respect said contract
must be understood. It only means that 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)
Conditions to apply the doctrine
(1) change of bargaining agent (through
affiliation, disaffiliation, or other means);
and
(2) existing CBA with the previous bargaining
agent [Benguet Consolidated v. BCI
Employees and Workers Union-PAFLU,
G.R. No. L-24711 (1998)]
Effects:
(1) new bargaining agent cannot revoke and
must respect the existing CBA; and
(2) it may negotiate with management to
shorten the existing CBAs lifetime
LABOR RELATIONS LABOR LAW
B. RIGHT TO COLLECTIVE
BARGAINING
B.1 GENERAL CONCEPTS
Constitutional Policies
(1) [The State] shall guarantee the rights of
workers to self-organization, collective
bargaining and negotiations. [] [1987
Constitution, Art. XIII, Sec. 3]
(2) The State shall promote the principle of
shared responsibilities between workers
and employers [] and shall enforce their
mutual compliance therewith to foster
industrial peace. [1987 Constitution, Art.
XIII, Sec. 3]
Statutory Policies
(1) To promote and emphasize the primacy
of free collective bargaining and
negotiations, including voluntary
arbitration, mediation and conciliation,
as modes of setting labor or industrial
disputes. [Art. 218 (a)]
(2) It is the policy of the State to promote
and emphasize the primacy of free and
responsible exercise of the right to self-
organization and collective bargaining,
either through single enterprise level
negotiations or through the creation of a
mechanism by which different employers
and recognized certified labor unions in
their establishments bargain collectively.
[Book V, Rule XVI, 1]
(3) 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 [Art.
218 (b)]
Definition, Nature, and Purpose
Collective bargaining, which is defined as
negotiations towards a collective agreement,
PAGE 172 OF 222
UP LAW BOC LABOR RELATIONS
is one of the democratic frameworks under
the Labor Code designed to stabilize the
relations between labor and management
and to create a climate of sound and stable
industrial peace. It is a mutual responsibility
of the employer and the Union and is
characterized as a legal obligation. [Kiok Loy
v. NLRC, 1986]
The institution of collective bargaining is a
prime manifestation of industrial democracy
at work. The two parties to the relationship,
labor and management, make their own rules
by coming to terms to govern themselves in
matters that really count. [United Employees
Union of Gelmart Industries v. Noriel, 1975]
W aiver of Right to Collectively
Bargain
The right to free collective bargaining
includes the right to suspend it. [Rivera v.
Espiritu, 2000]
B.2 DUTY TO BARGAIN COLLECTIVELY
I. IN GENERAL
Definition
The duty to bargain collectively means 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. [Art. 263]
Jurisdictional Preconditions of Duty to
Bargain
(1) Possession of the status of majority
representation of the employees
representative in accordance with any of
the means of selection or designation
provided for by the Code
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LABOR LAW
(2) Proof of majority representation by the
representative labor organization
(3) Demand to bargain by the labor
organization [Art. 250(a)]
The employer is only bound to bargain with
the appropriate collective bargaining agent.
An employer asked by a labor organization
(which is not the SEBA of the establishment)
to bargain collectively may file a petition for
certification election to ascertain the will of
the bargaining unit or it may voluntarily
recognize the labor organization in proper
circumstances.
Meaning of Bargaining in Good Faith
[T]here is no per se test of good faith in
bargaining. Good faith or bad faith is an
inference to be drawn from the facts. [Kiok
Loy v NLRC, 1986]
[T]he failure to reach an agreement after
negotiations have continued for a reasonable
period does not establish a lack of good faith.
The laws invite and contemplate a collective
bargaining contract, but they do not compel
one. [Tabangao Shell Refinery Employees
Association vs. Pilipinas Shell Petroleum
Corporation, 2014]
Duty to Bargain does not include:
(1) Any legal duty on the part of the
employer to initiate contract negotiation
[Kiok Loy v NLRC, 1986]
(2) The obligation to reach an agreement.
While the law makes it an obligation for
the employer and the employees to
bargain collectively with each other, such
compulsion does not include the
commitment to precipitately accept or
agree to the proposals of the other. All it
contemplates is that both parties should
approach the negotiation with an open
mind and make reasonable effort to
reach a common ground of agreement.
[Union of Filipro Employees v. Nestle,
2008]
UP LAW BOC LABOR RELATIONS
II. WHEN THERE IS AN ABSENCE OF A CBA
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. (Art. 262)
III. WHEN THERE IS A CBA
General Rule
The duty to bargain collectively shall also
mean that neither party shall terminate nor
modify such agreement during its lifetime.
[Art. 264]
In case a new union becomes the majority
union while the CBA is still existing, the said
CBA continues to bind the members of the
new (or disaffiliated) union up to the CBAs
expiration date.
Substitutionary doctrine - the
change of bargaining representative does
not terminate the currently existing CBA.
The new bargaining agent has to respect
such CBA until a new one is duly
executed [Elisco-Elirol Labor Union v
Noriel, 1977].
Exception
At least sixty (60) days prior to the expiration
of the collective bargaining agreement, either
party can serve a written notice to terminate
or modify the agreement. Note: During this
60-day period, a verified petition questioning
the majority status of the incumbent
bargaining agent may also be filed.
Effect on existing CBA
It shall be the duty of both parties to keep the
status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the 60-day period and/or
until a new agreement is reached by the
parties. [Art. 264]
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LABOR LAW
B.3 BARGAINING PROCEDURE
General Rule
Private Procedure - The bargaining
procedure shall be governed by the parties
agreement or voluntary arrangement,
provided it is a more expeditious manner of
collective bargaining. [Art. 262]
Rationale - It is the policy of the state
to promote the primacy of free collective
bargaining [Art. 218 (a)]
Exception
Labor Code Procedure In absence of a
private agreement, the collective bargaining
procedure under Art. 261 shall be followed.
i. W ritten notice and statement of
proposals. When a party desires to
negotiate an agreement, it shall serve a
written notice upon the other party with a
statement of its proposals.
ii. Reply. The other party shall make a
reply thereto not later than ten (10)
calendar days from receipt of such notice.
iii. Conference. Should differences arise
on the basis of such notice and reply,
either party may request for a conference
which shall begin not later than ten (10)
calendar days from the date of request.
iv. Board intervention and
conciliation. If the dispute is not
settled, the NCMB shall intervene upon
request of either or both parties or at its
own initiative and immediately call the
parties to conciliation meetings. The
NCMB shall have the power to issue
subpoenas requiring the attendance of
the parties to such meetings. It shall be
the duty of the parties to participate fully
and promptly in the conciliation meetings
the Board may call;
v. Voluntary arbitration. The NCMB
shall exert all efforts to settle disputes
amicably and encourage the parties to
submit their case to a voluntary
arbitrator.
vi. Prohibition against disruptive
acts. During the conciliation
proceedings in the Board, the parties are
prohibited from doing any act which may
 UP LAW BOC
disrupt or impede the early settlement of
the disputes.
vii. Deadlock. When the parties have
reached an impasse in negotiations,
either or both of them may declare a
deadlock which is a ground to file a
petition for preventive mediation or a
notice of strike or notice of lockout with
the NCMB.
Period to Reply; Bad Faith
The period to reply is merely procedural, and
non-compliance cannot be automatically
deemed to be an Unfair Labor Practice
(ULP). [National Union of Restaurant
Workers vs. CIR, 1964]
Failure to Reply as Indicia of Bad Faith
[The employers] refusal to make a counter-
proposal is an indication of its bad faith.
Where the employer did not even bother to
submit an answer to the bargaining
proposals of the union, there is a clear
evasion of the duty to bargain collectively. It
is guilty of ULP. [General Milling Corp. v. CA,
2004]
Bargainable Issues
(1) Mandatory Bargainable Issues
a. Wages
b. Hours of work
c. All other terms and conditions of
employment including proposals for
adjusting any grievances or questions
arising under such agreement [Art.
263]
Examples:
i. Vacations and holidays
ii. Bonuses
iii. Seniority, Transfer, and Layoffs
iv. Employee workloads
v. Work rules and regulations
vi. Union security arrangements
vii. Pension and insurance benefits
for active employees
LABOR RELATIONS LABOR LAW
(2) Permissive Issues:
a. Unilateral benefits extended by the
employer [cf., Union of Filipino
Employees-Drug v. Nestle, 2008]
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 []. As in all other
contracts, the parties in a CBA may establish
such stipulations, clauses, terms and
conditions as they may deem convenient
provided they are not contrary to law, morals,
good customs, public order or public policy.
[Manila Fashions v. NLRC, 1996]
Test for Mandatory Bargainable Issues
The NEXUS Between the Nature of
Employment and the Nature of the
Dem and: For other terms and conditions of
employment to become a mandatory
bargainable issue, they must have a
connection between the proposal and the
nature of the work.
In order for a matter to be subject to
mandatory collective bargaining, it must
materially or significantly affect the terms
and conditions of employment. Whether the
agreement concerns a mandatory subject of
bargaining depends not on its form, but on its
practical effect. [Azucena]
Im portance of Determ ining the
character of the Bargaining Issue
"The question as to what are mandatory and
what are merely permissive subjects of
collective bargaining is of significance on the
right of a party to insist on his position to the
point of stalemate. A party may refuse to
enter into a collective bargaining contract
unless it includes a desired provision as to a
matter which is a mandatory subject of
collective bargaining. But a refusal to
contract unless the agreement covers a
matter which is not a mandatory subject is in
substance a refusal to bargain about matters
which are mandatory subjects of collective
bargaining; and it is no answer to the charge
of refusal to bargain in good faith that the
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insistence on the disputed clause was not the
sole cause of the failure to agree or that
agreement was not reached with respect to
other disputed clauses.
Such refusal will not be deemed as an unfair
labor practice. However, if a party refuses to
contract based on an issue which is not a
mandatory bargainable issue, the party will
be guilty of ULP. [Samahang Manggagawa sa
Top Form v. NLRC, 1998]
Minutes of Negotiation
Where a proposal raised by a contracting
party does not find print in the CBA, it is not a
part thereof and the proponent has no claim
whatsoever to its implementation. The
Minutes [only] reflects the proceedings and
discussions undertaken in the process of
bargaining for worker benefits in the same
way that the minutes of court proceedings
show what transpired therein. At the
negotiations, it is but natural for both
management and labor to adopt positions or
make demands and offer proposals and
counter-proposals. However, nothing is
considered final until the parties have
reached an agreement. [Samahang
Manggagawa sa Top Form v NLRC, 1998]
Suspension of Bargaining
Negotiations
The mere filing of a petition for certification
election does not ipso facto justify the
suspension of negotiation by the employer. In
order to allow the employer to validly
suspend the bargaining process there must
be a valid petition for certification election
raising a legitimate representation issue.
[Colegio de San Juan de Letran v. Association
of Employees, 2000]
Bargaining Deadlock
A deadlock is defined as the counteraction
of things producing entire stoppage: a state
of inaction or of neutralization caused by the
opposition of persons or of factions: a
standstill. There is a deadlock when there is a
complete blocking or stoppage resulting
from the action of equal and opposed forces.
The word is synonymous with the word
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impasse which, within the meaning of the
American federal labor laws, presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the parties.
[Divine World Tacloban v Secretary of Labor,
1992]
Collective Bargaining Deadlock is defined as
the situation between the labor and the
management of the company where there is
failure in the collective bargaining
negotiations resulting in a stalemate. [San
Miguel Corp. v NLRC, 1999].
Privileged Communication in
Conciliation Proceedings
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. [Art. 233]
Rationale
i. a person is entitled to buy his or her
peace without danger of being prejudiced
in case his or her efforts fail
ii. offers for compromise are irrelevant
because they are not intended as
admissions by the parties making them
[Pentagon Steel v. CA, 2009]
B.4 COLLECTIVE BARGAINING
AGREEMENT (CBA)
I. GENERAL CONCEPTS
Definition
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 1(j)]
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Nature of the CBA
It is a familiar and fundamental doctrine in
labor law that the collective bargaining
agreement (CBA) constitute the law between
the parties and they are obliged to comply
with its provisions. [Zuellig Pharma
Corporation vs. Alice Sibal, 2013]
However, although it is a rule that contract
freely entered between the parties should be
respected, said rule is not absolute. 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. [Civil Code, Art.
1700]
Beneficiaries of the CBA
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. [Art. 267]
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]
To accord its benefits only to members of the
union without any valid reason would
constitute undue discrimination against non-
members.
Contract Interpretation
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.
{Art. 1702]
[A]s a labor contract within the
contemplation of Article 1700 of the Civil
Code of the Philippines which governs the
relations between labor and capital, [it] is not
merely contractual in nature but impressed
with public interest, thus it must yield to the
common good. As such, it must be construed
liberally rather than narrowly and technically,
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and the courts must place a practical and
realistic construction upon it, giving due
consideration to the context in which it is
negotiated and purpose which it is intended
to serve. [Davao Integrated Port Stevedoring
Services vs. Abarquez, 1993]
General Rule: [W]here the CBA is clear and
unambiguous, it becomes the law between
the parties and compliance therewith is
mandated by the express policy of the law.
[Zuellig Pharma Corporation v Alice Sibal,
2013]
Exception: If the words appear to be
contrary to the evident intention of the
parties, the latter shall prevail over the
former. [Kimberly Clark Phils. V. Lorredo, 1993]
II. MANDATORY PROVISIONS OF CBA
(1) 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:
a) The interpretation or
implementation of their CBA; and
b) those arising from the
interpretation or enforcement of
company personnel policies.
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. 273]
It should be remembered that a grievance
procedure is part of the continuous process of
collective bargaining. It is intended to
promote a friendly dialogue between labor
and management as a means of maintaining
industrial peace. [Master Iron Labor Union v.
NLRC, 1993]
No particular setup for a grievance machinery
is required by law. [Art. 273] of, as
incorporated by R.A. 6715, only mandates
that the parties to the CBA establish a
machinery to settle problems arising from
UP LAW BOC LABOR RELATIONS
"interpretation or implementation of their
collective bargaining agreement and those
arising from the interpretation or
enforcement of company personnel policies.
[Caltex Refinery Employees Association v.
Brillantes, 1997]
(2) 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. [1987 Constitution. Art. XIII Section 3]
W ho is a voluntary arbitrator
A voluntary arbitrator is any person
accredited by the National Conciliation and
Mediation Board or any person named or
designated in the Collective Bargaining
Agreement by the parties to act as their
Voluntary Arbitrator, or 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 [Art. 219 (n)]
Autom atic Referral If Grievance
Machinery Fails
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. [Art. 273]
Provision for Voluntary Arbitration 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
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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. 273]
Voluntary Arbitration as a Condition
Precedent
The stipulation to refer all future disputes to
an arbitrator or to submit an ongoing dispute
to one is valid. Being part of a contract
between the parties, it is binding and
enforceable in court in case one of them
neglects, fails or refuses to arbitrate. Going a
step further, in the event that they declare
their intention to refer their differences to
arbitration first before taking court action,
this constitutes a condition precedent, such
that where a suit has been instituted
prematurely, the court shall suspend the
same and the parties shall be directed
forthwith to proceed to arbitration. A court
action may likewise be proper where the
arbitrator has not been selected by the
parties. [Chung Fu Industries v. CA, 1992]
Arbitrable Issues
1. interpretation or implementation of the
CBA [Art. 274]
2. interpretation or enforcement of company
personnel policies [Art. 274]
3. violations of CBA provision which are not
gross in character (gross being
flagrant/malicious refusal to comply with
the economic provisions of the CBA) [Art.
2274]
4. all other labor disputes including ULP
and bargaining deadlock, if the parties
agree [Art. 275]
5. Wage distortions arising from application
of any wage orders in organized
establishments [Art. 124]
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6. Unresolved grievances arising from the
interpretation and implementation of the
productivity incentives program under RA
6971 [Book V, Rule XIX, Sec. 4]
In general, the arbitrator [VA] is expected
to decide those questions expressly stated
and limited in the submission agreement.
However, since arbitration is the final resort
for the adjudication of disputes, the arbitrator
can assume that he has the power to make a
final settlement. The VA has plenary
jurisdiction and authority to interpret the CBA
and to determine the scope of his or her own
authority. Subject to judicial review, this
leeway of authority and adequate prerogative
is aimed at accomplishing the rationale of the
law on voluntary arbitration speedy labor
justice. [Goya, Inc. vs. Goya, Inc. Employees
Union-FFW, 2013]
Procedure of Voluntary Arbitration
(1) All parties shall be entitled to attend the
arbitration proceedings.
(2) The hearing may be adjourned for cause
or upon agreement by the parties.
(3) Unless the parties agree otherwise, it
shall be mandatory for voluntary
arbitrator or panel of voluntary
arbitrators to render an award or decision
within twenty (20) calendar days from the
date of submission for resolution [Book V,
Rule XIX, Sec. 6]
Powers of voluntary arbitrators during
arbitration proceeding
(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 276)
Finality of the final decision, Order, or
Award
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[T]he award or decision of the Voluntary
Arbitrator [] shall be final and executory
after 10 calendar days from receipt of the
copy of the award or decision by the parties.
[] (Art. 276)
Motion for Reconsideration
The absence of a categorical language in Art.
276 [then Art. 262-A] does not preclude the
filing of a motion for reconsideration of the
VAs decision within the 10-day period. [Teng v
Pahagac, G.R. 169704, (Nov. 17, 2010)]
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed
of, the filing of a motion for reconsideration is
a condition sine qua non to afford an
opportunity for the correction of the error or
mistake complained of. So also, considering
that a decision of the Secretary of Labor is
subject to judicial review only through a
special civil action of certiorari and, as a rule,
cannot be resorted to without the aggrieved
party having exhausted administrative
remedies through a motion for
reconsideration, the aggrieved party, must be
allowed to move for a reconsideration of the
same so that he can bring a special civil
action for certiorari before the Supreme
Court. [PIDLTRANCO Service Enterprises Inc v
PWU AGLO, GR No. 180962, (Feb 26, 2014)]
The rule, therefore, is that a Voluntary
Arbitrators award or decision shall be
appealed before the Court of Appeals within
10 days from receipt of the award or decision.
Should the aggrieved party choose to file a
motion for reconsideration with the Voluntary
Arbitrator, the motion must be filed within
the same 10-day period since a motion for
reconsideration is filed "within the period for
taking an appeal." [PHILEC v Court of
Appeals, GR No. 168612, (Dec 10, 2014)]
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 quasi-
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judicial agency, board or commission, still
both he and the panel are comprehended
within the concept of a "quasi-judicial
instrumentality." A 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]
The decisions of the voluntary arbitrator are
akin to those of the Regional Trial Court, and
therefore should first be appealed to the
Court of Appeals before being elevated to
[the Supreme Court]. [Centro Escolar
University Faculty and Allied Workers Union v.
Court of Appeals, 2006]
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. 277]
Voluntary Arbitrator's Fee
[] The fixing of the fee of the Voluntary
Arbitrators, whether shouldered wholly by
the parties or subsidized by the special
voluntary arbitration fund, shall take into
account the following factors:
(1) nature of the case
(2) time consumed in hearing the case
(3) professional standing of the voluntary
arbitrator
(4) capacity to pay of the parties. [Art. 277]
(3) 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]
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(4) Labor Managem ent Council
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. [] [Art. 267]
Selection of Representatives
In organized establishments, the workers
representatives to the council shall be
nominated by the exclusive bargaining
representative. In establishments where no
legitimate labor organization exists, the
workers representative shall be elected
directly by the employees at large. [Book V,
Rule XXI, Sec. 2]
III. ADMINISTRATION AND ENFORCEMENT
OF CBA
Substandard CBA
A CBA that falls below the minimum
standards required by law is prohibited.
Nonetheless, RA 9481 removed substandard
CBAs as a ground for the cancellation of
registration of union registration. Note: A
substandard CBA cannot bar a petition for
certification election under the contract-bar
rule.
Ratification
The agreement negotiated by the employees
bargaining agent should be posted in two
conspicuous places in the place of work and
should be ratified or approved by the majority
of all workers in the bargaining unit. [Art. 237;
Book V, Rule XVII, Sec. 2 (c)]
[T]he posting of copies of the collective
bargaining agreement is the responsibility of
the employer. [] The purpose of the
requirement is precisely to inform the
employees in the bargaining unit of the
contents of said agreement so that they could
intelligently decide whether to accept the
UP LAW BOC LABOR RELATIONS
same or not. [Associated Labor Unions v
Ferrer-Calleja, 1989]
Effect of Non-ratification
General Rule: The collective bargaining
agreement should be ratified by the majority
of all the members of the bargaining unit.
Non-compliance with this requirement
renders the CBA ineffective. [Associated Trade
Unions v. Trajano, 1988]
Exception: Even if there was no ratification,
the CBA will not be invalid or void considering
that the employees have enjoyed benefits
from it.
[The employees] cannot receive benefits
under provisions favourable to them and
later insist that the CBA is void simply
because other provisions turn out not to
the liking of certain employees. [Planters
Products Inc. v. National Labor Relations
Commission, 1989]
Note: Ratification of the CBA by the
employees in the bargaining unit is not
needed when the CBA is a product of an
arbitral award as a result of voluntary
arbitration under Art. 275 or from the
secretarys assumption of jurisdiction or
certification under Art. 278 (g).
To require ratification of the CBA in case of
arbitral awards will be inconsistent with the
nature of arbitration, which entails
submission to the judgment of an impartial
third person. The settlement device would be
circuitous and the very nature of arbitration
would be contradicted if the arbitrators
decision, would be dependent on the
employees acceptance.
Registration
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration []. [Art. 237]
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Requirem ents for Registration
The application for CBA registration shall be
accompanied by the original and two (2)
duplicate copies of the following documents
which must be certified under oath by the
representative(s) of the employer(s) and labor
union(s) concerned:
(1) The collective bargaining agreement
(2) A statement that the collective
bargaining agreement was posted in at
least two (2) conspicuous places in the
establishment or establishments
concerned for at least five (5) days before
its ratification
(3) A statement that the collective
bargaining agreement was ratified by the
majority of the employees in the
bargaining unit of the employer or
employees concerned. [Book V, Rule XVII,
Sec. 2]
Confidentiality of registered CBA or
Parts Thereof
General rule: CBA is not confidential
Exceptions:
(1) confidentiality authorized by Secretary of
Labor
(2) when it is at issue in any judicial litigation
(3) public interest or national security
requires [Art. 237]
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.
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IV. EFFECTIVITY AND DURATION OF
COLLECTIVE BARGAINING
AGREEMENT
CBA Effectivity
If it is the first ever CBA, the effectivity date is
whatever date the parties agree on.
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; renegotiations
concluded on November 30:
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
[In the absence of a new CBA], [i]t shall be
the duty of the parties to keep the status
quo and to continue in full force and
effect the terms and conditions of the
existing agreement during the 60 day period
and/or until a new agreement is
reached by the parties. [Art. 264]
The last sentence of Article 264, which
provides for automatic renewal [upon expiry],
pertains only to the economic
provisions of the CBA, and does not
include representational aspect of the CBA. A
[CBA which continues to take effect beyond
its expiration date] cannot constitute a bar to
a filing of petition for certification election.
When there is a representational issue, the
status quo provision insofar as the need to
await the creation of a new agreement will
not apply. Otherwise, it will create an absurd
situation where the union members will be
forced to maintain membership by virtue of
the union security clause existing under the
CBA and, thereafter, support another union
when filing a petition for certification election.
If we apply it, there will always be an issue of
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LABOR RELATIONS LABOR LAW
disloyalty whenever the employees exercise
their right to self-organization. The holding of
a certification election is a statutory policy
that should not be circumvented, or
compromised. [PICOP Resources, Inc. v.
Taneca et al., 2010]
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.
[Manila Electric Company vs. Quisumbing,
1999]
[O]n the other hand, [when the CBA is only]
part of an arbitral award [,] [] it may be
made retroactive to the date of expiration of
the previous agreement. Therefore, in the
absence of a specific provision of law
prohibiting retroactivity of the effectivity of
arbitral awards issued by the Secretary of
Labor pursuant to Art. 263(g), the latter is
deemed vested with plenary and discretionary
powers to determine the effectivity thereof.
[Manila Central Line Corp. v. Manila Central
Line Free Workers Union, 1998]
CBA Duration
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 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. [Art. 259-A]
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CBA Duration for econom ic provisions
3 years.
CBA Duration for non-economic
provisions
5 years for representational or political issues.
CBA Duration: Freedom Period
No petition questioning the majority status of
the incumbent bargaining agent shall be
entertained and no certification election shall
be conducted by the DOLE outside of the
sixty-day period immediately before the date
of the expiry of such five year term of the
Collective Bargaining Agreement. [Contract-
bar rule]
CBA and 3rd Party Applicability
Labor contracts such as employment
contracts and CBAs are not enforceable
against a transferee of an enterprise, labor
contracts being in personam, is binding only
between the parties. As a general rule, there
is no law requiring a bona fide purchaser of
the assets of an on-going concern to absorb
in its employ the employees of the latter.
However, although the purchaser of the
assets or enterprise is not legally bound to
absorb in its employ the employees of the
seller of such assets or enterprise, the parties
are liable to the employees if the transaction
between the parties is colored or clothed with
bad faith. [Sundowner Devt. Corp. v. Drilon,
1989]
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: When the liability therefore is
assumed by the new employer under the
contract of sale, or when liability arises
because of the new owner's participation in
thwarting or defeating the rights of the
employees. The most that the transferee may
do, for reasons of public policy and social
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LABOR RELATIONS LABOR LAW
justice, is to give preference to the qualified
separated employees in the filling of
vacancies in the facilities of the purchaser.
[Manlimos v. NLRC, 1995]
B.5. UNION SECURITY
B.5.A. UNION SECURITY CLAUSES
Definition
Union security is a generic term which is
applied to and comprehends closed shop,
union shop, maintenance of membership
or any other form of agreement which
imposes upon employees the obligation to
acquire or retain union membership as a
condition affecting employment.
[NUWHRAIN v. NLRC, G.R. No. 179402
(2008)]
Union security is any form of agreement
which imposes upon employees the
obligation to acquire or retain union
membership as a condition affecting
employment. [GMC v. Casio, 2010]
[Union security clause] is an indirect
restriction on the right of an employee to self-
organization. It is a solemn pronouncement
of a policy that while an employee is given the
right to join a labor organization, such right
should only be asserted in a manner that will
not spell the destruction of the same
organization. [Tanduay Distillery Labor Union
v. NLRC, 1987]
[Employees], although entitled to
disaffiliation from their union to form a new
organization of their own, must, however,
suffer the consequences of their separation
from the union under the security clause of
the CBA. [Villar v. Inciong, 1983].
Statutory Basis and Rationale
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. [Art.
UP LAW BOC
259(e)]
The law has allowed stipulations for 'union
shop' and 'closed shop' as means of
encouraging workers to join and support the
union of their choice in the protection of their
rights and interests vis-a-vis the employer.
[Del Monte Philippines v. Salvidar, G.R. No.
158620 (2006)]
Purpose
To safeguard and ensure the existence of the
union and thus, promote unionism in general
as a state policy.
It is the policy of the State to promote
unionism to enable the workers to negotiate
with the management on the same level and
with more persuasiveness than if they were to
individually and independently bargain for
the improvement of their respective
conditions. [] For this reason, the law has
sanctioned stipulations for the union shop
and closed shop as a means of encouraging
the workers to join and support the labor
union of their own choice vis--vis the
employer. [Liberty Flour Mills Employees v
Liberty Flour Mills, 1989]
Coverage
General Rule: All employees in the
bargaining unit covered by the union security
clause are subject to its terms
Exception:
(1) 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. [Art. 254 (e)]
(2) Employees already in service at the
time the union security clause took
effect
A [union security] provision in a
CBA is not to be given a
retroactive effect as to preclude
its being applied to employees
PAGE 184 OF 222
LABOR RELATIONS LABOR LAW
already in service. [Guijarno v
CIR, 1973]
(3) Any employee who at the time the
union security clause took effect is a
bona fide member of religious
organization which prohibits its
members from joining labor unions
on religious grounds
(4) Confidential employees who are
excluded from the rank-and-file
bargaining unit
(5) Employees excluded from the union
security provisions by express terms
of the agreement [BPI v BPI
Employees Union-Davao Chapter,
2010]
B.5.B. TYPES OF UNION SECURITY CLAUSE
1) Closed shop
Condition for em ploym ent
An agreement where only union members
may be employed and, for the duration of the
agreement, remains a member in good
standing of a union.
A closed shop may be defined as an
enterprise in which, by agreement between
the employer and his employees or their
representatives, no person may be employed
in any or certain agreed departments of the
enterprise unless he or she is, becomes, and,
for the duration of the agreement, remains a
member in good standing of a union entirely
comprised of or of which the employees in
interest are a part. [GMC v. Casio, 2010]
Only union members can be hired by the
company and they must remain as members
to retain employment in the company.
[Azucena]
The closed shop provision is the most prized
achievement of unionism. However it can also
be a potent weapon wielded by the union
against the workers whom the union is
supposed to protect in the first place. Hence,
any doubt as to the existence of a closed shop
provision in the CBA will be resolved in favor
of the nonexistence of the closed shop
provision. [Azucena]
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2) Maintenance of m em bership shop
Condition for continued employment
An agreement where present and future
union members must maintain their
membership as a condition for continued
employment until they are promoted or
transferred out of the bargaining unit or the
agreement is terminated
There is maintenance of membership shop
when employees, who are union members as
of the effective date of the agreement, or who
thereafter become members, must maintain
union membership as a condition for [their]
continued employment until they are
promoted or transferred out of the bargaining
unit or the agreement is terminated. [GMC v.
Casio, 2010]
No employee is compelled to join the union,
but all present or future members of the
union must, as a condition of employment,
remain in good standing in the union.
[Azucena]
3) Union shop
Condition for continued em ploym ent
An agreement where all new regular
employees are required to join the union
within a certain period as a condition for their
continued employment.
There is union shop when all new regular
employees are required to join the union
within a certain period as a condition for their
continued employment. [GMC v. Casio, 2010]
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]
4) Modified union shop
Employees who are not union members at
the time of signing the contract need not join
the union, but all workers hired thereafter
must join. [Azucena]
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LABOR RELATIONS LABOR LAW
5) Agency shop
It is an arrangement whereby non-members
must pay the union agency fees for the
benefits they received as a consequence of
the bargaining efforts of the union.
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]
B.5.C. ENFORCEMENT OF UNION
SECURITY CLAUSE
Termination due to Union Security
Provision
Termination of employment by virtue of a
union security clause embodied in a CBA is
recognized and accepted in our jurisdiction.
This practice strengthens the union and
prevents disunity in the bargaining unit
within the duration of the CBA. By preventing
member disaffiliation with the threat of
expulsion from the union and the consequent
termination of employment, the authorized
bargaining representative gains more
numbers and strengthens its position as
against other unions which may want to
claim majority representation. [Alabang
Country Club v. NLRC, G.R. No. 170287
(2008)]
Requisites for the enforcement of
Union Security Clauses
In terminating the employment of an
employee by enforcing the union security
clause, the employer needs only to determine
and prove that:
1) The union security clause is
applicable
2) The union is requesting for the
enforcement of the union security
provision in the CBA
3) There is sufficient evidence to support
the unions decision to expel the
employee from the union. [Alabang
Country Club v. NLRC, 2005]
UP LAW BOC LABOR RELATIONS LABOR LAW

Company must conduct separate B.5.D. CHECK-OFF, UNION DUES, AGENCY

investigation or hearing FEES
While company may validly dismiss the Check-off
employees expelled under the union security
A check-off is a process or device whereby the
upon the recommendation by the union, this
employer, on agreement with the Union,
dismissal should not be done hastily and
recognized as the proper bargaining
summarily thereby eroding the employees'
representative, or on prior authorization from
right to due process, self-organization and
the employees, deducts union dues or agency
security of tenure. The enforcement of union
fees from the latters wages and remits them
security clauses is authorized by law provided
directly to the Union. [Marino v Gamilla,
such enforcement is not characterized by
2009]
arbitrariness, and always with due
process. Even if there are valid grounds to The system of check-off is primarily for the
expel the union officers, due process requires benefit of the Union, and only indirectly, for
that these union officers be accorded a the benefit of the individual employees.
separate hearing by respondent company. [Marino v Garnilla, 2009]
[Malayang Samahan ng Manggagawa sa M.
Note: For a check-off to be valid, it must
Greenfield v. Ramos, G.R. No. 113907 (2000)]
comply with the requirements of a valid
special assessment.
Requirement of Due Process
The requirements laid down by the law in Jurisdiction over Check-off Disputes
determining whether or not an employee was
The Bureau of Labor Relations has
validly terminated must still be followed even
jurisdiction to hear, decide and to mete out
if it is based on a [union security clause] of a
punishment any reported violation under
CBA, i.e. the substantive as well as the
Article 250.
procedural due process requirements. [Del
Monte v. Saldivar, 2007] Note: Sec of Labor or his duly authorized
representative may inquire into financial
activities of legitimate labor orgs UPON
Obligations and Liabilities filing of complaint under oath and supported
by written consent of at least 20% of total
Where the employer dismissed his employees
membership, Provided, such inquiry shall not
in the belief in good faith that such dismissal
be conducted during (60)-day freedom period
was required by the [union security provision]
nor within the thirty (30) days immediately
of the collective bargaining agreement with
preceding the date of election of union
the union, he may not be ordered to pay back
officials. [Art. 289]
compensations to such employees although
their dismissal is found to be illegal.
[Confederated Sons of Labor v. Anakan
B.6 UNFAIR LABOR PRACTICE IN
Lumber Co., 1960]
COLLECTIVE BARGAINING
As dictated by fairness, [] the union shall be
Both employers and labor organizations can
liable to pay their backwages. This is because
commit acts of unfair labor practices in
management would not have taken the
collective bargaining. However, the labor
action it did had it not been for the insistence
organization must be the representative of
of the labor union seeking to give effect to its
the employees before any act it does may be
interpretation of a closed shop provision.
considered as a violation of the duty to
[Guijarno v. CIR, 1973]
bargain collectively. [Art. 259 (g) and Art. 260
(c)]

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Four form s of Unfair Labor Practice in
Bargaining
(1) Failure or Refusal to meet and convene
(2) Evading the mandatory subjects
bargaining
(3) Bargaining in bad faith
(4) Gross violation of the CBA
B.6.A. FAILURE OR REFUSAL TO BARGAIN
Statutory Basis of Employers
To violate the duty to bargain collectively as
prescribed by this code. [Art. 254 (g)]
Statutory Basis of Labor
Organizations
(1) To violate the duty, or refuse to bargain
collectively with the employer, provided it
is the representatives of the employees;
[Art. 256 (c)]
(2) [I]t shall be the duty of employer and the
representatives of the employees to
bargain collectively in accordance with
the provisions of this Code. [Art. 257]
Acts deem ed as refusal to bargain
Refusal to bargain when there is an
unresolved petition for union
cancellation
That there is a pending cancellation
proceedings against the union is not a bar to
set in motion the mechanics of collective
bargaining. [] Unless [the unions]
certificate of registration and status as the
certified bargaining agent is revoked, [the
employer], by express provision of the law,
duty bound to collectively bargain with the
Union. [Capitol Medical Center v. Trajano,
2005]
Employers suspension of operations in
order to forestall a demand for
collective bargaining
By admitting that the closure [of the
business] was due to irreconcilable
differences between the Union and the school
LABOR RELATIONS LABOR LAW
management, [] SJCI in effect admitted that
it wanted to end the bargaining deadlock and
eliminate the problem dealing with the
demands of the union. [St. John Colleges Inc. v.
of St. John Academy Faculty and Employees
Union, 2006]
Im plied refusal
The school is guilty of unfair labor practice
when it failed to make a timely reply to the
proposals of the union more than one month
after the same were submitted by the union.
In explaining its failure to reply, the school
merely offered a feeble excuse that its Board
of Trustees had not yet convened to discuss
the matter. Clearly, its actuation showed a
lack of sincere desire to negotiate. [Colegio de
San Juan de Letran v. Association, 2000]
Acts not deem ed refusal to bargain
(1) Adoption of an adamant bargaining
position in good faith, particularly where
the company is operating at a loss
(2) Refusal to bargain over demands for
commission of unfair labor practices
(3) Refusal to bargain during period of illegal
strike
(4) Not initiating the bargaining
(5) Refusal to bargain where the union
demands for recognition and bargaining
within the year following a certification
election, and the clear choice is no union
and no ad interim significant change has
taken place in the unit
(6) Refusal to bargain because the other
party is making unlawful bargaining
demands
B.6.B. EVADING THE MANDATORY
SUBJECTS OF BARGAINING
The refusal to negotiate a mandatory subject
of bargaining is an unfair labor practice
although either party has every desire to
reach agreement and earnestly and in all
good faith bargains to that end. [] However,
duty to bargain does not obligate the parties
to make concessions or yield a position fairly
held. [Azucena]
PAGE 187 OF 222
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The duty to bargain is limited to mandatory
bargaining subjects; as to other matters, he is
free to bargain or not to bargain. Over a
mandatory subjects, a party may insist on
bargaining, even to the point of deadlock,
and his insistence will not be construed as
bargaining in bad faith.
Over a non-mandatory subject, on the other
hand, a party may not insist on bargaining to
the point of impasse, otherwise his insistence
can be construed as bargaining in bad faith.
B.6.C. BARGAINING IN BAD FAITH
The crucial question whether a party has met
his statutory duty to bargain in good faith
typically turns on the facts of the individual
case. There is no per se test of good faith in
bargaining. Good faith or bad faith is an
inference to be drawn from the facts of the
case. [Hongkong and Shanghai Banking Corp.
Employees Union v. NLRC, 1997]
GMCs refusal to make a counter-proposal to
the unions proposal for CBA negotiation on
the excuse that it felt the union no longer
represented the workers is an indication of
bad faith. [] Failing to comply with the
mandatory obligation to submit a reply to the
unions proposals, GMC violated its duty to
bargain collectively, making it liable for unfair
labor practice. [GMC v. CA, 2004]
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as "unrealistic
and unreasonable demands in negotiations
by either or both labor and management,
where neither concedes anything and
demands the impossible." It actually is not
collective bargaining at all. [Standard Bank
Chartered Employees Union v. Confesor, 2004]
Surface Bargaining
Surface bargaining is defined as "going
through the motions of negotiating," without
any real intent to reach an agreement. It
violates the Act's requirement that parties
negotiate in "good faith." It is prohibited
because, as one commentator explained: The
bargaining status of a union can be destroyed
PAGE 188 OF 222
LABOR RELATIONS LABOR LAW
by going through the motions of negotiating
almost as easily as by bluntly withholding
recognition [] As long as there are unions
weak enough to be talked to death, there will
be employers who are tempted to engage in
the forms of collective bargaining without the
substance. [K-MART Corporation v NLRB,
1980 626 F.2d 704
Individual Bargaining
It is an unfair labor practice for an employer
operating under a CBA to negotiate with his
employees individually. That constitutes
interference because the company is still
under obligation to bargain with the union as
the bargaining representative.
Individual bargaining contemplates a
situation where the employer bargains with
the union through the employees instead of
the employees through the union. [The Insular
Life Assurance Co. Ltd., Employees Assn. v.
Insular Life Assurance Co. Ltd, 1971]
B.6.D. GROSS VIOLATIONS OF THE CBA
Accordingly, violations of a Collective
Bargaining Agreement, except those which
are gross in character, shall no longer be
treated as unfair labor practice and shall be
resolved as grievances under the Collective
Bargaining Agreement. For purposes of
this article, gross violations of Collective
Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the
economic provisions of such agreement.
B.7 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 self-organization 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. 259
(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]
UP LAW BOC
B.7.A. NATURE OF ULP
(1) inimical to the legitimate interests of both
labor and management, including their
right to bargain collectively and
otherwise deal with each other in an
atmosphere of freedom and mutual
respect
(2) disrupt industrial peace
(3) hinder the promotion of healthy and
stable labor-management relations
(4) violations of the civil rights of both labor
and management but are also criminal
offenses [Art. 258]
Purpose of the Policy Against ULPs
Protection of right to self-organization
and/or collective bargaining:
(1) The employee is not only protected
from the employer but also from
labor organizations.
(2) Employer is also protected from ULP
committed by a labor organization.
The public is also protected because it has an
interest in continuing industrial peace.
Employer-Employee Relationship
Required
General Rule - An unfair labor practice may
be committed only within the context of an
employer-employee relationship [American
President Lines v. Clave, 1982]
Exception
Yellow Dog condition: to require as a
condition of employment that a person or an
employee shall not join a labor organization
or shall withdraw from one to which he
belongs. [Art 259 (b)]
Parties Not Estopped from Raising
ULP by Eventual Signing of the CBA
The eventual signing of the CBA does not
operate to estop the parties from raising
unfair labor practice charges against each
PAGE 189 OF 222
LABOR RELATIONS LABOR LAW
other. [Standard Chartered Bank Union v.
Confesor, 2004]
Statutory Construction
The Labor Code does not undertake the
impossible task of specifying in precise and
unmistakable language each incident which
constitutes an unfair labor practice. Rather, it
leaves to the court the work of applying the
law's general prohibitory language in light of
infinite combinations of events which may be
charged as violative of its terms. [HSBC
Employee Union V. NLRC, 1997]
B.7.B. ULP OF EMPLOYERS
(1) Interference/ Restraint/ Coercion
An act which restrains, coerces, or interferes
with employees in the exercise of their right
to self-organization is an Unfair Labor
Practice.
Interrogation
General rule: employer may interrogate its
employees regarding their union affiliation
for legitimate purposes and with the
assurance that no reprisals would be taken
against the unionists.
Exception: when interrogation interferes
with or restrains employees' right to self-
organization. [Phil. Steam Navigation Co. v.
Phil. Marine Officers Guild, 1965]
Speech
The acts of a company which subjects a union
to vilification and its participation in soliciting
membership for a competing union are also
acts constituting a ULP. [Phil. Steam
Navigation Co. v. Phil. Marine Officers Guild,
1965]
An employer may not send letters containing
promises or benefits, nor of threats of
obtaining replacements to individual workers
while the employees are on strike due to a
bargaining deadlock. This is tantamount to
interference and is not protected by the
Constitution as free speech. [Insular Life
Assurance Co. Employees Assn. v. Insular Life
Assurance Co. Ltd, 1971]
UP LAW BOC
Espionage
Espionage and/or surveillance by the
employer of union activities are instances of
interference, restraint or coercion of
employees in connection with their right to
organize, form and join unions as to
constitute unfair labor practice. [] The
information obtained by means of espionage
is invaluable to the employer and can be used
in a variety of cases to break a union. [Insular
Life Assurance Co. Employees Assn. v. Insular
Life Assurance Co. Ltd, 1971]
(2) Yellow Dog Contracts
Yellow dog contracts require, as a condition
of employment that a person or an employee
shall not join a labor organization or shall
withdraw from one to which he belongs.
Requisites of a Yellow Dog Contract:
(1) a representation by the employee
that he is not a member of a labor
organization
(2) a promise by the employee that he
will not join a union
(3) a promise by the employee that upon
joining a labor organization, he will
quit his employment
3) Contracting Out
General rule: contracting out is not a ULP
Exception:
(1) contracted-out services or functions
are performed by union members
AND
(2) contracting out will interfere with,
restrain, or coerce employees in the
exercise of their right to self-
organization. [Art. 259 (c)]
4) Company Union
"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.
[Art. 218(i)]
PAGE 190 OF 222
LABOR RELATIONS LABOR LAW
The employer commits ULP if it initiates,
dominates, or otherwise interferes with the
formation or administration of any labor
organization. [Article 259]
Example: giving out financial aid to any
union's supporters or organizers.
5) 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. [Art. 259 (e)]
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. [Art. 259 (e)]
Exception to exception:
Those employees who are already members
of another union at the time of the signing of
the collective bargaining agreement. [Art.
259(e)]
6) Testimony
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. [Art. 259 (f)]
7) Violate duty to bargain collectively
Duty to bargain collectively is a continuous
process, non-compliance constitutes ULP.
Collective bargaining does not end with the
execution of an agreement, being a
continuous process, the duty to bargain
necessarily imposing on the parties the
obligation to live up to the terms of such a
collective bargaining agreement if entered
into, it is undeniable that non-compliance
therewith constitutes an unfair labor practice.
[Shell Oil Workers Union v Shell Co., 1971]
UP LAW BOC LABOR RELATIONS LABOR LAW

8) Paym ent of negotiation or 3) Violate duty to bargain or the CBA

attorney's fees
Please refer to part B.4 for some examples.
Sweetheart contracts are favorable both to
the union and the employer at the expense of
the employees. The settlement of bargaining 4) Exaction (Featherbedding)
issues must be made by fair bargaining in
Featherbedding or make-work by the union
good faith, and not through the payment of
is the practice of the union asking (exacting)
negotiation or attorney's fees which will
for money or other things of value from the
ultimately lead to sweetheart contracts.
employer in return for services which are not
performed or are not to be performed.
9) To violate a collective bargaining
agreem ent
5) Asking or accepting negotiation
Flagrant and/or m alicious refusal and other attorney's fees
required
See counterpart in ULP by employers
Violations of collective bargaining (sweetheart contracts).
agreements, except flagrant and/or
malicious refusal to comply with its economic
provisions, shall not be considered unfair 6) Violate a collective bargaining
labor practice and shall not be strikeable. agreem ent
[IRR] Flagrant and/or m alicious refusal
Note: The list in Art. 259 is not exhaustive. required
Other acts which are analogous to those Violations of collective bargaining
enumerated can be ULPs. agreements, except flagrant and/or
The alleged violation of the CBA, even malicious refusal to comply with its
assuming it was malicious and flagrant, is economic provisions, shall not be
not a violation of an economic considered unfair labor practice and shall not
provision, thus not an Unfair Labor Practice. be strikeable. [IRR]
[BPI Employees Union-Davao FUBU v. BPI,
2013]

B.7.C. ULP OF LABOR ORGANIZATIONS

1) Restraint, or coercion
Interfere is not included in Art. 260 simply
because any act of a labor organization
amounts to interference to the right of self-
organization.

2) Discrimination: Encourage/
Discourage Unionism [Art. 260 (b)]
General rule: it is a 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.

PAGE 191 OF 222

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C. RIGHT TO PEACEFUL CONCERTED
ACTIVITIES
Basis
[The state] shall guarantee the rights of all
workers to self-organization, collective
bargaining and negotiations, peaceful
concerted activities, including the right to
strike in accordance with law. [Const.
Art. XIII 3]
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. [Art. 278 (b)]
Definition
A concerted activity is one undertaken by two
or more employees to improve their terms
and conditions of work.
Right to self-organization includes the
right to engage in lawful concerted
activities and may not be abridged.
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 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 279 of this Code.
(Art. 257)
PAGE 192 OF 222
LABOR RELATIONS LABOR LAW
Limitation: Concerted activities m ust
be in accordance with law
The strike is a powerful weapon of the
working class. Precisely because of this, it
must be handled carefully, like a sensitive
explosive, lest it blow up in the workers own
hands. Thus, it must be declared only after
the most thoughtful consultation among
them, conducted in the only way allowed,
that is, peacefully, and in every case
conformably to reasonable regulation. Any
violation of the legal requirements and
strictures will render the strike illegal, to the
detriment of the very workers it is supposed
to protect. [Batangas Laguna Tayabas Bus Co.
v NLRC, 1992]
C.1. FORMS OF CONCERTED ACTIVITIES
Concerted Activities by Employees:
(a) Strike
(b) Picketing
Response to Concerted Activities
available to Employers:
(c) Lockout
(a) Strike
A strike is any temporary stoppage of work by
the concerted action of employees as a result
of an industrial or labor dispute. [Art. 219(o)]
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 or not the disputants
stand in the proximate relation of employers
and employees. [Solidbank Corp. v EU Gamier,
2010]
Strikes not limited to work stoppages
The term strike shall comprise not only
concerted work stoppages, but also
slowdowns, mass leaves, sit-downs, attempts
to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
UP LAW BOC
[Samahang Manggagawa v. Sulpicio Lines,
2004]
As coercive m easure by em ployees
A strike is a coercive measure resorted to by
laborers to enforce their demands. The idea
behind a strike is that a company engaged in
a profitable business cannot afford to have its
production or activities interrupted, much
less, paralyzed. [Phil. Can Co. v. CIR, 1950]
No severance of employer-employee
relationship during lawful strike
Although during a strike the worker renders
no work or service and receives no
compensation, [] his relationship as an
employee with his employer is not severed or
dissolved. [Elizalde Rope Factory, Inc. v. SSS,
1972]
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.
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.
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
employers discriminatory acts from the time
they were refused reinstatement. [Philippine
Marine Officers Guild v. Compania Maritima,
1968]
PAGE 193 OF 222
LABOR RELATIONS LABOR LAW
Form s of Strikes
As to legality
(1) Legal strike one called for a valid
purpose and conducted through means
allowed by law.
(2) Illegal strike one staged for a purpose
not recognized by law, or if for a valid
purpose, conducted through means not
sanctioned by law.
Effect of Illegality / Liability of
participating members/officers of the
union
1) Ordinary Striking W orker cannot
be terminated for mere participation in
an illegal strike; proof must be adduced
showing that he or she committed illegal
acts during the strike.
2) Participating Union Officer may be
terminated, not only when he actually
commits an illegal act during a strike, but
also if he knowingly participates in an
illegal strike [Phimco Industries, Inc. v
PILA, 2010]
As to grounds
1) 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]
2) ULP strike called against a company's
unfair labor practice to force the
employer to desist from committing such
practices.
As to how com m itted
I. 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.
A slowdown is inherently illicit and
unjustifiable because while the
 UP LAW BOC
employees continue to work, they, at the
same time, select what part of their
duties they perform. In essence, they
work on their own terms. [Ilaw at Buklod
ng Manggagawa v. NLRC, 1991]
II. Wild-cat strike one declared and
staged without filing the required notice
of strike and without the majority
approval of the recognized bargaining
agent.
III. Sit-down strike one wherein workers
take over possession of the property of
such business to cease production and to
refuse access to owners.
IV. 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.
V. Mass leave one in which workers
collectively abandon or boycott regular
work causing temporary stoppage of
work
Conversion from economic to ULP
strike
It is possible for a strike to change its
character from an economic to a ULP strike.
In the instant case, initially, the strike staged
by the Union was meant to compel the
Company to grant it certain economic
benefits set forth in its proposal for collective
bargaining. However, the strike changed its
character from the time the Company refused
to reinstate complainants because of their
union activities after it had offered to admit
all the strikers and in fact did readmit the
others. It was then converted into an unfair
labor practice strike. [Consolidated Labor
Assoc. of the Phil. v. Marsman and Company,
1964]
Strike cannot be converted to
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 RELATIONS LABOR LAW
labor dispute between the union and the
employer. [Rizal Cement Workers Union v. CIR,
1962]
(b) Picketing
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. [Art.
278 (b)]
Peaceful Picketing is the right of workers
during strikes consisting of marching 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. [Guidelines Governing Labor
Relations, October 19, 1987] [NCMB Manual,
1]
(c) Lockout
Lockout is the temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute. [Art. 219 (p)]
Illegal strike and illegal lockout/In
Pari Delicto Doctrine
When the employer engaged in illegal
lockout and the employee engaged in illegal
strike, both parties are in pari delicto and
such situation warrants the restoration of the
status quo ante and bringing the parties back
to the respective positions before the illegal
strike and illegal lockout. [Philippines Inter-
Fashion Inc. v NLRC, 1982]
C.2 WHO MAY DECLARE A STRIKE OR
LOCKOUT?
W ho may declare a strike
1. The certified or duly recognized
a bargaining representative
2. Any legitimate labor organization in
the absence of #1, but only on
grounds of ULP [Book V, Rule XXII,
6]
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W ho may declare a lockout
The employer [Book V, Rule XXII, Sec. 6]
C.3 REQUISITES FOR A VALID STRIKE
A valid strike must have a lawful ground and
must conform with the procedural
requirements set by law.
Substantial Requirements/Grounds
A strike or lockout may be declared in cases
of:
(1) Bargaining deadlocks
(2) ULP [Art. 278 (c)]
W hen violations of collective
bargaining strikeable as a ULP
Only gross violations of the economic
provisions of the CBA are treated as ULP. [BPI
Employees Union-Davao FUBU v. BPI, 2013]
W hen no lawful strike can be declared
(1) Ground is an inter-union or intra-union
dispute
(2) No notice of strike
(3) No strike vote obtained and reported to
the NCMB
(4) After assumption or certification by the
Secretary of Labor
(5) Wage Distortion (as described previously
in Part 1 of the Reviewer)
Prohibited activities in strike
1. By employer. No employer shall use or
employ any strike-breaker, no shall any
person be employed as a strike-breaker.
[Art. 279 (c)]
2. By public official or police force.
No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the
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LABOR RELATIONS LABOR LAW
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. [Art. 279 (d)]
Procedural requirements
1) Effort to bargain
2) Filing and service of notice of strike
3) Observance of cooling-off period
4) Strike vote
5) Strike vote report
6) Observance of the waiting period
(1) Effort to bargain
No labor organization [] shall declare a
strike [] without first having bargained
collectively in accordance with Title VII of this
Book [] (Art. 279(a))
In case of bargaining deadlocks, the notice
shall, as far as practicable, further state
the unresolved issues in the bargaining
negotiations and be accompanied by the
written proposals of the union, the counter-
proposals of the employer and the proof of a
request for conference to settle differences. In
cases of unfair labor practices, the notice
shall, as far as practicable, state the acts
complained of, and efforts taken to resolve
the dispute amicably. [Rule XXII, Section 4,
Omnibus Rules Implementing the Labor Code]
(2) Filing and service of notice of
strike
Bargaining deadlocks
[T]he duly certified or recognized
bargaining agent may file a notice of strike
[] with the Department at least 30 days
before the intended date thereof. [] [Art.
278(c)]
UP LAW BOC
Unfair Labor Practice; Union Busting
[I]n cases of unfair labor practice, the
period to file notice of strike shall be 15
days and in the absence of a duly certified
or recognized bargaining agent, the notice
of strike may be filed by any legitimate
labor organization in behalf of its
members. However, in case [] of union
busting (dismissal of duly elected union
officers from employment), the cooling
period shall not apply and the union may
take action immediately. [Art. 278 (c)]
Note: The notice must be served to the
employer. Failure to do so will constitute
noncompliance with the procedural
requirements and will result to an illegal
strike. [Filipino Pipe and Foundry Corp v NLRC,
1999]
Rationale: Due process. [IRR]
Contents of Notice of Strike
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. [Book V Rule XXII Sec. 8]
Additional Requirem ents
In case 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. [Book V, Rule
XXII, Section 4]
In cases of ULP:
1) Statement of Acts complained of
2) Efforts taken to resolve the dispute
amicably. [Book V, Rule XXII, Section
4]
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LABOR RELATIONS LABOR LAW
Action on Notice
1. Upon receipt of a valid notice of strike
or lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively
assist them to explore all possibilities
for amicable settlement.
2. 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.
3. 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
1) Bargaining deadlock 30 days
2) ULP but not union busting 15 days
3) ULP and union busting no cooling-
off period
Purpose of Cooling Off Period
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. [Art. 278 (e)]
The purpose of the cooling-off period is to
provide an opportunity for mediation and
conciliation. [National Federation of Sugar
Workers v. Ovejera, 1982]
UP LAW BOC
(4) Strike Vote
Requirements for a declaration of a
strike in a strike vote
1) approval by a majority of the total
union membership in the bargaining
nit concerned
2) approval is obtained by secret ballot
in a meeting/referendum called for
the purpose
Duration of the Validity of the Strike-
Vote
[T]he 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.
[] [Art. 278 (f)]
DOLE intervention
[T]he Department may, at its own initiative
or upon the request of any affected party,
supervise the conduct of the secret
balloting. [] [Art. 278 (f)]
(5) Strike Vote Report
[I]n every case, the union or the employer
shall furnish the Department the results of
the voting at least 7 days before the
intended strike 1 or lockout, subject to
the cooling-off period herein provided.[Art.
278 (f)]
(6) Observance of the 7-day 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]
The waiting period is intended to give the
DOLE an opportunity to verify whether the
projected strike really carries the imprimatur
of the majority of the union members.
[Lapanday Workers Union v NLRC, 1995]
1
7-day Waiting Period.
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LABOR RELATIONS LABOR LAW
Compliance with Both Cooling-off and
W aiting Periods
The observance of both periods must be
complied with, although a labor union may
take a strike vote and report the same within
the statutory cooling-off period. The cooling-
off and 7-day strike ban provisions of law
constitute a valid exercise of police power of
the State. [National Federation of Sugar
Workers v. Ovejera, 1982]
Strike-vote Reported within the
Cooling-off Period
When the strike-vote is reported within the
cooling-off period, the phrase at least 7 days
before the intended strike or lockout, subject
to the cooling-off period herein provided. in
Article 278 (f) admits two interpretations:
(1) Mutually exclusive periods (used in
the NCMB Manual). The cooling off
period and the 7-day period are mutually
exclusive. Thus, in the case of Capitol
Medical Center v. NLRC, the Court held
that when the strike vote is conducted
within the cooling-off period, the 7-day
requirement shall be counted from the
day following the expiration of the
cooling off period.
(2) Coexistent periods. The cooling-off
period and the 7-day requirement may
coexist. After all, the purpose of the 7-day
requirement is to give time for the DOLE
to verify if the projected strike is
supported by the majority. There is no
reason to add it to the cooling-off period.
C.4 REQUISITES FOR A VALID LOCKOUT
Limitations
[N]o employer may declare a lockout on
grounds involving inter-union and intra-
union disputes. [Art. 278 (b)]
Grounds
Similar to a strike, the proper grounds
for a lockout are
1) bargaining deadlock
2) ULP by labor organizations
UP LAW BOC
Requisites
1. Effort to bargain
2. Filing and service of notice of lockout
3. Observance of cooling-off period
4. Lockout vote
5. Report of lockout vote
6. Observance of the waiting period
(1) Effort to bargain
No employer shall declare a [] lockout
without first having bargained collectively in
accordance with Title VII of this Book. [Art
279 (a)]
(2) Filing and service of Notice of
Lockout
Bargaining deadlocks
[T]he duly certified or recognized bargaining
agent may file [] a notice of lockout with
the Department at least 30 days before the
intended date thereof. [] [Art. 278(c)]
Unfair Labor Practice; Union Busting
[I]n cases of unfair labor practice, the period
to file notice of strike shall be 15 days and in
the absence of a duly certified or recognized
bargaining agent, the notice of strike may be
filed by any legitimate labor organization in
behalf of its members. However, in case []
of union busting (dismissal of duly elected
union officers from employment), the cooling
period shall not apply and the union may
take action immediately. [Art. 278 (c)]
Note: The notice must be served to the
employees through the representative union.
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.
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LABOR RELATIONS LABOR LAW
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. [Book V, Rule XXII, Section
4]
In cases of ULP
1) Statement of acts complained of
2) Efforts taken to resolve the dispute
amicably. [Book V, Rule XXII, Section 4]
Action on notice
1. Upon receipt of a valid notice of strike or
lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
them to explore all possibilities for
amicable settlement.
2. 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.
3. 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
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
UP LAW BOC
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.
[Art. 278 (f)]
(5) Report of Lockout Vote
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. [Art. 278 (f)]
(6) Observance of W aiting Period (7
days)
See notes under strike.
Effect of Illegal Lockout
Any worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages. [Art. 279
(a) par. 3, 1st Sentence]
C.5 REQUISITES FOR LAWFUL PICKETING
Prohibited activities in picketing
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. 279 (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 orders. [Art. 279 (d)]
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LABOR RELATIONS LABOR LAW
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. 279 (e)]
Picketing as Part of Freedom of
Speech/Expression
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. Courts
may insulate establishments or
persons with no industrial connection
or having interest totally foreign to
the context of the dispute [PCIB v.
Philnabank Employees Association]
Picketing and Libel
Libel laws are not applied strictly considering
that there is emotional tension in the picket
lines and expected discourteous and impolite
exchanges between the employees and the
employer. [PCIB v. Philnabank Employees
Association, 1981]
Peaceful picketing is legal even in the
absence of em ployer-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
UP LAW BOC
Constitution. [De Leon v. National Labor
Union, 1957]
C.6 ASSUMPTION OF JURISDICTION BY
THE DOLE SECRETARY OR CERTIFICATION
OF THE LABOR DISPUTE TO THE NLRC
FOR COMPULSORY ARBITRATION
W hen Sec. of Labor can Assume
Jurisdiction:
(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
W ho determines industries
indispensable to the national interest
[I]t is in the discretion of the Secretary of
Labor to determine which industries are
indispensable to the national interest.
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
PAGE 200 OF 222
LABOR RELATIONS LABOR LAW
and assuming jurisdiction over any such
labor dispute in order to settle or terminate
the same.[Art. 278 (g)]
C.7 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 im pending strike or lockout
[S]uch 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.278 (g)]
(2) Return-to-work and readmission if
strike or lockout has already taken
place
[I]f 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. [] [Art.278 (g)]
Nature of return-to-work order
[T]he return-to-work order not so much
confers a right as it imposes a duty; and while
as a right it may be waived, it must be
discharged as a duty even against the
worker's will. Returning to work in this
situation is not a matter of option or
voluntariness but of obligation. The worker
must return to his job together with his co-
workers so the operations of the company can
be resumed and it can continue serving the
public and promoting its interest. That is the
real reason such return can be compelled. So
imperative is the order in fact that it is not
even considered violative of the right against
involuntary servitude. [Kaisahan ng Mga
UP LAW BOC
Manggagawa sa Kahoy v. Gotamco Sawmills,
1948]
(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
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 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. [Article 278, par. 2]
Rationale
The highest respect is accorded to the right of
patients to life and health.
C.8 EFFECT OF DEFIANCE OF
ASSUMPTION OR CERTIFICATION ORDERS
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. [Art. 279 (a), par. 2]
Strike/lockout becomes illegal
A strike undertaken despite the issuance by
the Secretary of Labor of an assumption or
PAGE 201 OF 222
LABOR RELATIONS LABOR LAW
certification order becomes a prohibited
activity and thus, illegal, pursuant to Article
279 (a) of the Labor Code. [Allied Banking v.
NLRC, (1996)]
See notes on liabilities of employer, union
officers, and ordinary workers under illegal
strike.
Summary of Liabilities of Participants
in an Illegal Strike/Lockout [Art. 279]
1) Employer in an illegal lockout
workers terminated due to illegal lockout
shall be entitled to reinstatement plus
full backwages.
2) Union officers who participated in
illegal strike deemed to have lost
their employment
3) Union officers who participated in
illegal acts during a lawful strike
deemed to have lost their employment.
4) Ordinary workers deemed to have
lost their employment only if they
participated in illegal acts.
Stricter penalties for non-compliance
with orders, prohibitions, and/or
injunctions issued by the Secretary of
Labor in strikes involving hospitals,
clinics, and 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
C.9 ILLEGAL STRIKE
Reasons for being illegal
(1) Prohibited by law
(2) Improper grounds
UP LAW BOC
(3) Noncompliance with procedural
requirements
(4) Unlawful means and methods
(5) Violation of injunction order
(6) No strike/lockout provisions in the
CBA
(1) Prohibited by law
Government employees
While the Constitution guarantees the right
of government employees to organize, they
are otherwise not allowed to strike.
(2) Improper grounds
A legal strike must be based on a bargaining
deadlock and/or a ULP act only.
Intra-union and inter-union disputes are not
proper grounds to strike.
Good faith strike
Good faith may be used as a defense if the
strike is held on the basis of an act of ULP by
the employer even if it turned out that there
was no act of ULP. However, the mandatory
procedural requirements cannot be
dispensed with (notice of strike, cooling-off
period, strike vote, strike vote report). [Grand
Boulevard Hotel v. GLOWHRAIN, 2003]
Good faith strike requires rational
basis
A mere claim of good faith would not justify
the holding of a strike under the aforesaid
exception as, in addition thereto, the
circumstances must have warranted such
belief. It is, therefore, not enough that the
union believed that the employer committed
acts of ULP when the circumstances clearly
negate even a prima facie showing to sustain
such belief. [Interwood Employees Assoc. v.
Intl Hardwood, 1956]
(3) Noncompliance with procedural
requirements
See notes under procedural requirements of a
valid strike.
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LABOR RELATIONS LABOR LAW
A strike which does not strictly comply with
the procedural requirements set by law and
the rules is an unlawful/illegal strike. [Santa
Rosa Coca-Cola Plant Employees v Coca-Cola
Bottlers, 2007]
Good faith strike must still comply
with procedural requirements
Even if the union acted in good faith in the
belief that the company was committing an
unfair labor practice, if no notice of strike and
a strike vote were conducted, the said strike is
illegal. [Grand Boulevard Hotel v.
GLOWHRAIN, 2003]
GR: A strike based on a non-strikeable
ground is an illegal strike; a strike grounded
on ULP is illegal if no such acts actually exist.
Exception: Even if no ULP acts are
committed by the employer, if the employees
believe in good faith that ULP acts exist so as
to constitute a valid ground to strike, then the
strike held pursuant to such belief may be
legal. [NUWHRAI v NLRC, 1998]
(4) Unlawful means and methods
Purpose and means test
There must be concurrence between the
validity of the purpose of the strike and the
means of conducting it.
A strike is a legitimate weapon in the
universal struggle for existence. It is
considered as the most effective weapon in
protecting the rights of the employees to
improve the terms and conditions of their
employment. But 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
UP LAW BOC
obstruct public thoroughfares.
[Association of Independent Unions in
the Philippines (AIUP), et. al. v NLRC,
1999]
A legal strike m ay turn into an illegal
strike
Even if the strike is valid because its objective
or purpose is lawful, the strike may still be
declared invalid where the means employed
are illegal. [Phil. Diamond Hotel and Resort,
Inc. v. Manila Diamond Hotel Employees Union,
2006]
Examples of unlawful means and
methods
1) Acts of violence and terrorism
2) Destruction of property
Guidelines and Balancing of Interest
(1) A strike otherwise valid, if violent in
character, may be placed beyond the
pale.
(2) Care is to be taken especially where
an unfair labor practice is involved, to
avoid stamping it with illegality just
because it is tainted by such acts. To
avoid rendering illusory the
recognition of the right to strike,
responsibility in such a case should
be individual and not collective.
(3) A different conclusion would be
called for if the existence of force
while the strike lasts is pervasive and
widespread, consistently and
deliberately resorted to as a matter of
policy. It could be reasonably
concluded then that even if justified
as to ends, it becomes illegal because
of the means employed'.
(4) This is not by any means to condone
the utilization of force by labor to
attain its objectives. It is only to show
awareness that in labor conflicts, the
tension that fills the air as well as the
feeling of frustration and bitterness
could break out in sporadic acts of
violence.
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LABOR RELATIONS LABOR LAW
If there be in this case a weighing of interests
in the balance, the ban the law imposes on
unfair labor practices by management that
could provoke a strike and its requirement
that it be conducted peaceably, it would be,
to repeat, unjustified, considering all the facts
disclosed, to stamp the strike with illegality. It
is enough that individual liability be incurred
by those guilty of such acts of violence that
call for loss of employee status. Such an
approach is reflected in our recent decisions.
[Shell Oil Workers Union v. Shell Co. of the
Phils, 1971]
The Labor Code regulates the exercise of said
right by balancing the interests of labor and
management in the light of the overarching
public interest. Thus, paragraphs (c) and (f) of
Article 278 mandate the following procedural
steps to be followed before a strike may be
staged: filing of notice of strike, taking of
strike vote, and reporting of the strike vote
result to the DOLE. It bears stressing that
these requirements are mandatory, meaning,
non-compliance therewith makes the strike
illegal. The evident intention of the law in
requiring the strike notice and strike-vote
report is to reasonably regulate the right to
strike, which is essential to the attainment of
legitimate policy objectives embodied in the
law. [Stamford Mark Corp. v Julian, 2004]
(5) Violation of injunction order
An automatic injunction under Article 278 (g)
or a valid injunction order under the
exceptions to Article 279 must be complied
with. Otherwise, the strike becomes illegal.
(6) No strike/lockout provisions in the
CBA
A no strike, no lock-out is a valid provision
in the CBA. However, it only applies to
economic provisions. It cannot prevent a
strike which is grounded on unfair labor
practice. [Malayang Samahan ng mga
Manggagawa sa Greenfield v. Ramos, 2000]
I. LIABILITY OF UNION OFFICERS
UP LAW BOC
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. [Article 279(a)]
Note: 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.
[Article 279(a)]
II. LIABILITY OF ORDINARY WORKERS
General rule: Participation by a worker in a
lawful strike is not ground for termination of
his employment. [Article 279(a)]
Exception: When the worker participated in
illegal acts during the strike.
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. 279. Only the
union officers are deemed to have lost their
employment status.
III. 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. [Article 279(a)]
IV. WAIVER OF ILLEGALITY OF STRIKE
W hen defense of illegality of strike is
deemed waived
An employer can be deemed to have waived
the defense that a strike is illegal. In one case,
the Court held that:
Admitting for the sake of argument that the
strike was illegal for being premature, this
defense was waived by the [Company], when
it voluntarily agreed to reinstate the
radio operators. [Bisaya Land Transportation
Co., Inc. v. CIR, 1957]
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LABOR RELATIONS LABOR LAW
W hen defense of illegality of strike is
not deemed waived
The ruling cited in the Bisaya case that the
employer waives his defense of illegality of
the strike upon reinstatement of strikers is
applicable only to strikers who signified their
intention to return to work and were accepted
back. []
Truly, it is more logical and reasonable for
condonation to apply only to strikers who
signified their intention to return and did
return to work. The reason is obvious. These
strikers took the initiative in normalizing
relations with their employer and thus helped
promote industrial peace. However, as
regards the strikers who decided to
pursue with the case, [] the employer
could not be deemed to have
condoned their strike, because they had
not shown any willingness to normalize
relations with it. [Philippine Inter-Fashion, Inc.
v. NLRC, 1982]
However, the mere act of entering into a
compromise agreement cannot be deemed to
be a waiver of the illegality of the strike,
unless it such a waiver is clearly shown in the
agreement. The court has emphasized that
[for] a waiver to be valid and effective [it]
must be couched in clear and unequivocal
terms which leave no doubt as to the
intention of a party to give up a right or
benefit which legally pertains to him. [Filcon
Manufacturing Corp v. Lakas Manggagawa sa
Filcon Lakas Manggagawa Labor Center]
C.10 INJUNCTIONS
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 225 and 279 of
this Code. [Art. 266]
General Rule: Injunctions are prohibited.
Exceptions: Those provided under Art. 225
(referring to the Powers of the NLRC) in
connection with Art. 279 (on Prohibited
Activities) under the Labor Code.
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I. REQUISITES FOR LABOR INJUNCTIONS
Requisites for injunction to issue (in
accordance with the Powers of the
NLRC)
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 substantial and
irreparable damage to any party OR
render ineffectual any decision in
favor of such party
3. complainant has no adequate remedy
at law
4. public officers charged with the duty
to protect complainants property are
unable or unwilling to furnish
adequate protection [Art. 225 (e)]
Prohibited Activities
[Art. 279]
(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 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
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LABOR RELATIONS LABOR LAW
shall not constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.
(b) 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.
(c) No employer shall use or employ any
strike-breaker, nor shall any person be
employed as a strike-breaker.
(d) 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.
(e) 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.
II. INNOCENT BYSTANDER RULE
Test to Determine if a Party is an
Innocent Bystander
An "innocent bystander," who seeks to enjoin
a labor strike, must satisfy the court that
aside from the grounds specified in Rule 58
of the Rules of Court, it is entirely
different from, without any
connection whatsoever to, either
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party to the dispute and, its interests
are totally foreign to the context
thereof. [MSF Tire and Rubber Inc. v. CA,
1999]
Injunction Available to Innocent
Bystanders
An innocent by-stander is entitled to
injunction if it is affected by the activities of a
picketing union.
Rationale
The right [to picket] may be regulated at the
instance of [] `innocent bystanders' if it
appears that the inevitable result of its
exercise is [1] to create an impression that a
labor dispute with which they have no
connection or interest exists between them
and the picketing union or [2] constitute an
invasion of their rights. [Liwayway Publishing
v. Permanent Concrete Worker's Union, 1981]
PAGE 206 OF 222
LABOR RELATIONS LABOR LAW
VIII. Procedure and
Jurisdiction
A. LABOR ARBITER
A.1 JURISDICTION
Except as otherwise provided under the Code
the Labor Arbiters shall have 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;
(5) Cases arising from any violation of Art.
279 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. 224]
(7) Money claims arising out of employer-
employee 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. 233]
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(10) Other cases as may be provided by law.
Requisites of LAs jurisdiction over
Money Claim s
(1) Money claims arose from ER-EE relations,
and
(2) Money claims arose from law or contracts
other than a CBA
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]
If m oney claim s do not arise from ER-
EE relations
Regular courts has jurisdiction
If m oney claim s arise from ER-EE
relations but by virtue of
implementation of CBA
Voluntary Arbitrator has jurisdiction
Exclusive and Original Jurisdiction
subject to Articles 274 and 275
A case under Art 224 may be lodged instead
with a voluntary arbitrator. The policy of the
law is to give primacy to voluntary modes of
settling dispute.
I. VERSUS REGIONAL DIRECTOR
Jurisdiction on Money Claims (Labor
Arbiter vs. Regional Director)
(1) A money claim arising from
employer-employee relations, except
SSS, ECC/Medicare claims, is within
the jurisdiction of a labor arbiter if:
(2) The claim, regardless of amount, is
accompanied with a claim of
reinstatement; or
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LABOR RELATIONS LABOR LAW
(3) 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
[Art. 129]
A.2 PROCEDURE
W here to File
Complaint should be filed with the Regional
Arbitration Branch (RAB) having jurisdiction
over the workplace of the complainant or
petitioner.
Workplace - place or locality where
the employee is regularly assigned at
the time the cause of action arose.
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.
Some Rules on Venue
1. Exclusion. Where 2 or more Regional
Arbitration Branches have jurisdiction
over the workplace of the complainant,
that first which acquired jurisdiction over
the case shall exclude others.
2. W aiver. When venue is not objected to
before the filing of position papers, such
issue shall be deemed waived.
3. Transfer. Venue of an action may be
transferred to a different Regional
Arbitration Branch upon written
agreement of the parties or upon order of
the LA in meritorious cases and on
motion of the proper party.
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4. OFW Cases. Cases involving overseas
Filipino workers may be filed before the
RAB having jurisdiction over the place
where the complainant resides or where
the principal office of any of the
respondents is situated.
A.3. NATURE OF THE PROCEEDING
Proceedings before the LA are non-litigious.
The Labor Arbiter is not bound by the
technical rules of procedure.
The Labor Arbiter shall use all reasonable
means to ascertain the facts in each speedily
and objectively. [Art. 227]
A.4 REQUIREMENTS TO PERFECT APPEAL
TO NLRC
(1) The appeal should be filed within the
reglementary period;
(2) The Memorandum of Appeal should
be under oath;
(3) The appeal fee should be paid;
(4) There should be posting of cash or
surety bond, if judgment involves
monetary award; and
(5) There should be proof of service to
the adverse party.
A.5 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]
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LABOR RELATIONS LABOR LAW
B. NATIONAL LABOR RELATIONS
COMMISSION (NLRC)
B.1 JURISDICTION
NLRC divisions
(1) Original Jurisdiction: Over petitions for
injunction or temporary restraining order
under Art. 225 (e).
(2) Exclusive Appellate Jurisdiction: over all
cases decided by labor arbiters (Art
224[b]) and the DOLE regional directors
under Art 129.
Period of Appeal
(1) Labor Arbiter to NLRC: Decisions and
Resolutions of the LA shall be final and
executory unless appealed to the NLRC
by any or both parties within 10
calendar days from receipt thereof.
[2005 NLRC Rules of Procedure]
(2) Regional director to NLRC:
Decisions of the Regional director shall
be final and executory unless appealed
within 5 days from receipt thereof. [Art.
129]
Note: If the last day of the reglementary
period falls on a 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
It is clear from the NLRC Rules of Procedure
that appeals must be verified and certified
against forum-shopping by the parties-in-
interest themselves. The purpose of
verification is to secure an assurance that the
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allegations in the pleading are true and
correct and have been filed in good faith.
[Antonio B. Salenga, et al. v. CA, 2012]
B.2 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.
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]
B.3 REMEDIES
Requisites for Perfection of Appeal to
the Court of Appeals
[Rule 43]
(1) The appeal shall be:
Filed within the reglementary period;
Verified by the appellant himself in
accordance with 4, Rule 7 of the
Rules of Court;
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;
In three (3) legibly typewritten or
printed copies; and
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
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LABOR RELATIONS LABOR LAW
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.
B.4 CERTIFIED CASES
Definition
Certified labor disputes are cases certified to
the Commission for compulsory arbitration
under Art. 278 (g) of the Labor Code. [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. 278]
Function of the NLRC
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the
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NLRC is not sitting as a judicial court but as relative or incident to the certified case
an administrative body charged with the duty before it.
to implement the order of the Secretary. Its
5. When a certified labor dispute involves a
function only is to formulate the terms and
business entity with several workplaces
conditions of the CBA and cannot go beyond
located in different regions, the Division
the scope of the order. Moreover, the
having territorial jurisdiction over the
Commission is further tasked to act within the
principal office of the company shall
earliest time possible and with the end in
acquire jurisdiction to decide such labor
view that its action would not only serve the
dispute; unless the certification order
interests of the parties alone, but would also
provides otherwise. [Section 3, 2011 NLRC
have favorable implications to the community
Rules and Procedures]
and to the economy as a whole. This is the
clear intention of the legislative body in
enacting Art. 278 paragraph (g) of the Labor
Effects of Defiance
Code, as amended by Section 27 of R.A. 6175
[Union of Filipino Employees v. NLRC, 1990] Non-compliance with the certification order
of the SOLE shall be considered as an illegal
act committed in the course of the strike or
Effects of Certification lockout and shall authorize the Commission
to enforce the same under pain of immediate
1. Upon certification, the intended or
disciplinary action, including dismissal or loss
impending strike or lockout is
of employment status or payment by the
automatically enjoined, notwithstanding
locking-out employer of backwages,
the filing of any motion for
damages and/or other affirmative relief, even
reconsideration of the certification order
criminal prosecution against the liable
nor the non-resolution of any such
parties.
motion which may have been duly
submitted to the Office of the Secretary of The Commission may also seek the
Labor and Employment. assistance of law enforcement agencies to
ensure compliance and enforcement of its
2. If a work stoppage has already taken
orders and resolutions. [Sec. 4, 2011 NLRC
place at the time of the certification, all
Rules and Procedures]
striking or locked out employees shall
immediately return to work and the
employer shall immediately resume
Strict Compliance of Assumption and
operations and readmit all workers under
Certification Orders
the same terms and conditions prevailing
before the strike or lockout. The Secretary's assumption and certification
orders being executory in character are to be
3. All cases between the same parties,
strictly complied with by the parties even
except where the certification order
during the pendency of a petition questioning
specifies otherwise the issues submitted
their validity for this extraordinary authority
for arbitration which are already filed or
given by law to the Secretary of Labor is
may be filed, and are relevant to or are
"aimed at arriving at a peaceful and speedy
proper incidents of the certified case,
solution to labor disputes, without
shall be considered subsumed or
jeopardizing national interests." [Union of
absorbed by the certified case, and shall
Filipro Employees v. NLRC, 1990]
be decided by the appropriate Division of
the Commission.
4. The parties to a certified case, under pain Procedure in certified cases
of contempt, shall inform their counsels (a) When there is no need to conduct a
and the Division concerned of all cases clarificatory hearing, the Commission
pending with the Regional Arbitration shall resolve all certified cases within 30
Branches and the Voluntary Arbitrators calendar days from receipt by the

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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.
(b) 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.
(c) No motion for extension or postponement
shall be entertained. [Sec. 5, 2011 NLRC
Rules and Procedures]
Execution of Judgment
Upon issuance of the entry of judgment, the
Commission motu propio 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]
C. BUREAU OF LABOR RELATIONS
MED-ARBITERS
C.1 JURISDICTION (ORIGINAL AND
APPELLATE)
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.
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LABOR RELATIONS LABOR LAW
The Bureau shall have fifteen (15) calendar
days to act on labor cases before it, subject
to extension by agreement of the parties.
[Art. 232]
Original Jurisdiction
Decisions of the BLR through its original
jurisdiction are appealable to the Secretary of
Labor and Employment.
Appellate Jurisdiction
BLR has the power to review the decisions of
the Regional Director
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.
D. NATIONAL CONCILIATION AND
MEDIATION BOARD
D.1 NATURE OF PROCEEDINGS
Conciliation and mediation is non-
litigious/non-adversarial, 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 them wider
latitude of possible approaches to the
problem.
D.2 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.
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Mediation reinstatement: Provided, further, That the

aggregate money claims of each employee
A mild intervention by a neutral third party,
or househelper do not exceed five thousand
the Conciliator-Mediator, wherein the CM
pesos (P5,000).
advises the parties or offers solutions or
alternatives to the problems with the end in The Regional Director or hearing officer shall
view of assisting them towards voluntarily decide or resolve the complaint within thirty
reaching their own mutually acceptable (30) calendar days from the date of the filing
settlement of the dispute. of the same.
Any sum thus recovered on behalf of any
employee or househelper pursuant to this
Conciliation Mediation
Article shall be held in a special deposit
C-M facilitates C-M assists parties to account by, and shall be paid, on order of the
disputants to keep voluntarily reach Secretary of Labor and Employment or the
things calm, delivers mutually acceptable Regional Director directly to the employee or
messages back and settlement. househelper concerned.
forth between the
Any such sum not paid to the employee or
parties.
househelper, because he cannot be located
after diligent and reasonable effort to locate
him within a period of three (3) years, shall
D.3 PREVENTIVE MEDIATION
be held as a special fund of the Department
Preventive mediation case refers to the of Labor and Employment to be used
potential or brewing labor dispute which is exclusively for the amelioration and benefit
the subject of a formal or informal request for of workers.
conciliation and mediation assistance sought
The Secretary of Labor and Employment or
by either or both parties in order to remedy,
his duly authorized representative may
contain or prevent its degeneration into a full
supervise the payment of unpaid wages and
blown dispute through amicable settlement.
other monetary claims and benefits,
including legal interest, found owing to any
employee or househelper under this Code.
E. DOLE REGIONAL DIRECTORS [Art. 129]

E.1 JURISDICTION
NOTE: See RA 10361 (Kasambahay Law) on
Small money claims settlement of disputes.
Recovery of wages, sim ple m oney
claims and other benefits. Upon
Mechanism for Settlement of Disputes. All
complaint of any interested party, the
labor-related disputes shall be elevated to
Regional Director of the Department of
the DOLE Regional Office having jurisdiction
Labor and Employment or any of the duly
over the workplace without prejudice to the
authorized hearing officers of the
filing of a civil or criminal action in
Department is empowered, through
appropriate cases. The DOLE Regional Office
summary proceeding and after due notice, to
shall exhaust all conciliation and mediation
hear and decide any matter involving the
efforts before a decision shall be rendered.
recovery of wages and other monetary claims
and benefits, including legal interest, owing Ordinary crimes or offenses committed under
to an employee or person employed in the Revised Penal Code and other special
domestic or household service or penal laws by either party shall be filed with
househelper under this Code, arising from the regular courts. [Sec. 37, RA 10361]
employer-employee relations: Provided, That
such complaint does not include a claim for

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F. DOLE SECRETARY The Secretary of Labor and Employment or

his duly authorized representative is hereby
empowered to inquire into the financial
F.1 VISITORIAL AND ENFORCEMENT activities of legitimate labor organizations
POWERS upon the filing of a complaint under oath and
duly supported by the written consent of at
The Secretary of Labor and Employment or
least twenty percent (20%) of the total
his duly authorized representatives, including
membership of the labor organization
labor regulation officers, shall have access to
concerned and to examine their books of
employers records and premises at any time
accounts and other records to determine
of the day or night whenever work is being
compliance or non-compliance with the law
undertaken therein, and the right to copy
and to prosecute any violations of the law
therefrom, to question any employee and
and the union constitution and by-laws:
investigate any fact, condition or matter
Provided, That such inquiry or examination
which may be necessary to determine
shall not be conducted during the sixty (60)-
violations or which may aid in the
day freedom period nor within the thirty (30)
enforcement of this Code and of any labor
days immediately preceding the date of
law, wage order or rules and regulations
election of union officials. [Art. 289]
issued pursuant thereto.
Notwithstanding the provisions of Articles
129 and [224] of this Code to the contrary, F.2 POWER TO SUSPEND/EFFECTS OF
and in cases where the relationship of TERMINATION
employer-employee still exists, the Secretary
The Secretary of the Department of Labor
of Labor and Employment or his duly
and Employment may suspend the effects of
authorized representatives shall have the
the termination pending resolution of the
power to issue compliance orders to give
dispute in the event of a prima facie finding
effect to the labor standards provisions of this
by the appropriate official of the Department
Code and other labor legislation based on the
of Labor and Employment before whom such
findings of labor employment and
dispute is pending that the termination may
enforcement officers or industrial safety
cause a serious labor dispute or is in the
engineers made in the course of inspection.
implementation of a mass lay-off. [Art. 283
The Secretary or his duly authorized
(b)]
representatives shall issue writs of execution
to the appropriate authority for the
enforcement of their orders, except in cases
F.3 ASSUMPTION OF JURISDICTION
where the employer contests the findings of
the labor employment and enforcement When in his opinion, there exist a labor
officer and raises issues supported by dispute causing or likely to cause a strike or
documentary proofs which were not lockout in an industry indispensable to the
considered in the course of inspection. [Art. national interest, the SOLE may assume
128] jurisdiction over the dispute and decide it or
certify the same to the Commission for
compulsory arbitration.[Art. 269 (g)]
The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the
premises, books of accounts and records of F.4 APPELLATE JURISDICTION
any person or entity covered by this Title,
a. Orders issued by the duly authorized
require it to submit reports regularly on
representative of the SOLE under Art. 128
prescribed forms, and act on violation of any
may be appealed to the latter.
provisions of this Title. [Art. 37]
b. Denial of application for union
registration or cancellation of union
registration originally rendered by the

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BLR may be appealed to the SOLE (if
originally rendered by the Regional Office,
appeal should be made to the BLR)
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. 272]
F.5 VOLUNTARY ARBITRATION POWERS
Before or at any stage of the compulsory
arbitration process, the parties may opt to
submit their dispute to voluntary arbitration.
[Art. 278 (h)]
The Secretary of Labor and Employment []
shall decide or resolve the dispute []. [Art.
278 (i)]
G. GRIEVANCE MACHINERY AND
VOLUNTARY ARBITRATION
G.1 SUBJECT MATTER OF GRIEVANCE
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
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.
G.2 VOLUNTARY ARBITRATOR
I. JURISDICTION
Exclusive and Original Jurisdiction
Over Grievances
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LABOR RELATIONS LABOR LAW
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. 274]
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. [Art.
274]
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. 275]
Even if the specific issue brought before the
arbitrators merely mentioned the question of
whether an employee was discharged for
just cause, they could reasonably assume
that their powers extended beyond the
determination thereof to include the power to
reinstate the employee or to grant back
wages. In the same vein, if the specific issue
brought before the arbitrators referred to the
date of regularization of the employee, law
and jurisprudence gave them enough leeway
as well as adequate prerogative to determine
the entitlement of the employees to higher
benefits in accordance with the finding of
regularization. [Manila Pavilion Hotel, etc. vs.
Henry Delada, 2011]
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II. 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
determined by the VA or panel of Vas.
Hearing may be adjourned for cause or upon
agreement by the parties.
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.
NOTE: See Page 39 on availability of motion
for reconsideration.
Execution of award/decision
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. 275]
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,
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LABOR RELATIONS LABOR LAW
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. 276]
III. REMEDIES
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. [Rule 43 1, Rules of Court]
NOTE: See Page 39 on availability of motion
for reconsideration.
H. COURT OF APPEALS
H.1 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, 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.
Section 2.Petition for prohibition.
When the proceedings of any tribunal,
corporation, board, officer or person, whether
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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.
Section 3.Petition for m andam us.
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 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.
I. SUPREME COURT
[A]ll 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.
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LABOR RELATIONS LABOR LAW
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]
I.1 RULE 45, RULES OF COURT
Section 1. Filing of petition with
Supreme Court. A party desiring to
appeal by certiorari from a judgment or final
order or resolution of the Court of Appeals,
the Sandiganbayan, the Regional Trial Court
or other courts whenever authorized by law,
may file with the Supreme Court a verified
petition for review on certiorari. The petition
shall raise only questions of law which must
be distinctly set forth.
Appeal from CA to SC should be under Rule
45 (Petition for Review on Certiorari) and not
Rule 65 (Special Civil Action for Certiorari).
[Sea Power Shipping Enterprises, Inc. vs. CA,
2001]
Since the Court of Appeals had jurisdiction
over the petition under Rule 65, any alleged
errors committed by it in the exercise of its
jurisdiction would be errors of judgment
which are reviewable by timely appeal and
not by a special civil action of certiorari. If the
aggrieved party fails to do so within the
reglementary period, and the decision
accordingly becomes final and executory, he
cannot avail himself of the writ of certiorari,
his predicament being the effect of his
deliberate inaction. [Tirazona v Phil EDS
Techno-Service Inc, 2009]
J. PRESCRIPTION OF ACTIONS
No claim for compensation shall be given due
course unless said claim is filed with the
System (SSS or GSIS, as the case may be)
within three (3) years from the time the cause
of action accrued. [Art. 207, as amended by
Section 5, Presidential Decree No. 1921]
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(1) Money Claims
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 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. [Art. 306]
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.
The day the action may be brought is the day
a claim started as a legal possibility. In the
present case, the day came when petitioner
learned of Asiakonstrukts deduction from his
salary of the amount of advances he had
received but had, by his claim, been settled,
the same having been reflected in his
payslips, hence, it is assumed that he learned
of it at the time he received his monthly
paychecks. [Anabe v Asian Const, et al., 2009]
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LABOR RELATIONS LABOR LAW
(2) Illegal dismissal
The time of his dismissal within which to
institute In illegal dismissal cases, the
employee concerned is given a period of four
years from 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:
1) Upon an injury to the rights of the
plaintiff;
2) Upon a quasi-delict;
However, when the action arises from or out
of any act, activity, or conduct of any public
officer involving the exercise of powers or
authority arising from Martial Law including
the arrest, detention and/or trial of the
plaintiff, the same must be brought within
one (1) year. [As amended by PD No. 1755,
Dec. 24, 1980.]
(3) Unfair Labor Practice
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. 305]
Concept of unfair labor practice and
procedure for prosecution thereof.
[] 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 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
UP LAW BOC LABOR RELATIONS LABOR LAW

as proof of compliance of the requirements (6) Kasambahay Law

therein set forth. [Art. 258, as amended by
All existing arrangements between a
Batas Pambansa Bilang 70, May 1, 1980 and
domestic worker and the employer shall be
later further amended by Section 19, Republic
adjusted to conform to the minimum
Act No. 6715, March 21, 1989]
standards set by this Act within a period of
sixty (60) days after the effectivity of this
Act: Provided, That adjustments pertaining to
(4) Offenses penalized by the Labor
wages shall take effect immediately after the
Code and IRR issued pursuant thereto
determination and issuance of the
Offenses penalized under this Code and the appropriate wage order by the
rules and regulations issued pursuant thereto RTWPBs: Provided, further, That nothing in
shall prescribe in three (3) years. [Art. 305] this Act shall be construed to cause the
diminution or substitution of any benefits and
privileges currently enjoyed by the domestic
(5) Prescriptive Period of Illegal worker hired directly or through an agency.
Recruitment Cases [Sec. 41]
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 8040]

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PROCEDURE FOR UNION REGISTRATION

Filing of application

If independent union, chartered local or If federation, national union or workers'

workers' association association operating in more than one
region

File with Regional Office File with BLR

Act within 1 day from receipt Act within 30 days

Approve application Deny application for failure to comply with

requirements

Within the day, notify applicant of

issue certificate of registration requirements and order completion within
30 days

Completed Not completed

Issue certificate of Denial without prejudice

registration

Appeal within 10 days from receipt of notice

to BLR/SOLE

BLR/SOLE to decide within 20 days from

receipt of records of case

Decision can be appealed to CA via Rule 65

CA decision can be appealed to SC via Rule 45

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SUMMARY OF UNION REGISTRATION

W orkers association
National Union or
Independent Union Chartered Local W orkers Association operating in m ore
Federation
than one region
Requirements (1) Name of labor union 1) Name of federation (1) Charter certificate 1) Name of association Same as workers
for and its principal and its principal issued by national and its principal association
application address addresses union or federation address
+
Name of its officers 2) Name of its officers Name of officers and
7) Resolution of
and their respective and their respective their respective
Other requirements (to membership of each
addresses addresses addresses
be entitled to all other member association,
(2) Approximate 3) Minutes of rights and privileges of 2) Minutes of duly approved by its
number of organizational LLO) organizational board of directors
employees in the meetings and list of meetings and list of
(a) Names of
bargaining unit participating participating
local/chapters
where it seeks to employees members
officers and their
operate
4) Annual financial addresses 3) Annual financial
(3) Statement that it is reports (if it has been reports (if it has been
(b) Principal office of
not a chartered local in existence for more in existence for more
local/chapter
of any federation or than one year) or than one year) or
natl union statement that no (c) Chapters CBL, or statement that no
collection has been statement that collection has been
(4) Minutes of
made chapter has adopted made
organizational
the CBL of federation
meetings and list of 5) CBL, minutes of its 4) CBL, minutes its of
or national union
participating adoption and adoption and
employees ratification, and list (d) Certification under ratification, list of
of participating oath by secretary participating
(5) Name of all its
employees (list may and attestation by members, and date
members comprising
be dispensed with if President of ratification (unless
at least 20% of
ratification was done ratification was done
employees in BU
during during
(6) Annual financial organizational organizational
UP LAW BOC LABOR RELATIONS LABOR LAW
SUMMARY OF UNION REGISTRATION

in existence for more meeting) meeting)

than 1 year) or
6) Resolution of 5) Registration fee
statement that no
affiliation of at least (P50.00)
collection has been
10 LLOs
made 6) Certification under
(independent or
oath by Secretary or
(7) CBL, minutes of its chartered locals)
treasurer and
adoption and which are the SEBA
attestation by
ratification, and list in their BU
President
of participating EEs
7) Names and
(which can be
addresses of
dispensed with if
companies where
CBL adopted during
affiliates operate
organizational
and list of all
meeting)
members of affiliates
(8) Registration Fee in each company
(P50.00) involved
(9) Certification under 8) Registration fee
oath by secretary or (P50.00)
treasurer and
9) Certification under
attestation by
oath by secretary or
President of all the
treasurer and
requirements
attestation by
President of all the
requirements

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