LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 1

Elizabeth Lemon’s Notes

of such payment; and
SALIENT TOPICS IN LABOR
(5) That if a female worker should give birth or suffer a
1. EXPANDED MATERNITY BENEFIT miscarriage or emergency termination of pregnancy
without the required contributions having been
RA 11210 remitted for her by her employer to the SSS, or without
Section 3. Grant of Maternity Leave.— All covered the latter having been previously notified by the
female workers in government and the private sector, employer of the time of the pregnancy, the employer
including those in the informal economy, regardless of shall pay to the SSS damages equivalent to the benefits
civil status or the legitimacy of her child, shall be which said female member would otherwise have been
granted one hundred five (105) days maternity leave entitled to.
with full pay and an option to extend for an additional
thirty (30) days without pay: Provided, That in case the In case the employee qualifies as a solo parent under
worker qualifies as a solo parent under Republic Act No. Republic Act No. 8972, or the "Solo Parents’ Welfare
8972, or the "Solo Parents’ Welfare Act", the worker Act", the employee shall be paid an additional maternity
shall be granted an additional fifteen (15) days benefit of fifteen (15) days.
maternity leave with full pay.
(b) An additional maternity leave of thirty (30) days,
Enjoyment of maternity leave cannot be deferred but without pay, can be availed of, at the option of the
should be availed of either before or after the actual female worker: Provided, That the employer shall be
period of delivery in a continuous and uninterrupted given due notice, in writing, at least forty-five (45) days
manner, not exceeding one hundred five (105) days, as before the end of her maternity leave: Provided, further,
the case may be. That no prior notice shall be necessary in the event of a
medical emergency but subsequent notice shall be given
Maternity leave shall be granted to female workers in to the head of the agency.
every instance of pregnancy, miscarriage or emergency
termination of pregnancy, regardless of frequency: (c) Workers availing of the maternity leave period and
Provided, That for cases of miscarriage or emergency benefits must receive their full pay. Employers from the
termination of pregnancy, sixty (60) days maternity private sector shall be responsible for payment of the
leave with full pay shall be granted. salary differential between the actual cash benefits
received from the SSS by the covered female workers
Section 5. Maternity Leave for Female Workers in the and their average weekly or regular wages, for the entire
Private Sector.— Any pregnant female worker in the duration of the maternity leave, with the following
private sector shall be granted a maternity leave of one exceptions, subject to the guidelines to be issued by the
hundred five (105) days with full pay, regardless of Department of Labor and Employment (DOLE):
whether she gave birth via caesarian section or natural
delivery, while maternity leave of sixty (60) days with (1) Those operating distressed establishments;
full pay shall be granted for miscarriage or emergency
termination of pregnancy. (2) Those retail/service establishments and other
enterprises employing not more than ten (10) workers;
(a) A female Social Security System (SSS) member who
has paid at least three (3) monthly contributions in the (3) Those considered as micro-business enterprises and
twelve (12)-month period immediately preceding the engaged in the production, processing, or
semester of her childbirth, miscarriage, or emergency manufacturing of products or commodities including
termination of pregnancy shall be paid her daily agro-processing, trading, and services, whose total
maternity benefit which shall be computed based on her assets are not more than Three million pesos
average monthly salary credit for one hundred five (105) (₱3,000,000.00); and
days, regardless of whether she gave birth via caesarian
section or natural delivery, subject to the following (4) Those who are already providing similar or more
conditions: than the benefits herein provided.

(1) That the female worker shall have notified her Provided, That said exemptions shall be subject to an
employer of her pregnancy and the probable date of her annual submission of a justification by the employer
childbirth, which notice shall be transmitted to the SSS claiming exemption for the approval of the DOLE
in accordance with the rules and regulations it may
provide;

(2) That the full payment shall be advanced by the

employer within thirty (30) days from the filing of the
maternity leave application;

(3) That payment of daily maternity benefits shall be a

bar to the recovery of sickness benefits provided under
Republic Act No. 1161, as amended, for the same period
for which daily maternity benefits have been received;

(4) That the SSS shall immediately reimburse the

employer of one hundred percent (100%) of the amount
of maternity benefits advanced to the female worker by
the employer upon receipt of satisfactory and legal proof

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to
sit in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 2
Elizabeth Lemon’s Notes

SOCIAL JUSTICE In essence, social justice is both a juridical principle

and a societal goal.
LABOR LAW AND SOCIAL LEGISLATION
Distinction exists between “labor law” and “social As a juridical principle, it prescribes equality of the
legislation” but it is not easy to delineate. No law dictionary, people, rich or poor, before the law. As a goal, it means
local or foreign, defines “social legislation.” the attainment of decent quality of life of the masses
through humane productive efforts. The process and
But a definition is called for. We define social legislation as the goal are inseparable because one is the synergistic
those laws that provide particular kinds of protection or cause and effect of the other — legal equality opens
benefits to society or segments thereof in furtherance of opportunities that strengthen equality which creates
social justice. In that sense, labor laws are necessarily social more opportunities.
legislation.
The pursuit of social justice does not require making
Agrarian reform law is a social legislation, so is the law the rich poor but, by lawful process, making the rich
providing for a social security system. The Labor Code share with the government the aim to realize social
provisions on State Insurance Fund to cover work-related justice.
injuries and occupational diseases are, likewise, pieces of
social legislation. This perception proceeds from a forthright
pronouncement by our Supreme Court way back in
Insisting to differentiate, some authors contend that “labor 1949:
laws” directly affect employment while “social legislation”
governs effects of employment. Social justice does not champion division of
property or equality of economic status; what it and
This insistence hardly makes things clear. For instance, it is the Constitution do guaranty are equality of
hardly defensible to say that emergency medical treatment opportunity, equality of political rights, equality
rendered at the worksite to a worker is covered by “labor before the law, equality between values given and
law” but not by social legislation, while medical treatment received, and equitable sharing of the social and
rendered outside the workplace to the same person for the material goods on the basis of efforts exerted in their
same injury involves a “social legislation” but not a labor production. (Guido vs. Rural Progress Administration,
law. L-2089, October 31, 1949)

Specifically, how can one say that medical treatment under The 1987 Constitution, formulated by the 1986
Article 162 of the Labor Code is labor law but not social Constitutional Commission and ratified by the people
legislation, while sickness benefit under Section 14 of the on February 2, 1987, gives fundamental significance to
Social Security law is social legislation but not labor law? social justice. The Declaration of State Policies
provides that “the State shall promote a just and
If distinction must be stressed at all, it is simply in the sense dynamic social order that will ensure the prosperity and
that labor laws are social legislation but not all social independence of the nation and free the people from
legislations are labor laws. In other words, in relation to poverty through policies that provide adequate social
each other, social legislation as a concept is broader, labor services, promote full employment, a rising standard of
laws narrower. living, and an improved quality of life for all.”

Succinctly, the Constitution says “the State shall

SOCIAL JUSTICE AS THE AIM promote social justice in all phases of national
development.”
The aim and the reason and, therefore, the justification of
labor laws is social justice. Furthermore, “the State affirms labor as a primary
social economic force.” Therefore, “it shall protect the
Social justice, according to Dr. Jose P. Laurel in Calalang vs. rights of workers and promote their welfare.”
Williams, 70 Phil. 726 [1940], is “neither communism, nor
despotism, nor atomism nor anarchy, but the humanization Not content with these basic State policy declarations,
of laws and the equalization of social and economic forces by the Commission devotes an entire article — Article XIII
the State so that justice in its rational and objectively secular with 14 sections — to “Social Justice and Human
conception may at least be approximated. Rights.” This Article in part provides:

Social justice means the promotion of the welfare of all the “Section 1. The Congress shall give highest priority to
people, the adoption by the Government of measures the enactment of measures that protect and enhance
calculated to insure economic stability of all the component the right of all the people to human dignity, reduce
elements of society through the maintenance of proper social, economic, and political inequalities, and remove
economic and social equilibrium in the interrelations of the cultural inequities by equitably diffusing wealth and
members of the community, constitutionally, through the political power for the common good.
adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers “To this end, the State shall regulate the acquisition,
underlying the existence of all governments, on the ownership, use, and disposition of property and its
time-honored principle of salus populi est suprema lex.” increments.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 3
Elizabeth Lemon’s Notes

“Sec. 2. The promotion of social justice shall include the

Enumeration of Labor Enumeration of Rights
commitment to create economic opportunities based on
Rights in the Social in the Bill of Rights
freedom of initiative and selfreliance.”
Justice thrust in the
It can be seen that the social justice concept in the 1987
Constitution
Constitution transcends the economic sphere. Political
equality is likewise a goal of social justice.
Needs implementation. Self executory - no need for
Towards this aim, the State is commanded not just to create Congress has to pass laws. implementing legislation. It
economic opportunities but also to diffuse economic wealth. is already the source of
“This,” says the constitutionalist Fr. Joaquin Bernas, S.J., right.
“is a recognition of the reality that, in a situation of extreme
mass poverty, political rights, no matter how strongly SITUATIONAL
guaranteed by the constitution, become largely rights When the employer says “the employee waived his right
enjoyed by the upper and middle classes and are a myth for to minimum wage -Does that have value in labor
the underprivileged. controversies?
Without the improvement of economic conditions there can Ans: You CANNOT waive minimum wage. It is
be no real enhancement of the political rights of the people. contrary to public policy. When the state protects labor,
that means, he protects labor from itself. Even the
[TSN] laborer is protected against himself. He cannot waive
labor rights.
SOCIAL JUSTICE
One of the distinguishing features of our Constitution You can only waive your labor rights in the backward
is that it has this clear bias or preference for the so-called direction. You cannot waive it forward.
social justice.
When you go to the labor arbiter and then the labor
Q: What is social justice? arbiter brings you and your employer together and says
A: 2 basic elements in social justice. There’s a negative “is there a possible compromise?”
element and the positive element.
Ans: Here, you can waive because it is REDUCED TO
Negative Positive A MONEY CLAIM. You are already looking back.
1. Our society is 1. Mandate to the
radically and State to give more in law This is one of the ways the law protects the worker. He
fundamentally flawed. to those who have less in has the right to even go back to his word.
- It’s a sick society. life.
Justice is not - That is the Even if his waiver was notarized, it is not
conspicuous. Too many revolutionary concept. waivable in the forward direction.
have too few. Too little Because in civil law
and a few have so much society, law simply puts This is one of the few instances in law where there is a
more than what they or order. Law does not MANDATORY APPEAL
their industry have to have a transformative
possess. function. MANAGERIAL PREROGATIVE, definition
Sinultian sa kilid-kilid, Our law is supposed to Under the doctrine of management prerogative, every
nagkalata ang kabos. remedy this imbalance, employer has the inherent right to regulate, according
this fundamental flaw. to his own discretion and judgment, all aspects of
By giving more to those employment, including hiring, work assignments,
who have less in life. working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of
AIM OF SOCIAL JUSTICE employees. The only limitations to the exercise of this
The remote aim of social justice is for the general welfare. prerogative are those imposed by labor laws and the
Only, in its immediate effect it gives more to those who have principles of equity and substantial justice. (Peckson vs.
less in life. But in so attending to the many, you save all of Robinsons supermarket)
them. That is the thinking and that is in our constitution. .
BUT NOTE: According to father, managerial
Because of social justice, the constitution singles out sectors prerogative is:
in society that are considered rightful beneficiaries of the 1. Not an inherent right
law that will give to those who have less. One of them 2. The source is the civil code
principally is the working man. That is why there is an 3. This pertains to ownership.
article on labor and social justice. a) Jus possidendi - right to possess
b) Jus utendi - right to use
c) Jus abutendi - right to consume
d) Jus fruendi - right to fruits

What balances managerial prerogative is the LABOR

RIGHTS GRANTED TO EMPLOYEES

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 4
Elizabeth Lemon’s Notes

HOW LABOR IS PROTECTED IN CASE OF DOUBT RESOLVE IN FAVOR OF

1. Legislator passes laws in favor of labor granting them LABOR
rights
- NOTE: Social justice allows for non impairment of The judge or the tribunal, has no choice but to
contracts. Contracts are not sacred when it pertains to social resolve that doubt in favour of labor. That is a
justice. mandate.

2. Creation of governmental agencies charged with If he (employee) can prove that he was engaged,
enforcing these laws. suffered or permitted to work, that is enough. Now
a) Department of labor and the burden of proof falls on the employer to prove
b) System of labor tribunals that he was paid.
i. Technical rules not applicable
ii. Procedure is summary in nature Q: So employers are mandated by law to
Review of cases Priority keep payroll records for at least 3 years.
1. Criminal 1. Labor Why?
2. Labor 2. Civil
3. Admin A: The prescriptive period for money
claims is 3 years.

BIRTH OF THE LC -The Labor Code of the Philippines states: “All

Blas Ople - father of the LC doubts in the implementation and interpretation of the
LC – designed to be a dynamic & growing body of laws w/c provisions of the Labor Code, including its
will reflect continually the lessons of practical implementing rules and regulations, shall be resolved
application & experience in favor of labor.”

-Under the New Civil Code: “In case of doubt, all

7 PRINCIPLES UNDERLYING THE CODE labor legislation and all labor contracts shall be
1. Labor relations must be made both responsive & construed in favor of the safety and decent living for the
responsible to national devt laborer.”

2. Labor laws/labor relations during a period of

national emergency must substitute rationality for WAIVER OF LABOR RIGHTS
confrontation;  strikes or lockouts give way to a
rational process w/c is arbitration An employee can not agree to a wage below the
minimum wage provided by law or to waive his right
3. Laggard justice in the labor field is injurious to the to overtime pay for overtime work rendered.
workers, the EERS & the public; labor justice can
be made expeditious w/o sacrificing due process. HOWEVER, AN EMPLOYEE CAN VALIDLY
ENTER INTO A QUITCLAIM. THE REQUISITES
4. Manpower devt & EENT must be regarded as a ARE:
major dimension of labor policy, for there can be
no real equality of bargaining power under 1. That there was no fraud or deceit on the part of any
conditions of severe mass unemployment. of the parties;
2. That the consideration for the quitclaim is credible
5. There is a global labor market available to and reasonable; and
qualified Filipinos, esp those who are unemployed 3. That the contract is not contrary to law, public order,
or whose EENT is tantamount to unemployment public policy, morals or good customs or prejudicial to
bcoz of their very little earnings. a third person with a right recognized by law.

6. Labor laws must command adequate resources &

acquire a capable machinery for effective & NON DIMINUITION OF BENEFITS
sustained implementation; when labor laws Any benefit and supplement being enjoyed by
cannot be enforced, both EERS & the workers are employees cannot be reduced, diminished,
penalized, & only a corrupt few (those who are in discontinued or eliminated by the employer.
charge of implementation) may get the reward
they don’t deserve. The application of the principle presupposes that a
company practice, policy and tradition favorable to the
7. There shld be popular participation in national employees has been clearly established; and that the
policy-making through what is now called payments made by the company pursuant to it have
tripartism. ripened into benefits enjoyed by them.

To ripen into benefits, the following requisites

must concur:
1. It should have been practiced over a long period of
time; and,

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 5
Elizabeth Lemon’s Notes

2. It must be shown to have been consistent and deliberate. Other tests:

1. Two tiered Test
a) Control Test and Economic Dependence
ARTICLE 6. COVERAGE. Test
i. No written agreement or terms of
Labor Code is applicable to all workers, whether agricultural reference from which the relationship
or non-agricultural. can be based.

Fr G: WHO ARE COVERED?

1. Agricultural NUANCES OF THE POWER OF CONTROL TEST
2. Industrial
3. Commercial BASIS
Even if the employee is not Sterling Products vs.
juxtapose with the Sol
General rule: The provisions of the Labor Code is employer in the same place.
applicable when there is employer-employee (er-ee) Payment on a piece-rate Dy Keh Beng vs.
relationship. basis neither affirms nor International labor
negates the existence of an
Exceptions: employer-employee
1. Indirect employer’s liability (Art. 109); relationship. Merely a
2. Illegal recruitment (Art. 38); and, mode of payment
3. Misuse of POEA license (Art. 35). Power of control need not RJL Martinez fishing
be continuous vs. NLRC

EMPLOYER-EMPLOYEE RELATIONSHIP;
QUESTION OF LAW/QUESTION OF FACT
General rule: the character of the relationship between the DISTINCTIONS BETWEEN:
parties is not whatever they call it in their contract but what Employer-Employee Relationship Against
the law calls it after examination of the facts. 1. Contractors
2. roving independent peddlers
But the conclusion that an employer-employee relationship 3. Independent salesmen,
exists depends on the facts of each case. 4. agency,
5. agricultural tenancy,
6. lease contract,
7. industrial partnership.
REQUISITES TO ESTABLISH EMPLOYER
EMPLOYEE RELATIONSHIP

Viana vs. Al lagadan INDEPENDENT CONTRACTOR

An independent contractor is one who exercises
Requisites to establish employer-employee independent employment and contracts to do a piece of
relationship work according to his own methods and without being
1.Selection and hiring subject to control of his employer, except as to the result
2.There must be payment of wages of the work.
3.There must be power to dismiss
4.There is power of control not only as to the goal or end to A person who has no capital or money of his own to pay
be achieved but also as to the means and methods and his laborers or to comply with his obligations to them, who
manner of achieving the end. files no bond to answer to the fulfillment of his contract
with his employer, falls short of the requisites or
NOTE: the paramount test is test of control conditions necessary to classify him as an independent
Even in the absence of items 1-3, there is still er-ee contractor.
relationship if the power of control is present.
Relevant instances:
The control test is passed if it is shown that the person for 1. Carpentry works is necessary in the business of
whom the services are performed reserves the right to renting out buildings. The repair of buildings is
control not only the end to be achieved but also the means necessary and not casual. So when a carpenter is hired
to be used in reaching such end. to fix a building in this capacity, there is EE-ER
relationship (Caro vs. Rilloraza)

CONTROL TEST is the ultimate but not exclusive test. 2. A glassware dealer who employs a carpenter, no EE-
ER relationsip; the relationship is pruely casual and not
Control Test: whether the employer controls or has for the purpose of the business of glassware.
reserved the right to control the employee not only as to the
result of the work to be done but also as to the means and 3. A claim for reimbursement of labro costs and
methods by which the same is accomplished. materials - DOLE has no jurisdiction. Such claim did

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 6
Elizabeth Lemon’s Notes

not arise from an EE-ER relationship - this is a civil contract

issue; go to regular courts.

ROVING INDEPENDENT PEDDLERS

Salesman Peddler

They both sell

Does not bring along what Brings long what he is selling

he sells

Relevant instances:
1. Snow White supplied push carts, ice, ice cream, salt and
cap. There was NO TRANSFER OF OWNERSHIP of the
ice cream products because at the end of the day, he can
return the ice drop so ownership was not transferred to him.
(Snow white vs. Garcia)

2. IF A CONTRACT IS REDUCED TO WRITING, the

relationship is as it was defined in the contract.
When the terms of the agreement are reduced to writing,
there is no other evidence to define the relationship except
the terms of the agreement. This is a conclusive
presumption following the PAROLE EVIDENCE RULE.
a) Having signed the peddler’s contract, you are
bound by those terms (Mafinco vs. Ople)

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 7
Elizabeth Lemon’s Notes

AGENCY 4. SC: exclusivity of service, control of assignments and

furnishing of company facilities and materials show
AGENCY EMPLOYER-EMPLOYE
control.
E RELATIONSHIP
(Insular Life vs. NLRC and Delos Reyes)

Services are extended in both cases to another person.

The agent extended services for his or her principal.
The employee rendered services for his or her employment. AGRICULTURAL TENANCY

SHARE TENANCY ER-EE RELATIONSHIP

The services that are The services rendered is not
rendered are for purposes of for representation but it is
representation. for the purpose of the Joint undertaking/venture Farm owner’s undertaking;
employer. Not a joint undertaking
The services rendered is The service that is rendered Right of possession by tenan No right of possession
always preparatory to is an end in itself. There is t; TENURIAL
another contract which will no preparation for another - if terminated, tenant has
be concluded by the efforts contract. It is an end in itself right to be paid a distubance
of the agency between the for the employer. fee distinct from just
third party and the compensatin
employer.

Can terminate it when you If the engagement is not for Compensation of tenant is c Compensation is fixed
no longer have confidence a definite period then the ontingent on the harvest
because the essence of a presumption is it will
contract of agency is trust continue indefinitely until a The whole household partici Farm worker’s labor alone
and confidence. just or authorized cause for pates in the production
its termination supervenes.
The basis of the
presumption is social Tenant has the right of contr Farm owner has the right o
justice. ol f control
Landowner has control by
way of VETO.
Instances, examples: Governed by CARP Governed by labor code
1. Agent; Employee of insurance company -
Carungcong was an agent. The rules and regulations was
necessary for the regulation of insurance business.
Carungcong received an annual income of P3M - which was
too high for an employee. LEASE CONTRACT
Ex.
2. Agent; commission agent - Basiao was the master of 1. The drivers of the jeepneys staged a strike because the
his own time and selling methods. He was left to determine jeepney owners did not recognize them as employees
the time, place and means of soliciting insurance. He had no when they requested to bargain collectively.They were
quotas and his compensation was based on the results under a boundary system.
obtained. a) SC: They are EMPLOYEES.
i. They are confined to the franchise route
3. SC: NOT EVERY FORM OF CONTROL PASSES of the operator.
THE CONTROL TEST. ii. Only the terminology is different but the
Supreme Court says that we are not
Control in the form of mere guidelines for the achievement bound by the terminologies. The legal
of mutually desired result does not establish er-ee characterization of the relationship is not
relationship. This promotes the result. altered by the use of the regular
pedestrian word lease. It is not lease. It is
Control not only as to the result, but also as to the means their payment to the operator who is
and methods in achieving the result establishes er-ee responsible for the franchise, for the
relationship. maintenance of this vehicle and for his
share in providing the vehicle to the
Insurance is an enterprise imbued with public interest, driver who drives it.
where the Insurance Code applies. When some of the
provisions of the Insurance Code are found in the INDUSTRIAL PARTNERSHIP
employment contract, this fact does not on its own establish
er-ee relationship. (Insular Life vs. NLRC and Basiao) Industrial Partnership is under the Civil Code.

When two or more persons contribute property or monies

for a common enterprise and they divide the profits

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 8
Elizabeth Lemon’s Notes

among themselves on the basis of their contributions. That 2. IN THE EMPLOYMENT OF WORKERS, IS
is a partnership. THERE A DIFFERENCE BETWEEN AN
ORDINARY EMPLOYER-EMPLOYEE
Now, what if what you contribute is your industry – imong RELATIONSHIP AND SUBCONTRACTING?
kahago? Then that is called an industrial partnership.
Yes.
Instances:
1. Golf caddies - Ruling: They are NOT EMPLOYEES. ORDINARY EE-ER SUBCONTRACTING
The rules that subjected the caddies is not an index of RELATIONSHIP
control anymore than the rules that the members are There are only two parties There are three parties
subjected to. involved - involved:
2. Shoe shiners; Industrial partners - The shoe-shiners have 1. the employer and a. The principal which
their own customers, which directly paid them. Then they 2. the employee. decides to farm out a job or
give the ½ share of Besa (OWNER). Besa did not supervise service to a subcontractor;
the shoe-shiners. He did not exercise control.
b. The subcontractor which
has the capacity to
independently undertake
EMPLOYER- EMPLOYEE RELATIONSHIP the performance of the job
CREATED BY LAW or service; and
1.Labor only contracting (illegal)
2.Permissible bonafide labor contracting c. The employees engaged
3.Classification of certain women by the subcontractor to
accomplish the job or
service.
LABOR ONLY CONTRACTING
Labor-only contracting. shall be declared prohibited. For THIS RELATIONSHIP In subcontracting,
this purpose, labor-only contracting shall refer to an. IS ESTABLISHED THE FOUR-FOLD TEST
arrangement where the contractor or subcontractor merely THROUGH A OF ER- EE
recruits, supplies or places. workers to perform a job, work FOUR-FOLD TEST, RELATIONSHIP
or service for a principal, and the following elements are. under which the employer: SHOULD BE
SATISFIED BY THE
a. Directly exercises control SUBCONTRACTOR in
CONTRACTING AND SUB CONTRACTING and supervision over the relation to the employees it
DEFINITION employee not only as to the engages to accomplish the
Dole Primer On Contracting And Subcontracting results of the work but also subcontracted job or
Effects of Department Order No. 3, Series of 2001 as to the means employed service. In such cases, the
to attain this result; subcontractor is also
1. WHAT IS CONTRACTING AND b. Has the power to select referred to as independent
SUBCONTRACTING? and hire the employee; contractor.
There is contracting or subcontracting when an employer,
referred to as the principal, farms out the performance of a c. Has the obligation to pay If the four-fold test is
part of its business to another, referred to as the contractor the employees his or her satisfied not by the
or subcontractor. For the purpose of undertaking the wages and other benefits. subcontractor but by the
principal's business that is farmed out, the contractor or principal, the principal
subcontractor then employs its own employees. The power of control is the then becomes the employer
most important factor in of the employees engaged
Contracting and subcontracting are synonymous under determining the existence to accomplish the job or
Philippine labor law. The term that is more commonly used of an employer-employee service. What exists is not
is subcontracting. relationship. subcontracting but a direct
employer-employee
relationship between the
principal and the
The employer need not employees.
actually exercise this
power. It is enough that the
employer retains the right
to exercise this power. It is
enough that the employer
retains the right to exercise
it as it may deem necessary
or appropriate.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 9
Elizabeth Lemon’s Notes

WHAT LAW OR RULES GOVERN

SUBCONTRACTING? Where a subcontractor is highly capitalized, the Supreme
The basic law governing subcontracting is the Labor Code, Court has held that it need not show evidence that it has
particularly Articles 106 to 109. These provisions prescribe investment in the form of tools, equipment, machineries,
the conditions for regulating subcontracting and the rights work premises, among others, to be considered legitimate.
and obligations of parties to this arrangement. There was However, it is still necessary for it to show that it has the
also a set of rules implementing Articles 106 to 109, known capacity to be an independent contractor, That is, it can
as Department Order No. 10, issued by DOLE in 1997. undertake the performance of the contract according to its
However, D. O. No. 10 was revoked by DOLE on 08 May own manner and method, free from the supervision of the
2001 through another order, D. O. No. 3, Series of 2001. D. principal in all matters except as to the results of the work.
O. No. 3 took effect on 29 May 2001.

With the revocation of D. O. No. 10, the following laws and LEGITIMATE SUBCONTRACTING IS DIFFERENT
rules will apply in addition to Articles 106 to 109 of the FROM LABOR-ONLY CONTRACTING
Labor Code:chanroblesvirtuallawlibrary Legitimate subcontracting Labor only contracting
Legal Illegal
a. Article 248 (c) which disallows contracting out of services
or functions being performed by union members when such
will interfere with, restrain or coerce employees in the WHEN IS THERE LABOR ONLY CONTRACTING?
exercise of their rights to self-organization; where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or
b. Article 280. which classifies employees into regular, service for a principal, and the following elements are
project or seasonal employees; present:

c. Article 2180 of the Civil Code, under which the principal, a. The contractor or subcontractor does not have
in a civil suit for damages instituted by an injured person, substantial capital or investment to actually perform the
can be held liable for any negligent acts of the employees of job, work or service under its own account and
a labor-only contractor; responsibility; and

d. Republic Act No. 5487 and its implementing rules, which b. The employees recruited, supplied or placed by such
regulate the operation of security agencies; contractor or subcontractors are performing activities
directly related to the main business of the principal.
e. Jurisprudence interpreting the foregoing laws;
WHAT IS THE BASIS OF THE STATE IN
PROHIBITING LABOR-ONLY CONTRACTING?
WHAT IS THE OBJECTIVE OF THE
LEGITIMATE SUB CONTRACTING: PROHIBITION?
Contracting shall be legitimate if the following conditions The bases of the State in prohibiting labor-only
concur: contracting are:
a. The Constitution, which mandates that the State shall
a. the contractor or subcontractor carries on a distinct and protect labor and promote its welfare, and shall guarantee
independent business and undertakes to perform the job, basic labor rights including just and humane terms and
work or service on its own account and under its own conditions of employment and the right to
responsibility, according to its own manner and method, self-organization.
and free from the control and direction of the principal in all b. Article 106 of the Labor Code, which allows the
matters connected with the performance of the work except Secretary of Labor to distinguish between labor-only
as to the results thereof; contracting and job contracting to prevent any violation or
circumvention of the Labor Code.
b. the contractor or subcontractor has substantial capital or
investment; The objective of the State in prohibiting labor-only
contracting is to ensure that labor laws are followed and to
c. The agreement between the principal and the contractor prevent exploitation of workers. A labor-only contractor is
or subcontractor assures the contractual employees one which presents itself as an employer even if it does not
entitlement to all occupational safety and health standards, have capital to run a business or capacity to ensure that its
free exercise of the right to self organization, security of workers are paid their wages and other benefits as
tenure, and social and welfare benefits. prescribed by law. As such, it cannot independently
undertake to perform a subcontracted job or service. To
allow a labor-only contractor to operate is to give it an
WHAT IS SUBSTANTIAL CAPITAL? IS opportunity to circumvent the law and to exploit workers.
SUBSTANTIAL CAPITAL SUFFICIENT TO
ESTABLISH LEGITIMATE SUBCONTRACTING?
Substantial capital refers to such investment, whether in the
form of money, facilities, tools, equipment, machineries,
work premises, or subscribed capital stock that would
indicate the subcontractor's capacity to undertake
the subcontracted work or service independently.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 10
Elizabeth Lemon’s Notes

WHAT WILL BE THE EFFECT OF A LABOR-ONLY NEW GUIDELINES ON CONTRACTING AND

CONTRACTING ARRANGEMENT? SUBCONTRACTING:
The following are the effects:
a. The subcontractor will be treated as the agent of the The Department of Labor and Employment (DOLE) has
principal. Since the act of an agent is the act of the principal, issued Department Order No. 174, series of 2017 (DO 174),
representations made by the subcontractor to the employees providing a new set of guidelines to govern contracting
will bind the principal. and subcontracting.

b. The principal will become the employer as if it directly DO 174 identifies TWO ARRANGEMENTS THAT
employed the workers engaged to undertake the CONSTITUTE LABOR-ONLY CONTRACTING,
subcontracted job or service. It will be responsible to them WHICH IS PROHIBITED UNDER THE LAW.
for all their entitlements and benefits under the labor laws.
1st type when
c. The principal and the subcontractor will be solidarily (a) the contractor does not have substantial
treated as the employer. capital or it does not have investments in the
form of tools, equipment, machineries,
d. The employees will become employees of the principal, supervision, work premises, among others;
subject to the classifications of employees under Article 28 (b) the contractor’s employees are performing
of the Labor Code. activities which are directly related to the main
business of the principal.
If the labor-only contracting activity is undertaken by a 2nd type when the contractor does not exercise the right
legitimate labor organization, a petition for cancellation of of control over the performance of the work of
union registration may be filed against it, pursuant to its employees.
Article 239(e).
While many provisions of the previous guidelines
governing contracting and subcontracting were
IF A LEGITIMATE SUBCONTRACTOR CANNOT maintained, the most
PAY THE WAGES OF THE EMPLOYEES IT significant changes introduced by DO 174 include:
ENGAGED TO PERFORM THE JOB OR SERVICE,  The registration fee of contractors has been
WILL THE PRINCIPAL AUTOMATICALLY BECOME increased to ₱100,000 and the effectivity of the
THE EMPLOYER OF SUCH EMPLOYEES? certificate of registration has been decreased to two
years.
No.
 The capitalization requirement of contractors has
Under Article 106, a principal has two types of liability in also been increased to ₱5,000,000.
relation to the employees of the subcontractor:
1st liability is limited, and is governed by the first two  Contracting out work through an in-house
paragraphs of Article 106. Thus, mere cooperative, which merely supplies workers to the
inability of the subcontractor to pay wages principal, is a prohibited form of employment
will not automatically make the principal arrangement.
the direct employer. It will only make the
principal jointly and severally liable with  Prohibition on requiring the contractor’s employees
the subcontractor for payment of the to perform functions that are currently being
employees' wages to the extent of the work performed by
performed under the contract. regular employees of the principal.

2nd liability arises from the third and fourth  The mandatory provisions in a service agreement
paragraphs of Article 106, is absolute and between a principal and contractor has been reduced
direct. This liability arises when there is and it is no longer required to include provisions on:
labor-only contracting as defined in D. O. (a) Net Financial Contracting Capacity;
No. 3. In such cases, the principal shall be
responsible to the workers in the same (b) ensuring compliance with all the rights and
manner and extent as if it directly benefits of the employees under the Labor Code; and
employed these workers.
(c) the obligation of the contractor to directly remit
the relevant contributions to the Social Security
System, Employees Compensation Commission,
FR GUS: Philippine Health Insurance Corporation, and the
To be a contractor, you need to have: Home Mutual Development Fund.
1.Sufficient capital; or
2.Investments by way of equipment, offices  The termination of a service agreement between a
3.the activity for which you are contracted to perform is not principal and a contractor does not automatically
directly related to the main business and activity of the result in the termination of the employment of the
indirect employer. The principal contracts out. contractor’s employees.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 11
Elizabeth Lemon’s Notes

The following can be contracted out because the

court has taken judicial notice of them: (Kimberly
Clark vs. Drilon)
1.Security
2.Janitorial
3.Technical and
4.other maintenance services

Q: WHAT HAPPENS WHEN PRINCIPAL IS

GOVERNMENT?
A: Like a GOCC and the agency that supplies the manpower
underpays or fails to pay wages of employees. That law says,
even if there is bona fide contracting/subcontracting, if
there is non payment/underpayment, then it is the principal
who must pay. Now you are government, are you obliged
to pay?
SC: Yes, it is the law that imposes employer/ employee
relationship (created by law)
This is somehow ironic because it is possible for SC to be in
this situation because it contracts out.

Q: WHAT HAPPENS IF THERE IS

UNDERPAYMENT BY THE AGENCY AND THEY
ALREADY PAID?
A: it is not a defense.you are still obliged to pay without
prejudice to your right of reimbursement for the
overpayment made to the agency.

EMPLOYER-EMPLOYEE EMPLOYER-EMPLOYEE
RELATIONSHIP RELATIONSHIP
QUESTION OF FACT QUESTION OFLAW

1. er-ee relationship is a 1. er-ee relationship

question of fact it is not is a question of law
for the SC to determine it is within the
whether or not it purview of the SC
exists. Only when the to decide.
lower court gravely
abused its discretion, 2. a question of law
the SC comes in. search for the law
which says there is
2. only 1 putative er-ee relationship
employer, look for or there is no er-ee
whether or not the 4 relationship.
requisites of er-ee
relationship exist.. All
we know when we
examine that is the
paramount importance
of the control test. You
may be deficient in the
first 3 requisites but if
there is an
overwhelming
indication that there is
an exercise of control,
then er-ee relationship
is verified.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 12
Elizabeth Lemon’s Notes

CONTRACTOR : any person or entity engaged IN A

ART. 106. Contractor or subcontractor. - Whenever
LEGITIMATE CONTRACTING OR
an employer enters into a contract with another
SUBCONTRACTING ARRANGEMENT providing
person for the performance of the former’s work, the
services for a specific job or undertaking farmed out by
employees of the contractor and of the latter’s
principal under a service agreement.
subcontractor, if any, shall be paid in accordance
with the provisions of this Code.
CONTRACTOR’S EMPLOYEE : Employee of the
contractor hired to perform or complete a job or worked
In the event that the contractor or subcontractor fails
farmed out by the principal pursuant to a service
to pay the wages of his employees in accordance with
agreement with the latter
this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such
In HOUSE AGENCY : a contractor which is owned,
employees to the extent of the work performed under
managed or controlled directly or indirectly by the
the contract, in the same manner and extent that he
principal or one where the principal owns or represents
is liable to employees directly employed by him.
any share of stock and which operates solely or mainly for
the principal
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
LABOR ONLY CONTRACTING ;arrangement where
contracting-out of labor to protect the rights of
the contractor or subcontractor merely recruits, supplies
workers established under this Code. In so
or places workers to perform a job or work for a principal
prohibiting or restricting, he may make appropriate
and the following elements are present:
distinctions between labor-only contracting and job
A.
contracting as well as differentiations within these
1. The contractor or subcontractor does not have
types of contracting and determine who among the
substantial capital or
parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or
2. The contractor or subcontractor does not have
circumvention of any provision of this Code.
investments in the form of tools, equipment,
machineries, supervision, work premises, among
There is "labor-only" contracting where the person
others;
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
3. The contractor or subcontractor’s employees
equipment, machineries, work premises, among
recruited and placed are performing activities which
others, and the workers recruited and placed by such
are DIRECTLY RELATED to the main business
person are performing activities which are directly
operation of the principal
related to the principal business of such employer. In
such cases, the person or intermediary shall be
B. the contractor or subcontractor does not
considered merely as an agent of the employer who
exercise the right to control over the
shall be responsible to the workers in the same
performance of the work of the employee
manner and extent as if the latter were directly
employed by him.
PRINCIPAL : any natural or juridical entity whether and
employer or not who puts out or farms out a job or work to
ART. 107. Indirect employer. - The provisions of the
a contractor.
immediately preceding article shall likewise apply to
any person, partnership, association or corporation
SOLIDARY LIABILITY :
which, not being an employer, contracts with an
1. the liability of the principal, pursuant to the provision
independent contractor for the performance of any
of article 109 of the Labor Code as DIRECT EMPLOYER
work, task, job or project.
together with the contractor for any violation of any
provision of the labor code.

2. Liability of the principal in the same manner and

extent that he/she is liable to his/her direct employees to
DISCUSSION BASED ON IMPLEMENTING RULES 2017 the extent of the work performed under the contract when
the contractor fails to pay the wages of his/her employees
GUIDING PRINCIPLE: Non permissible forms of as provided in art 106 of the labor code.
contracting and subcontracting arrangements undermine
the Constitutional and statutory right to security of tenure of SUBSTANTIAL CAPITAL
workers. Paid up capital Corporations
stock/shares of AT Partnerships
RULE APPLICABLE TO: All parties in an arrangement LEAST 5 MILLION Cooperative
where emploer employee relationship exists. PESOS
Net worth of AT LEAST Single Proprietorship
CONTRACTING/SUBCONTRACTING: an arrangement
5 MILLION PESOS
whereby a principal agrees to farm out to a contractor the
performance or completion of a specific job or work within a
definite or pre determined period regardless of whether
such job or work is to be performed or completed within or
outside the premises of the principal.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 13
Elizabeth Lemon’s Notes

LABOR ONLY CONTRACTING IS TOTALLY 7. Such other practices, schemes, or employment

PROHIBITED and REFERS TO AN ARRANGEMENT arrangements designed to circumvent the right of workers
WHERE: to security of tenure.

A.
1.The contractor or subcontractor does not have substantial WHEN PRINCIPAL MAY BE DEEMED DIRECT
capital or EMPLOYER OF THE
CONTRACTOR/SUBCONTRACTOR’S EMPLOYEE
2.The contractor or subcontractor does not have
investments in the form of tools, equipment, machineries, In the event that there is a finding that the contractor or
supervision, work premises, among others; subcontractor is engaged in labor only contracting under
sec 5 and other illicit forms of employment under sec 6,
3.The contractor or subcontractor’s employees recruited and the principal SHALL BE DEEMED THE DIRECT
placed are performing activities which are DIRECTLY EMPLOYER OF THE CONTRACTOR OR
RELATED to the main business operation of the principal SUBCONTRACTOR’S EMPLOYEE.

B.the contractor or subcontractor does not exercise PERMISSIBLE CONTRACTING/

the right to control over the performance of the SUBCONTRACTING
work of the employee
Contracting shall be legitimate if the following conditions
OTHER ILLICIT FORMS OF EMPLOYMENT concur:
ARRANGEMENTS:
1. When the principal farms out a “CABO” A. the contractor or subcontractor carries on a distinct
and independent business and undertakes to perform
2. Contracting out of job or work the job, work or service on its own account and under
its own responsibility, according to its own manner and
a) Through an in house agency method;
b) Though an in house cooperative which merely
supplies workers to principal b. the contractor or subcontractor has substantial
capital or investment to carry out the job farmed out by
c) By reason of a strike or lockout where actual or the principal on his account, manner and method,
imminent investment in the form of tools, equipment, machinery
and supervision;
d) Being performed by union members and such
will interfere with, restrain or coerce employees
c. In performing the work farmed out, the contractor or
in the exercise of their rights to self organization
subcontractor is free from the control and direction of
as provided in article 259 of the labor code as
the principal in all matters connected with the
amended
performance of the work except as to the results
3. Requiring the contractor’s/ subcontractor’s employees to thereof;
perform functions which are currently being performed by
regular employees of the principal D. The service agreement ensures compliance with all
rights and benefits for all employees of the contractor
4. Requiring the contractor’s/ subcontractor’s employees to or subcontractor under labor laws.
sign as a precondition to employment or continued
employment: SOLIDARY LIABILITY
a) an antedated resignation letter In the event of violation of any provision of the labor Code
including the failure to pay wages, there exists a solidary
b) A blank payroll liability on the part of the principal and the contractor for
purposes of enforcing the provisions of Labor Code and
c) Waiver of labor standards including minimum other social legislations to the extent of the work
wages and social welfare benefits performed under the employment contract.
d) A quitclaim releasing the principal or contractor
from liability as to payment of future claims
e) Require the employee to become a member of a
cooperative
5. Repeated hiring by the contractor/ subcontractor of
employees under an employment contract of short duration
6. Requiring employees under a contracting/subcontracting
arrangement to sign a contract fixing the period of
employment to a term shorter than the term of the Service
agreement, unless the contract is divisible into phases for
which substantially different skills are required and this is
made known to the employee at the time of engagement.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 14
Elizabeth Lemon’s Notes

Note, based on 2016 TSN: 1. A legitimate contractor is not necessarily a firm; it may
be an individual.
BONAFIDE LABOR ONLY
2. To contract out is a proprietary right. (the book says it’s
CONTRACTING CONTRACTING
an inherent right but according to the lecture, it’s not. So asa ka
Upon failure of the Upon failure of the mutuo, sa book or sa mucheck sa imong exam?)
manpower agency or manpower agency or
contractor to pay the wages contractor to pay the wages 3. To contract out is an exercise of management prerogative.
of the employees, of the employees, 4. Management has the ultimate determination of
whether services should be performed by its personnel or
Indirect employer is Indirect employer is liable contracted to outside agencies.
solidarily liable for the not only for payment of
payment of WAGES only. wages but also for the 5. Absent proof that the employer acted in a malicious
following: manner, the court will not interfere with the exercise of
SSS judgment by an employer.
Philhealth
Empolyee’s Comp, etc. Management prerogative Those which affect the
Limited Employer- Employer Employee per se rights of employees
Employee relationship is relationship created According to lecture: Here, the employer should
created (indirect employer and This is not an inherent see to it that the employees
employees) right. are at least proeprly
Indirect employer does not Manpower agency/ This is provided for by the informed of its decision or
automatically become the contractor is treated as the civil code and pertains to modes of action in order to
employer; only jointly and agent and the indirect ownership. attain harmonious labor
severally liable for the employer becomes the management relationship
nonpayment or direct employer of the and enlighten the workers
underpayment of wages employees (the manpower concerning their rights
agency is disregarded)
6. Requisites of LEGITIMATE CONTRACTING:
RIGHTS OF CONTRACTOR’S SUBCONTRACTOR’S a) Registration with DOLE (in accordance with DO
EMPLOYEE: 18-A, series 2011. Note: I think this is still effective
because the 2017 amendment pertained only to art.
1. Safe and Healthful working conditions 105-109)
2. Labor standards such as but not limited to: b) Carries on a distinct and independent business and
a) service incentive leave, undertakes to perform the job, work or service:
b) rest days
i. On its own responsibility
c) Overtime pay
d) Holiday pay ii. According to its own manner and method
e) Separation pay
iii. Free from control and direction of the principal
3. Retirement benefits under the SSS or retirement plans of
in all matters connected with the performance
the contractor/ sub contractor; of the work EXCEPT AS TO THE RESULTS
4. Social security and welfare benefits
5. Self organization, collective bargaining and peaceful c) Possesses substantial capital and/or investment and
concerted activities including the right to strike. d) Engaged through a service agreement that ensures
compliance with all the rights and benefits under
labor laws.
Discussion from Azucena:
NOTE: OF THESE FOUR. THE SECOND IS THE MOST
IMPORTANT AND MOST DETERMINATIVE.
EMPLOYER- EMPLOYEE RELATIONSHIP IN A
CONTRACTING AGREEMENT:
Legitimate contracting should be an independent business,
GR: Contracting or outsourcing is allowed by law operatiing freely from teh client’s control as regards the:

This creates a trilateral relationship: 1. Manner and method of accomplishing the job
1. Employer - employee relationship between the contractor 2. EXCEPT as to the results.
and employees it hires to perform the contracted work and
2. A CONTRACTUAL relationship (governed by teh civil WITHOUT FREEDOM, the arrangement is not contracting but
code) between the contractor and the principal or client that employment.
owns the work contracted out.

To the workers, the contractor is the direct employer NOTE: Private recruitment and placement agency is not a labor
immediately obligated under the labor laws while the contractor. A PRPA is licensed to find and supply job applicants to
individuals who need people particular jobs. The job owners select
principal is the indirect employer who is ultimately liable if and hire them and at such point, the role of PRPA is done.
the contractor defaults in its obligation to the workers.
IF THE FOLLOWING ARE CONTRACTORS:
NOTES:

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 15
Elizabeth Lemon’s Notes

1. Cooperative - must register with cooperative development SECTION 4. Status of women workers in certain work
authority places. — Any woman who is permitted or suffered to
2. Corporation - must register with SEC work with or without compensation, in any night club,
cocktail lounge, beer house, massage clinic, bar or similar
3. Union - must register with DOLE. establishments, under the effective control or supervision
NON REGISTRATION will create the presumption that they are of the employer for a substantial period of time as
engaged in labor only contracting. determined by the Secretary of Labor and Employment,
shall be considered as an employee of such establishments
for purposes of labor and social legislation. No employer
FORMER EMPLOYEES AS CONTRACTORS shall discriminate against such employees or in any
manner reduce whatever benefits they are now enjoying
Where people cease being employees to become contractors to by reason of the provisions of this Section.
former employers, such change in relationship by itself violates no
law. However, in times when the shift from employee to contractors
is merely a semblance scheme to end employment relationship while SECTION 5. Night work of women employees. — Any
still utilizing worker’s services, without shouldering the employer’s woman employed in any industrial undertaking may be
obligation, it may still be considered labor only contracting. allowed to work beyond 10:00 o'clock at night, or beyond
12:00 o'clock midnight in the case of women employees of
commercial or non-industrial enterprises, in any of the
ART. 109. Solidary liability. - The provisions of existing laws following cases:
to the contrary notwithstanding, every employer or indirect
employer shall be held responsible with his contractor or (a) In cases of actual or impending emergencies caused by
subcontractor for any violation of any provision of this Code. For serious accident, fire, flood, typhoon, earthquakes,
purposes of determining the extent of their civil liability under epidemic or other disaster or calamity, to prevent loss of
this Chapter, they shall be considered as direct employers.
life or property or in cases of force majeure or imminent
danger to public safety;
From Azucena: (b) In case of urgent work to be performed on machineries,
equipment or installation, to avoid serious loss which the
In relation to the liability of an indirect employer in arts. 107 employer would otherwise suffer;
and 109, the following civil code provisions should be noted:
1. Art 1729 - (c) Where the work is necessary to prevent serious loss of
a) Art. 1729. Those who put their labor upon or perishable goods;
furnish materials for a piece of work undertaken
by the contractor have an action against the (d) Where the woman employee holds a responsible
owner up to the amount owing from the latter to position of a managerial or technical nature, or where the
the contractor at the time the claim is made. woman employee has been engaged to provide health and
However, the following shall not prejudice the welfare services;
laborers, employees and furnishers of materials:
(e) Where the nature of the work requires the manual skill
1. Payments made by the owner to the and dexterity of women and the same cannot be
contractor before they are due; performed with equal efficiency by male workers or where
2. Renunciation by the contractor of any the employment of women is the established practice in
amount due him from the owner. the enterprises concerned on the date these Rules become
3. This article is subject to the provisions of effective; and
special laws.
(f) Where the women employees are immediate members
The indirect employer cannot escape this liability EVEN IF of the family operating the establishment or undertaking.
HE HAS PAID the owrker’s wages in accordance with the
contract with the agency or contractor. The Secretary of Labor and Employment shall from time
to time determine cases analogous to the foregoing for
Labor standards law are considered written in every purposes of this Section.
contract and stipulations which violate the same are deemed
not stipulated. SECTION 6. Agricultural work. — No woman, regardless
of age, shall be permitted or suffered to work, with or
Art. 136. Classification of certain women workers. Any without compensation, in any agricultural undertaking at
woman who is permitted or suffered to work, with or night time unless she is given a rest period of not less than
without compensation, in any night club, cocktail lounge, nine (9) consecutive hours, subject to the provisions of
massage clinic, bar or similar establishments under the Section 5 of this Rule.
effective control or supervision of the employer for a
substantial period of time as determined by the Secretary SECTION 7. Maternity leave benefits. — Every employer
of Labor and Employment, shall be considered as an shall grant to a pregnant woman employee who has
employee of such establishment for purposes of labor and rendered an aggregate service of at least six (6) months for
social legislation. the last twelve (12) months immediately preceding the
expected date of delivery, or the complete abortion or
IMPLEMENTING RULES (based on 2017 IRR) miscarriage, maternity leave of at least two (2) weeks
before and four (4) weeks after the delivery, miscarriage or

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”
LABOR STANDARDS SALIENT TOPICS | FIRST EXAM | 2019-2020 16
Elizabeth Lemon’s Notes

abortion, with full pay based on her regular or average

weekly wages.

SECTION 8. Accreditation of leave credits. — Where the

pregnant woman employee fails to avail of the two-week
pre-delivery leave, or any portion thereof, the same shall be
added to her post-delivery leave with pay.

SECTION 9. Payment of extended maternity leave. — When

so requested by the woman employee, the extension of her
maternity leave beyond the four-week post-delivery leave
shall be paid by the employer from her unused vacation
and/or sick leave credits, if any, or allowed without pay in
the absence of such leave credits, where the extended leave
is due to illness medically certified to arise out of her
pregnancy, delivery, complete abortion or miscarriage which
renders her unfit for work.

SECTION 10. Limitation on leave benefits. — The maternity

benefits provided herein shall be paid by an employer only
for the first four (4) deliveries, miscarriages, and/or
complete abortions of the employee from March 13, 1973,
regardless of the number of employees and deliveries,
complete abortions or miscarriages the woman employee
had before said date. For purposes of determining the
entitlement of a woman employee to the maternity leave
benefits as delimited herein, the total number of her
deliveries, complete abortions, or miscarriages after said
date shall be considered regardless of the identity or
number of employers she has had at the time of such
determination, provided that she enjoyed the minimum
benefits therefor as provided in these regulations.

“Can I share with you my worldview? All of humankind has one thing in common: the sandwich. I believe that all anyone really wants in this life is to sit
in peace and eat a sandwich.”